Despite a subdued advertising market that saw Nine report flat revenues for the full year to June, the media company is feeling bullish on its future, especially where BVOD is concerned.
9Now revenue was reported to have increased 16% in revenue to 175.5 million in FY23 from 151 million in FY22.
Michael Stephenson, Nine's chief sales officer, said BVOD is an enormous part of the future of the company and a great driver of revenue.
"As we look into the future, we see increasingly 9Now as a part of the digital video market, not a part of the traditional Seven/Nine/Ten subset or quarantined part of the market," he said.
"Our opportunities to continue to grow are endless. If you think about the size of the digital video market being almost three and a half billion, it's growing in the mid-single digits, and within that increasingly you're seeing sport play a major role.
"The product suite that we have within our platform differentiates us from the social video platforms and gives us a massive opportunity to grow into the future."
Stephenson said Nine is "completely optimistic" about the future of the video market and the role that the company can play in it.
"When you think about the big programming moments, whether that's the Australian Open, the NRL, State of Origin, Married at First Sight, The Block and more, in a Total TV sense, those programs and those moments are in growth," Stephenson told AdNews.
"In terms of BVOD more broadly speaking, what's interesting about BVOD is because it's a digital platform and therefore more personalised from a commercial perspective, on a revenue per user basis, the BVOD audience is increasingly more valuable than a linear audience and therefore, it's a combination of BVOD with linear TV television that creates the power couple."
Looking at its Total TV results more broadly - the network said that in CY23, Nine leads the Metro FTA ratings year in the key demographics - Nine CEO Mike Sneesby said that the driver of audience results comes from its investment in content.
"Content is the most visible thing that you see in the driver of audience opportunity, but it's also supported heavily by our investments in product and technology, particularly in 9Now which probably slightly less visible to the obvious observer," he said.
"I think the combination of programming strategy, shifting into areas where we see the opportunity to maximise growth of the BVOD audience alongside broadcasts, means you get those shows that are increasing audience year on year. On a Total TV basis, tentpole programming on Nine is delivering bigger audiences year on year as opposed to declining audiences.
"Behind those audiences, we have the best commercial team in the market who understands the value of audience and you convert that into revenue and you deliver a significant share. It's great content, well executed in the market with great commercial partners that we work closely with and the results today speak for themselves."
Stan revenue increased 12%, jumping to 427.6 million in FY23 from 381.2 million in FY22.
With active subscribers on the streaming service approaching 2.6 million, Sneesby said that although the streaming market has become more crowded over the last couple of years, Stan’s result in delivering growth in revenues and profitability this year is its fourth year of profitability and positive cash flow, which is somewhat rare in either local or international streaming circles.
"Stan has a very strong and sustainable position, new entrants have a big challenge to try and get to scale to generate enough cash to cover the costs of direct to consumer distribution, so there's no doubt that the pressure on those other entrants and potential new entrants to the market has increased and the dynamic is changing," Sneesby told AdNews.
"If you look at the commentary from the international players around the world, they are tending to pull back from direct to consumer and international markets and focus back to the more traditional model of content distribution through licensing to direct to consumer players that are in the local market. That dynamic has certainly played in Stan's favour."
Nine's CEO said that for the next 12 months, there will still be some pressure on subscriber growth given part of the market’s pressure at the moment is coming from the squeeze on consumer spending.
"It's no doubt that consumers are having to stretch their dollar further and that will impact on various consumer spending categories and place a little bit of pressure on the subscriber market, but again, Stan’s in a very strong position in the price increases that they put through late this year, which means they'll see that revenue full year flow into FY24," he said.
"We've got a range of new opportunities that hit the platform this year in terms of the Rugby World Cup, which kicks off later this year, and if you’re tracking what's going on in the US with the with the writer's and actor's strikes, it's likely that Stan, through their original production slate, will gain some competitive advantage in terms of having more opportunity for local content supplied than the other players in the market in Australia, given Stan has the biggest proportion of their slate coming through local originals produced here."
Nine's performance outside of the TV space also made headlines - revenue for the 'Digital (including streaming)' sector of Nine Radio was up 115% from FY22, as Stephenson (pictured right) said that everything that Nine has seen in television over the last couple of years is now starting to happen in radio.
"The combination of live radio, like we've always seen it - our product is talk based and live and local - but in combination with the live stream and podcast audiences creates a Total Audio proposition," he said.
"The launch of Radio 360 earlier this year allowed us to separate the live stream from the terrestrial signal. What you see there is increasingly our audiences consuming our content on a connected device or a smart speaker and that we've got a dominant share in that particular market, where we're a third of the streaming audience.
"That creates some enormous opportunities for us, because even to this point, whilst we have the capability, we haven't started to insert ads digitally into that stream. When you do that, everything you'll be able to do in 9Now you'll be able to do in our live radio stream: utilise our first party data and create more personalised experiences, which we know delivers more effective advertising and delivers better results for brands.
Looking ahead to the December quarter, Stephenson said that as it's very early days, Nine hasn't got a clear line of sight on outlooks yet, but the current quarter is certainly an improvement on July and August.
"When I speak to media buyers they're certainly more optimistic," Stephenson told AdNews.
"We are veering on the side of caution and I think that's the right thing to do as we enter into a slightly stronger market with marginal improvement."
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