Nine Entertainment Co. Holdings Limited · ASX:NEC
Nine Entertainment — Investor Day (May 2014)
75 slides from Nine Entertainment's investor day presentation, May 28, 2014
Slide 1: ASX Announcement: Investor Briefing 28 May 2014
ASX ANNOUNCEMENT Wednesday 28th May 2014 The Manager Company Announcements Office Australian Securities Exchange 20 Bridge Street SYDNEY NSW 2000 ELECTRONIC LODGEMENT Dear Sir or Madam, Nine Entertainment Co. Presentation – Investor Briefing 28 May 2014 Attached is a copy of a presentation to be del
Slide 2: Investor Day 28 May 2014
Investor Day 28 May 2014
Slide 3: Disclaimer
Disclaimer Important notice and disclaimer including NEC’s expectations about the performance performance and no representation or warranty is This document is a presentation of general of its businesses. Forward looking statements can made by any person as to the likelihood of background informatio
Slide 4: Agenda
Agenda • Introduction and Welcome David Gyngell, CEO / Simon Kelly, COO and CFO • NEC Sales and Nine Network Peter Wiltshire, Group Sales and Marketing Director • Nine Perth David Mott, Managing Director, Nine Perth • Nine Adelaide Sean O’Brien, Managing Director, Nine Adelaide • News and Current Af
Slide 5: Nine Entertainment Co. Sales
nine entertainment co. sales Peter Wiltshire Group Sales and Marketing Director
Slide 6: The marketplace is evolving
The marketplace is evolving • Australian media landscape is under-going enormous structural change with audiences and buying points continuing to fragment • TV and digital continue to out-perform and are increasingly co-dependent. Together, they will secure each other’s future • Free To Air TV is be
Slide 7: Sales centralisation = one voice
Sales centralisation = one voice • One centralised sales location from September 2014 means one voice in market • Customer-aligned service model provides flexibility to accommodate new media acquisitions within existing structure • Structure is defined around cross-platform ‘athletes’ leading the al
Slide 8: Powered maximises the combination
Powered maximises the combination • Powered specialises in the ideation and strategy of market leading cross-platform solutions for our clients • Working seamlessly across the group of organisations, Powered is able to amplify NEC’s assets to deliver our clients’ brand message in innovative and mean
Slide 9: Integrated platform
Partnership for tours un mai nine ::: live Daily Mail aes Tour organised by s ONY. Exclusive behind the Nine Live Introduced 1D scenes coverage of 1D to Nine Live Ticketing contract with Allphones Arena allphones arena 6 concerts at 1D perform on Allphones Arena The Voice and TV Week Logie Awards 19
Slide 10: Television
television
Slide 11: Sustained ratings improvement
Sustained ratings improvement • 5 years of consistent Free To Air ratings improvement • Strong performance across the schedule led by News and Current Affairs, Sports, and Local Production • Revenue share trends follow ratings performance • Premium emerging to reflect consistency and predictability
Slide 12: Drive to 40% revenue share
Drive to 40% revenue share Key drivers of revenue increase • Programming • Nine leads every key advertiser demographic in 2014 to date1 • The ratings momentum will continue with The Voice, a strong sports line-up with World Cup Cricket, The Ashes and World Cup Rugby in 2015, coupled with long term C
Slide 13: Pillars of key programming
Pillars of key programming 2 HOURS PER WEEK Drama 6 HOURS PER WEEK Big Events JAN DEC Sport 11 HOURS PER WEEK News & Current Affairs 64 HOURS PER WEEK 12
Slide 14: Nine Perth
Nine Perth David Mott Managing Director
Slide 15: Nine Perth acquired September 2013
Nine Perth acquired September 2013 • 30 September 2013 - Nine Network acquired Nine Perth from WIN • Price paid $223m, or ~9 x incremental EBITDA • Previously, Nine received an affiliate fee of ~45% of gross revenue • 12.3% of Australia’s metro population and 11.2% of metro FTA ad revenue Perth mark
Slide 16: Nine Perth coverage map
Nine Perth coverage map Market 25 – 54s 855,000 18 – 39s 653,500 35 – 64s 757,000 GBs 776,400 All People 1,981,200 15
