The underlying total TV advertising market remains challenging with the December quarter decline after the Olympics boost, according to Nine Entertainment.
In the September quarter, Nine’s total TV revenues grew by about 15%, reflecting the impact in July and August of the Olympics and Paralympics.
However, since then the market has since reverted to the rate of decline of the 2024 financial year, about 10%.
“While we remain more optimistic about the second half of FY25, we are seeing no tangible signs of improvement to date, the company said in a trading update.
The media group, like other Australian players, has been hit by a stubbornly weak advertising market.
Nine told shareholders at its AGM the company was continuing to focus on costs and efficiency of the television business.
However, total TV costs, ex-Olympics, are expected to be marginally higher in the current financial year. This includes a step-up in tennis rights under the new Australian Open contract.
“Ongoing cost initiatives across Total Television are helping to absorb inflationary costs, as well as our material investment in technology, including cyber security,” the company said.
Stan’s paying Entertainment and Sport subscribers performed strongly in the September quarter, with better-than-expected post Olympic/Paralympic churn to date.
Nine expects another year of growth at Stan, with revenue, driven primarily by ARPU (average revenue per user), expected to more than offset higher costs.
Nine’s Publishing business continues to benefit from a focus on quality, differentiated journalism, with digital subscription revenue growth of 14% in the September quarter, slightly ahead of earlier expectations.
However, with the absence of digital platform revenue from Meta, revenue and earnings from Nine Publishing are expected to be down this financial year.
Radio advertising revenues grew by around 6% in the September quarter, supported by strong growth in digital and with an increasing contribution from live audio streaming.
“On a longer term basis, continued growth in digital subscriptions coupled with an ongoing focus on a sustainable cost base, is expected to lay the foundations for increasing underlying profitability for the mastheads,” the company said.
“Nine is very focused on expediting the evolution of its business - continuing to invest in premium content, supporting the growth areas and improving the efficiency of our cost base.
“To this end, we are accelerating our strategic transformation program that covers the re-setting of Nine’s operating model, focusing on business improvement and encompassing the cultural priorities.
“The media industry is evolving quickly, and we need to similarly expedite the evolution of our business. We have the right assets, but need to ensure they work together more effectively and with a clearer focus on our competitive strengths of premium content and data.”
Nine posted a 31% fall to $134.9 million in net profit after tax for the year to June in a challenging market. Revenue was down 3% to $2.6 billion. Total TV revenue fell 10% to $1.13 billion over the full year.
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