An open letter to the industry from a casualty of the Australian media bloodbath
Australian media was already in crisis before the wet-markets of Wuhan have provided the perfect PR-approved scapegoat for devastating decisions, argues a stood down member of the media. In this rallying cry to the industry, they demand better, bolder, braver decisions, before it's too late.
As a casualty of the recent Australian media bloodbath, I was asked this week what shape I saw Australian media taking in the future. I answered the question twice – once with what I hoped the media landscape looked like post-COVID, and then once more with perhaps a harsher, more accurate reality given the decisions being made by current leadership.
Despite the recent devastation to the media industry from said leadership, Australian media is not dead, yet. However, it is on the fast track to the grave at the hands of current decision makers.
The thirst for content remains strong amongst the Australian public as they search for quality, trusted sources of information. Ratings, sales, and engagement are up across all major publishing and media platforms. So why are so many big media organisations turning their backs on opportunities for the future by burning through brilliant talent and mothballing growing brands?
Make no mistake, the devastating decisions being made in the media industry are not a result of the COVID-19 pandemic. Whilst hiding behind a coronavirus mask, the financial positions and moves to slash costs by the likes of Seven West Media, Bauer, Ten and Buzzfeed are the results of years of mismanagement.
Businesses are hiding behind COVID-19 (Photo by Марьян Блан | @marjanblan on Unsplash)
Unfortunately for the bulk of the media industry, short-sighted business decisions are now being made by executives who don’t know media, don’t know their audience and don’t know the value of their brands. They know spreadsheets, and the wet-markets of Wuhan have provided the perfect PR-approved scapegoat for devastating decisions.
These leaders will also tell you that advertising dollars have dried up. Yet the reality is that these leaders don’t know how to sell the properties they own. How could they when they don’t know the value in their brands and talent? How can they when they don’t take the time to understand the industry they occupy? So far removed are the decision makers that they are only fringe members of an industry that is suffering at the hands of their ignorance and refusal to plan for the future. Any future. These are leaders that have been brought in to meet budgetary goals today, without any regard for forward planning.
As a result, quality content is being sacrificed to produce cheap reality TV, hubbed magazine teams, and grainy, iPhone-shot user generated content. Is it any wonder advertisers aren’t spending like they used to?
If we continue down this path, they’re unlikely to ever return.
Redundancies and stand-downs are being implemented across the board, and whilst our leaders think that removing the ‘personal’ element from these decisions somehow softens the blow, they are haemorrhaging talent and future earning potential. In the case of one such media organisation, recent cuts have been made so hastily and with such little insight into their own business operations, that all staff with knowledge of a specific commercial bookings platform were stood down, rendering the digital earning capacity of the business void in an age of mass digital consumption.
Media leaders would be well intentioned to investigate exactly what they’re losing in the long term for the sake of a saved dollar today. With the current level of reckless abandon, they
won’t have businesses to steward for much longer and these reactive measures can only be effective when there is an industry to react to.
‘Everything is fine’ (Photo by Ninety Eyes on Unsplash)
Our only hope at this stage is that either through current leadership, or rapidly instated new leadership, potential in media is recognised and a proactive management system is created. We’ll have to conduct business differently, but that’s been needed for almost 20 years. Competition needs to become collaboration, and brands need to extend beyond their pages, screens, and devices.
Huge potential alone lies in our unique position within the global media landscape right at this very moment. Australia is truly the lucky country, and in our current state, we are on the threshold of a return to a new normality months ahead of our British and American counterparts. For the media industry, this could mean an imminent return to full functioning capacity, presenting us the opportunity to produce quality content for the world.
And we have the talent and resources to do it. Or at least we did.
Sure, profits may not be free-throwing at first, but the current appetite for content can be used as an opportunity to reset and plan for future growth; both creatively and financially. One only needs to look towards the most successful media machine of the past four decades, Disney, for proof of concept.
When Robert Iger launched Disney+ in 2019, he did so knowing that the product wouldn’t turn a profit for Mickey Mouse Inc until at least 2024. However, it was a necessary, self-disrupting, investment in a new distribution model to secure Disney’s future.
Disney+ changed the game
Fast forward nine months, and thanks to an investment in quality content, creative partnerships and a thoroughly planned, proactive response to a changing media landscape, Disney+ is on track to turn profits by the end of 2020, four years ahead of schedule. All thanks to the actions of a leader immersed in his own product and industry.