Slide 17: Historically – revenue and ratings share have underperformed
Historically – revenue and ratings share have underperformed • Nine has long under-delivered relative to its East Coast averages • Gains to date have been primarily at the expense of Ten • Revenue share has caught up to ratings share • The challenge now is ratings Audience share1 − Perth Revenue sha
Slide 18: Key initiatives
Key initiatives • Infrastructure • Playout from NPC (national playout centre) in Sydney • Broadcast interruptions eliminated • Programming • Investment in News including ~40 journalists and crew, move to one hour News, live and local • Leverage Network assets to build performance of key franchises •
Slide 19: Under NEC ownership – trends are positive
Under NEC ownership − trends are positive Nine Perth – ratings share since acquisition 50.0% East Coast 45.0% equivalent ratings share 40.0% up 1.0 pts 35.0% pcp +1.6 pts Since acquisition 30.0% 25.0% 20.0% 7 9 10 Source: OzTAM All People, 6pm-midnight, 1/10/13 to current (week 21, 24 May) vs. pcp 1
Slide 20: Into 2014 – the improvement continues
Into 2014 − the improvement continues Nine Perth – audience1 share Nine Perth – revenue2 share 50.0% 33.0% 32.4% 32.5% 45.0% 32.0% 40.0% 31.5% 31.0% 35.0% pcp +2.6 pts +2.0 pts 30.5% ytd 29.8% 30.0% 30.0% 29.5% 25.0% 29.0% 20.0% 28.5% 7 9 10 Q1 CY13 Q1 CY14 1 Source: OzTAM All People, 6pm-midnight,
Slide 21: Nine Perth – Early signs
Nine Perth – Early signs 6-7pm, 2014 ytd vs 2013 Nine News + 3.7% Seven News / TT - 8.0% Ten MF / Project - 16.4% More than Melbourne, Brisbane and Adelaide Source: OzTAM All People, 6pm-7pm, Wk 7-20 20
Slide 22: Big jumps in our big Franchises
Big jumps in our big Franchises The Block and The Voice Year on Year growth, Perth, total people The Voice 2014 178,835 16.6% increase The Voice 2013 153,317 The Block 2014 124,751 18.7% increase The Block 2013 105,091 Source: OzTAM data, Perth metro, Total People, season The Block and Season-to-dat
Slide 23: Slide 23
Slide 24: Nine Adelaide
Nine Adelaide Channel 9 Adelaide Sean O’Brien Managing Director Sean O’Brien
Slide 25: Nine Adelaide acquired July 2013
Nine Adelaide acquired July 2013 • 1 July 2013 − Nine Network acquired Nine Adelaide from WIN • Price paid $139.5m, or 9.3 x incremental EBITDA • Previously, Nine received an affiliate fee of ~50% of gross revenue • 9.0% of Australia’s metro population and 7.0% of metro FTA ad revenue Adelaide marke
Slide 26: Nine Adelaide coverage map
Nine Adelaide coverage map Market 25 – 54s 585,600 18 – 39s 426,600 35 – 64s 567,300 GBs 598,000 All People 1,449,500 25
Slide 27: Historically – revenue and ratings share have underperformed
Historically – revenue and ratings share have underperformed • Nine has traditionally under-delivered relative to its East Coast averages • Gains to date have been primarily at the expense of Ten • Nine’s key franchises benefitting from direct ownership – enables targeted marketing and advertiser pl
Slide 28: Nine Adelaide – what's changed
Nine Adelaide – what’s changed • Infrastructure • Playout from NPC (national playout centre) in Sydney • Additional equipment means more local content Major partners Sports and recreation • Programming • Investment in News including 30+ journalists and crew, move to one hour News, new on air line-up
Slide 29: Nine Adelaide – and still to come
Nine Adelaide – and still to come • Sales force integration • Combining Mi9 and Nine sales teams in H2 CY14 • Local Powered by Nine resource • Relocation – expected by Q3 CY15 • Selling current 6,000m2 site and redeploying sale capital into long term leased facility • Street level glass News studio
Slide 30: Since acquisition − Nine Adelaide gaining audience share
Since acquisition − Nine Adelaide gaining audience share Nine Adelaide – ratings share since acquisition 50.0% East Coast 45.0% equivalent ratings share 40.0% up 1.6 pts +2.3 pts 35.0% pcp Since acquisition 30.0% 25.0% 20.0% 7 9 10 Source: OzTAM All People, 6pm-midnight, 1/7/13 to current vs. pcp 29
Slide 31: Year to date − improving trend continues
