Why Australia's TV Broadcasters Are Losing Share of Growing Ad Spend

Nine Entertainment (ASX: NEC), Australia's largest free-to-air broadcaster, saw its share price collapse 36% in a single trading session on September 11, 2025, hitting an intraday low of A$1.09 from a prior close of A$1.70, as Australia's advertising economy simultaneously grew 5.2% to A$28.9 billion.

Nine Entertainment's Financial Results Reveal Structural Weakness

The September drop was partly triggered by ex-dividend mechanics following a 53-cent-per-share payout, funded by the A$1.4 billion sale of Nine's 60% stake in property platform Domain to US real estate data company CoStar. The transaction closed across May and August 2025.

Beneath the dividend mechanics, Nine Entertainment's FY25 results showed deepening margin pressure. Total revenue rose 2% to A$2.68 billion, but EBITDA fell 6% to A$486.1 million and net profit after tax declined 10% to A$194.4 million. The company's broadcast TV division now operates at a 13% profit margin, compared to 29% for its publishing and digital divisions.

The stock has since settled around A$1.02, trading approximately 30.1% below its estimated fair value of A$1.45, with a three-year total shareholder return of -14.4%. Macquarie maintains a neutral rating on the stock with a price target of A$1.25.

TV Ad Revenue Falls as Digital and Retail Channels Absorb Budgets

Australia's total advertising market grew to A$28.9 billion in 2025 and is forecast to reach A$30.7 billion in 2026, a further 6.5% increase. The growth is not reaching broadcast television.

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TV advertising revenue fell 8.7% in 2025 and is forecast to decline a further 5.1% in 2026. Retail media, by contrast, surged 28.1% in 2025 and is projected to surpass TV as an advertising channel by 2027. Digital advertising now accounts for 75.9% of Australia's total ad market, a share projected to reach 83.5% by 2030. Search advertising grew 9.1% and out-of-home advertising rose 6.2% in the same period.

The data confirms that advertising dollars are migrating away from legacy broadcast channels rather than leaving the market entirely.

Nine Entertainment's Digital Pivot Gains Traction Amid Broadcast Decline

Nine Entertainment's streaming service Stan grew revenue 10% in FY25, while digital revenue rose 6%. Together, these segments now represent approximately 50% of the company's total revenue.

The company has committed more than A$140 million to technology and digital investments, including artificial intelligence, advertising technology, and Premier League broadcast rights. Nine is targeting A$150 million in annualized cost savings by FY27. The Domain divestment and subsequent special dividend signal that management is prioritizing capital returns over acquisitive growth at current valuations.

APAC Regional Context: Digital-Native Markets Diverge from Australia's Broadcast Decline

For marketing leaders allocating budgets across Asia-Pacific, Australia's broadcast media decline contrasts with broader regional growth in digital channels. Hong Kong's entertainment and media industry is projected to grow at a 2.26% compound annual rate to US$15 billion by 2029, with internet advertising expanding at 7.4% annually and OTT video at 4.6% annually.

The Hang Seng Index gained over 27% in 2025, driven largely by technology equities, while Australia's S&P/ASX 200 returned approximately 0.2% over the same period.

Nine Entertainment's next scheduled investor communications are expected to address FY27 transformation milestones and the pace of its digital revenue transition.