CEO Hugh Marks Admits Nine Had “Disappointing” Year, Predicts Drop In 2017 Ad Spend

CEO Hugh Marks Admits Nine Had “Disappointing” Year, Predicts Drop In 2017 Ad Spend
SHARE
THIS



Speaking at the Nine AGM this morning, CEO Hugh Marks expressed disappointment in Nine’s performance this year, which came off the back of two major issues facing the broadcaster.

CEO Hugh Marks singled out these two issues as, “A soft free to air advertising market, and our own weaker than planned FTA ratings performance.

“While we worked hard on our cost base, we weren’t able to absorb both impacts, resulting in a disappointing performance at the bottom line.

“As much as our performance in FY16 was impacted by the overall market, it was impact by our own disappointing share. Share is something we can directly control.”

But Marks said 2016 was the year they made new progress to reshape the business to put them “in a good stead for the years to come”, citing 9Now digital platform, the SVOD venture with Stan, launching fourth channel 9Life, and locking in long term broadcast rights for NRL through to 2022.

“Both our digital and broadcast businesses are currently investing in leading edge ad management systems that will ensure maximisation of yield and efficiency of delivery for our advertisers. We expect both systems to be operational before the end of this financial year.

“In terms of the financial outlook for FY17, it would be fair to say that the advertising market continues to be short and difficult to predict. After a Q1 market decline of around four per cent it appears likely metro FTA advertising revenue will be down in the low single digits for FY17.”

Marks committed to having at least 50 per cent more premium local hours in 2017, along with a continued investment in its digital publishing business, adding more verticals into the existing mix and enhancing “monetisation of this content including across video and mobile”.

“The ownership and exploitation of content rights will be a key priority in the current year and in the futire with a number of key owned content franchises being available for exploitation in 2017.”

Marks spoke to the six per cent dip in group revenue for the year to June 2016 off the back of a “weaker FTA market and Nine’s lower share”.

Marks added the group paid a four per cent final dividend taking full year dividends to 12 cents, making it a payout of 86 per cent. Nine also sold the stake in Southern Cross for a $30 million pre-tax profit, with Marks saying “our balance sheet remains solid”.

“This will become more pronounced as we work through calendar 2017 with proceeds from the sale of the Willoughby site and recoupment of our previous NRL payment across calendar 2017, offsetting the recent prepayment relating to the new agreement.”

Looking at divisions, Marks also noted TV revenue was down seven per cent, metro FTA markets were down by two per cent, and regional down six.

“Nine’s slow start to the 2016 season resulted in a 37 per cent share of metro revenues for the 12 months to June, in line with the guidance we provided in April. Other revenues include those from the NRL simulcast arrangements with Foxtel.”

Chairman Peter Costello also conceded to the network not boasting the best start to 2016, but that it’s recovered as the year progressed, despite licencing issues hindering FTA.

“Our Free To Air business has successfully overcome a slow start to the 2016 ratings year, with consistent post-Olympic victory across all of its key demographics and the promise of further incremental local premium content for 2017,” he said.

“Of course, licence fees remain a key cost of the business. While we welcomed the reduction… our licencing regime remains unfair to Australian broadcasters. Not only does the Australian FTA industry remain liable for [consumption] taxes but of course it has local content and production requirements as well.

“The licencing regime is anachronistic, it was conceived for a media world that has passed and is out of step with arrangements in other comparable markets.”

Costello stressed that “re-addressing Australia’s licence fee regime” is the most pressing issue facing FTA right now, with international benchmarks the key to creating a fair playing field.

He also insisted that Nine would remain supportive of wider media reform that would allow “local industry to evolve without artificial barriers”, claiming it would “seek out commercial opportunities where they present themselves”.

Harking back to the wildly controversial issue the 60 Minutes incident in Beirut in April, Costello added, “Following this incident, NEC commissioned an extensive independent review of the events leading up to the incident to ascertain what had gone wrong and what should have been done better.

“We have subsequently committed to enhanced processes relating to story selection and approval, how we approve contracts and payments, and the way we conduct risk assessments.”

 

 

Please login with linkedin to comment

Latest News

West Australia Gets Its First Influencer Marketing Agency TIA
  • Marketing

West Australia Gets Its First Influencer Marketing Agency TIA

Western Australia’s first dedicated social influencer marketing agency will launch next week to service the State’s new and rapidly growing digital industry. Social media influence is no longer reserved for celebrities and socialites. Everyday West Australians are creating genuine and authentic blogs, Instagram accounts and Facebook pages that are closely followed by thousands, if not […]

One-on-one With Marie Claire Editor Nicky Briger
  • Media

One-on-one With Marie Claire Editor Nicky Briger

Following the launch of the revamped marieclaire.com.au, editor Nicky Briger spoke to Magazine Networks about all it can offer readers. In September, Pacific Magazines unveiled an all-new digital experience for Marie Claire. Led by design thinking, the new look marieclaire.com.au was crafted to provide a better reader experience across all devices. It’s a testament to […]

Women’s Health Unveils Its New Premium Digital Experience
  • Media

Women’s Health Unveils Its New Premium Digital Experience

Pac Mags’ Women’s Health has unveiled an all-new premium digital experience. With a faster, cleaner, more intuitive and visually consistent brand experience across all devices, the new look is designed to optimise the user’s journey with less clutter, discoverable content and seamless integration for commercial partners. Will Everitt, head of product and technology said: “The digital evolution of […]

Digital Agency Inlight Secures Two Key Client Wins
  • Marketing
  • Technology

Digital Agency Inlight Secures Two Key Client Wins

Independent agency Inlight has announced it has won the digital account for Benetas, a not-for-profit aged care provider in Victoria. Following a competitive pitch process, Inlight was chosen to handle Benetas’ new website design, build and ongoing optimisation. Richard Barker, marketing manager at Benetas, said: “We wanted an agency that could be our true digital […]

AMI Awards 2017 Winners Revealed!
  • Marketing

AMI Awards 2017 Winners Revealed!

