TV is not dead, and networks can’t afford it to be

The advertising industry has almost taken the decline of traditional broadcast TV as a given. But Nine’s earnings yesterday show that TV is still alive, and also prove that networks can’t afford to let it die.

Nine’s total TV revenue for the 2023 financial year was $1.2 billion, down 2% year-on-year. Nine has assets across television, publishing and audio – but the TV share was close to 45% of the total group revenue.

Meanwhile, its competitor, Seven West Media, attributed 88% of its group revenue to its TV division Seven Network. Its other assets are limited to WA-based publications.

Commenting on Nine’s results, chief investment officer of Dentsu, Ben Shepherd, said the conversations around TV’s downfall as an ad medium have been blown out of proportion.

“My view is the TV headwinds in 2023 to date have been overstated by the market and the pullback in spend is not commensurate with the pullback in the value of the medium, so I’m bullish on TV’s outlook and feel it can hold its position,” he told Mumbrella.

“They [the earnings] were a really positive set of numbers in a super challenging market. Strong BVOD growth, radio up 4%, Stan continues to grow revenue with more competition, and the subscription revenue within publishing continues to rise.”

Matt Stanton

Nine Entertainment’s chief financial and strategy officer, Matt Stanton, was confident about Nine’s position to manage a fluctuating TV market, but admitted that the overall results were softer than the company would have liked.

Speaking of Nine’s 20-year high 40.7% metro free-to-air revenue share, Stanton told Mumbrella it demonstrated that Nine’s investment in content has been working, whether it be entertainment or sports, although the latter does come with a “premium price”.

“We’ll be cost-disciplined because we need to be,” he said. “But also … we’re not just relying on one platform. We’re not just reliant on advertising – we have the subscription revenue model and multiple revenue streams.”

There won’t be ads on Stan … or will there?

Elsewhere in Nine’s results, the company’s streaming service, Stan delivered a 12% jump in revenue and average revenue per user (ARPU).

Mike Sneesby spent almost eight years at the helm of Stan before becoming group CEO

“The opportunity Nine has with an ad tier on Stan I think is significant as well, and could really change the margin profile of that business,” Shepherd said.

“For consumers, my view is it wouldn’t be a hugely disruptive move, but ad revenue would open up more opportunity for content acquisition and funds to develop local content.

“For Nine, it could open up a new pricing tier and could improve ARPU with minimal cost outlay. For brands, it would provide access to a large user base who right now are inaccessible for advertising when they’re using Stan.”

Right now, Nine’s approach to push Stan’s margin mainly lies in subscription price increases. A premium subscription to the service will set users back $21 a month, and an additional $15 with the Stan Sport add-on.

Stanton reiterated that there’s no plan to introduce ad tiers yet – as the company has been saying in the past few years – but never say never.

“We have to do the right thing for what we think for the local market,” he said.

“You take a choice: do you chase subs? Do you chase EBITDA? Do you chase revenue? … I think they [the Stan team] are very centred in the way they do things.

“We’ve got our own path, so there’s no real plan at this point [to introduce ads]. But I wouldn’t want to say we’ll never do it.”

Nine Entertainment’s share price was down 1% on Thursday and closed at $2.04.


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