“I’ve never seen such a good execution of the incumbent learning the new way and mastering it,” Netflix CEO Reed Hastings said of Disney and their venture into streaming. “To see both the execution and the numbers line up, my hat’s off to them. Great execution, clarity around brand and focus really makes a difference.”
The ‘Disney-ification’ of Australian media needs to occur, and it needs to occur quickly to save a much-needed industry.
It’s this exact informed leadership and proactive approach Australian media needs now, before it’s too late. Bold, educated leaders willing to make decisions for the future of media, not for today. And if our bosses aren’t brave enough to defy their spreadsheet overlords, then perhaps the most noble decision they could make is to hand over the reins to those who understand and believe in what they do. After all, the biggest saving will occur by cutting the big-wigs.
The marketplace is currently flooded with potential leaders, storytellers and creators, all fuelled by hope, insight and passion for an industry that is facing murder at their former employers’ hands.
My personal message and urgent plea to the leaders decimating our industry? Stop holding us hostage, and let Australians engage with the content they so desperately deserve, then you may have the chance to reap your financial profits.
The author of this piece requested to remain anonymous
“Unfortunately for the bulk of the media industry, short-sighted business decisions are now being made by executives who don’t know media, don’t know their audience and don’t know the value of their brands.”
What a lazy and sweeping comment. I’ve worked in media for 25 years and the people who work, run, and own media companies certainly know what they’re doing. I suggest the author does quite grasp the complexity of the issues and challenges they face.
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Based on that comment you likely fall into the category the author is talking about, hence the reaction.
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A sweeping statement that seems to be based in a lot of truth.
I’d argue that if they knew what they were doing, the state of media in this country wouldn’t be so dire.
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The problem with modern media (radio is perhaps the exception) is that they have failed to adapt sufficiently to the new world. A good analogy is 19th century coach builders. The advent of the internal combustion engine largely saw off the horse, so coach builders got into the business of building bodies for motor vehicles (Holden, for example), Print media have made a half-hearted attempt to embrace the new way of doing things by putting some material on-line, but they’ve been unable to sufficiently monitise it. They have certainly been unable to convince enough people to pay for on-line material. I don’t know the answer, but greater minds than mine are paid a lot of money to come up with the answers. They’ve failed. Here’s a suggestion: hand over your companies to 20 somethings and tell them to do their worst. It certainly couldn’t result in anything worse that we have now.
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Well written and argued, and there can be no doubt that some of this is true.
But aren’t we experiencing the same as the rest of the world? Do they have the same problem?
(I don’t see Disney as being a fair comparative.)
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Anonymous, I like the fire, but feels like the proposed solutions are pretty weak. That said, if you can see the path forward, now’s the time to strike. I hope you can succeed where others have failed.
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The situation is unprecedented for most people’s entire lives.
Everyone is a backseat driver on this one, no one has the right answers.
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Agree with that sentiment there…
Pre-COVID: unknown counts of junior staff and those with a suppressed voice doing the majority of the work, long hours and suffering some form of mental health issue.
During COVID: leadership exposed lacking core business robustness, an over reliance on month to month cash and clear absence of strategic business continuity plans. Took a pandemic to learn that people could be trusted to work from home.
Post-COVID; clean out leadership dead weight, empower employees more, go to work fixing your business
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COVID 19 actually served Disney+ well. Audiences spend more time at home, and they made an excellent decision by moving forward the digital release of Frozen 2 and Star Wars: ROS.
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As a former employee of a large Australian media company, I 100% agree with the sentiment of this author. Obviously there are nuances to every company’s situation, but speaking from experience, I saw years of gross mismanagement of budgets and resources. Wasting more and more money on projects that we all knew would never go anywhere. Pushing already stretched staff into working on a million different projects in order to make a quick buck or to support old business models, rather than defining a clear business strategy and investing in platforms for the future.
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Dear Anonymous author – it is a very sad picture which you have painted. However, here are a couple of tips for you:
1/ Get an ABN set up through the Tax Office.
2/ Do some consulting for other agencies or find some clients of your own which require your specific skill-set.
3/ Be your own boss and make the change you want – don’t wait for others.