Year to date − improving trend continues Nine Adelaide – audience1 share Nine Adelaide – revenue2 share 50.0% 37.5% 36.8% 37.0% 45.0% 36.5% 36.0% 40.0% +1.9 35.5% pts 35.0% 35.0% +2.7 pcp pts ytd 34.5% 34.1% 30.0% 34.0% 33.5% 25.0% 33.0% 20.0% 32.5% 7 9 10 Q1 CY13 Q1 CY14 Source: 1. OzTAM All People
Slide 32: Minutes strong in Adelaide
60 Minutes strong in Adelaide 2014 ytd vs 2013 avg +21.7% 25-54s More than Sydney, Melbourne, Brisbane, Perth 31
Slide 33: Huge launch for The Voice in Adelaide
Huge launch for The Voice in Adelaide 32
Slide 34: Big return for The Block in Adelaide
Big return for The Block in Adelaide 33
Slide 35: Nine News and Current Affairs
Nine News and Current Affairs Darren Wick Director of News and Current Affairs 34 34
Slide 36: Nine News − leads the way
Nine News − leads the way • When big news breaks, the audience goes to FTA TV • 2013 NSW bushfires – Nine’s Sydney News audience up 18%1 on pcp • Nationally, Nine News’ audience jumped 9%1 vs. YTD average in the first few days of MH370 disappearance • A strong news product brings viewers in at the s
Slide 37: Move to one hour News boosts the evening schedule
Move to one hour News boosts the evening schedule • In early 2014, Nine announced the extension of the evening News from half an hour to one hour • Incremental cost of $10m for 150 hours of Prime Time programming • Focus on stemming the 6.30pm viewer drop-off 1,100,000 1,050,000 1,000,000 950,000 90
Slide 38: Nine News − innovation
Nine News − innovation 37
Slide 39: In 2014, Nine's News continues to deliver
In 2014, Nine’s News continues to deliver • Nine’s News has been the #1 National News 10 out of 13 weeks of the ratings season this year • Nine’s News has retained on average 93.4% of its 5 city audience from its first half hour to its second since introduction • ACA at 7.00pm has beaten Home & Away
Slide 40: And is very efficient programming
And is very efficient programming With 30+ hours of additional news each quarter, delivering 1 million plus viewers on average every night, it’s like having four more seasons of The Block each year. Michael Stephenson – National Sales Director, Nine Network 39
Slide 41: Nine Events
‘ainment co Nine ents ‘ertainment co: © ‘A r) entertainment co nine: entertainment co nine entertainment co
Slide 42: Geoff Jones, CEO Nine Events
Geoff Jones CEO Nine Events
Slide 43: Nine Events – an integrated model
Nine Events – an integrated model Ticketing and digital Entertainment solutions Data and technology Venue solutions • Leading Australian and New • Nine Live: touring, • Nine Rewards: digital • Largest indoor Zealand ticketing business promoting live content, marketing services entertainment arena in
Slide 44: Nine Events – revenue stream diversifying
Nine Events – revenue stream diversifying Revenue contributors to Nine Events $m 160 Other 140 120 100 Nine Live 80 Ticketek 60 40 Allphones 20 0 H1 H2 H1 H2 H1 H2 H1 H2 H1 FY10 FY10 FY11 FY11 FY12 FY12 FY13 FY13 FY14 Other Nine Live Allphones Ticketek 43
Slide 45: Ticketek – lead player by ticket sales volume
Ticketek – lead player by ticket sales volume • Issues over 22 million tickets per annum in Australia and New Zealand Estimated total Length of historical Venue capacity (people) relationship − # 1 market share New South Wales • Over 135 exclusive ticketing services contracts with venue and ANZ Stad
Slide 46: Ticketek – the value of live entertainment
Ticketek – the value of live entertainment • Fee construct – inside and outside charges • Channel migration to on-line – the future is MOBILE • Focus on sustainability – the creation of new revenue streams Key genres Family & Sport Concert Theatre Exhibitions Annuity Greatest return Long Growing Rel
Slide 47: Allphones – top venue globally
Allphones – top 5 venue globally ^ • Revenue sources in order of importance: food and beverage, venue rent, sponsorship and suite sales • 80 event nights per annum (SEC closure may boost) • Concerts are the main driver, although other content growing • Australia is a popular touring market AND touri
Slide 48: Nine Events – revenue streams diversifying
