When Nine Entertainment Co boss Mike Sneesby delivers the company’s annual financial results on Wednesday, many eyes in the media industry will be on the streaming service he built from the ground up.
With an estimated value of around $1 billion, Stan contributes a significant amount to Nine’s $5 billion market value. It is considered one of the company’s crown jewels, and a key growth asset. Sneesby’s deft stewardship of the platform got him the top job at the nation’s biggest media company (which is also the owner of this masthead). But while Stan has a lot going for it, it also faces significant challenges. Competition is intensifying, and not just for subscribers, but also for the content that powers its service.
Stan, which has not had permanent boss since Sneesby was elevated to run all of Nine in April, is expected to reveal on Wednesday it has reached well over 2.4 million paying subscribers. The announcement will include updated figures on the number of people paying to watch the rugby union and tennis tournaments such as Wimbledon and the French Open.
Sports content is sold through an add-on package that is considered key to driving Stan’s revenue growth (in May, Stan said it had gained nearly 150,000 sport subscribers). Stan also recently secured lucrative soccer rights, and announced last week it had extended deals with key Hollywood studios Lionsgate/Starz and WarnerBros.
But while Stan is growing the path forward is unclear. When it launched back in 2015, Stan’s task was simple: buy quality movies and television series that could be watched by millions. Local rival, Foxtel, had not launched a viable streaming service. Netflix arrived several months later. Amazon Prime Video, Disney Plus, Apple, Paramount+ and the myriad other services competing for eyeballs and credit cards were not even on the horizon. Now they are all in Australia, selling content they produce themselves.
A few years ago, Netflix faced a similar predicament to what Stan faces now. When it realised it could not rely on Hollywood studios to supply it with content, it started making its own. But it is difficult for Stan to do so on the same scale as Netflix. Production is expensive and the frequent COVID-19 lockdowns have added logistical and financial complications.
Meanwhile, rival Foxtel now appears reinvigorated. The News Corp-controlled platform secured a major deal with WarnerMedia for its HBO Max content last year, which has driven subscriptions to its new streaming service Binge. Its controlling shareholder News Corp is once again considering an initial public offering.
Recent moves by US film studios to launch direct to consumer services represent a challenge for all streaming services that lack direct pipelines to Hollywood. In an Australian context, it makes Stan and Foxtel fight hard for the content that is left, which drives up costs.
And the glut of streaming services in Australia may not be over: The launch of Discovery Plus, which is owned by Discovery (which plans to merge with HBO owner WarnerMedia), was flagged last week when Optus revealed its new streaming service aggregator, SubHub.