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

Attention! B&T’s Inaugural Bootcamp Launches!
  • Advertising
  • Marketing
  • Media
  • Technology

Attention! B&T’s Inaugural Bootcamp Launches!

B&T announces its new industry bootcamp! And, if you're like us & didn't know anything about it, all's revealed here.

by B&T Magazine

B&T Magazine
Brand Safety “Considerably More Complex” Than The Industry Thinks: Inskin Media GM
  • Advertising
  • Marketing
  • Media

Brand Safety “Considerably More Complex” Than The Industry Thinks: Inskin Media GM

The relationship a reader has with a publisher has far more impact on the effectiveness of online ads than the surrounding editorial content, according to a new study, which suggests some concerns around brand safety may be misunderstood. The study – by Inskin Media, Research Now and Conquest Research – compared the conscious and subconscious […]

Nova’s ‘Kate, Tim & Marty’ Show Goes Regional
  • Media

Nova’s ‘Kate, Tim & Marty’ Show Goes Regional

Nova has announced that its Kate, Tim & Marty drive show will expand its reach beyond the metropolitan market to be syndicated across 48 regional stations from today. Kate Ritchie, Tim Blackwell and Marty Sheargold, who won the Best On-Air Team (Metro FM) trophy for the second year running at the 2017 Australian Commercial Radio […]

Over 50s Insurer Apia Unveils New Work Via DDB Melbourne
  • Campaigns

Over 50s Insurer Apia Unveils New Work Via DDB Melbourne

Apia takes a look at the real-life, relatable moments over 50s experience with its new campaign via DDB Group Melbourne. For 30 years Apia has been designing products and services for Australians over 50. This new Home Insurance, Health Insurance and Multi-Policy Discounts campaign aims to speak to people in a way that’s refreshing, relatable […]

Facebook Makes Another News Feed Change
  • Media

Facebook Makes Another News Feed Change

Social media behemoth Facebook has announced its second major update for News Feed to make sure the news people see, while less overall, is high quality. This week, Facebook announced that the platform will launch a small test in the US focused on prioritising news from publishers that users find trustworthy. Facebook is also exploring ways […]

Domain Boss Antony Catalano Exits
  • Media

Domain Boss Antony Catalano Exits

Mystery surrounds Domain boss's surprise exit, although the Mystery Machine nor a talking dog not spotted at Fairfax.

PHOTOPLAY Offers A Ghost Train Ride Like No Other At Sydney Festival
  • Media

PHOTOPLAY Offers A Ghost Train Ride Like No Other At Sydney Festival

Jasmin Tarasin, director at boutique production company PHOTOPLAY, is inviting invites audiences to take a trip through the inner-workings of the mind in ‘Ghost Train’, her latest multi-sensory VR project set to feature at this year’s Sydney Festival. Working in collaboration with musician and co-creative director Jonnine Standish, Tarasin’s uniquely immersive ‘Ghost Train’ is a […]

March One To Rebrand Fundraising Institute Australia
  • Marketing

March One To Rebrand Fundraising Institute Australia

Independent advertising and branding agency March One has been appointed to oversee the rebrand and repositioning of Fundraising Institute Australia (FIA). FIA is the national peak body representing professional fundraising in Australia. It was established to advance advocacy and professional standards, and has identified the need to better promote its role as the industry self-regulator, […]

Victorian Government Launches VR Bushfire Experience Via The Fuel Agency
  • Advertising
  • Campaigns
  • Technology

Victorian Government Launches VR Bushfire Experience Via The Fuel Agency

As part of its summer fire campaign, the Victorian government has launched a virtual reality (VR) bushfire experience and content series via The Fuel Agency. The VR experience places the user in the midst of a large bushfire, and is designed to encourage people to leave early on high-risk days before it’s too late. The […]

Local Ad Tech Company VeNA Partners With RugbyPass
  • Advertising
  • Media
  • Technology

Local Ad Tech Company VeNA Partners With RugbyPass

ad tech company VeNA has signed an exclusive reseller partnership covering Australia and New Zealand with digital rugby network RugbyPass. Across Asia and parts of Europe, RugbyPass is the exclusive digital rights holder and over-the-top broadcaster for live rugby, including the Super Rugby, the Rugby Championship and autumn internationals, the Six Nations, the Aviva Premiership, […]

SpotX Appoints Gavin Buxton As Asia MD
  • Advertising

SpotX Appoints Gavin Buxton As Asia MD

Video advertising platform SpotX has announced it has appointed Gavin Buxton as managing director of Asia to lead the company’s expansion in the region. Buxton has over 17 years’ global experience in the digital advertising space, having worked in leadership roles at tech and publishing companies, including Microsoft, Turner Broadcasting, and LinkedIn, with the last […]

Big Mobile Doubles Down On Ad Tech & Rebrands
  • Advertising
  • Technology

Big Mobile Doubles Down On Ad Tech & Rebrands

B&T Awards 2017 finalist Big Mobile has unveiled a fresh look to reflect its new ad tech credentials. The company successfully pivoted its business from ad network to mobile ad tech vendor when it announced a joint venture (JV) with Widespace in October last year. As a result of the business changes, Big Mobile wanted […]

March One Appoints New Senior Account Manager
  • Advertising

March One Appoints New Senior Account Manager

Independent ad agency March One has appointed a fresh face to the team, with Melanie Tozer to reinforce its mission to put humans first as a senior account manager. Tozer (pictured above), an up-and-coming talent from New Zealand, will align her extensive experience in FMCG marketing with March One, having worked on accounts for Bunnings […]