What does it take for a business publication to succeed in Australia?
Welcome to Tuesdata, our weekly analysis for Unmade’s paying members.
Below, we examine why it’s so difficult for business media publications to survive, let alone thrive in Australia.
Further down, the Unmade Index clings to positive territory despite most media stocks going red.
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The factors that drive so many business publications to failure – and how they can succeed
Seja Al Zaidi writes:
The Australian media environment has a tendency to be inhospitable to new business and finance publications.
The landscape is littered with niche publications that have struggled to find audience, while legacy behemoths continue to command most of the market share. According to several media bosses who are currently attempting to scale business titles of their own, the struggle to monetise a business news publication is largely due to the relatively small size of the market and the unwillingness of marketers to switch spend to smaller titles.
The latest online ranking of financial news from Ipsos sees the financial sections of general news sites dominate the top ten. More than 11 million Australians aged 14 and over consumed finance news related content on websites and apps in September.
Despite many new entrants in this competitive arena, the finance section of News Corp’s news.com.au comes top for business and financial news readership with a monthly audience of nearly 3.9m.
Next comes the Forbes global site with an audience of 2.6m and the Australian Financial Review which reaches 2.2m. Other paywall-free titles in the top ten include 7news.com.au, MSN Money and Yahoo Finance.
Business publications have an especially hard time surviving in the Australian media landscape.
Titles that have shuttered in recent years include business magazine BRW (which was partly folded into the AFR), Business Spectator and Eureka Report (after they were acquired by News Corp). Nine’s Chainsaw has had a shaky start with top editorial talent leaving shortly after launch. The Market Herald has faced farcical levels of internal turmoil and David Koch’s Pinstripe Media has just laid off its sales and partnerships team.
Global publications rarely make it down under, and they don’t have a history of faring well when they do.
One example of a recently shuttered business media import was
Business Insider Australia, which shut up shop in early 2022 after its German-owned parent company, Axel Springer, decided to end its local publishing licence.
The man responsible for the launch of the publication, Chris Janz – who has since co-founded Capital Brief, a publication armed with a team of pedigreed reporters, aiming to play in the same sandbox as the AFR – says local licensing arrangements for global media brands often fail because the local arm doesn’t have ‘full control over future direction’.
“In a market the size of Australia, you need that control. There are benefits in bringing brands here and being instantly recognisable. But it also comes with baggage. To get that balance right can be really difficult,” Janz says.
“You look at Insider, and the reality is the US parent was bought by another company and they had different priorities when it came to international editions. So you kind of become beholden to the strategy of the licensor, rather than being able to adapt to the local market. They chose to become one hundred percent owned and operated and you’ve kind of got no choice in the matter. That’s another reason why we’re building a new brand here that we have full control over. We can make the appropriate decisions for our audience rather than getting the memos from head office in the States, which is a very different media market.”
Just over a year ago, Private Media, owner of Crikey, introduced the local franchise of US business publication Inc. Magazine. It was the same day that Forbes Australia launched, with plans to establish a bi-monthly magazine in addition to its website (which is generally made up of paid editorials, branded content and articles from contributors who receive remuneration based on traffic).
Private Media CEO Will Hayward says that arrangements with global business brands which go beyond sales representation are challenging. “These deals are pretty hard to negotiate. There’s a fairly easy version where you just represent their commercial interests in the market and you don’t try and build a product. You just sell that entry and both those deals work pretty well and you’re like a local market sales house,” he explains.
“If you want to build a product and monetise digital audiences in this era, I think it’s really important to have diversified revenue. What you want is a well defined, valuable audience that is valuable because you can monetise them from subscriptions, events, and advertising. In order to monetise in any of those three directions, you need to deeply understand this audience. And that really leads back to zero and first party data and your capacity to further segment what is already a fairly niche audience,” Hayward says.
“If you’re just representing an international brand and selling their local market inventory, it’s very hard for you to do any of those things. You can’t integrate any of your own systems and you can’t run your own customer data platform (CDP). So our view is that there is an underserved category. There is an excess of brands that claim to service the SME (small to medium enterprise) audience, but actually in terms of audience reach and quality of content created, the SME audience is fairly underserved.”
There is a litany of niche publications in Australia aiming to service the SME, startup and investor market. Mostly, however, they remain minor players, perpetually struggling to ever scale and establish sustainable business models.
