In a continued sign the free-to-air players are having a tough time of late, Nine Entertainment this morning released its third quarter revenues that showed they were down 11 per cent from this time last year.
Dow Jones is reporting that the result is due to weaker than expected TV ratings and subdued advertising demand all of which creates a big headache for new CEO Hugh Marks. A lacklustre summer of Test cricket against the New Zealand and West Indies sides and the disastrous results of Reno Rumble are the main sources of blame.
However, 2015’s revenues in the third quarter were inflated by last year’s Cricket World Cup in February.
The network has downgraded its guidance for the free-to-air advertising market and now expects a rating share of 37 per cent (in a clear concession to rival Seven).
In a statement to media this morning, the Newtwork said: “The advertising market in the March quarter remained subdued. Nine’s ratings during the period were softer than anticipated, which has impacted FTA revenue share. In particular, Nine’s Summer of Cricket was adversely impacted both by the weather and the standard of the competition, with c30% of scheduled play days lost.
“For the quarter, Nine’s Television revenues were down c11 per cent, against Q3 FY15. This was also impacted by the earlier timing of Easter this year and the absence of the Cricket World Cup event.
“The free-to-air advertising market is now expected to record a low single digit decline for FY16, versus our previous guidance of `flat to down marginally’. Reflecting the disappointing ratings start to 2016, Nine’s share is now expected to be c37 per cent for the year.
“Given the revenue environment, the Company continues to focus on all cost lines, with reported TV costs expected to be at least 4 per cent lower across the year, notwithstanding higher-than-expected legal expenses incurred during H2.
“The trends experienced in Digital in the first half, have continued in the second half.”