Digital subscriptions offer bright future for journalism
NEWS organisations must take some blame for any current financial woes after giving online content away for free, according to News Corp Australasia executive chairman Michael Miller.
Mr Miller also condemned the lack of investment in local content, particularly in regional markets, and a shift away from the marketing and promotion of news brands, The Australian reports.
But Mr Miller sounded a positive note for Australian news brands, which face competition from Google and Facebook, and digital start-ups, stating the company's digital subscription offering is defying the naysayers with growth in subscribers.
Addressing the Melbourne Press Club today, Mr Miller said the industry had made a mistake before the turn towards paywalls, not least because it allowed content aggregators like Google and Facebook to disintermediate the direct relationship between newspapers and readers.
TO WORK for News, by definition, means a love of journalism is at your core, regardless of whether you're in sales, marketing or a senior executive.
Our journalists tell tough stories; investigate truths and campaign for what's right for our communities.
I hold the greatest respect for those who put their name and reputation to reporting those stories; and those who have an instinctive knowledge and understanding of what audiences want, and how they feel.
Journalism is a unique craft and one we need to treasure. That craft - creating the journalism that connects, engages and matters - is critical to our industry's prosperity and longevity.
I am an optimist. I believe in what we do. But I am not Pollyanna. I am a realist. And as an industry, we do have some real challenges. These challenges are well documented, and well known to you all:
● The advertising pie is shrinking, and revenues in print and FTA TV are declining and not accelerating in digital. June's SMI numbers showed another 10% decline in the agency ad revenue;
● There are more players than ever before competing for this decreasing pie;
● The cost of entry and to operate are lower than ever, enabling start-ups and pop-up publishers to compete for eyeballs, ears and dollars;
● Then there are the international streamers such as Netflix, Amazon Prime and YouTube who continue to dilute local broadcast audiences;
● The Daily Mail, the New York Times, The Guardian and many others are taking share in the news category;
● Global digital advertising players such as Google and Facebook dominate the new advertising landscape, accounting for 85% of new digital revenues over the past year;
● These global broadcasters, publishers and networks challenge us with scale and resources previously unseen in this country and dwarfing those of the local industry, while pushing up our creative and content costs.
● Then there's the current media legislation was established in a world pre the internet and prevents us all from competing on a level playing field.
It's a legislation that prohibits Australian media companies achieving the scale needed to meet these challenges.
And while we can justifiably blame technology, society's changes, piracy, global players, government and legislation for our current dire state, we must assume some of the blame ourselves. The fact is: less is being invested in Australian content across all mediums, and the challenge of producing great content is harder to meet; we are primarily domestically oriented, focused on our traditional competitive share rather than investing regionally for growth; while at the same time, reducing the marketing and promotion of our brands and our talent.
We have also given our unique journalism away for free - to both consumers and our new competitors.
It is a cruel irony that here we are, organisations who invest in journalism and support the creation of unique, local content for Australian audiences, in the fight of our lives against international players - who, despite their scale, lack our local commitment, influence and impact.
Today, I want to talk about what those challenges mean for our industry, and what we need to do to meet them to ensure the future of a strong Australian media sector. This is not only what News Corp needs to do, and is doing, but what we, collectively, as stakeholders in this vital industry, need to do.
The News Corp of today is not the company you may think it is. For many, News Corp is seen as a print monolith. We are so much more than that. I am proud to lead a company that has such a depth and breadth of assets.
News Corp is Australia's leading publisher of online video, with more than 50 million views a month. We are the number one lifestyle publisher, with an 8:1 lead over our competitors in the food category. We are the largest prestige publisher in the country, with a monthly audience of more than 7 million. Our online news site, news.com.au, is Australia's number one news brand by a significant distance. FOX SPORTS delivers more than 10,00 hours of live sport a year. We are the major stakeholder in REA, now part of the world's largest digital property business.
All up, more than 16 million Australians choose to engage with our brands each month -that's more than Facebook.
Yes, we are also a newspaper publisher and proudly so. The influence, the journalism and the authority of our printed newspapers are our core franchise. We firmly believe in their future - it is one of the reasons why we purchased the Australian Regional Newspaper business last year.
Despite News Corp being a complex media company, we are not immune to the same challenges as all other local players. Those issues are hurting us, and will continue to hurt our capacity for growth unless we address them.
At News Corp, we have four clear priorities. Our first step, is to move from a diversified media company to a unified media company. We need greater internal cooperation to deliver better outcomes for our customers, our audiences, our staff, and our portfolio of businesses.
An example of the benefits of that cooperation is already seen between The Australian, the Wall St Journal and SKY NEWS Business. Ticky Fullerton now sits alongside the WSJ team - ensuring we maximise our quality resources to deliver world class content.
It is why we created Food Corp - a united network of our food titles such as delicious, Donna Hay and taste, to deliver multi-brand solutions to advertisers. Or created whimn.com.au - a single destination for news, opinion and lifestyle advice and debate for a female audience.
We are taking the same network approach to property, sport and travel.
This internal collaboration creates a more attractive scale proposition for our commercial partners to effectively communicate their messages.