Nine Events – revenue streams diversifying Softix Eventopia • World Class platform developed in Australia • Third-tier ticket business aimed at protecting the ‘bottom end of • Licence Software globally − growth focus Asia market’ • New business − Dubai/UAE and South Africa • Low fee model, complemen
Slide 49: Nine Rewards – data business
Nine Rewards – data business • Strong positioning based on quality data • Key revenue stream is on-line research • Complementary to TIPSTONE • New opportunities through Rewards offerings and lead generation 48
Slide 50: Nine Live – growing the live content
Nine Live – growing the live content • Proposition: ‘support Ticketek venues’/unique offering with NEC • Model: multiple revenue streams across Nine Events businesses • Content strategy has 4 pillars (concert/international sport/exhibitions/family) • Healthy pipeline into 2015 • Unique selling propo
Slide 51: Nine Events – an integrated model: Ricky Martin tour
Nine Events – an integrated model Case study: Ricky Martin tour Oct/Nov 2013 • Nine Live – co-promote with Sony Music (mitigate risk) • Ticketek venues – sold ALL tickets • Nine Live secured additional commission revenue from NRL for Grand Final • Nine Live/NEC Sales – secured > $1m in sponsorship f
Slide 52: A unique model fully integrated throughout the event lifecycle
A unique model fully integrated throughout the event lifecycle Premium Packages Ticketing & Hospitality Event Promotion & Activation Marketing Services & Expertise Brand Partnerships Research & Insights & Content Commercial- isation Marketing Media Integration Partnerships cation & Amplification
Slide 53: Nine Events – areas of focus
Nine Events – areas of focus Ticketek • Securing major contracts/renewals • Improving cost efficiencies, including migration online • Innovating the offering Allphones • Maximising the occupancy (opportunity with the closure of SEC) • Improving margins • Broadening revenue streams Softix • Internati
Slide 54: Mark Britt, CEO Mi9
Mark Britt CEO Mi9
Slide 55: Australian digital advertising market
Australian digital advertising market Online display advertising grew 28% in CY 2013… Australian media market – CY 2013 Australian media market $12.7b Online advertising market $4.0b Online display market $1.1b CY13 CY13 3Yr CY13 growth growth CAGR growth Classifieds Video 0.2 +72% Other 2.2 0.7 +11
Slide 56: Australian digital advertising market
Australian digital advertising market …and is forecast to be the fastest growing media segment over the next 5 years Australian media market – forecast revenue growth 2013 to 2017 CAGR % (PWC) Online display 12.9% Online search 8.8% Online 2.7% classifieds Source: Online advertising revenue from IAB
Slide 57: Key digital trends
Key digital trends The Australian digital media market continues to be highly dynamic, with significant changes taking place from both an audience and advertiser perspective • Online video continues to increase – content availability and platform usability Video • Short form video has greater reach
Slide 58: Online advertising trend − programmatic
Online advertising trend − programmatic Significant shift in online display advertising monetisation as industry is moving towards programmatic buying Ad product Inventory Premium/ • Primarily sold face-to-face, traded annually similar to TV brand Owned and operated If not utilised in premium • Appl
Slide 59: TV + Digital = Great reach
TV + Digital = Great reach Content is going beyond the traditional TV screen to live in a range of formats, across devices, creating deeper community and engagement Time spent on media TV and digital make 81% of all time spend on media Print Radio 6% Reach of Nine and 13% Mi9 together is 50% Online
Slide 60: Strategic framework
Strategic framework Mi9 Strengthen our domestic online leadership position as part of the NEC group, Strategy leading the market with our consumer and advertiser product sets Growing high value audience and advertising inventory Strategic Building a material ad supported digital video business theme
Slide 61: The Mi9 business
The Mi9 business Mi9’s business comprises revenue streams from online display and search advertising as well as a collection of related businesses and investments Own and operated Partnerships Display advertising FY14 revenue: ~85% Mi9 sells search advertising appearing on the Bing Search advertisin
