Soft Advertising Hits Nine’s TV Revenue Despite Cost Savings and Streaming Gains
Nine Entertainment reports continued digital subscription growth and cost efficiencies that help offset a softer advertising market in Q1 FY26, setting the stage for EBITDA gains.
- Mid-teens digital subscription revenue growth at Nine Publishing continues into Q2
- Stan expects FY26 EBITDA growth driven by revenue despite higher costs
- Total TV advertising revenues down mid-high single digits in Q1 FY26
- Total TV costs expected to decline mid-single digits, improving prior guidance
- Over $100 million in cost savings targeted across FY26 and FY27
Digital Momentum Amid Advertising Challenges
Nine Entertainment has provided an insightful trading update revealing a mixed but cautiously optimistic outlook for FY26. The media giant continues to ride strong digital subscription growth at its publishing arm, with mid-teens percentage increases in revenue extending from the first quarter into the second. This digital momentum is a critical counterbalance to the headwinds faced in traditional advertising markets.
Streaming Service Stan’s Growth Prospects
Stan, Nine’s streaming platform, is poised for another year of EBITDA growth in FY26. The company attributes this to revenue growth outpacing rising costs, bolstered by strategic content deals such as the recent Premier League agreement. This suggests a continued focus on premium content to attract and retain subscribers in a competitive streaming landscape.
Advertising Market Softness and Cost Efficiency
Despite these positives, Nine’s Total TV advertising revenues have declined by mid to high single digits in September and October, reflecting a softer-than-expected market. The absence of the Paris Summer Olympics, which boosted comparables last year, and ongoing market softness have pressured revenues. However, Nine is responding with aggressive cost management, expecting Total TV reported costs to fall by mid-single digits, an improvement on earlier guidance.
Audio Segment and Broader Strategic Focus
Nine Audio’s advertising revenues underperformed initial expectations in Q1, prompting short-term cost initiatives to mitigate the impact. More broadly, Nine is advancing its Nine2028 strategy, emphasizing organic investment in core businesses and leveraging its unique data and premium content to deepen audience and advertiser engagement. This strategic pivot aims to offset advertising softness through digital and subscription growth.
Looking Ahead
Overall, Nine anticipates EBITDA growth in the first half of FY26 compared to the prior year, supported by over $100 million in underlying cost savings planned across FY26 and FY27, surpassing previous targets. While challenges remain, particularly in advertising, the company’s diversified revenue streams and disciplined cost approach position it well for navigating the evolving media landscape.
Bottom Line?
Nine’s blend of digital growth and cost discipline will be crucial as it confronts ongoing advertising market uncertainties.
Questions in the middle?
- How sustainable is the mid-teens digital subscription growth amid increasing competition?
- Will Stan’s revenue growth continue to outpace rising content and operational costs?
- Can Nine’s cost efficiencies fully offset the persistent softness in the advertising market?