David Koch-owned Pinstripe Media, which owns Startup Daily and Flying Solo as well as a stake in scrappy, bare-bones television upstart Ausbiz, is one of those servicing that niche. In the last month, Pinstripe made its sales and partnership team redundant, a sign that advertising revenue may be weakening.
Fear and Greed co-founder (and newly appointed part time publisher of Mumbrella) Adam Lang suggests a lot of titles have struggled (and shuttered) due to increased disruption and an ‘unhealthy precedent’ being set in recent years.
Fear and Greed vies with the AFR’s Chanticleer as the country’s most downloaded business podcast. In the September Australian Podcast Ranker, Fear & Greed had 57,111 monthly listeners to Chanticleer’s 52,102.
Fear & Greed was launched two years ago by Lang and fellow Fairfax refugees Sean Aylmer and Michael Thompson.
“You’ve got to have an audience target and a context that’s appealing to advertisers. You’ve got to work out a way to make that connection from advertiser to your audience. And then of course, to be able to do so at a profit. All of those areas are challenging and they’re constantly evolving,” says Lang.
According to Private Media’s Hayward: “The business media landscape in Australia is slightly bifurcated between the big mastheads that are obsessed with the big companies – they have great products, great first party data and they can monetise in a number of ways. Then at the other end of the market, you have a bunch of niche players who are attempting to cater for the SME audience, but lack any of the infrastructure to properly monetise that audience or build any scale whatsoever to that audience.
“99.8 percent of businesses in Australia have fewer than 200 employees. The big mastheads are obsessed with those companies that have more than 200 employees for good reason. They’re huge businesses with massive revenues, and a whole bunch of advertisers are also obsessed with those businesses”.
No publication is more emblematic of this ASX-200 infatuation than the Australian Financial Review. Since it was started by Fairfax as a weekly just over 70 years ago, before going daily a decade later, the masthead has grown to overwhelmingly service ‘the big end of town’.
As a paper, the AFR’s influence outweighs its print circulation. Before the the Audit Bureau of Circulations collapsed five years ago, the AFR had dropped below 40,000 printed copies per day. That number is likely to be closer to 30,000 now, as readers continue to switch to digital. From an advertiser perspective, it’s the right 30,000 readers.
August’s Roy Morgan audience numbers suggest that more than 1.1 million people read a print edition of the Financial Review in the four weeks to the end of June, with the masthead experiencing its fourth consecutive quarter of growth, and a 9 per cent year-on-year increase.
Lang points out that in comparison, niche titles will struggle to get budget allocation so long as their audiences remain diminutive.
“One of the challenges is that as an audience, we’ve only got so much attention to spare, so yeah, we’ll go with the big brand names, reading about the ASX 200, we’ll pay attention to that. You want to read about people you’re familiar with.
“But after that, maybe we just haven’t got enough time to consider everything else. Niche titles bring them to attention at a smaller scale, and occasionally they’ll reach beyond those niches to bigger audiences. But I think unless you’re getting bigger audiences, it’s hard to then appeal to the bigger advertising brands for some of their budget,” Lang says.
But Chris Janz, who ran Nine’s publishing division between 2016 and 2021, says the robustness of the AFR’s advertising revenue keeps diminishing, thanks in part to the rise and rise of Google.
“If you go back to 2006-8, you were still able to command really high CPMs in digital advertising. Advertisers also really respected context and wanted to be associated with high quality content in a safe environment,” he says.
Securing context-relevant advertisers was another challenge pinpointed by Janz.
“That is a core challenge, because if you rewind more than a decade ago, if you were advertising in a business environment, you’d command CPMs north of $100. And today, you only need to look at a publication like the Financial Review in print. There isn’t the advertising volume that there once was, and digitally, a lot of the time, it’s house ads. So they’re not able to command the premium for the audience that they once were. And I think there’s a whole host of reasons for that. One of them is the dominance of Google in the space and the ability to target readers individually. Another reason that titles like the Fin have become much less targeted. Once upon a time, it was the publication for the C-suite, but now they boast about their reach and how their reach is much bigger than that population they were once targeting.”
Can smaller finance titles scale? If so, how?
