company overview
3.6 Growth strategy
3.6.1 Continue strong momentum and consolidate position as a leading FTA TV network
NEC intends to achieve consistent performance across Sydney, Melbourne and Brisbane and to increase its audience and revenue share in Adelaide and Perth, with an overall aim of developing a leading position in audience and advertising revenue share across the five capital cities. NEC believes that the integration of the Perth and Adelaide television stations and establishment of a national metropolitan broadcast platform will enable it to improve its performance in these cities and to increase its overall 5-City audience and revenue share. NEC also plans to use its digital channels to grow its total share of audience and revenue. NEC is also focused on optimising content returns through improved broadcast rights deals and affiliate arrangements, and maintaining disciplined cost management.
In programming, NEC recognises the importance of broadcasting leading news and current affairs and sports content and audience demand for local content, and is focused on continuing to make targeted investments in content to reflect audience preferences. In general, NEC will consider specific merger and acquisition opportunities that arise having regard to the circumstances prevailing at that time. For example, in the event the 75% audience reach rule is materially amended or removed, the FTA TV industry could potentially experience consolidation. In that event, Nine Network would consider all of its options in light of market conditions and the actions of its competitors, amongst other factors, which may potentially involve NEC engaging in a merger or undertaking acquisitions.
NEC intends to develop and launch a new internet delivered online video content service. It is anticipated that this new service will contain a mixture of free and paid content services, building and significantly expanding upon NEC’s existing Catch-Up Television offering delivered through the Mi9 website. See Section 3.2.5 for more information.
3.6.2 Utilise NEC’s content and audience reach through its integrated platform to grow returns
The combined ownership of Nine Network, Nine Events and Nine Digital and Ventures provides NEC with various cross- promotional and cross-selling opportunities for all of its business divisions. NEC will continue to identify and pursue opportunities where it can utilise its content or audience reach to generate returns and cross-selling opportunities across its integrated platform. This includes investments through Nine Ventures, as well as commercial relationships with other businesses. NEC will continue to develop its cross-business data strategy and explore opportunities to commercialise the data that is generated across its business divisions. NEC intends to improve financial returns by improving alignment and integration across its businesses, including its sales and marketing functions.3.6.3 Maintain strong industry position and expand the Nine Events business
NEC intends to expand revenue streams and maintain the industry position of its core ticketing business via innovation, technology and business development. This includes successfully renewing major Ticketek contracts, increasing tours via Nine Live, and using its integrated business model to access talent and a variety of revenue streams. NEC will also use the content and media from other parts of NEC to support growth in Nine Events. NEC will also seek to explore new ways to utilise its online assets to grow online and data revenues.
3.6.4 Continue to grow Mi9 and other digital media assets
NEC intends to build on Mi9’s position as a leading online network in Australia to grow audience and advertising revenue. It plans to expand its audience by increasing its content and the ways customers find and access this content, including via tablets and mobile devices. Mi9 expects to make changes in the user interface of Mi9’s websites to support the development of content for tablets and mobile, and to support advertising growth in these areas.
Mi9’s goal is to increase its advertising revenue through growth in audience, inventory, as well as making use of its data assets to improve yields and effectiveness of advertising. NEC also intends to build the revenue from the cricket digital products through advertising and subscriptions.
financial
4.1 Introduction
The financial information for NEC contained in this Section 4 includes:
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statutory historical financial information for NEC, being the:–
consolidated statutory revenue and Net Profit After Tax (NPAT) for FY11, FY12 and FY13 (Statutory Historical Results);–
consolidated statutory cash flows from operating activities for FY11, FY12 and FY13 (Statutory Historical Cash Flows); and–
consolidated statutory historical balance sheet as at 30 June 2013 (Statutory Historical Balance Sheet) (Statutory Historical Financial Information)•
Pro forma historical financial information for NEC, being the:–
Pro forma consolidated historical income statements for FY11, FY12 and FY13 (Pro Forma Historical Results);–
Pro forma consolidated historical cash flow statements for FY11, FY12 and FY13 (Pro Forma Historical Cash Flows); and–
Pro forma consolidated historical balance sheet as at 30 June 2013 (Pro Forma Historical Balance Sheet) (Pro Forma Historical Financial Information)(together, Historical Financial Information); and
•
Forecast financial information for NEC, being the:–
Pro forma consolidated forecast income statement for FY14 (Pro Forma Forecast Result);–
Statutory consolidated forecast income statement for FY14 (Statutory Forecast Result);–
Pro forma consolidated forecast cash flow statement for FY14 (Pro Forma Forecast Cash Flows); and–
Statutory consolidated forecast cash flow statement for FY14 (Statutory Forecast Cash Flows) (together, Forecast Financial Information).The Historical Financial Information and Forecast Financial Information together form the Financial Information.
All amounts disclosed in this Section 4 are presented in Australian dollars and, unless otherwise noted, are rounded to the nearest $0.1 million.