Stan CEO Martin Kugeler gives update on the platform’s strategy and focus for 2022
ASX-listed Nine Entertainment Co. released its results for the six months to December 2021 yesterday and during the presentation Stan CEO Martin Kugeler gave an update on how the platform was performing.
“What we see is a global trend of increasing investment in productions and output and 2021 has been a record year in terms of that — 14% growth year-on-year and that is across all key markets, the US, the UK and Australia,” Kugeler said. “The result of that is that more and more content comes to what we refer to as the spot market, which is content that we can buy outside of existing output deals. And just to give you two good examples currently, very successful on our platform: Trigger Point, one of my personal favourites from the makers of Line of Duty and of Bodyguard, and the Janet Jackson documentary”
Stan CEO, Martin Kugeler (pictured.)
He added: “We have built really strong relationships with all of our Hollywood partners and international distributors. In the last six months we have extended our LionsGate Starz output deal, our MGM output deal, and our Warner deal to increase our global content library.”
Nine Entertainment Co. CEO, Mike Sneesby, said: “Content is at the heart of Nine. We have the best people in the business when it comes to content across television, radio, and in publishing.
“Our Total Television business is built primarily off Nine’s original content. For Stan, the equation was originally quite different with the business historically focused on licensing of international content. Today, that focus has developed significantly, as we’ve executed on a long term strategy to deliver a greater proportion of our first-run of Stan Original productions, and the launch of live-streaming, Stan Sport.
“At Stan, we are continuing to grow revenues and subscribers while expanding our annual volume of Stan Originals as we take greater control of our premium content pipeline and continue to invest in Stan Sport.”
In the financial results, released yesterday, it showed subscriber momentum remains positive at Stan with current active subscribers of more than 2.5 million, driven both by sport and entertainment. Not only have underlying subscriber numbers exceeded earlier expectations, but Stan’s ability to retain Sport customers through the year has also outperformed.
Strong subscriber numbers, together with double-digit growth in ARPU (average revenue per user), resulted in revenue growth across the half of 23%. The 43% increase in costs primarily reflected the investment in Stan Sport.
Ex sport, costs were up by 17%, reflecting the ramp up of the NBCU output deal, as well as the increased roll out of Stan Originals.
Sneesby said that with the increase of content globally, there is a shift in the way that content is being distributed, and has also seen much bigger opportunities through independent distribution arrangements.
“We have spoken about Stan Originals being the key pillars of the strategy for Stan, and over the summer time, we’ve seen some great successors for the platform,” he said.
“If we look at our most watched feature movies on Stan, since we launched, five of the top 10 are Stan Originals,” Kugeler added. “Gold at number one and Christmas on the Farm at number two — so, two features of the summer lineup. The same applies to our TV shows. Four out of 10 are Stan Originals again, with all three summer originals of this year: The Tourist, Wolf Like Me and Bump season two in the top 10.”
Kugeler said Stan announced last year, “We want to have about 30% of our first run premium slate from Stan Originals and we are well on track to achieve that target.”
Kugeler said the company is well on track with this, thanks to strong relationships it has with producers, and with international distributors. “The ramp up of Stan Originals isn’t just about quantity, it’s about quality, and we’re clearly seeing that in these results,” he said.
He added that Stan Sport has exceeded the company’s expectations on subscribers, on revenue, and contribution to the business, on rugby, tennis and the Champions League.
“This is not only just on the financial side, but also what we’ve been able to achieve is more than double the audience of rugby per season across Stan and Nine,” he explained. “That shows what value we are creating sports here in the Australian market.”
“We have been clear that our strategy is not about becoming a broad sports aggregator, we want to focus on key sports that suit us,” Kugeler noted. “That means, they have to be financially viable, be positive contributors, be premium, and have to drive additional audience growth for Stan.”
In January, Stan Sport partnered with Australian Racing Group’s Speed Series to secure exclusive rights to some of Australia’s biggest local motorsports events.
The partnership provides coverage of the new Speed Series events, with all six racing categories to be streamed ad-free, live and on demand on the Stan Sport platform, along with a number of other key Australian motorsports events. The deal will include exclusive coverage of exclusive coverage of the Supercheap Auto TCR Australia Series, S5000 Australian Drivers’ Championship, Turtle Wax Trans Am Series, Gulf Western Oil Touring Car Masters and Fanatec GT World Challenge Australia powered by AWS. The Speed Series also includes the upcoming AWC Race Tasmania event, the Hi-Tec Oils Bathurst 6 Hour and the Supercheap Auto Bathurst International.
It is one of many in a recent string of partnerships secured by the platform as they expand their world-class motorsports line-up, with Stan Sport having announced multi-year coverage of the NTT Indycar Series, World Rally Championship (WRC) and the World Endurance Championship (WEC) late last year. Last year, Stan also signed an agreement with Formula E to secure exclusive multi-year coverage of the ABB FIA Formula E World Championship.
“Motorsports, which we launched last month is a great example of this. The next big milestone for us is the launch of Stan Event, our first pay-per-view boxing event on Stan, which is a great example of how we again, with our assets, our subscriber base, our platform, and our marketing can generate additional revenue streams for Stan.”
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