Australian Mail Online unlikely to be “a game-changer”
Nine’s deal with the Mail Online to create the most-visited website in Australia will not be a “game-changer” in the market, media experts have told Mumbrella.
Commenting on the surprise joint venture announced this morning analysts said while it was a good move to increase traffic and ad sales on the site, it will not affect the upcoming $2 billion stock market float, or the local news scene.
“It’s not a game-changer, they are putting it out there as a game changer but I can’t see that it will be. I can see the rationale for why they’ve done it, to bulk up their offering on news and global news,” said Fusion Strategy principal Steve Allen.
Journalism academic Dr Margaret Simons said the emergence of the Mail Online, The Guardian and Buzzfeed in Australia is part of a push by publishers toward global media brands.
“We are going to see probably a handful of global media brands in the English language. The Guardian is one but no one knows how many there will be but there will be a business model which relies on a global audience and 24 hour global reporting where they bring international resources to bear on local stories,” said the University of Melbourne professor of journalism.
In terms of whether the Australian market was big enough to sustain all these new players Simons said the market had previously sustained a greater variety of news players.
“If you go back to the 80s and 90s when you had many more hard copy mastheads than we have now,” said Simons. “That decline in newspaper circulations occurred largely because of all the afternoon newspapers.”
“Compared to last couple of years it might look crowded but if you look back a few decades we may well be going back to where we used to be with a number of mastheads and a greater variety.”
One media analyst, who declined to be named, said the Mail Online would only write $20 million or $30 million in ad revenue in its second year. With an operation of more than 50 journalists Allen believes it could cost up to $15m to launch. By comparison Fairfax is currently writing display ad revenue of $60 million or $70 million and Mi9 around $50 million at best, he estimated.
However the analyst said it was interesting and good to see Channel Nine doing deals now that it is not encumbered by Microsoft and expects the launch of a new site for Channel Nine will launch before long.
Match Media’s trading director Theo Zisoglou said the launch could impact on the “tabloid” news sites locally, but added: “It will be tough to break people’s habit and loyalty to their local news source and I don’t believe the Daily Mail will impact on the quality content behind the current paywalls.”
He also questioned what they could offer to differentiate themselves in the market, but pointed out: “The interesting part is that a brand that was founded in the newspaper industry, is setting up overseas with a digital-only product, which probably says a lot for the future of newspapers.”
Fusion’s Allen agreed the launch is unlikely to have a big impact on the market, estimating the play is to drive traffic for international news and play-off the competitors from Fairfax and News Corp.
He added: “They’re kind of the last people in and even on The Guardian you kind of go why would you go to the Australian site when you can go to the international site.”
Megan Reynolds, Miranda Ward and Nic Christensen
it’ll eat into news.com.au only
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Shock. Horror. Steve Allen comes up with opposing viewpoint, pokes his finger into required media. Headline delivered!
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If they’re hiring local journalists then that can only be good news (even if the content leads a lot to be desired.) That said, everything’s being “globalised” isn’t it? Mags are all overseas licenses, and it’s all Starbucks, Hyundai, Red Bull and Time magazine. Despite its detractors, that’s why the ABC stands out to the contrary – amazing local content and market leading audiences to boot…
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Journalism academic Dr Margaret Simons says it’s a “push by publishers toward global media brands.” But they’re ALL British media brands with a very Anglo-skewed view of the world. More Royals anybody?
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err – shouldn’t that be Fusion Strategy PrincipAL Steve Allen, not Principle???
Sloppy!
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@Seb,
You’re right, I’ve amended.
Cheers,
Alex, Editor, Mumbrella
Who is this Steve Allen fellow? He seems even more important than either Mum or Dad.
And that’s saying something.
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$20-30m in ad revenue in year 2 – seems very optimistic.
No need for analyst to estimate mi9 revenue – it’s outlined in NEC prospectus …
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Just been “watching” the five -hour summing up and verdict in the SImon Gittany case (he’s just been found guilty of throwing his girlfriend over a balcony to his death). Twitter coverage was gripping and so much more compelling to watch it unfold this way than on the “real” news sites. Just goes to show: the threat to news organisations is not from other news organisations…..
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@ Shamma…. if a new news site, employing 50 journalists, can bring in $30mill in ad revenue then you’ve renewed my faith in my former career!
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Interesting the way things are playing out. Fairfax abandons its demographic with a digital equivalent of soft porn. News expends vast energy to erode the foundations of The Age and then SMH and, finally, AFR. Then along comes The Guardian to pick up the Fairfax readers with a classy left of centre read. And now the Mail will chew up the audiences left behind by Rupert’s savagery. Very messy looking market if you ask me.
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“If you go back to the 80s and 90s when you had many more hard copy mastheads than we have now” – this is an extraordinary statement from Simons. The internet wasn’t around in the 80s and 90s, so the media companies had all the ad revenues to themselves. But, sadly, much of that valuable classified revenue has gone to the likes of Google, Seek, carsales.com.au, and so on. So there’s less revenue which unfortunately means fewer outlets can be sustained. Her comments confirm my views on the value of journalism “academics”.
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This will only speed up the demise of print newspapers in Australia. There is now a glut of online news content providers from all colours of the political spectrum. If the new Daily Mail venture relies heavily on advertising, then it will mean more competition for Fairfax and News Limited for revenue. I’m not sure the Australian market can sustain it – something will have to give.
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