Lastly and most importantly, get off your arse and do something positive INSTEAD of blaming others. Whilst your observations of the media industry have some merit, the overall tone of your article is one of self-pity and utter hopelessness. If you disagree with any of the above points, then our industry is probably better off without your anonymous ranting.
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A problem is that the difference between journalist and influencer is almost nothing in many cases. Why spend a fortune on PR/advertising and hope a journo prints your press release when there’s a horde of influencers, with massive audiences, willing to push whatever you want, for much less outlay. Of course, offering valuable journalism would be a real point of difference – but how many journalists truly offer that, if we’re honest?
Still, you’re right about dinosaur publishers not understanding the industry anymore. That said, it’s completely in a state of flux and even the ‘innovative’ new way (relying on events) has taken a hammering lately.
Ultimately, though, the fact that publishers are not prepared to hang around and lose short-term profits, at the expense of their loyal workforce, is the way of the world right now. And it’s a situation that’s evolved with complicity from the media. Perhaps ‘journalists’ should think twice about publishing relentless neo-con propaganda that puts profits above people? That way, when profits get put above themselves, they’re less likely to cry foul.
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A good summary of where we are at today. Australian FTA Networks have and are still running around like were in the 80’s and 90’s. Too many people and too many inflated salaries. Just look at Sales Departments with all their layers. In house creatives and production units designed to rob the hand that feeds them. Integrated strategy Directors, Directors of Revenue on 7 figures with National sales Directors on half a ton reporting also.
Then theirs programming and production heads all on huge dollars.
It’s nuts but onward they go. Drive into the car park at 7 or 9 and check out the bling!
Industry is having a huge rationalisation but the media owners still don’t no enough about their own companies to make the big calls.
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I worked in a Media company for 18 years and loved the “electricity” I felt working in such a wonderful industry. Always being one in trying to create change and think outside the box. Loving change and growth but of course that was me! But in any industry, as life, everything changes and that’s where companies need to think ahead. Growth requires thinking and doing things a new way, a better way, a different way. It requires the right kind of people who can run companies and have staff who think about growth and change and most importantly, in making change. If you play it safe you will remain where you are. And if you are not prepared to invest in new ideas or take the chance there will always be someone else who will. I still love the Media Industry and still see it as “life”and am still interested in getting back in it. Believing, that as long as there is “life in us” anything is possible in re-igniting the life back in it.
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The unfortunate truth in most cost-cutting is that businesses need to make money – they are not charities. I understand (first-hand) the crushing disappointment of being made redundant, but it is rarely personal, and it is usually done to ensure businesses remain viable and profitable.
I have read several articles about the ‘short-sightedness’ of redundancies due to Covid – I daresay made by people without visibility of P&Ls – most media companies live and die by their monthly billings – and when advertisers stop, they have little wriggle room.
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Mumbrella, why would you allow the writer for this piece to be anonymous?
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The problem is revenue, not content. You can’t survive for long without adequate revenue and profits.
Few publishers earn enough from digital ad sales to cover their staff wages, let alone their entire set of overheads. It is true for dinosaurs and innovators alike.
While some publishers supplement advertising sales through subscription based revenue streams, few earn enough from digital subscriptions to even bother. Event related revenue streams used to keep some publishers afloat, but now look dire.
Finding a “sugar daddy” (a rich philanthropist willing to throw money at an unprofitable business) has been a successful strategy for a number of publications – big and small. It could turn out to be the only realistic option for news focused content producers.
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Interesting that the author cites The Lucky Country without (seemingly) understanding the terms origins as it fits the authors narrative perfectly.
From Donald Horne’s book of the same name:
“Australia is a lucky country run mainly by second rate people who share its luck. It lives on other people’s ideas, and, although its ordinary people are adaptable, most of its leaders (in all fields) so lack curiosity about the events that surround them that they are often taken by surprise…”
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First off, sorry to hear you lost your job through this. It really is unprecedented times. I hope you and your family are safe and well.
A few points up for debate though.
Disney is not a great example. Disney+ has one of the strongest brand portfolios in the world (Disney, Pixar, marvel, star wars and Nat Geo), is global (unlike all Aus OTT), and is driven largely by kids (as most parents of young children can attest). They also had one of the best CEOs (across any industry) in a generation in Bob Iger.
