Nine Entertainment to buy into youth market

Nine Entertainment has agreed to buy 66 per cent of youth-focused brand Pedestrian.tv for about $11m as traditional media chases young millennials.

Nine Entertainment has agreed to buy 66 per cent of youth-focused brand Pedestrian.tv for about $11m as traditional media chases young millennials more likely to be found on social networks than watching television.

The controlling stake represents a chance to reach the most sought after and hard-to-reach demographic; distracted young men and women.

While financial details were not disclosed, the deal would value the youth-focused online media company at about $16.5m.

Pedestrian.tv claims to have about 200,000 subscribers among 16 to 35 year-olds; a small audience in comparison to the millions of viewers Nine Network pulls in during prime time viewing through reality shows such as The Voice.

But it doesn’t matter that Pedestrian.tv has relatively low audience numbers because it is not reliant on traditional cost-per-thousand advertising.

The majority of the company’s revenues are generated from sponsorships with partners such as Telstra, Lion Nathan, Intel and Mini, which sell in the $60,000 to $100,000 range.

The business also makes a portion of its revenue acting as an advertising agency through activities like video production.

Founded by Australian entrepreneurs Chris Wirasinha and Oscar Martin, Pedestrian.tv made an operating profit of about $1.5m last year.

The move continues Nine’s corporate agenda of making strategic investments in the fast-growing digital media sector.

Executives are said to have been impressed by the founding duo’s marketing skills, and have no plans to seek control across content, operations and sales. It’s understood Nine recently ran the ruler over Sound Alliance, which targets the 18 to 29-year-old audience through websites such as FasterLouder, inthemix, and The Hype Machine.

After starting the business in their parent’s homes before moving to a location in Sydney’s inner city suburb Surry Hills, co-founder Martin said the “wild ride” had only started.

For Pedestrian.tv, the investment will allow the company to invest in content across platforms including digital, mobile, and online video.

After a challenging first year as a newly listed company, shares in Nine have performed strongly this year, adding 9.42 per cent in the last three months. They gained 2.43 per cent, or 5c, to $2.11 yesterday.