Advertisers will come back to free-to-air television on the back of local original content, says Nine Entertainment Co chief executive David Gyngell.
News, current affairs and sport will be the core of what Nine will produce and air because international content doesn't work, Mr Gyngell said.
"I'd like to make more original things and own more IP (intellectual property). If you look around the world, free-to-air is really going to survive on the bones of news, current affairs and sports," Mr Gyngell said.
"[In two years] I would say that we would be more committed to news and current affairs than we are now, not less. It just works for us."
Having the mix of local content including, reality TV, panel shows, drama and sport will be a point of difference for free-to-air, he said.
"There's an incredibly opportunity to have a different relationship with advertisers, which we have to keep proving to them."
"I believe they will come back, especially the large advertisers who will try to get out in front of their competitors who are nipping at their heels. Because they're larger and they've got more money, they'll spend on television. Having the locally owned content is going to create more value and it's going to define us."
Nine did admit that its ratings share over the 2016 financial year will come in slightly lower than 2015, due to increased competition and one-off events, such as the Rio de Janeiro Summer Olympic Games on Seven next year.
In the latest Standard Media Index figures from July, Nine had ad revenue share of 37.1 per cent, down from 39.1 per cent in July 2014. Seven remained number one with ad share of 38.5 per cent, down from 39.7 per cent from a year earlier. Ten rose from 21.2 per cent in July 2014 to 24.4 per cent in July 2015.
Mr Gyngell said the audience was still there for Nine, but people were watching in different ways, such as video on demand, where numbers aren't yet officially measured, making it hard to negotiate pricing with advertisers.
"The challenge we've got now is all our shows that we're talking about, that people are worried about, are all pretty close to the numbers they were doing two years ago. But, they're coming in at catch-up; they're coming in on an AVOD service, but we can't charge for them. This is a worldwide problem we're dealing with," Mr Gyngell said.
The industry is working towards to an accepted measure of capturing audiences on catch-up services.
Mr Gyngell also commented that Stan, the subscription video-on-demand service it started with Fairfax Media, publisher of the Australian Financial Review and BusinessDay, has exceeded expectations, but it was not going to be "the saviour" of Nine long-term.
"Stan is running ahead of what we thought it was going to be, but then again the category is," Mr Gyngell said.
Stan has had 300,000 gross sign-ups, and the company claims 70 per cent of users who take on a free trial stay on as paying customers.
"Are we getting our share? I think we're probably keeping in touch, just. We're up against the hottest brand in the world right now in Netflix," Mr Gyngell said.
"The difference between us and our competitors is that we're going to have a much more Australian tone to it. This is the space to watch and it is going to cause us a lot of sleepless nights in free-to-air until we get a really good understanding of it."
