COMMENT: Has Nine & Stan Bought A Rugby Union Pup From Foxtel
One thing that you can credit Nine Media journalists with is that they have learnt how to talk out of their backside when it comes to writing promotion pieces for their employer.
Yesterday Nine could not help bragging about their decision to stump up a claimed $100M for the rights to Rugby Union a code that’s not rating in Australia and will struggle to rate while the Australian team and the Waratahs keep losing, Mosman in NSW is a Rugby Union stronghold and supporters there have all but given up on the private school sport.
What I suspect is that the bulk of the Nine deal which will see the code streamed on the Stan service is contra and not cash and the big winner out of this deal is Foxtel who made the right decision and walked away from the deal. The Foxtel deal was $27M with $3M from Channel Ten, and if Nine have forked out $100M that is a lot of money to get back from subs and advertisers especially as the likes of Qantas a long-time supporter have already walked away from the code.
Elizabeth Knight Business writer at Nine Media claims that ‘The creation of Stan Sport required just one cornerstone sporting code which Nine sealed on the back of a snafu in negotiations between Foxtel and Rugby Australia for Stan to start making a success of sports coverage.
The reality is that Stan needs more than one sports code to get people to stump up money to watch Rugby Union on a streaming platform that has lost some major TV and movie streaming contracts this year and is desperate to deliver content at any cost.
Knight claims that Stan Sport will be looking bulk up its schedule with second tier sports, maybe we will see the emergence of table tennis for seniors or donkey racing because most of the sports that count such as NRL, Golf, Formula One, Cricket V8 Super Cars are already locked up and available via Foxtel and as for soccer, Optus has the UK Premier League and the European games locked up.
Australians want tier one sports and that is locked up by Foxtel who have a five-year deal with the NRL.
Nine the owner of The Sydney Morning Herald and The Age are desperate to hold onto Stan marketshare after losing programming deals to Foxtel earlier this year with Warner Bros, HBO, HBO Max and WarnerMedia networks which Nine were hoping to get for their Stan service.
Stan is also having to compete up against Disney and Amazon-owned Prime and next year a new Viacom CBS service.
Knight claims Stan needed to disrupt the closest thing it has to an Australian competitor – Foxtel or more particularly Fox Sports which is Australia #1 and the most popular sports streaming service by a Country mile.
Foxtel’s paid subscribers were 3.287 million, up 7%, due to Kayo and the launch of Binge. At the end of September, Kayo had 644,000 paid subscribers, and 681,000 total subscribers, Foxtel Now had 298,000 paid subscribers and 310,000 total subscribers, and Binge had 290,000 paid subscribers and 321,000 total subscribers.
Stan has only just made a profit with Nine Media referring to the Stan service as having 2.2 million accounts, which it says translates into an audience reach of more than 6 million.
Having accounts is radically different from having paying subscribers which in Stans case could fall next year as people spend less time at home following the release of a COVID-19 vaccine next year.
Another problem facing Stan is that in 2021 there is set to be a shortage of new content due to the impact of COVID-19 on studio’s who are struggling to shoot new movies and TV shows which Stan needs to stop people cancelling subscriptions.
Knight claims Foxtel’s pay TV service has been struggling for viewers and for relevance, however this is not reflected in their latest numbers released earlier this month.
The latest facts about Rugby Union reveal that the Wallabies have always been on Free TV as well as Fox – The Bledisloe and Rugby Championship audiences are down 12% YoY, and Australian test rugby audiences are down 12% YoY.
The Super Rugby era is over with the South Africans pulling out resulting in the games involving Australia falling from 54 to 22.
The Average audiences for Super Rugby fell by 35% between 2014 and 2019 (pre-COVID).
It peaked in 2011 with an average audience of over 500k on Fox Sports watching the Super Rugby Final.
This year, with two Australian teams in the final it only managed an average audience of 110,000. Let’s say Stan get all this audience to pay $10 to get Rugby Union they are still going to be out of pocket by tens of millions.
The new “Super” Rugby competition is very different from the peaks of 2011 with total games going from 127 in 2019 to 43 (including Super Rugby AU and Aotearoa) in 2021 and games involving Australia going from 54 to 22.
For Stan, the reality is that under all scenarios – there will only be two games involving Australian teams on Rugby AU or Trans-Tasman from 2021 going forward.
With all Wallabies and one of 2 games of domestic Rugby on Free TV – there is no need for any other source. It’s all on Free TV.
There will be no Super 8 and no National Clubs Championship.
Nine is also facing other problems with sports viewing on traditional free to air channels is in decline.
The first game of the 2020 State of Origin series which was shown exclusively on the Nine network delivered the lowest metro audience since 2001, delivering 1.598m and 2.378m nationally. T
he matches, which saw the Queensland Maroon’s win for a 1-0 lead in the series, aired from 7pm EST last Wednesday night.
2019’s first match drew 2.178m metro, while 2018’s clash brought in 2.321m.
As for Rugby, Bledisloe on Ten is down 10% on average each year since 2015. The Rugby Championship is down 15% annually. NRL on Nine up 1% for 2020, Fox Sports (Foxtel and Kayo) +18%
Nine’s plan is to offer extensive live and on-demand coverage to Stan subscribers, as well as making select premium events available on Nine’s FTA television channels.
In other words Nine is going to compete with Stan for Rugby Union audience share and that is an interesting issue as all Nine has to do is hold the rights to streaming and free to air a clause that allows them to pick which games go to free to air and which ones to Stan.