According to Janz, reliance by small titles on advertising revenue alone is a factor that often leads to poorer content quality, diminished audiences and inability to scale.
“There’s a dependence on advertising revenue that doesn’t get them to scale and it means they are producing content that isn’t worth paying for. They get caught in the branded content trap and end up in a world then where you don’t have a big enough audience. To be funded by advertising alone, you’re not producing quality journalism that people are willing to pay for. So you’re kind of caught in a no man’s land.”
One news business that has lost momentum is the famously embattled Perth-based Market Herald, which owns trading forum HotCopper.
TMH’s core product is being first to cover news about smaller listed stocks simultaneous with its release to the ASX, as well as video content produced near-live.
The parent company has been embroiled in a series of public sagas that have chipped away at the firm’s credibility.
In recent months the company’s biggest shareholders, the Argyle family, were ordered by the Takeovers Panel to sell a chunk of their holdings in the business after dubious ownership manoeuvres came to light.
As part of the battle for control, managing director Jag Sanger was ousted by the Argyles. More recently, the company filed a statement of claim alleging financial improprieties on the part of Sanger. He denies the claims.
This all came after the company’s purchase of Gumtree, Autotrader and Carsguide, purchases that Sanger at the time believed would help achieve his vision of shaping the business into an Asia-Pacific version of the Wall Street Journal or Financial Times.
Drilling into a niche
Hayward notes that honing in on a niche, and using zero and first party data to further delineate and target that audience is key to establishing both monetisation and profitability.
“If you can obsess over a valuable niche, get very close to that audience, quantify that proximity through first party data, and further segment that audience, then there’s a really great path to monetisation.”
“We think of sustainability in three directions. So you need to grow audience. You need to extract sufficient ARPU (average revenue per user) from the audience that you have, so you can reinvest. And you need to control cost. If you can do those three things, then you can build a sustainable, great business. In other markets we’ve seen that work incredibly well. But it is even more challenging in a small market like Australia. There is only so much advertising revenue and so much audience, and so much time for that audience to come to your events, and capacity for them to spend on all of these things. It’s a small competitive market, which means you need to be very, very disciplined.”
Hayward cites US-based Industry Dive as an example of a niche trade publisher that has successfully achieved that. Industry Dive was sold to Informa last year for a reported US$389m.
“They’re super focused on these niches. The interesting thing about them is they take a very standardised playbook approach. So if you go to their different websites, they all look exactly the same.
“So there’s none of this ‘oh, we’re building this bespoke experience because plumbers are totally different to supply chain executives’. They don’t bother changing the colour. They don’t do any of that. They just know how to build a good website and a good newsletter. They know the single biggest thing advertisers want from them is leads. So if you can say to an advertiser, spend this money with us and we will get your sales team a thousand qualified leads where we can tell you who the person is, what industry they work in, what their job title is and how much budget they control – that’s the way you open up real budgets and then part of the execution is just being very, very disciplined on not meandering away and wandering off and deciding to do videocast or whatever.”
Janz rejects the proposition that a quality publication can be funded just from advertising any longer. Asking readers to pay to subscribe is the plan.
“Unashamedly, we’re after a very distinctive, focused, targeted audience. The reality of the Australian market is that if you are funded by advertising, you do need to reach a certain scale or to be able to churn a whole bunch of low cost ads through your product. Our model instead is, we know exactly who the readership that we’re wanting to service is, and they are willing to pay for journalism that provides them with value. They don’t want a fire hose of irrelevant content served to them. The incentives are not there to produce great quality content if it’s funded by advertising. The beauty of being reader funded is that it provides great clarity of purpose.”
Nine’s rise helps Index stay flat despite dashboard of red
After a week of dismal performance that saw it hit an all time low, the Unmade Index crept back into the green on Monday with a modest 0.29% lift to 570.39 points.
Although there were broad falls in listed media and marketing companies, a lift in share price for Nine, the largest stock on the Unmade Index, helped it edge into positive territory.
Nine had a 2.21% lift in share price. The only other stock to go up yesterday was The Market Herald, up by 2.17%.
IVE Group experienced the sharpest drop in share price – 4.37% – ARN Media fell 1.86%, Seven West Media 1.85%, Domain 1.45% and Sports Entertainment Group 4.17%.
Seven is now trading at its lowest market capitalisation since late 2020.
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