Hopefully doesnt mean less drama such as Dr Dr etc… in favor of more crappy reality
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That’s exactly what they mean.
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yes I know drama can be unprofitable but they get some funding from Screen Australia ETC and I think Dr Dr makes good money from overseas sales so hopefully this saves some dramas.
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From the above Guardian article:
Nine has identified the Ashes, 2020 men and women’s cricket T20 World Cups and international TV programs as possible targets in a drive to cut $100m out of its struggling free-to-air television business, as the media company reports a 9% drop in profits.
The bold bit is kind of intriguing. Since the beginning of last year, they have already lost a number of Warner Bros TV titles to 10 (for 10 Peach), such as Two & A Half Men, Friends, 2 Broke Girls & The Middle, with the early seasons of Mom set to move there too. I certainly wouldn’t be surprised if The Big Bang Theory & Young Sheldon will be the next WB TV titles (which are among the very few that is still on Nine) to go over there if or when the time comes.
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Nine Entertainment Co. FY20 Interim Results
Nine Entertainment Co. (ASX: NEC) has released its H1 FY20 results for the 6 months to December 2019.
On a Statutory basis, pre Specific Items, on Revenue of $1.2b, Nine reported Group EBITDA of $251m, and a Net Profit After Tax of $114m. Post Specific Items, the Statutory Net Profit was $102m. These numbers are stated excluding Discontinued Businesses.
On a pre AASB16 and Specific Item basis, Nine reported Group EBITDA of $231m, down 8% on the Pro Forma results in H1 FY19 for its Continuing Businesses. On the same basis, Net Profit After Tax and Minority Interests was $115m, down 9%.
Key takeaways include:
- Strong growth from digital video businesses
- $35m EBITDA improvement at Stan1, with subscribers exceeding 1.8m
- 65% growth in EBITDA at 9Now1, with market leading BVOD share of ~50%
- Further investment in 9Now to accelerate growth into the broader digital video market
- Result was heavily impacted by challenging cycles
- Broad based ad market weakness including a 7% decline in Metro FTA revenues
- Housing market softness impacting Domain’s residential listing volumes
- Stability in Metro Media earnings 1
- Synergies of $9m identified following completion of the Macquarie Media acquisition
- Nine expects FY20 EBITDA at a similar level to FY191
1 like-basis, pre AASB16
Hugh Marks, Chief Executive Officer of Nine Entertainment Co. said: “This result is a testament to the work we have done over the last four years to reposition Nine for a digital future. With strong growth in our digital businesses helping to offset some of the cyclical headwinds faced by our traditional media assets.
We have now clearly established Nine as the leading domestic player in the digital video market with both 9Now and Stan recording very strong growth in the period. Growth that we expect to continue into H2. We have successfully unified our first party database across all of our owned and controlled businesses, meaning we are in a position to offer our partners the benefits of more targeted advertising across the Nine suite of assets.
We have invested in technology through 9Galaxy which will enable our inventory to be traded seamlessly, and in a premium content mix that works across linear and on-demand television. Positioning us to compete more effectively with the global technology companies for revenue.
Recognising this company-wide evolution, we believe there is significant potential to refocus the cost structure of our FTA business, targeting the removal of up to $100m in annualized costs over the next 3 years – costs that will not inhibit our ability to continue to invest in the growth opportunities around premium revenue and digital video, as we have done successfully over the past 3 years.
Nine is in a unique, and incredibly exciting position. We own platforms across linear television, digital, print and radio – leading assets, and all of which are evolving towards digital distribution. Almost 40% of our earnings are now sourced from growing digital platforms. Together with data and technology, we have the ability to distribute messages to mass audiences as well as to small but valuable, addressable audiences. We have the systems to ensure seamless and efficient delivery for advertisers and we have the balance sheet to invest in the content that works for Australians“.
Broadcast
For the purposes of this release, Nine’s Broadcast division comprises Nine Network, 9Now as well as Nine Radio (previously Macquarie Radio). Together, Broadcast reported EBITDA of $146m on revenues of $631m for the half.
Nine Network reported a revenue decline of 6%, from $564m to $531m for the half. Reflective of a very difficult overall advertising market, the Metro FTA ad market declined by 7%1. Nine’s Metro FTA share of 38.7%1 was marginally down on pcp and was disappointing in light of Nine’s strong ratings performance.
In 2019, Nine recorded its strongest year in OzTAM history. For Ratings Season 2019, Nine was the #1 Network and Primary Channel in all key demographics. Nine attracted a commercial network share of 39.4%2 of the 25-54 demographic, up 3.2 pts on pcp. On a primary channel basis, Nine’s share of the 25-54s was 40.5%2, up 3.9 points, and 8.6 share points ahead of its nearest competitor. In the December half, Nine also won all of the key demographics3.
Ex the impact of AASB16, FTA costs rose by 6%, or $25m. This reflected the one-off broadcast of the UK Ashes and World Cup Cricket ($16m) as well as a contracted $8m increase in NRL rights costs. Full year costs are expected to be up by around 2.5%, equating to a slight reduction in the
second half.As a result, FTA EBITDA fell by 36% to $104m, pre AASB16, or $111m inclusive of the accounting change.
In a BVOD market which grew by 43% for the half to $87m4, 9Now held its share ~50%, for revenue growth of 44%. Users and engagement continued to grow with long form VOD minutes increasing by 31% across the half on pcp, and live streams up by 137%. 9Now increased its EBITDA contribution from $16m to $27m, up 65%. 9Now will continue to invest in incremental content to further expand its position in Australia’s fast-growing digital video market.
