Nine Entertainment’s streaming platform Stan records soft growth as interim profit jumps 20pc

Streaming service Stan is looking to original content and live sports, after soft growth for the six months to December.

Nine Entertainment, which is chaired by Peter Costello, has reported soft growth for its streaming business Stan, which the media group relies on to underpin its earnings. Picture: James Brickwood

Nine Entertainment’s streaming platform will look to develop more original content and deepen its investment in live sports, despite Stan recording soft subscriber growth for the six months to December.

The media company’s chief executive officer Mike Sneesby said there were multiple pathways for Stan’s entertainment and live sports divisions to build their respective content slates, notwithstanding the increasing competition in the streaming sector.

Mr Sneesby’s comments came after it was revealed on Thursday that Stan now has 2.5 million subscribers — only a modest increase from the 2.4 million subscribers announced at the media giant’s full-year results last August.

“It isn’t surprising,” Mr Sneesby said of Stan’s soft growth in the first half of this financial year.

“We’ve always seen periods of stronger growth and periods of slower growth.”

In its half-year result, Nine reported a net profit of $213m, while revenue climbed 15 per cent to $1.3bn.

Group earnings before interest, tax, depreciation and amortisation grew 15 per cent to $406m.

Mr Sneesby said Nine would continue to consider investing in “tier-2” sports for Stan Sport.

“Stan’s goal is not to go out and become a ‘super aggregator’ of sport,” he said.

“Our view around sport is that the distribution of subscription sports right in the internet-delivered world is going to far more fragmented than what it has been in a traditional pay-TV environment.

“Stan doesn’t need to acquire all the major sports to be a scalable, profitable business that delivers a great proposition to consumers.

“We continue to look at those sporting opportunities through the lens of commercial return.”

Since August, Stan has invested in Six Nations Rugby, in a $1.5m deal over three years; second-tier motorsport competitions, the ARG SpeedSeries, the little-known Formula E, IndyCar and the World Rally Championship, as well as the mixed martial arts Professional Fights League.

In announcing the company’s half-year results on Thursday, Mr Sneesby declined to reveal how many unique subscribers had signed up to Stan Sport, but he said the platform had enjoyed “solid growth” over the past six months.

Mr Sneesby said the company wouldn’t be rushing into any negotiations over the future broadcasting rights to the Australian Open. Nine has the contract to the grand slam tennis tournament for another two years.

Asked about reports earlier this month that Seven was “in the market” to bid for the rights to the tournament from 2025 onwards, Mr Sneesby said: “We’ll come to the table not just waving a cheque and looking to bid on the highest offer — we’ll come to the table as a partner, looking at the complete opportunity in conjunction with the sporting body.”

Earlier this week, The Australian reported that the next rights deal to the Australian Open could balloon to $100m a year, up from the $60m a year under Nine’s current deal.

Mr Sneesby declined to comment on the report.

The 47-year-old CEO said Stan’s entertainment arm is increasingly looking to secure on-air material from a wider range of suppliers, and invest further in local productions, as some of its content pipelines from overseas distributors dry up.

“More content outside of major studio output deals has become available in the past 12 months than at any time in the history of the business, while we are also creating more originals,” Mr Sneesby said.

“The reality is that the nature of licensed content supply is changing, and our position of strength in delivering local original productions is continuing to grow.”

Nine shares closed at $2.74 on Thursday, up 1 per cent.