BotW: On the road to Hubbl and Brad Banducci’s awkwardly timed exit

BY Tim Burrowes

February 23, 2024 11:14

Welcome to Best of the Week, mostly written on a crisp Saturday morning in Evandale, Tasmania.

Today: Why Woolworths had to go ahead with its Brad Banducci retirement announcement despite the bad timing, and understanding what’s at play with Hubbl.

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Banducci’s big week

I travel to Sydney from Tasmania often enough that I’ve developed an agreeable routine. The 140 minute road trip to the airport is great for catching up on podcasts. It’s a short enough trip to be done in one go, but even better is stopping off at the pleasant bakery cafe along the way, and spend a few minutes over coffee checking emails while cows graze in the paddock outside.

Having not been offline for long, there’s not usually much to deal with.

On Wednesday, I had a hunch something was different. My phone had been chirping with text messages every few minutes.

When I stopped, all became clear. About ten minutes after that morning’s Unmade email went out of the door – examining what went wrong with Woolworths boss Brad Banducci’s confrontational interview on the ABC’s Four Corners – he announced he was going to step down. To use his now infamous words (as the AFR’s Rear Window was first to point out) he was retired, by the way.

The messages were from people amused by the close timing of Unmade’s post. Half of them commiserating that it was bad timing; if only we could have waited a few more minutes; the other half celebrating that it was good timing; thank goodness it came out first.

Banducci’s forthcoming exit became a fascinating Day Three story. I did a number of media interviews, and was asked in every one whether Banducci’s poor Four Corners performance was the real cause of his exit.

It was not.

Woolworths’ position was that Banducci had told the board long ago. And the timeline backs that up. The logical moment to tell the market was during a half year financial results briefing, and that had always been scheduled for Wednesday.

Even if that poor interview was a resigning matter (which it wasn’t) there just wouldn’t have been time between Monday night and Wednesday morning to do the necessary formalities to lock in his successor Amanda Bardwell.

But a CEO resigning (or, retiring) in the middle of a PR storm certainly changes the tone of the coverage. Which leads to the logical question: shouldn’t Woolworths have waited a few more days for the announcement, so the story had moved on?

In the real world, absolutely not. There would have been a detailed plan for the announcement already in place. By Monday, staff and key partners would have been starting to be informed. With the circle of information widening, the information would have leaked anyway – it always does. That would have been far messier, particularly if it broke during a trading day.

Having got it wrong on Monday, they got this one right.

Speaking of the Woolworths results, there was a number I was particularly interested to see.

The division which includes the company’s retail media play, Cartology, is still on a tear. The “Digital & Media, Rewards & Services and HomeRun” unit grew its revenues by 50% for the half, to just over $1bn. While the dollar amount wasn’t broken down within that for Cartology, the company did disclose that Cartology grew its revenue by another 15%.

Nearly five years in, that’s impressive growth in a market that’s otherwise down.

Hubbling on the Harbour

The reason for Wednesday’s trip was to attend the launch of Foxtel Group’s new offering, Hubbl. The next morning I also headed out to Macquarie Park to interview CEO Patrick Delany for next Thursday’s podcast.

It wasn’t until arriving at the Sydney Harbour launch that it became obvious what an absolute priority Hubbl is for the organisation.

Most of News Corp’s global board was in the audience, including CEO Robert Thomson. So too were executives from most of the wider TV industry.

For an organisation that used last October’s Foxtel Media Upfronts to break up with the TV establishment, the love was back on Wednesday night. The free to air players were prominently featured across the evening, as they will be on Hubbl.

The event was fronted by Hamish Blake and Andy Lee, who will also be the faces of the marketing campaign. Along with above the line advertising, a key component will be the retail strategy, via Harvey Norman and JB Hi-Fi.

In terms of the launch, they’re leaving everything on the field. If a product can succeed through willpower, then Hubbl will succeed.

And that’s the multi million dollar: if.

So what is Hubbl? Is it at heart, a device play, a software play, or a subscription play?Reflecting how complicated the TV landscape has become, Hubbl is all of those things.

Effectively, Hubbl is becoming the operating system for Foxtel Group’s streaming operations. The word Foxtel was not uttered during the presentation. Foxtel’s Streamotion, the corporate parent of Kayo and Binge, is changing its name to Hubbl.

