The chief executive officer of streaming platform Stan, Mike Sneesby, visited the Mediaweek PodcastOne studio this week.
Interviewing him were Mediaweek’s James Manning and Andrew Mercado.
Stan recently came under 100% ownership of Nine Entertainment Co and Nine chief executive Hugh Marks told Mediaweek last month that they were targeting 3m subscribers for Stan.
Sneesby agreed with that target, but he did admit that Marks might, sensibly, be a little conservative in his forecasting for the business that is now generating annual revenues over $200m.
Here are some of the interview highlights.
Stan’s brand recognition
Sneesby: “Our name is Stan, but our brand is everything that we take to the consumer – by that I mean the content most importantly, and how people engage with our content, our platforms and our applications and the places where people can reach us. An important part of that is our original production slate and what we do with a true Australian built and growing streaming service.
“We are very proud of that brand recognition and it has been a long journey and there was a tipping point. We passed the 1 million active subscriptions mark around the end of the last financial year and we really felt the momentum in the network. People were talking about our content in day-to-day conversations. People were going to work and they talk about Billions or this week’s premiere of Ru Paul’s Drag Race.
They were talking about Bloom over the summertime. They were talking about the deal with Disney.
With 1.5m subscribers, what is your conversation rate at turning a free trial subscriber into a paying customer?
The model that Stan has is very similar to the Netflix model in that we have a 30-day free trial. Our conversion rate has been quite consistent over the journey and we’re converting around 75% of people. So about three quarters of all subscribers who takes up a free trial become a paying subscriber. And that metric for us, based on international benchmarks that we’ve seen, is a very strong metric. A lot of it has got to do with the fact that we are a local trailblazer. We didn’t have the brand awareness that Netflix had back in 2015 and so the consumer expectations of us were a little bit lower. What you find is people, ever since we launched the service, who have signed up go, ‘Wow, I’m really surprised. I didn’t think it was going to be that good.’
Compared to some of the internationals, we have a better conversion because we tend to beat the expectation of what consumers have in their head.
[What about Hugh Marks’ idea of a potential for 3m subscribers?]
I think that’s right. I also think it’s conservative. He probably would have said the same thing. If you look at the household population in Australia around nine plus million, getting to a 60% plus penetration of that in terms of households, is extremely realistic. If you have a look at where the US is already, some of the numbers in the US are pointing more towards 80% penetration.”
Stan Australian originals
“We are really proud of all of our originals. Bloom specifically has been a huge success for us in terms of its premiere viewing. The January 1 premiere date for Bloom has become our biggest ever day for sign ups of subscribers. The audience and the consumers love the idea of it. They’ve signed up for it and they’ve watched it in their droves. To be able to land legends like Jacki Weaver and Bryan Brown is honestly a dream come true. You think about what we were doing four years ago when we started this service.”
Revenue from Originals
Our revenue model is we want people to be subscribed to our service and we want people to watch as much content as they possibly can. Getting a show that appeals very strongly to a narrow audience in some ways is more important than a show that appeals to a broad audience because we don’t have advertising on Stan.
The size of the audience doesn’t matter. What matters is that we get a really strong following of people who will be prepared to sign up to our service for a particular show. And what we inevitably see in that number that I mentioned before – about 75% of people choosing to continue on as a paying subscriber once they come on. They also get immersed in the breadth of content that we have and continue to enjoy that.