Nine’s Stan Looks Set To Turn A Profit But Disney Threat Looms

Nine’s Stan Looks Set To Turn A Profit But Disney Threat Looms
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Nine’s streaming service Stan is on the brink of becoming a significant money-maker for the company, according to recent financial results.

After reaching the milestone of 1.7m subscribers (Netflix has about 5m in Australia), Stan delivered Nine $157.1m in revenue in the last financial year, up $60.3m from the year prior.

The problem for the network is this was offset with $178.4m in costs, meaning Nine posted an earnings loss of $21.3m on Stan.

This was still a 56 per cent improvement on FY18 and Nine is bullish this upwards trend will soon translate into profitability.

According to Nine, although it operated at a loss across the entire year, the service was profitable for the second half, led by a $2 monthly price increase for subscribers introduced in March and the roll-out of exclusive programming like Who Is America.

“Growth in digital and publishing and the move to profitability through the second half at Stan enabled us to grow Nine’s EBITDA year on year, giving us further confidence that we are investing in the right content and technology for the future of our business,” said Nine CEO Hugh Marks.

Nine also made a $93m gain on the consolidation of Stan, after completing the high-profile acquisition of Fairfax, which previously had its own stake in the platform.

But Stan’s newfound financial success comes at a precarious time for streaming services in Australia.

Disney announced this week its long-awaited Disney+ service is now less than 90 days away from arriving on Australian screens.

While Nine partnered with Disney ahead of the holiday season last year to bring Disney content to Stan, no details were provided on how long this agreement was to be in place for.

Nine-owned publication Lifehacker has reported this deal is set to expire in October, just before Disney+ arrives.

This opens up the possibility of Disney content being taken off Stan completely. However, there is also a chance Stan could become Disney’s official partner for the service, giving Disney+ access to a pre-existing audience.

Reports have also suggested Foxtel, Telstra, Optus/Fetch TV, Woolworths and Coles have all put their hat in the ring to partner with Disney.

Disney+ will be just one more player in an increasingly crowded Australian streaming market.

Apple TV+ – which Roy Morgan has predicted could reach 17m Australians – is expected to launch globally in May next year, joining Netflix, Foxtel, Stan, Hayu, Amazon Prime Video and by that stage Disney+ in the Australian market, meaning consumers will have to choose carefully where they spend their video streaming subscription dollars.

Stan has this week signed a long-term agreement with Viacom-owned Paramount Pictures Mission: Impossible, Top Gun, The Godfather Trilogy, the Transformers and Star Trek to the streaming service, as well as upcoming television shows.

 

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