Taking nothing away from their amazing achievements; this is an extreme outlier. They have also spent ~3b USD to launch this product and have a very profitable business that does not rely on OTT as the saviour (theme park business is the cash cow although COVID will put it to the test!). The Disney business model is built on its unique ecosystem across movie theatres, theme parks, cruises, merch and content etc. Content pulls them into the ecosystem, and they monetise more broadly; content is not the end game.
Similarly, Amazon uses prime video to sell more sneakers (famous Bezos quote). Apple is doing the same thing with Apple TV+. Optus and Telstra also use content to acquire/retain customers in their mob/broadband packages.
It has been clear for a while now that most content pure plays (ex Netflix; again global scale) are going to struggle. The cost to create, acquire and distribute quality content is increasing (at least video content; inflated by the stupid money thrown at it by Netflix, Amazon, apple etc and rising sports rights costs) while the amount ppl pay has decreased and audiences have fragmented (plus everyone wants Netflix level product/UX). The ‘9.99’ monthly fee with no switching cost model is great for consumers, not so much for businesses (not to mention the high CAC and churn!). Likewise on the ad side, audience growth alone does not get you far when Google and FB monopolise digi ad spend.
We are going to see much needed mass consolidation in traditional media over the coming years. Global tech cos will continue to eat our lunch (pay negligible tax, and not support the local industry; govt needs to step in and support at some level) while we fight each other for scraps. Yes, new players will emerge, but it will take time. It is also much more difficult for new media players to break through.
The core concept of network effects did not exist prior to the internet. This strengthens their mass aggregation (ecosystem) model as they grow, creating a near insurmountable moat (and warchest of free cash) – particularly as they start to expand their ecosystem into adjacent services such as Amazon Prime (video, audio, books, groceries etc) and Facebook’s move into ecommerce. They can also quickly copy products/features to test at scale (like facebook does to Sanpchat) or buy and integrate/retire businesses like Google.
The industry does need to fundamentally change the way we operate to compete, and fast (yesterday); but this will take time, cash and patience/permission from the ‘market’ (ie. shareholders). Unfortunately, cash is required to fund this kind of change, and lots of it (ie. Disney’s 3b USD investment in disney+ product, the billions spent on buying Pixar, Lucasfilm, marvel and fox – the latter was 71b USD alone!, NBCs 1b USD re Peacock). Given most legacy media revenues are structurally challenged and digital $ heavily contested, cost has to be part (not all) of the response. Debt is the other major option which has its own challenges.
This is all a long way of saying yes there needs to be significant change. Yes it should have been done a long time ago. Yes (most) management are aware of this (and we do need a refresh). But it is not easy. There is a reason why traditional media across the world is struggling to breakthrough. This is a really hard problem to solve and there are plenty of great minds who have toiled on this for years; but that is the beauty of this industry. We are on the forefront of tech and consumer behaviour change (at least the impacts of).
No one knows how it will turn out, but that to me is the exciting part. There will be plenty of opportunities as this plays out!
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Yes are all aware of most of this.
But seemed strange to me that the author not mention News corp when they rattled off a number of media companies??? You are writing about news companies and you forgot to mention the biggest one and the one that closed all the papers last wee and killed them for good? Surely should have been called out??
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Terrible times. Just heard from a friend that there are more job losses – MSN laying people off at the end of the month.
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I do feel sorry for ‘Anonymous’ and what has happened with COVID-19.
In fact I feel sorry for all affected by COVID-19 and other events such as drought and bushfire.
But to come up ‘Disney-fication’ is pie-in-the-sky writ large.
Disney has resources to fall back on that are larger than money nations have. It’s the ‘too-rich-to-fail’ strategy.
But back to reality, no Australian media company has those sorts of resources. Suggesting that as the panacea is irresponsible.
Having said that, I agree that many, if not most’ Australian media businesses have displayed blissful ignorance and coupled that with pie-in-the-sky business strategies on the road to disappearing up their own fundaments.
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Handing the reigns over is pretty much exactly what has just happened in New Zealand with the Management Buy-Out of Stuff (see existing CEO Sinead Boucher who has negotiated with Nine). Will it be a success? TWT (time-will-tell). But it won’t come down to just handing the reigns over to someone else who is less spreadsheet-inclined… It will come down to smart operators who can balance the scales operationally and engage with Clients on the Revenue side to compete against the Tech Platforms for Digital Ad Revenue. That is the key.
