Best of the Week: Walkbacks, setbacks, LinkedIn hacks, trainwrecks and a holdco flex
Welcome to Best of the Week, started on a grey Friday at Sisters Beach, Tasmania, and finished on a beautiful, crisp, clear morning.
Today’s writing soundtrack: The Smiths: Meat is Murder.
Happy Gay Uncle’s Day. I’m not sure they’ve got the apostrophe in the correct place.
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From first thing Monday, it was a busy news week. We were spoilt for choice on the topics to include in our Start the Week podcast.
The Australian began the week by walking back its July story that Paramount was going to bid $600m per year to win the AFL rights for its free-to-air network Ten and streaming service Paramount+. The previous 2017 deal had been worth about $420m per year, which rose to about $470m over each of the last two years.
But on Monday, The Oz revised its numbers downwards by $100m. Actually, the number being offered by Paramount was less than $500m a year, said The Australian. Meanwhile, Beverley McGarvey, the content boss of Paramount locally, was politely claiming in The Age and The Sydney Morning Herald that the $600m had been a fiction in the first place. “Some of those numbers are plucked from thin air,” she told the papers.
With AFL broadly happy with how Seven and Foxtel promote and broadcast the sport, that shifts the power back in the direction of the incumbents.
AFL would need a good reason to take the risk of switching horses – technical difficulties with the early streams of Paramount’s A-League coverage won’t boost confidence there.
Paramount+ launched one year ago this week, incidentally. I’ve had that service for the last year (and am stuck with it for another 12 months to come because I forgot to cancel before it auto-renewed on me without warning this week; learn from my mistake). I’d say it’s the buggiest of the major streaming platforms.
The prize is a big one. Ten’s ratings have never recovered from the loss of its slice of AFL a decade ago back when Lachlan Murdoch was calling the shots. The new reality format Hunted briefly put the network back in the game recently, but the long term predictability of sport ratings makes it easier to lock in sponsors on long term deals, which is what makes it so valuable.
That applies to Seven and Foxtel too. Seven without AFL is almost inconceivable. With no inside track, it’s impossible to say from here who will win. But from the hints that have emerged so far, it’s starting to look like status quo.
Sticking with streaming, Disney revealed on Thursday, our time, that it has hit a milestone. It now has 221.1m paying subscribers to its streaming services, overtaking Netflix’s 220.7m.
It’s worth remembering, by the way, that when Rupert Murdoch sold 21st Century Fox to Disney in 2019, he became one of the biggest shareholders. So that’s a win for him too.
Admittedly, that subscriber number comes by counting subscribers not just to Disney+, but sister services Hulu and ESPN+, which aren’t yet available in Australia.
Just like Netflix, Disney+ will have an advertising tier by the end of the year, the company announced this week. That’s a big deal too.
Incidentally, Think TV said this week that advertising revenue into the total television market was worth $4.3bn in the financial year just gone. The fastest growing segment of that was indeed ad-supported video, which grew by 53.3% for the year, with more than $400m going into Seven, Nine, Ten and Foxtel.
Based on that growth and the imminent arrival of more competitors, the best time for Paramount to push the button on a local launch of its free ad-supported Pluto TV is now, and the second best time is soon.
Not that all the overseas financials were as good this week.
Sticking with the TV industry, there was a fascinating piece of analysis published by The Media Leader on Tuesday. The newly merged Warner Bros Discovery came into being saddled with a massive debt, just as interest rates are starting to rise. The company is loaded with an astonishing $53bn in debt – which is about five times as much as its annual profits are likely to be.
We’re still at least 18 months from Warner Bros Discovery launching its streaming service in Australia, which will mean the end of Foxtel’s access to HBO content like Succession and the Game of Thrones universe.
That will be bad for Binge. Incidentally, what most analysis of this week’s News Corp and Foxtel number missed, was that on a quarterly basis, Binge’s subscribers went down for the first time (see the yellow line in the chart below).
I wonder how much trouble Warner Bros Discovery will be in by the time it finally gets to Australia. What with closing CNN+ within weeks of its launch and canning the Batgirl movie when it was almost finished, the cost cutting is starting to smell like disaster. Could there be yet another reprieve for Foxtel’s entertainment offering?
Hello from the holdcos
Elsewhere in the world, Dentsu Group released its quarterly numbers last night. They were pretty good, with a mention for Australia delivering 8% growth in the second quarter.
Locally Dentsu has finally got itself on an even keel in both its creative and media offerings after a wild few years.
