Nine’s CEO is upbeat the TV advertising market will show signs of recovery in the first half of 2025 and that Nine is well placed to capitalise after a successful Olympics and growing audiences across its media portfolio. Sneesby also said that Nine has protected its content from being scraped by Generative AI machines, and is in exploratory talks about partnering with one of the major tech players but said that Nine’s use of AI technology won’t replace journalists.
Nine’s revenue and profitability declined in its most recent fiscal year but the media company is confident that a recovery is in sight.
Nine’s CEO Mike Sneesby fronted journalists hours after revealing Australia’s largest media company had posted a revenue decline of 3 per cent to $2.62 billion, and a 12 per cent drop in group profit (EBITDA) to $517.4 million.
Although the results – which have been negatively impacted by the declining TV advertising market – don’t appear rosy, Nine has managed to show resilience in its total TV audience at a time when linear TV audiences are in structural decline.
Coupled with a successful Olympic Games and a looming federal election next year, Sneesby is confident that Nine’s performance in FY25 could improve on what has been a challenging FY24 on several fronts.
“We do expect the ad market to be more positive in the second half of the year over the first half of the year and (there are several) drivers behind that,” he said. “Firstly, we’ve seen really strong resilience in our free to air TV audiences and growth in our digital audiences, which has been getting us to net audience growth across total TV. We’ve also seen audience growth on our main broadcast channel.
“The revenue will follow the audience in terms of the way advertisers are prepared to pay for advertising. As we go into the next round of conversations with agencies and advertisers, which are done on a calendar year basis, we do expect those strong audiences to underpin the value that we’re bringing to advertisers.”
Although Nine is predicting advertising expenditure growth in the second half of FY25, Sneesby wouldn’t speculate on market rumblings that Christmas advertising budgets this year will shrink.
Nine’s coverage of the Paris Olympic and Paralympic Games have already helped the multi-media company grow its slice of the commercial TV audience share in July, with Sneesby referencing an audience share of 48 per cent, even though the event only kicked off in the final week of the month.
August promises to be an even stronger month for Nine with the second half of the Olympics and start of the Paralympic Games running during the month.
This makes predicting Nine’s underlying performance challenging, but Sneesby said that the Paris games have already generated $160 million in revenue (which includes $140 million in advertising and $20 million in subscriptions) and would be profitable. Nine revealed that its coverage of the games had cost $77 million, which includes flying in more than 200 staff to Paris.
Sneesby’s optimism comes after a challenging period for Nine and the broader media industry.
In July, Nine revealed it would be cutting around 200 staff, including 85 in its publishing arm, to reins in costs. Several high profile journalists have taken voluntary redundancies, including long-serving entertainment and gossip columnist Andrew Hornery, chief sports writer Andrew Webster, cartoonist and illustrator John Shakespeare. B&T understands that culture editor Osman Faruqi has also left the business.
Staff from Nine’s publishing division went on strike on the eve of Nine’s Olympic Games coverage, an industrial relations dispute that has now been resolved with staff receiving a 3.5 per cent per annum pay rise over a number of years.
Nine has also launched an investigation into its workplace culture following allegations of inappropriate behaviour by former news chief Darren Wick, who has left the business.
It’s not just Nine that has had a rough ride, Seven West Media and News Corp have also made redundancies as the realities of a softer advertising market and soaring inflation place pressure on marketing budgets and companies across the media industry.
FY24 has also been a transformational period for the media industry as companies grapple with whether (and how) they embrace generative AI technology.
Nine’s Gen AI Approach
Nine, which revealed five principles on how it plans to use AI technology across its business in July, has locked down its content to prevent technology companies from scrapping it to fuel their Gen AI machines. Other media companies, including News Corp, have already inked multi-year license deals with major Gen AI players like OpenAI.
Sneesby said Nine is in exploratory stages of how it plans to use Gen AI and which tech players it might partner with.
“Our approach to Gen AI and the conversations with the major platforms are at an early stage and they’re exploratory,” Sneesby said.
“We’re all understanding how these platforms are evolving and what their revenue models are looking like. We certainly understand that our content IP has value in relation to generative AI. What those models might look like is what we’re working on at the moment and ensuring that in the meantime, we’re protecting ourselves and reinforcing the fact that if our IP or content is being used, there needs to be a commercial model for us to be able to exchange value.”
Nine already uses AI technology in parts of its business. It has a tool called Nine Express that turns auto queue scripts from news broadcasts into articles that are published across its digital news brands, such as nine.com.au.
Sneesby said Nine is exploring how it can use AI technology to enhance Nine’s journalism and content production processes, but made one point clear: “We certainly don’t see AI as a tool that’s going to be replacing journalism on our digital sites or mastheads.”