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You can add Vice Australia to that list too.
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What a croc. Put your name to it if you are going to make a commentary. Otherwise call the waaambulance…
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I feel for you Anonymous as I’ve been dumped into the same “save some quick cash” so I can meet my performance bonus target “boat”. Unfortunately short sighted management is a cyclical beast that may end some Media companies well before their time. I totally agree with you the current lot can’t see the wood for all those trees. My company hired a banking industry IT “change manager” with zero, and I mean zero FTA TV or Radio knowledge to come in and devastate the life long industry Engineering experience held within the company. To what end? Out sourcing always costs more in the long term.
This decision means the company can’t move forward as they no longer have any real industry knowledge at their disposal and this is clearly the case as all development works have stopped. Where are the board members when these plans are hatched? Surely they aren’t just accepting the CEO & CFO’s word that it’s all due to covid19 and not just the lack of a clear business building plan for the TV & Radio divisions.? Share holders seem to be well aware of the lack of any plan to reinvigorate the free to air media and my old company is heading for single digit cent value way to rapidly because of this short sightedness. A broom is desperately needed at the top or just sell the assets to someone that can see a media future and look to rebuild what is a perfectly profitable business.
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Is Blerto your real / full name?
Vivienne – Mumbrella
Hi Stuart,
Thanks for the question.
The author didn’t want to be named.
As for why I ‘allowed’ it, I think the points the author makes are valid (even if we don’t agree with them all) and it’s a discussion worth having. As you can see from the comments, some agree, and others don’t.
Had the author thrown out specific accusations at individuals – for example, “Vivienne Kelly is destroying media because she does XYZ” – we likely would have required their name or more details about them be made public.
As it stands the piece meets our guidelines and gives voice to those who may have opinions, but can’t put their name to them due to the state of the job market.
I am pleased you put your name to this (as I do with all my comments and interactions), but not everyone can afford to do so.
I don’t think this will have convinced you it was the right call on my part, but wanted to explain anyway.
Thanks,
Vivienne – Mumbrella
Depending on the “media” being mentioned I can see some signs of short term thinking. News Ltd is a good example, the editorial push to support low tax governments into power meant they went from being seen as credible central right (remember how they got talked about in the 90s?) to being seen a a biased partisan organisation.
Short term gain (lower taxes) for long term pain (loss of audience trust, and eventual loss of audience).
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In the absence of solutions, consider the following:
1. Start with the audience. Understand them. Vanity metrics are jazz hands. Unless you have a deep understanding of the audience, every business decision made is stillborn – programming, channel, timing, medium, messaging…You can’t sell advertising unless you understand the audience.
2. Invest in content. What does the audience want? Eg. sport. Buying rights is not limited to live broadcasts. It’s a licence to create content. Think Front Bar, The Last Dance, F1 Drive To Survive, Sunderland ‘Til I Die, The Test…Content that has shelf life and ability to appeal well beyond its immediate audience. To quote another article, “Stories about sport are often more gripping than sport itself”. Good media is storytelling well done.
3. Cleanse the journeymen. Ie. those that have worked their way up everywhere and created value nowhere. Media is littered with stewards vs value creators. EPS growth built on cost cuts is a sugar hit.
4. Original content development should never be the first, second or third cost lever to pull. If you don’t create your own unique content, you’re a reseller. No-one likes paying for aggregators that stand for nothing.
5. Trial and error. Go to where your audience is. The days of expecting them to come to you are long gone. Test content. Test technologies. Test channels. Create your own. Doing nothing is not an option
6. Cut Facebook reliance for distribution. You’ve already lost if Facebook is driving 90% of your traffic. Who owns your audience? Not you.
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To be honest I was happy this happened. Most of these journalists and publications were a waste of time and added zero value to society with their press release rewrites and lack of inclination or drive to pursue a story. We all keep crying woe about the media industry, but I feel no-one talks about the quality of underlying journalism and the “talent” we churn out through colleges and universities. Journalists, the majority who are unskilled and show no interest in the work, are partly to blame for not being good enough to make their publication want to be picked up.
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This is a naive suggestion. Do you know how many freelancers are out there at the moment? And there are so many more than there were this time last year and so much less work. I know several incredible people who have been successful, full-time freelancers for years and they no longer have any work.
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