Globally, Dentsu’s revenue was up by 19.3% for the quarter to the equivalent of about $2.7bn. Profit for the quarter was up 31.5% to about $370m. Not bad.
However, there was the same paragraph of caution that all the global holding companies have been including in their updates about the months ahead: “Whilst the macro-outlook may remain uncertain, we enter the second half of the year with confidence,” was the quote from CEO Hiroshi Igarashi.
Meanwhiles, Enero – the only ASX-listed holdco – put out a decent set of annual results yesterday.
Enero’s best known creative agency is BMF, although it was only mentioned twice in the results presentation from CEO Brent Scrimshaw. By contrast, PR agency Hotwire got 11 mentions.
Having sold its research consultancies The Leading Edge and The Digital Edge to FiftyFive5 back in May, and acquiring B2B agencies ROI DNA in the US and GetIT in APAC in July, Enero is starting to take a new shape. It sees its future dollars in digital transformation.
Looking at the slide from the preso, it would seem that BMF’s days as the company’s flagship are coming to an end, or maybe that’s over already? That creative/content sliver is pretty small.
I wonder too, whether the next set of BMF numbers will be as good, now the election is over. As the update put it: “BMF benefitted from higher-than-expected initiatives in FY22 H1 associated with health and a period of government transition.”
“Government transition” is a polite way of describing the Coalition government’s pre-election spree using public dollars.
Is it the children who are wrong?
Demographic shifts were another big theme of the week.
The Guardian flagged in a piece on Monday that Triple J is struggling to retain its target audience of 18 to 24-year-olds.
I explored the ratings data, publishing the findings on Unmade on Thursday.
The article quickly became one of our most read and shared of the last 12 months. (Welcome to Unmade, for those of you who subscribed for the first time this week, by the way.)
But the ABC is not the only media organisation struggling to stay relevant for younger audiences. So is Facebook.
This week, the US-based Pew Research Center, which publishes high quality data around media and technology shared some fascinating stats about changing teenage digital habits over the last eight years.
Back in 2014, 71 per cent of those aged 13 to 17 said they were on Facebook. Now its 32%.
They’ve all (well, 67% of them, anyway) gone to TikTok.
That’s stunning, considering that TikTok didn’t even launch until 2018.
And the local impact of TikTok was also revealed this week. The Australian Financial Review dug up the company’s local filing to the Australian Securities and Investments Commission. Its revenue in 2021 was $71.8m, up from $22m the year before.
From nowhere, TikTok must now be in the top 15 media companies locally when it comes to revenue. It’s still less than a tenth of Facebook’s local advertising revenue of $1.1bn, but is closing the gap fast.
While we’re on the subject of social media, I can’t let the week go by without acknowledging the most awful post of the week, over on LinkedIn.
Braden Wallake, CEO of US marketing agency HyperSocial made it all about him when he published a lengthy post about how sad he was to be making some of his staff redundant because he’d changed business direction.
The comment thread is a trainwreck. Particularly once people started pointing to his now deleted social media post a few days earlier celebrating buying a new house. It takes a certain type of person to succeed on LinkedIn.
I use the word trainwreck, by the way, mainly as an excuse to make a recommendation. If you have Netflix, do check out the documentary Trainwreck: Woodstock ‘99. It’s a brilliant three-part behind-the-scenes story of the horror show that was the Woodstock revival. I binged the whole lot last night. Brilliant.
Unmade Index: Enero a-go-go
In an otherwise bad day on the Unmade Index of ASX-listed media and marketing companies, Enero was the bright spot yesterday.
Thanks to the result I mentioned above, Enero’s share price jumped by 7.8%.
Meanwhile, Seven and Nine both slipped back yesterday. For now the index has managed to stay just above its 700-point floor.
New weekender
Almost time to get on with Saturday stuff.
I’m trying to calculate the earliest socially acceptable time to head to the general store, buy a newspaper and order oysters Kilpatrick with a glass of Devils Corner pinot. Is 11.30am too early?
There’s a busy week ahead for my colleague Damian Francis and myself, as we start first round interviews for our head of sales. As you may recall, Unmade will be taking advertising from the beginning of October.
Inventory will initially be limited (and in some weeks limited to a single brand), so trade marketers looking to get a jump on their rivals might want to pounce now. If you’d like to see our media kit, please email Damo at damian@unmade.media
Have a great weekend
Toodlepip
Tim Burrowes
tim@unmade.media
