Martin Kugeler, who last month became the second CEO of the Australian streaming platform Stan, is keen on a new business model.
Stan’s first pay-per-view event, a boxing match, rugby’s Sonny Bill Williams (the winner) versus AFL’s Barry Hall, has been hailed a huge success even though it lasted only two minutes and cost $50 per person to watch.
The concept emerges as a competitor to the pay-per-view channel Main Event on Foxtel.
Kugeler is “extremely pleased” with the result. “It significantly exceeded our expectations and really we have now become the new home of boxing in Australia,” he told AdNews.
And there’s more to come. The event was a “fantastic start”.
“We didn't know exactly what to expect,” he says. ”We obviously put a lot of effort and work into making this a success. But seeing how successful this can be, this is a new area for us, and based on the feedback, this will become the new home of boxing in Australia.”
And the business came to Stan. Kugeler: “When we launched Stan sport, basically every boxing promoter in Australia knocked on our door and said, ‘Don't you want to do boxing on your platform?’
“We were then really waiting for the right fight and with Sonny Bill Williams and Barry Hall, two really iconic sport figures, and a large following, felt like the right first pay-per-view for us.”
Stan’s core business model is based on fixed costs. The platform buys licensed content at a agreed price then profitability is driven by scale and additional subscribers.
Pay-per-view turns that around.
“We don't really take on any risks by putting on those fights,” says Kugeler. “We obviously invest in marketing, but we don't have to pay a rights fee upfront.
“It’s a way of creating a relatively risk free new revenue stream for Stan based on the assets that we have, our live platform, our subscriber base, our marketing engine.
“That's basically what made it relatively easy for us to move now into this space, without any really additional risks."
Nine’s Stan, started by the media company’s current CEO MIke Sneesby, is a local success story in the highly competitive streaming content world.
In the half year to December, Stan posted a 23% rise in revenue to $183.5 million, with current active subscribers of more than 2.5 million.
Stan’s secret? Kugeler: “The content is obviously the driver that brings people and engages.
“At the same time you need good marketing and make people aware of the great content that you have on the platform.
“The third pillar is that customers expect a seamless experience. People don't even notice that there's a technology behind.
“Content is the biggest cost component that we have. But you wouldn't be able to go to 2.5 million active subscribers and be profitable without having really good marketing and a great platform behind it.”
Have something to say on this? Share your views in the comments section below. Or if you have a news story or tip-off, drop us a line at adnews@yaffa.com.au
Sign up to the AdNews newsletter, like us on Facebook or follow us on Twitter for breaking stories and campaigns throughout the day.