2022 saw Australia’s major free-to-air television network Nine Entertainment (commonly known as Nine) hit with economic head-winds, resulting in a profit decrease by approximately 25% as per the company’s latest financial year report. Nine has a suite of Broadcasting and SVOD services under its umbrella which includes Stan, an SVOD service, 9Now, an AVOD platform also serving as a catch-up service, as well as its staple Free TV channels “Nine”, “9Go!”, and “9Gem”. Stan saw its revenue and profit rise over the last year alongside a 4% increase in subscribers to approximately 2.6 million. This was majorly attributed to Nine’s strategy of increasing the subscription prices for Stan’s Standard and Premium plans by up to 14%.
Over the last couple of years, Nine has benefitted from large multi-year volume deals with major US studios which helped with increasing its profitability and number of subscribers. Stan signed a multi-year content deal with NBCUniversal in August 2020 which included Stan obtaining the first-window rights of productions from Sky Studios, NBCUniversal International Studios and all the new content produced for Peacock. Following this deal, most of the US and UK TV Show First Season First Window content on Stan comprised of the shows distributed by NBCUniversal, hitting a peak of 61% in the 2021/22 TV Season.
NBCUniversal’s own plans for D2C in Australia, coupled with a large price proposed price increase, blocked this deals renewal in 2022. The studio had a clause in the content agreement allowing early termination within six months were they to decide to launch Peacock in Australia. After unsuccessful negotiations, NBCUniversal entered into the same agreement with Nine’s competitor, the Pay TV operator Foxtel. Failure of these negotiations left a huge gap in the content slate for Stan, with Stan shifting its strategy from licensing content to commissioning content.
Show Tracker reveals that Nine has had the highest number of first-window premieres of the US, UK and UK/US Co-production Scripted TV Shows in Australia, since the 2018/19 season. This has been on the back of Nine having multi-year content deals with major US studios such as the one already mentioned with NBCUniversal, but also with Warner, Sony, Lionsgate, and MGM. Stan renewed its content deal with Sony last year, as well as with Lionsgate this year, which will allow Stan the first window premiere rights to their scripted drama content in Australia.
Nine is changing its longstanding strategy and moving towards alternative strategies to fill in the gaps left by NBCUniversal. They have been approaching major Hollywood producers and looking to commission movies and tv shows directly and owning them rather than having to buy the rights and relying majorly on output deals from Hollywood studios in a bid to increase their Originals slate. This strategy has been working well for Nine as Stan commissioned TV Series like Black Snow, Ten Pound Poms, and Totally Completely Fine attracted strong viewership for Stan and were among the key drivers of performance for Stan over the last financial year. With Foxtel entering into an output deal with NBCUniversal, and the acquisition opportunities arising from strategic shift by Hollywood studios from D2C model to other content licensing models, it will be interesting to see how Nine adapts its strategy of acquiring premium scripted content.
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