Nine still the one, with local single market monopoly ambitions and potential
Let’s not be too critical of the Fairfax Nine merger - it may prove to save quality local news and entertainment content, writes The Studio's Chantal Abouchar.
Sir Frank Packer started his working life in the early 1920s as a cadet journalist on his father’s newspaper. By 1956, following a Royal Commission into television, Frank was deemed suitable to apply a television licence, as were other newspaper proprietors.
The mythology goes that television was considered so risky that the banks had doubts about backing a television station, which would be only one of two allowed in each capital cities along with the ABC. Ironically, we now know that for most of their life, until the rise of the internet and the advertising black holes of Google and Facebook, television licences were nothing but a licence to print money.
However, as has been the case for their older newspaper counterparts, like Fairfax, the television networks have struggled to adapted fast enough to the new threat environment.
Advertising spending has been increasingly going online for a solid decade now. The concept of mass media – once a heavily used term and usually in the derogatory – has almost vanished. In its place we have highly customised social media and more users controlled traditional media, sans-ads wherever possible.
Yet where hope remains for traditional media, and what tends to explain the Nine and Fairfax merger, is the residing appeal of single market monopolies in major cities. A duopoly if you must.
Yes, global platforms will continue to rise and extract more revenue, but there is hope for otherwise stranded traditional media in carving out monopoly positions in major cities with strong local content. If you’re looking for examples, the pursuit of single market monopolies is what has driven the newspaper industry for decades. Brisbane, Adelaide, Hobart, Perth, Darwin and Canberra are all single market newspaper monopolies. Only Sydney and Melbourne are big enough to support two newspapers and the old free-to-air television industry is being rationalised in a similar way.
It is true that Fairfax has held a unique position in Australia’s media history and this in mainly attributed to its fearless reporting and criticism of the establishment and political class, irrespective of who is in power. And while Nine does not have such a claim, it has a history of producing high quality television, including news and current affairs. Kerry Packer’s baby, Sunday, set and still holds the standard for quality production values.
Many would feel that Fairfax has a more natural editorial affinity with the ABC than Nine and recent collaborations tend to support this view. Yet the fact that the editorial code of independence remains, at least for the time being, suggests that quality is going to be part of the competitive posture. Who would be stupid enough to waste the power and appeal of a Kate McClymont or mess with the formula of the AFR?
Ninja journalism – TV gold! https://t.co/LXQHwzrIij
— Kate McClymont (@Kate_McClymont) 26 July 2018
So let’s not be too critical of the merger. It may prove to save quality local news and entertainment content.
Much more broadly though, the Nine Fairfax merger provides the perfect point to pause, so to speak, and reflect on what is happening in the media industry. So let’s go big picture for a moment. And let’s do so in light of the fact that on the same day the Nine Fairfax merger was announced the Hon. Scott Morrison, Treasurer of Australia, officially launched The Studio, a new not-for-profit media-tech incubator.
Back in the 1960s when Marshall McLuhan claimed that ‘the medium is the message’ and coined the term ‘global village’, he was prophetically signalling how modern electronic media would dramatically influence society and individual behaviour.
By 1985 McLuhan’s follower and fellow medium theorist Joshua Meyrowitz would spell out exactly how new media, especially television, was changing us.
Meyrowitz argued that television was closing the generation gap, blending gender differences, making the private public and demystifying the status of political leaders and elites. More recently Meyrowitz has been talking about how technology is allowing us to experience global events locally, and that our sense of self is being changed by these experiences. He seems to be right. A single Trump tweet can ruin/ make your whole day, maybe more.
Today we can see exactly how McLuhan and Meyrowitz were on the money. And being on the money is exactly what we are witnessing as the media-tech industry around the world and in Australia ramps up.
Australia’s business community has been impressed by, and much has been written about, the new financial technology, or fin-tech, scene, especially those startups being nurtured by the incubator Stone & Chalk. Industry-focused incubators seem to work very well. Yet because media-tech is not as easily categorised and understood, the field has been somewhat ignored or undervalued. It is hoped that The Studio, a not-for-profit media-tech incubator, launched on Thursday by the Treasurer, the Hon. Scott Morrison, will start to change the way we think about media.
Media-tech is very worthy of your attention. And the big point to make is that there are now more than twice as many private companies worth more than US$1 billion (known as unicorns) in media-tech today (116) than there are in the more well-known financial technology (fintech) sector (52), according to CB Insights.
It is a surprising comparison, but it shouldn’t be. From the very beginning the film industry has seen international and media businesses, like Australia’s own News Corp and Reg Grundy, typically look for global opportunity, as the prize is so great. And today we witness the brilliant track record of companies such as Canva, a challenger to Adobe, by turning the design industry on its head, and Animal Logic, which now has facilities in North America and a list of production credits that are the envy of the industry. And why not? After all, it must be easier to dub a film into Arabic than it is to get banking licences for the countries of the Middle East.
Moreover, so many of today’s technology giants including Apple, Microsoft and Adobe all have their roots in media technology for the personal computer. Or others, like Amazon who started selling books and Netflix who mailed DVDs, are both investing billions in new content production. And as Rupert Murdoch sells 21st Century Fox to Disney for almost $AUD100 billion it all suggests the expansion and transformation of the media-tech sector is just warming up. And we haven’t even mentioned games or music.
Two of The Studio’s initial residents provide great examples of ways Australian companies might play in this global industry. Oovvuu, with a recent $3.8 million investment, is breaking new ground by using artificial intelligence to match video content to text-based news articles for publishers around the world, while startup, Evaro, is developing augmented and virtual reality technology for use in learning and entertainment applications.
For The Studio, it is just the beginning, but what a time to be alive, as the Prime Minister said. But for The Studio, it’s not just about an ideas boom, it is also about building a globally competitive media industry in Australia.
Chantal Abouchar is the founder and CEO of The Studio.