Most prominent in the marketing push is the $99 puck. But the hardware also extends to new 55 and 65 inch televisions. All of the technology is licensed from Comcast, onwer of Sky TV in the UK, where the Sky Glass has been in the market for more than two years.

The problem Hubbl is seeking to solve for consumers is a real one: With multiple household streaming subscriptions, how to watch TV seamlessly all in one place, through one interface?

But others are already attempting to answer that. Fetch TV, majority owned by Foxtel group’s minority owner Telstra (go figure), has been in the aggregation game for more than a decade, and relaunched an improved navigation late last year. Smart TVs provide another navigation point. To a lesser extent so does the Apple TV box, Google’s Chromecast or even Amazon’s Firestick. Hell, even the Foxtel iQ box is most of the way there as aggregation hub.

That remains the biggest question.

I’m yet to use the product over time at home, but let’s give it the benefit of the doubt and assume that it’s a really good experience. Let’s say it always knows where a viewer is up to with shows, and intelligently offers what you’re most likely to want. And let’s assume that its ability to help consumers manage their subscriptions has real utility.

With that be enough to overcome inertia for people already used to finding their shows through their smart TV, or directly through individual apps? Changing habits is really difficult, particularly if it involves asking people to buy another device.

It reminds me of another grand News Corp project. When the company launched digital subscriptions for its newspapers about 15 years ago, there was widespread scepticism. I remember asking a panel whether people would subscribe. The answer from PHD strategist Mark Holden (now their worldwide chief strategy officer) has always stayed with me because it was not the prevailing point of view at the time. “Will people subscribe? Sure. The question is, how many.”

As we now know, the answer eventually became: enough.

Hubbl is for a demographic. It’s for people who grew up with streaming, not broadcast. Maybe there are enough of them out there, particularly over time. Maybe.

What I still am not clear on, is why this project in particular is the one that is of such strategic importance that Foxtel should go all in. Yes, subscriptions seem to be plateauing for everybody – we saw that in Nine’s Stan numbers this week, and earlier this month was saw it in the Binge and Kayo numbers. So having a greater influence directly on consumers makes existential sense.

But is competing with TV makers and other hardware players a winnable fight?

Perhaps it will come down to willpower, after all.

Declaration: My travel and accommodation for the trip was covered by Foxtel

Index back in green

The Unmade Index recovered some of Thursday’s dramatic fall yesterday, improving by 2.26% to 589.9 points.

On Thursday, the index, which tracks Australia’s listed media and marketing companies, hit its second lowest point on record, of 576.84 points. The only time the index has dipped lower was at the end of last October when it dropped to 568.76.

The Unmade Index began at the start of 2022, at a nominal 1000 points. It has since lost 41% of that value.

Yesterday saw Nine recover 3.27% after disappointing the market on Thursday with a weak outlook. However the company is still trading below a $3bn market capitalisation.

Most of yesterday’s growth for Nine could be attributed to a 5.06% improvement in its majority owned real estate platform Domain.

Among the broadcasters, Seven West Media had the worst day yesterday, losing another 2.17%. The company’s market cap is the lowest it has been since November 2020.

CotW: Taylor, Trav… and Tooheys

In each edition of BOTW, our friends at Little Black Book Online highlight their Campaign of the Week.

LBB’s APAC reporter Casey writes:

In the midst of Swiftie-mania and every brand jumping to involve Taylor Swift in their marketing, Thinkerbell took a different route for Tooheys.

Poking fun at Swift’s partner, NFL player Travis Kelce, the out of home campaign took a tongue-in-cheek approach to the couple’s relationship, stating that he’s touched down ‘just in time for the real footy to start.’

In case you missed it on Unmade this week:

On Monday, we analysed the breaking news of the departure of Paramount boss Jarrod Villani:

On Tuesday, in our members-only content, we talked to Ooh Media boss Cathy O’Connor after a decent set of numbers for Australia’s biggest listed outdoor advertising company:

On Wednesday we focused on the PR failings behind Woolworths boss Brad Banducci’s memorable Four Corners interview:

On Thursday we shared highlights from industry body Commercial Radio + Audio’s Heard conference:

And on Friday we analysed Nine’s market-spooking half year results, and ARN Media’s full year update: