Nine is seeing a larger proportion of its revenue coming from subscriptions, monthly payments that can be forecast with more confidence than the advertising market.
In the media group's latest annual results, subscription revenue went from 28% of the total to 32%.
This is part of the reason Nine is able to confidently give guidance. Nine is expecting group EBITDA of $380m -$400m in the half year to December.
The company said in its resuls announcement: "Whilst broader economic factors are beginning to impact some areas of the market, Nine’s strong competitive position and balance sheet stands us in good stead. We have successfully diversified our earnings base, with more than 30% of our revenue now from subscription and licensing."
In digital, subscriptions and licensing was up 66% to $170.8 million.
CEO Mike Sneesby told AdNews: “We are seeing now, more than ever before, a bigger proportion of our revenue and drivers of EBITDA are coming from the components of our business or revenues in our business that are decoupled from the cycle.
“It is the advertising cycle that is the probably the biggest variable in where we end up, so the decoupling of a large part of our revenue streams gives us greater confidence at this point in the cycle versus prior years.
“And of course, at this point in time, our ad systems are open, particularly in television, right through to the end of the year.
“If you look at any risk to the guidance we've given in that first half, it does remain primarily the ad cycle.”
Sneesby says the reality is the future landscape of media will be a hybrid of subscriptions and advertising.
“The great thing for our businesses is we're in every part of it. We are actually growing and defining those markets.
“We're building those models and we've had great success in doing that. But certainly advertising will continue to be a very important part of the media mix, no matter how the market evolves, and what the ratios look like.”
Chief revenue officer Michael Stephenson says July and August advertising numbers were impacted by the Olympics last year.
However, September through to the end of the year looks strong.
“Notwithstanding the broader economic environment, the ad markets have proven to be pretty resilient. And of course, Nine is growing its share within each of those markets that we operate.”
“You've got a whole range of categories that are continuing to grow. Think about insurance … emerging new categories like home delivery and the like are contributing to a relatively robust market.
“I think the markets are relatively resilient and we're performing well.”
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