Acquisition of the minorities in Nine Radio (previously Macquarie Radio) was completed in November.
For the six months, revenue was down by 16%, to $58m, reflecting both the slower Metro radio ad market (down 9.7%5 for the half) as well as well-documented issues specific to the Macquarie business. Notwithstanding a slight cost decline, Nine Radio reported EBITDA of $8m, or $6m pre
AASB16, down sharply on pcp.From an audience perspective, Nine’s NewsTalk Network performed well with 6% growth in cumulative audience across the half6, leading in share, audience and time spent listening. However, the `breakfast-slot’ problems at 2GB had a marked impact on revenues in the Sydney market.
Since taking full ownership, Nine has made significant changes to its Radio business – consolidating back-office functions, sales and news into Nine and reformatting the loss-making Sports Network. Coupled with continued audience strength, this should underpin leverage when the ad market improves.
Digital and Publishing
For the purposes of this release, Nine’s Digital & Publishing division includes Metro Media and Nine’s other Digital Publishing titles including Pedestrian, CarAdvice and nine.com.au. Together, Digital & Publishing reported revenue of $288m, down 3% on pcp. A combined EBITDA of $54m was reported, or $47m ex AASB16.
Metro Media reported flat revenue in a challenging ad market. Share gains in print offset part of the ad market weakness, while Digital (subscription and advertising) revenues grew strongly. On average, double-digit growth in digital subscriptions across The Age, the Sydney Morning Herald and the Australian Financial Review reflects the reweighting of the business to both the digital platform and consumer revenue. Digital advertising revenue growth of 10% was underpinned by growing premium audiences across all mastheads, as well as the benefits of being part of the broader Nine Group. Excluding the impacts of the Weatherzone sale and Events inclusion, Metro Media costs were down by 8%, consolidating previous cost initiatives.
EBITDA increased by 13% to $44m, pre AASB16, the seventh consecutive half of EBITDA growth for the Metro Media business.Other key components of Digital & Publishing together contributed revenue of $57m, and EBITDA of $3m impacted by softer conditions in the broader digital display market.
Stan
During the half, Stan grew its active subscriber numbers to more than 1.8m currently. The combination of ongoing subscriber build and the $2 price rise from March 2019 underpinned the 79% increase in Stan’s revenue across the half. Further investment in content and marketing contributed to the 18% increase in costs. In combination, EBITDA improved by $35m, for an H1 total of $14m.
Stan continued to consistently build subscribers across the half - driven by the expansion of the Group’s Iconic Series, led by new content from Fox/Disney, as well as Stan’s biggest summer of originals. Average weekly viewing hours per subscriber increased by more than 25% over the important summer weeks (December → present).
MORE HERE:
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It’s contradictory they say or hint this, as they’ve just signed an output deal with NBC Universal! Although that includes 9Now and possibly Stan, which I take it aren’t included in the “$100m cuts” which is just for broadcast TV.
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Could the $100 million cuts affect Nine’s collaboration with the BBC (nature documentaries) though? Nine has apparently lost the Disney movies and shows (besides Star Wars) with the establishment of Disney+.
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I think someone here mentioned there hasn’t been a single Disney distributed show/movie on any Nine channel in many weeks, so seemingly yeah it seems something happened there.
Could Nine have been upset with Disney and not continued a broadcast deal? Although they definitely knew Disney+ was coming.
But if they haven’t continued with any Disney rights, isn’t that a big financial saving ready?
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Presumably the deal with Studio Canal for old British movies that are shown on 9Gem is fairly cheap, so Nine would probably continue with that as they need content for 9Gem? 9Gem, 9Go! and 9Life are full of overseas content. Is it all cheap because it’s on multichannels?
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Hugh Marks has hinted the $100 million worth of cuts will happen as the company moves into the new North Sydney headquarters.
The new building for Nine in North Sydney should be finished in September. It is now 80% leased:
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If there are plans to move Nine Radio from Pyrmont to North Sydney, surely it’d make sense to merge the TV and radio newsrooms or at the very least, keep both very close to each other?
So are we expecting the move to happen in September or a bit after that?
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Presumably fitout will take a couple of months at least?
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If Nine lets go of certain sports rights, couldn’t someone else just purchase them? They wouldn’t necessarily disappear from FTA…
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Nine might have access to the building earlier. I would say the below levels would be completed by July.
They have had access for a few weeks now. Fit out is well and truly underway, with some sections already completed.
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Majority shareholders are Nine and News, with Seven having a minor interest. The options are to massively reduce staff or shutdown the company, the SMH is claiming. If AAP is shutdown Australian Community Media will lose a lot of the content for its newspapers, I think.
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We saw what happened in New Zealand when the press agency NZPA shut down in 2011.
If AAP does close, Nine and News will lose much content especially in sports. (I notice Herald Sun used AAP reports for A-League matches in Melbourne and an AFLW game in Bendigo at the weekend when the paper could have sent a reporter to cover them, but didn’t bother to). Foreign agencies like Reuters don’t always cover overseas sporting events which have Australians competing, so it’s up to AAP to report it to provide an Australian perspective.
Nine has much to lose as SMH and The Age don’t have reporters present in every state and territory, so a national news syndication service is vital.
Could Nine and News agree to share general news stories, I wonder?