With almost 30 awards handed out, B&T predicts plenty of numb bottoms at last night's AMI Awards in Melbourne.

Clems Sydney CEO Andy Pontin Quits
  • Advertising

Clems Sydney CEO Andy Pontin Quits

Sure, B&T flashed the news of Andy Pontin quitting this morning. White lies aside, he's actually still got six months.

by B&T Magazine

B&T Magazine
Adobe MAXes Most Creatives In A Room Record
  • Advertising
  • Media

Adobe MAXes Most Creatives In A Room Record

B&T's journo is reporting live from the annual Adobe Summit in Vegas. Although, "reporting" is somewhat of a stretch.

Opinion

by David Hovenden

David Hovenden
Digital Women’s Network & The Australian College Of Marketing Unveil Latest Short Courses
  • Marketing

Digital Women’s Network & The Australian College Of Marketing Unveil Latest Short Courses

The Australian College of Marketing is collaborating with the Digital Women’s Network to bring new short courses aimed to provide the latest skills across all aspects of the Digital landscape, kicking off in Melbourne and Sydney in 2018. Course content will focus around various topics related to the digital marketing landscape. All courses will run […]

Man working at office desk, looking at computer and scratching head
  • Technology

Where Are Digital & Tech Skills & Salaries Headed?

The rapid pace of technological change in the digital sector is seeing demand for those with the right skill sets outstrip availability, both locally and globally. The individuals who have kept their skills up to date are being well-rewarded financially. Now, Digital + Technology Collective’s expanded annual Skills and Salary Survey will put some numbers and context […]

Disney & ESPN Unify Sales & Partnerships Teams
  • Advertising
  • Marketing
  • Media

Disney & ESPN Unify Sales & Partnerships Teams

Disney and ESPN have formed an even closer bond, announcing a new alignment of the two properties through their media sales and partnerships teams. Instead of entering through three doors, Disney ESPN Media Sales & Partnerships will give media buyers and marketers a refined, singular point of entry for Disney, ESPN Digital and Maker. Nik […]

by B&T Magazine

B&T Magazine
Sydney Start-up Muzaara Partners With Commission Factory To Turbocharge Digital Ad Spends
  • Advertising
  • Marketing

Sydney Start-up Muzaara Partners With Commission Factory To Turbocharge Digital Ad Spends

Sydney-based adtech start-up Muzaara has announced a new strategic partnership with performance marketing platform Commission Factory. Together, Muzaara and Commision Factory are providing SMEs with a secret weapon to skyrocket their online brand visibility and effectively manage and maximise their online advertising campaigns. This partnership will allow both online marketing companies and their impressive roster […]

Kellogg’s Creates AR Halloween Trick Or Treat Experience Via Shazam & Orchard
  • Campaigns
  • Marketing
  • Technology

Kellogg’s Creates AR Halloween Trick Or Treat Experience Via Shazam & Orchard

Breakfast cereal manufacturer Kellogg’s has joined forces with Shazam and digital agency Orchard to deliver a first-of-its-kind augmented reality (AR) Halloween Trick or Treat experience for families. The campaign, which leverages Shazam’s visual recognition platform and recently-launched AR platform, sees Kellogg’s pilot the replacement of physical gifts in cereal packs with a digital experience that […]

Kraft Heinz Appoints Cummins&Partners As New Creative Agency
  • Advertising

Kraft Heinz Appoints Cummins&Partners As New Creative Agency

Kraft Heinz today confirmed the appointment of Cummins&Partners as its new Creative agency after an extensive pitch process. They will be responsible for brand strategy and integrated creative across the expanding Kraft Heinz portfolio including Kraft, Heinz and Golden Circle. A Kraft Heinz spokesperson said: “After an exhaustive search involving a competitive pitch, we have made […]

Patrick Delany (CEO, Fox Sports), Hugh Marks (CEO, Nine Entertainment Co), Miranda Devine (Columnist, News Corp), Michael Miller (Executive Chairman, News Corp Australasia), Grant Blackley (CEO & Managing Director, Southern Cross Austereo) at Radio Alive 2017
  • Media

Media Bosses Weigh In On Ten-CBS Deal

Do you enjoy articles featuring industry big-wigs? Well, it doesn't come much bigger and wiggier than this, we say.

by B&T Magazine

B&T Magazine
Kantar TNS’ Ali Dexter Joins T Garage As Director Of Insights & Strategy
  • Marketing

Kantar TNS’ Ali Dexter Joins T Garage As Director Of Insights & Strategy

Melbourne-based market research consulting agency T Garage has announced the appointment of Ali Dexter as its director of insights and strategy. Dexter joins T Garage from Kantar TNS, where she was the director of its Qualitative division. Prior to that, Dexter held a number of senior roles at Kantar TNS in the US and Vietnam.  “After […]

XXXX on Tuesday, March 21, 2017, in Las Vegas. (Jeff Bottari/AP Images for Adobe)
  • Advertising

Adobe Releases Advertising Cloud App

Not one, but two Adobe announcements. The tech elves have been busy this week, not that we're inferring Adobe is Santa.