BOTW: Our winners (and losers) of FY23

BY Tim Burrowes

July 1, 2023 12:10

Welcome to Best of the Week, written in London while you were sleeping, with Test Match Special chattering in the background. The Ashes are a confusing time to hold two passports.

Today: The end of financial year verdict on our local media companies.

Your last chance to make a 45% saving on an Unmade membership has arrived. Our end of financial year offer closes tonight, and the offer will not be repeated. Only our paying members get access to the full Unmade archive.

The financial year’s (few) winners and (many) losers

Whatever the opposite of a starting pistol is, they fired it last night.

Goodbye 2022-23 financial year. Hello FY24.

We’ll find out the details on how everyone did in profit and loss terms when reporting season kicks off in six weeks or so, although there’ve already been one or two hints, including profit warnings from Ooh Media and Enero.

What’s possible to do immediately though is calculate how each company did in terms of market capitalisation across the year.

In terms of which listed media and marketing companies did best or worst, there’s a couple of ways of ranking it – that includes percentage movements or in dollar terms.

As it happens, both methods return the same result at top and bottom. In both percentage and dollars, Jason Pellegrino gets the gong for CEO of the financial year, while Enero boss Brent Scrimshaw gets the wooden spoon.

Crunching the numbers shows that somebody who bought a share in real estate platform Domain back on July 1 last year grew their investment by 26%.

Meanwhile, somebody who bought a share in communications agencies holding company Enero lost their shirt, or half of it anyway.

Scrimshaw: Oversaw Enero’s 50% loss in market capitalisation

Domain’s 26.33% share price growth over the last 12 months is some way off the all time high the business reached in late 2021, but still impressive during a housing downturn. Talk about cycle-proof. In an upturn volumes grow, and in a downturn, sellers have to work harder to promote their properties.

Domain’s $500m growth in market cap to $2.4bn has done some big favours to parent company Nine. Without its 60% ownership of Domain, it’s likely Nine would have seen a decline in its market capitalisation, which instead rose by $221m.

With Nine’s market cap now sitting on $3.34bn, almost half if its value comes from its stake in Domain.

At the other end of the table, Enero’s fall – part of a global decline in sentiment around communications agencies in the face of an impending global recession – represented a loss in value of $142m to shareholders.

The only other large media stock to see a decline of more than 10% during the financial year was Southern Cross Austereo, which dropped by 14.36% during the financial year. That represented a decline of roughly $36m to a valuation of just over $200m.

Seven West Media lost about $31m in valuation over the year.

Perhaps the hardest-to-justify decline in value was ARN Media. Despite successfully selling its stake in software company Soprano leaving it virtually debt free (until it splurged $38m on a stake in SCA), ARN fell by more than 6% for the year. Sentiment against radio’s downturn prospects really is sour (and overblown).

The Unmade Index, which features all the local ASX-listed media and marketing companies, tells its own story.

Having begun the financial year on July 1, 2022 on 611 points, the index closed last night not far from where it began, on 636 points.

That won’t have been much comfort for long term media investors though. We only began the Unmade Index in January 2022, on a nominal 1000 points. Since then there has never been a day when the index traded above 1000 points. Most of that fall came in the quarter of April to July 2022.

It’s been 12 months of treading water. The key question is whether investors have already priced in media’s downturn prospects, or if the worst is yet to come.

Meanwhile, we don’t track News Corp within the Unmade Index because most of its valuation comes from businesses held outside of Australia, in the US and UK. But for the record, News Corp outperformed its local rivals, with its market capitalisation rising by 30% during the financial year, to US$11.3bn.

And while we’re making notes for the record, as I’ve previously disclosed, through my super fund I have modest investments in every Unmade Index company except for The Market Herald. My worst investment so far has been Aspermont (down 40% since the April investment, while News Corp has done best (up 14% since April).

Meanwhile, the final day of trading for the financial year was a mildly positive one for the Unmade Index, with the index rising by 0.24% to 636.6 points.

On Friday, ARN Media had the best day, rising by 6.6%. Seven West Media was the worst performing of the large media stocks, falling by 2.6%. The Market Herald dropped by 15.38%, taking it close to a three year low.

The Week in AI

Cat McGinn, curator of Unmade’s AI conference for media and marketing, humAIn – human creativity x AI writes:

Pay no attention to the AI behind the curtain

Meta has released a detailed explanation of the AI algorithms that determine the social media content delivered to users, aiming to improve perceptions of transparency and accountability. The move, driven by regulatory pressure, follows criticism on the handling of user data and growing concern about AI technologies. The company’s AI systems’ workings are detailed in 22 “system cards” explaining how content is ranked and recommended on Facebook and Instagram. The company is expanding the “Why Am I Seeing This?” feature, testing a new interest-marking feature, and will soon roll out a Content Library and API for researchers. providing access to public data from Instagram and Facebook.

Close to the Edge

Microsoft has introduced new AI-driven shopping tools in Bing and the Bing AI chatbot in the Edge sidebar, including automated buying guides, aggregated product listings and AI-generated review summaries. The company claims these changes are intended to make the online shopping process less overwhelming. They are now available in the US and will roll out to all other territories soon. A ‘Price Match’ tool will help users request price matches from partnered retailers. These updates aim to enhance users’ online shopping experiences.

Coalition of the Billing

News publishers, including The New York Times, News Corp, Vox Media, Advance, and Axel Springer are considering forming a coalition to address the impacts of generative artificial intelligence (GAI) on advertising, search, content, and intellectual property rights. Their concerns stem from generative AI’s potential to provide comprehensive content summaries, eliminating the need for users to click through to the publishers’ sites. OpenAI CEO Sam Altman has said in the past that the company has used extensive data from publishers under the fair use provision, but that content deals are available, “where warranted.”

Genning up on GenAI

A new report from McKinsey predicts AI will have significant impacts on marketing and sales, particularly in the areas of customer experience (CX), growth, and productivity. The research finds at least one fifth of current marketing and sales operations could be automated by AI. The consultancy firm claims 90% of commercial leaders it surveyed expect to utilise generative AI solutions “often” over the next two years.

Everything AI all at once

OpenAI, the tech company behind ChatGPT, plans to launch a marketplace allowing developers to sell their AI models built on OpenAI’s technology. This move could extend OpenAI’s technology to a broader customer base, potentially competing with app stores like Salesforce and Microsoft. Amazon Web Services (AWS) divulged its strategy in the AI field, to provide a single access point for companies to utilise a variety of AI models through its Bedrock capability, including a platform for foundational models with applications for enterprise organisations, through to micro businesses.

AI for content, CX, and AI-powered shopping are some of the topics to be discussed at humAIn | human creativity x AI on July 12. Tickets are on sale.