Our second priority is our unwavering commitment to create unique, high value, local journalism. Journalism that holds governments to account, shines a light on public service incompetence and campaigns for better health and transport services for communities.
What we do is uniquely local, and is not readily replicated or replaced. We expose ministerial travel rorts and interrogate the issue of spiralling youth crime gangs on Melbourne streets.
When a siege hits this city, we are there, providing the essential information to a confused and frightened population. Just as we were there 86 years ago for the Good Friday Appeal, raising much needed funds for the Royal Children's Hospital.
We champion, we challenge and we care.
Providing local news and local voices essential for a vibrant media and an informed community. Our commitment to journalism is also why we acquired and invested in SKY NEWS. A team that provides must-watch analysis, news and commentary on local politics and is on the ground where Australians live, work and play. And it's working.
SKY NEWS Live is now the highest ranking channel in our history. The weekday prime time audience Jan-Jan 2017 is 25% higher than the first half of 2016. Paul Murray LIVE is now the highest rating Foxtel show in that timeslot and his weekly audience has grown 44% in the past 12 months.
Our third priority is growing consumer revenues, with a focus on subscriptions. We know that more people are paying for content than ever before. We know that our unique and trusted journalism is what our audiences want, and we know they are willing to pay for it.
We believe that quality, unique journalism and opinion should be paid for - we should never have given it away. Our numbers reflect that belief - The Australian's consumer revenue from subscriptions is now greater than advertising revenue. Digital subscriptions are now greater than print subscriptions for that title.
Publishers in the US are experiencing a resurgence in newspaper audiences, thanks to the Trump Bump. People are putting their faith in the trusted brands that matter - brands with authority, expertise and credibility. Revenue for our journalism is key for growing our revenues.
Our fourth priority, and to better compete with the new media players, is operating smarter.
We need to use the unique data that's available to us. The data we have, enables us to publish the relevant content that best meets our audience, and the individual's interests. This leads to journalism we can monetise.
With apologies to the editors in the room, while gut instinct once told you all you need to know, today, insight from data provides live and accurate measures of what audiences are consuming.
Combined - instinct and live data - are the new weapons in an editor's arsenal.
In Adelaide, for example, 40 per cent of subscriptions from our local Messenger sites come from local planning, zoning and development stories. In Brisbane, court reports are in the top three subscription drivers. Here in Melbourne, it's AFL, obviously. And yes, I concede, no need for data analytics to tell us that.
The shape and strength of the Australian media's future rests in our hands. As an industry, we also need clear priorities as we enter the new era of media opportunity. We need a unity of purpose.
To me, there are five clear industry priorities:
We need to:
- Cooperate as a unified media
- Support our own local industry
- Invest in more content and journalism
- Operate smarter by using data
- Speak with one voice about media reform
Allow me to explain. By definition, the media industry is competitive. That is healthy. The race for the scoop is the adrenalin charge that drives a newsroom and a news organisation.
But here and now we need cooperation and competition. Old demarcation lines should be redrawn. Not just for publishers, but for television and radio.
We need to use our industry scale to better meet our revenue and cost challenges and most of all, better serve Australians. They've done it New Zealand, where once traditional foes, TVNZ, Media Works, NZME and Fairfax Media have united to create a new local advertising exchange service, KPEX. By putting the customer first, they have given advertisers access to a range of publisher platforms - all via a single transaction.
As a result, Google and Facebook have not enjoyed the same rate of growth in that country.
We also need industry wide cooperation to actively and publicly support our industry. As I referenced earlier with those AFL writers, we don't have to like each other, but we do need to respect each other more.
We need to stop revelling in each other's problems and publish less negative headlines about rival newsrooms being "gutted."
No one should be rejoicing in the Channel 9 decision to close its Darwin newsroom, least of all the publisher of the NT News.
We need to be our own champions and change the conversation about the value, and contribution, of media in this country and its communities. This is what sets us apart, this is our differentiator.
Our ability to tell unique local stories, to cover councils, to report on courts, to give a voice to those who so often are without one.
We need to operate smarter by making better use of data. The power of data is what is propelling Google and Facebook to our detriment.
And finally, our united voice needs to maintain the pressure in Canberra for media reforms or I fear the Darwin community may not be the only one to lose its local TV, radio or newspaper.
The Government needs to ensure that Australian copyright law is protected. Copyright laws must provide a framework to ensure journalists, musicians and sporting bodies - can continue to create and invest in local content.
Let me conclude.
These are challenging times for our industry, we face a complexity of issues that pose significant threats to our future. But we will withstand them and grow stronger.
News Corp has constantly - and successfully - adapted to change.
Since Rupert Murdoch's first newspaper acquisition, he has been a disruptor, has made hard choices and driven change. We are a company defined by our ability to do things different, to take risks.
The future of Australian media will be determined by those who work together, work smarter, put their customers first and continue to invest in the craft that is of the utmost importance to this country - journalism.
I am, as I said, an optimist and I am confident of a vibrant future ahead.
I look forward to us working together to build that bright future.