It’s been just two weeks since Nine Entertainment and Fairfax Media announced they would spend $100 million to build a joint venture streaming media company.
CEO Mike Sneesby, a digital veteran and an experienced builder of platforms to deliver movies and televisions programs online, is a lot further ahead in building the business than you might think given it’s been just 14 days since the formation of StreamCo was announced. He’s promising the company’s product will have exclusive Australian rights to big-name TV programs as well as complete archives of popular shows.
“We are fairly well advanced with what we’re doing,” he told Business Insider.
“I’ve been working on this from late 2013 back to when we were having the earliest discussions on strategy and joint venture options for the business.
“We’ve had a team ramped up from around January of this year.”
The JV is being launched into the rapidly-evolving streaming media sector in Australia. Foxtel, the established player jointly owned by News Corp and Telstra, has just announced a product overhaul to better enable on-demand streaming of its content, and is expected to drop prices soon. And many consider an Australian launch of US streaming giant Netflix a practical certainty.
Sneesby’s CV is almost tailor-made for the job. His last role was CEO of Cudo, a joint venture between Microsoft and Nine. Before that he was vice president of IPTV and Technology at Intigral, a joint venture between Saudi Telecom and Astro Malaysia. Prior to that, he headed Business Development at what was then nineMSN.
From what he’s willing to talk about, the new platform will be similar in business model to Netflix, to which tens of thousands of Australians – some estimates put it at hundreds of thousands – are already subscribing.
The Nine and Fairfax platform will also be a subscription video service with one price for unlimited access to a catalogue of thousands of hours of television and movies. The price is unknown at this point, but the current market thinking would be around $10 a month.
Sneesby acknowledges the importance of differentiating against the other players in the market including Foxtel and smaller players such as the ASX-listed Quickflix (in which Nine has an 8% stake).
“To be successful it’s a business model which needs scale and therefore it’s all about having the strongest content line-up and the right marketing engine to go behind it,” he says.
“You’ve got to give consumers the content they want and you have to have the marketing horse power to get your message out there.”
Sneesby says the majority of the investment is in content.
“We will have a line-up of movies and some of those will be the more recent releases,” he says.
“We will have a very strong line up and the bulk of our volume on the platform will be in television coming from the Hollywood studios plus Europe, the UK and Australia.
“Amongst that we will include some big name and exclusive first-run content titles that will run exclusive on our platform.
“Clearly those are the kind of content assets that you have to pay the right dollars to secure.
“We will have of course have a huge line-up of people’s favourite television shows going right back in some cases to the first seasons.
“And a dedicated category within the platform for kids and families.”
The big question is how many players the streaming media market in Australia will be able to support. Sneesby says the numbers look like being 2.5 million to 4 million Australian subscribers in the next four years.
“That is a market which will sustain multiple players, whether two or three is the question,” he says.
The competition looks like Foxtel followed by Netflix when it makes its much forecast move into Australia proper, rather than Australians using services to disguise which country they’re coming from so they can sign up to the US service.
“Certainly Foxtel will have an important piece of that market,” Sneesby says.
“They are the business which has led the way in pay television in Australia. I see them, just like Netflix, as two businesses with very credible services in the market.”
The new Nine/Fairfax platform will launch before the end of this financial year, most probably late in the March quarter or early in the June quarter next year.
The brand name has already been selected – but it’s top secret.
“In due course we will announce our consumer brand which is finalised, trademarked, URLs acquired and ready to go,” he says.
“All our branding and design of the websites and applications are all complete.
“We have a really exciting four letter brand.”
And the business is on track with key roles in senior management, and the next level down, all filled for content, marketing and technology.
“I cannot wait to get the wrappers off this thing and give it a run,” Sneesby says.
DISCLOSURE: Fairfax Media owns 100% of Allure Media, publisher of Business Insider Australia.