Hugh Marks, the outgoing CEO of Nine Entertainment, says the company is positioned, with growing digital revenue, to take on bigger competitors.
He announced half year results with a lift in profit from a small drop in revenue, despite the impact of the pandemic. Shareholders also get dividends.
The company has been increasingly gathering revenue from digital rather than print or from linear television.
In the half year results, Nine reported 41% of group EBITDA (earnings before interest, taxes, depreciation, and amortisation) from digital.
The combined contribution from Stan and 9Now, and the digital components of Domain and Nine's publishing ublishing, grew by 53% to more than $140 million. Digital subscriptions were up 20%.
“We've just positioned to participate in the change in audience consumption shift from linear to digital,” he told AdNews.
“It's not rocket science, that's what we set out to do. And we've executed well to that. And we'll execute well to that in the future which means that what we bring to market is different to what our traditional competitors bring.
“And it will enable us in the future to compete more with our new competitors, Google and Facebook.
“So we're well down that path, but the next step will be really starting to compete more aggressively with those guys. And that's a good outcome for everybody because we don't want to just be dealing with monopolies.”
Nine's digital plan:
Marks says he’s always regarded Nine as a content business -- entertainment, news, current affairs and sport -- and not a platform business.
“The entertainment side of business is between Nine, Nine Now and Stan, going really well. Sport now is Stan Sport," he says.
“That's the ability to participate in a cross-platform basis from the rights that we require, is what the business is all about in the future.
“And with news and current affairs you could never have participated, which was digital platforms, so that was critical.”
He says the getting to the news media code with the platforms Facebook and Google, and backed by the federal government, has been a long journey.
“That negotiated arbitrate model is something that we started pushing down with Canberra for a while," he says. "So I feel good to have got to the end of that journey and that puts all the content creators in this business in a place where they can look forward to a bright future.”
And he described the delivery of revenue from the digital platforms as “material”. Nine is still negotiating with Facebook and Google.
Asked about Facebook’s decision to pull news from its platform, a move now reversed after changes to the code, Marks says that's not the way to conduct business.
“But we should look at the outcomes,” he says.
“I think they wanted some changes, which were codifying the way things were operating anyway so we're reasonably comfortable with that.
“So. I don't agree with how we got there but the outcome I think is the right outcome. So I guess we just move forward and we'll engage constructively with a view to finalising an arrangement."
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