Slide 62: Major strategic product initiatives
Major strategic product initiatives Strategic product initiatives are underway to improve content offering, user experience, and deliver enhanced commercial value to partners News Homepage Jump-in Daily Mail • 9NEWS.COM.AU redesign • Homepage redesign • Jump-in redesign and • Global News brand • 9NE
Slide 63: Microsoft relationship and business impact
Microsoft relationship and business impact In 2013 NEC acquired Microsoft’s 50% interest in Mi9. Mi9 and Microsoft will continue to have a commercial relationship in relation to technology, content and advertising sales Ownership • Microsoft selling down it’s equity interest from 50% to 0% by 1 July
Slide 64: HBB TV
HBB TV bias The Following HIDE FREEVIEWPLUS
Slide 65: Tipstone
Tipstone Tipstone (a data venture of NEC) connects Australian businesses with their target customers online, delivering benefit via three core services Analysis and measurement Targeted communication On-site services Online activity cross Available across all digital Hands on help where referenced b
Slide 66: StreamCo
StreamCo Mike Sneesby CEO StreamCo
Slide 67: SVOD – the international context
SVOD – the international context • OTT (Over The Top) subscription video on demand services continue to grow internationally • Ubiquitous broadband networks with uncapped data plans are driving online video • Development and take up of low cost connected devices (smartphone and tablet) are an enable
Slide 68: SVOD – the international context
SVOD – the international context Netflix penetration is at 28% of US There is a significant opportunity households Netflix has in Australia acquired 117.0 32m subs 8.8 113.6 over 4 years 8.1 13.6 20.0 31.7 There is a conservative market of 2.4m SVOD 6.5 subscribers in 5.8 Australia within 4 years 10
Slide 69: SVOD – the Australian market
SVOD – the Australian market • The barriers to mass market take up of OTT SVOD are falling • Wi-Fi household penetration, connection speed and price/caps • Technology (platform and consumer) simplifying • Consumer demand is increasing • Time spent consuming content online continues to grow at ~10% p
Slide 70: Target market – that currently not serviced in Australia
Target market – that currently not serviced in Australia Demand for SVOD will continue to grow Total universe 8.1m from the 2014 base Addressable universe We remove the most traditional FTA and Pay TV 4.9m households Propensity to subscribe conversions have been Target audience applied to each segme
Slide 71: StreamCo – expect to be the best value package
StreamCo – expect to be the best value package • Streaming service, price comparable to international platforms • Movie and TV SVOD titles • TV first run exclusives plus high volume back catalogue of premium titles • Movies − selection of pay window and catalogue titles • Dedicated content categorie
Slide 72: SVOD – our progress and plans
SVOD – our progress and plans • We have built a strong management team: • Mike Sneesby, Chief Executive Officer • Nick Forward, Content Director – formerly Virgin Media and BSkyB • Les Sampson, Content Acquisition – formerly Nine Network • Damian Cronan, Chief Technology Officer – former ninemsn CTO
Slide 73: NEC is well positioned
NEC is well positioned 1 Existing relationships with leading international and domestic studios 2 Understanding of Australian audience preferences 3 Opportunity to waive hold backs against SVOD exploitation for NEC FTA content Marketing reach Existing capability 4 Leading promotional ability through
Slide 74: In summary – to launch in FY15
In summary – to launch in FY15 • The SVOD business model has developed globally reaching mass market penetration and evolving the content rights model • While the Australian market has structural challenges largely stemming from its size, the barriers (to entry and consumer take-up) are falling • Th
Slide 75: “events : nine::entertainment. CO.
“events : nine::entertainment. CO.
Nine Entertainment Co. Holdings — Investor Day (May 2014) on 6ix