Profit in reality television

Free-to-air wins and digital growth lift revenues

Programs including Married At First Sight and the Sophie Monk-hosted Love Island have helped Nine Entertainment’s full-year profit to jump 26.8 per cent.

NINE Entertainment’s fullyear profit has jumped 26.8 per cent to $156.7 million, driven by strong earnings from its free-to-air television operations and the accelerated growth of its digital businesses.

Revenue for the year to June 30 was up 6.5 per cent to $1.32 billion, with both digital and television businesses reporting revenue growth of 7 per cent.

Nine’s metro free-to-air television advertising recorded 2.5 per cent growth for the year, the first year of growth in four years.

Ratings also improved, with Nine attracting a commercial share of 38.2 per cent of the 25-34 demographic, partly due to the success of programs including Married At First Sight, Love Island and The Block.

While the first season of Ninja Warrior was a ratings phenomenon, the 2018 season performed worse than expected.

“The drop in audience was a bit of a surprise to us ... (but) we probably wouldn’t have fully monetised that probably for another year,” CEO Hugh Marks told analysts yesterday.

Despite losing the rights to show home cricket tests for the first time in 40 years, Mr Marks (left) played down the impact.

“Remember next year we have a World Cup of cricket ... and the Ashes in England which come into (financial year 2019-20), there’s a bit of other sports costs coming through,” he said.

Nine has also gained the rights to the Australian Open tennis, which is expected to boost revenue and ratings in January.

Meanwhile, Nine’s online streaming service, 9Now, grew its registered user base to about 6.5 million, with growth in earnings offsetting the absence of a $14 million contribution from Microsoft’s Bing.

Stan, the streaming company jointly owned by Nine and Fairfax, recorded more than 1.1 million active subscribers, with revenue up 72 per cent to $100 million, despite a cost increase of 23 per cent.

Stan, along with Fairfax’s Domain assets, were primary motivators for the merger between the two media companies, announced in July.

Mr Marks said the annualised cost savings of at least $50 million was not a motivation for the merger.

“This was not a merger instigated ... just on cost-out; the really exciting parts are growth opportunities that will emerge, or be accelerated, by the (merger),” he said.

Nine will pay a fully franked final dividend of 5c a share.

Rival Seven West Media reported a $135.8 million profit on Tuesday.