Stan will ‘absolutely’ continue to see investment following ‘exceptional’ result, says Sneesby

Yesterday’s Nine Entertainment results saw subscription streaming service Stan grow its revenue by 22% in FY2022, however rising costs for the business meant that EBITDA growth took a backward turn compared to the previous year.

The media company did not put a specific figure on subscriber numbers but did point to an active figure exceeding 2.5 million. This comes after Stan CEO, Martin Kugeler gave an update on the platform in February, then-too noting the active subscriber base sat above the 2.5 million figure.

Sneesby, Nine CEO and former Stan CEO

“I think it’s an exceptional result for Stan,” said Nine CEO Mike Sneesby, who was the inaugural boss of Stan, until moving into the top job last year.  

Sneesby said the company gave an update at both the last year’s results and the half-year results around the expectations for Stan, while coming out of lockdowns and into the present environment, “coming off such a peak for the subscription market of subscriber growth”.

The result came as this month News Corp and Foxtel delivered its financials, within it figures showing that while across the entire financial year entertainment streaming service Binge had risen in subscribers, in the most recent quarter, paying subscribers had dipped from 1,212,000 to 1,192,000.

Stan recently announced the rights for the 2023 Rugby World Cup

Sneesby maintained that the company’s projections see growth in revenue and EBITDA into the FY2023, and that it is a direct reflection of the strategy to ensure that the business is “heavily differentiated”.

“The growth of originals that are continuing to perform extremely well, and the timing of the launch of Stan Sport, which has brought considerable growth in sports subscribers over the financial year is really underpinning the strength in the base.

“In other words,” Sneesby continued, “You look at the engagement with subscribers who sign up for Sport, and it really increases the lifetime value and the stickiness of subscribers.”

Stan CEO, Martin Kugeler

“So I think all the pieces and the strategy have come together for [Stan] and they’re doing a great job on executing.”

Looking ahead, Sneesby said he “doesn’t put timeframes” on projecting subscriber growth, asked when the three million subscribers figure might be reached, as he added “we continue to see great growth opportunities ahead for Stan in both entertainment subscriptions as well as Sports subscriptions.”

Costs were the main obstacle for Stan, which might be an expected growing pain for a company still in its early stages, also in a rapidly developing market. Stan launched Stan Sport in November 2020, and for this financial year costs increased by 127% from $33 million to $75 million.

“You’ve got to remember that Stan continues to be in a phase of growth, albeit they’re at scale in the market and they’re a clear local leader. We’ve given indication that costs will increase into 2023, but they’ll increase at a lower amount than what they increased into 2022.”

“But making investments in a category that’s still growing is absolutely what you need to do,” he added. “Having said that, I think you’ll find that Stan has been quite unique in its ability to deliver what’s now more than three years of profitability to a market where few businesses are profitable. It’s operating at scale on a cost base that makes sense, and it makes sense because business decisions for Stan have been made through a very rational commercial lens.”


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