Media experts say Stan is vital for success of new $4b merger

BOLD plans for the future of Netflix’s main Aussie rival have been laid out in the wake of a major media shake-up.

Subscription video on demand service Stan was a key inducement for Nine in its historic $4.2 billion takeover of Fairfax Media, announced last week.

While the exact implications of the deal are yet to be made clear, it will have huge ramifications for Aussie TV.

Stan has already racked up about one million subscribers, enticed by popular series such as Better Call Saul, The Office and Parks and Recreation.

However, it is understood Nine chief executive Hugh Marks wants to double its subscribers to two million in a bid to catch up with streaming giants Foxtel and Netflix, which has about 3.9 million Australian subscribers, according to research firm Telsyte.

It is unclear how Stan, which is now 50-50 owned by Fairfax Media and Nine Entertainment, will achieve this. However, media experts say fans of in-depth journalism, documentaries, true crime series and sport might be in luck as it tries to differentiate itself from its rivals.

“Stan is now the last Australian soldier in the subscription video on demand space and they’re up against it with Netflix,” media expert Marc C-Scott told news.com.au.

“One of the biggest things they’ll have to work out is how they see themselves in the market. They can’t just replicate what Netflix is doing.”

He says Netflix has already built up a “solid grounding” in Australia and it is here to stay.

“They’ll need to differentiate themselves in some way,” he said. “It could be around their programming. They could look into sport. They now have the tennis and Seven did some interesting stuff with the tennis when they had it. They had both free and premium subscription coverage for that.”

WHAT WILL HAPPEN TO 9 NOW?

Another point of contention for Stan’s new joint owners is how it will work with Nine’s on-demand streaming service 9 Now.

“It’s going to be interesting how they see the two of them,” Mr C-Scott said. “Do they leave 9 Now as the free service where you miss something on Channel 9 so you get to watch it for maybe a week via 9 Now and it goes on to Stan through a paywall?

“Or do they use Stan as a premium service where you get to view some of this content before it is actually broadcast on Nine?

“If they go down the sports angle, Foxtel is going to be their biggest competitor and if they go down the content route, then Netflix is their competitor.”

If Stan was to take on Netflix and battle it out with shows and movies, they might be able to win ground in areas where the market leader is lacking.

“They could fund Australian content, because Netflix currently buys Australian content, but they won’t necessarily fund it,” Mr C-Scott said.

OPTIONS ON THE TABLE

Telsyte managing director Foad Fadaghi said Stan would be vital to the success of the new merged company.

“A larger Stan could invest more in content or indeed return earning to shareholders,” he said. “Given subscription video on demand penetration has not reached the level of the USA or UK, continued growth of Stan and indeed other providers is expected in Australia.”

One of the options on the table for Stan is to bring in another major US player such as Hulu — a joint venture with Disney, 21st Century Fox, Comcast, and AT&T — to provide content.

However, Mr C-Scott said this was unlikely because of how stubborn Australia’s free-to-air stations were about not sharing content.

“If it did happen, it certainly wouldn’t be like the Hulu in America, which basically allows you to watch live TV and record it at the same time,” he said. “For that to happen here, you’d have to have Nine, Seven, Ten, SBS and ABC commit to this and they won’t do that because they’re scared to share data.”

TRUE CRIMES AND IN-DEPTH AUSSIE DOCUMENTARIES

Netflix has found huge success by broadcasting true crime documentaries such as Making a Murderer and The Staircase, and the genre has been boosted locally by the popularity of podcasts from Aussie journalists in recent years.

Mr C-Scott believes this could be a big opening for Stan because it is now under the umbrella of Fairfax — meaning it could use its print, radio and on-screen journalistic talent for series on Stan.

“They could say, ‘You’ve done a really great story there’ and produce it into a documentary; then they could put it on Stan for subscribers, then weeks or months later it could be broadcast on free-to-air,” he said.

“True crimes and documentaries are something that are working really well for Netflix but they don’t have the Australian (angle), which Stan could provide if it draws from its talent from across the new company.”

Mr Marks said the merger would “add another dimension” to the media landscape.

“Nine’s strong operating momentum has allowed us to invest in the future of our business through each of 9 Now, digital publishing and, of course, Stan,” he said.

“This merger with Fairfax will add another dimension, creating a unique, all-platform, media business that will reach more than half of Australia each day through television, online, print and radio.

“For our audiences and employees, this means we will continue to be able to invest in premium local content across news, sport, entertainment and lifestyle.”

Fairfax CEO Greg Hywood said the move would allow the “continuation of our quality journalism”.

Foxtel is part-owned by News Corp, the publisher of news.com.au

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