CEO Hugh Marks on Nine Entertainment Co’s results

Married’s momentum, overseas content, drama spend, 9Now potential

During a discussion with Mediaweek after its half-year results, Nine Entertainment Co chief executive Hugh Marks noted he would have liked to report higher profitability. However, he noted the recent change in momentum and how that could impact future results.

As the company exits the Warner Brothers content deal (see below), Marks told Mediaweek US content still had a role to play for a FTA broadcaster. “It is a much different role than it played in the past. We would have liked a few more viewers for new US series Lethal Weapon, but it’s not a bad show and we can play it again. We are not unhappy with it. We still get the US movies which play an important role on the multichannels and the primary channel on certain nights.”

The big change for Nine at the start of the survey year is the effect Married At First Sight has had and how it has built momentum for the channel. “It shows that Nine is constantly reinventing itself and refreshing the programs and the schedule. If we can keep that philosophy across the year and deliver high quality content, then that momentum will continue.

“I cannot overstate the difference in performance between this year and last year and how our whole schedule has delivered, not just Married At First Sight. If that continues across the first quarter that is worth a revenue share point, which is a huge result for us.”

Nine is sticking with the 2017 schedule it showed off toward the end of 2016, in itself a rare event for FTA broadcaster. “It has been the propensity of FTA broadcasters to hold back information in case the opposition sees it. The competition is now very different from what it was in the past. If we want to get on an advertiser’s schedule we need to be talking to them a lot earlier than we have in the past. I imagine we will do the same again this year.”

As to Nine’s partnership with Fairfax Media on Stan, we asked Marks if there was much Nine could do with Fairfax beyond that.

“They have been very strong partners. Whether that extends to other things…we are always open to opportunities and we will always consider Fairfax as we would others.”

With the renewed success of reality TV at Nine, and elsewhere, this quarter, could this have an impact on the amount of drama being commissioned? “Drama has a fantastic catchup profile and remains an important part of our business. Drama is harder to get away on linear FTA TV, but our success with Doctor Doctor in 2016 goes against that trend. The model now is content cost with a revenue opportunity across all platforms.”

NEC’s chief commercial officer Michael Stephenson told Mediaweek recently about making it easier for buyers to buy all the audience watching the one show on different platforms. He told Mediaweek this week: “It remains a focus, but I am not sure if we are as advanced as we would like to be. 9Now is a significant part of our proposition and the audience numbers are growing. We now need to work on the ad serving capability to make it a better experience for consumers and brands.”

Where advertisers get a big lift from multiplatform viewing is when they are integrated into a program, particularly a format like The Block in Nine’s case.

Warner Bros Content Deal

Nine has had an ongoing conversation about ending its output deal that gave it access to life-of-series rights to as many as 20 different programs, some of which weren’t currently screening on the network, said Marks. “We had an idea of what the value of that deal was so we could put a fence around it knowing what our obligation was. Because of that closure we are now able to present a result that reflects the business now and what it will be in the future.”

NEC has provisioned $85m to exit its life-of-series obligations on a list of US dramas and comedies with Warner Bros. The associated cash payment will be made over FY18 and FY19.

“We still have some Warners’ product including The Big Bang TheoryTwo Broke Girls and a few other shows.”

During our interview, Marks also mentioned the recent launch of the Suncorp Super Netball competition. “In the first year we have managed to set every target we set so far. Advertisers have taken a punt on the proposition and after just a short time they are very happy.”

NRL on Nine

With the NRL season under way, Stephenson told Mediaweek that Nine is in very good shape when it comes to monetising the rights. “We have a full suite of major partners and sponsors including new advertisers coming into the code.”

MORE: Meet the new face of Nine’s NRL coverage

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