Stan has stepped up its fight with larger rival Netflix by signing a long-term exclusive licensing agreement with US cable giant CBS for its Showtime content, including the much-hyped hit show Billions – which Stan premiered this week.
Stan, which analysts estimate is second by some distance to Netflix in the Australian subscription video-on-demand (SVOD) market, is owned by Nine Entertainment Co and Fairfax Media, owner of The Sydney Morning Herald, The Age and The Australian Financial Review.
All future Showtime series and hundreds of hours of programming will be added to the Australian streaming service and Stan has an exclusive licence to the Showtime brand and trademark.
Stan claimed the new agreement marked "the most significant content licensing deal in recent Australian television history", adding that Stan would exclusively premiere the widely anticipated return of 1990s hit series Twin Peaks.
Financial details were not disclosed although the deal indicates Nine and Fairfax's willingness to invest further in Stan, which reported it had a record quarter for sign-ups in the last three months of 2015.
Some analysts have questioned how long Nine and Fairfax will continue to invest in Stan, to which they have committed $100 million combined.
But Fairfax chief executive Greg Hywood said the deal underpinned the "sustainability and strength" of the business. "Stan is already meeting its business plan before this deal and this will throw it over the top," he said.
"We invested in this because we could see that it was a category that was going to grow. It was proven offshore and also proven offshore that there was room for more than one player ... in the US, 30 per cent of SVOD subscribers have two subscriptions."
Stan CEO Mike Sneesby said the deal showed Stan was differentiating its strategy from global powerhouse Netflix, which is investing more heavily in original content and rolling it worldwide.
"You'll see more and more a homogenous line-up of Netflix original content, what you see from Stan is a completely locally focused proposition; we are picking the best shows from the studios around the world and producing our own original productions such as No Activity and Wolf Creek."
Nine chairman David Haslingden used the press conference to take a side-swipe at Nine's rival Foxtel, which analysts say has come under pressure from the rise of cheaper SVOD services.
"SVOD is the way of the future and it's a particularly good category for Nine because as we are seeing around the world, SVOD fits very comfortably with free-to-air broadcasting businesses. It doesn't fit so comfortably with old-fashioned subscription television businesses."
Foxtel owns its own SVOD service Presto with Seven West Media, and analysts believe it is a close third to Stan.
Foxtel also has a content acquisition deal with Showtime, which is run mainly on a series-by-series basis.
Stan, which has an existing content deal with Showtime, said current rights with other platforms including Foxtel will remain unchanged, with series migrating to Stan for SVOD when existing commitments expire.
"The growth of SVOD services internationally has created a huge demand for premium content globally. Showtime's prestigious brand and growing portfolio of programming align perfectly with this marketplace," said Armando Nunez, president and CEO of the CBS Global Distribution Group.
"We're excited to expand the international footprint of Showtime in a big way in Australia with Stan, and build on our relationship with their corporate parents Nine Entertainment Co and Fairfax Media."