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