Business of Media
National newswire AAP turns to crowdfunding after finding itself under early financial pressure
A month after Australian Associated Press 2.0 was launched as a not-for-profit company the 85-year-old newswire is under financial pressure and appealing to the public for monetary contributions, report Guardian Australia‘s Amanda Meade and Anne Davies.
AAP’s chief executive, Emma Cowdroy, has revealed some clients have signed for “much shorter periods” as they may be “testing the service and they also know there is a new entrant coming into the market”.
The new entrant referred to by Cowdry is News Corp Australia’s inhouse newswire, NCA NewsWire, which will be offered to non-Murdoch outlets once its non-compete clause ends in five months. AAP was previously owned by News Corp and Nine Entertainment.
Cowdroy said the speed of News Corp’s “well-funded” move “threatens AAP’s unique role supplying independent content”.
If some AAP customers, like Seven West Media and Antony Catalano’s Australian Community Media, were to sign up for NCA NewsWire next year, AAP’s revenue stream from the smaller media companies would be insufficient for it to stay afloat.
The newswire has applied for funds from the $50m Public Interest News Gathering (Ping) fund established by the government to support regional newsrooms but to date has not heard the outcome. AAP was ineligible prior to the sale.
Mediaworks Sells TV operations to Discovery INC.
New Zealand’s largest independent commercial broadcaster MediaWorks and Discovery Inc. (“Discovery”) have announced a binding agreement regarding the sale of MediaWorks’ free-to-air TV business. The transaction is subject to a number of pre-completion approvals and is expected to complete by the end of the year.
The MediaWorks TV acquisition will be Discovery’s most significant free-to-air investment in the New Zealand market to date, and includes entertainment channels Three and Bravo, streaming service ThreeNow, and multi-platform news and current affairs service Newshub, as well as the further channels Three+1, Bravo+1, The Edge TV and The Breeze TV. Discovery will continue the partnership with NBCUniversal for the Bravo channel joint venture.
In the New Zealand market, Discovery currently operates a portfolio of six pay-tv channels including Discovery Channel, TLC, Animal Planet, Food Network, Living and Discovery Turbo and two free-to-air channels HGTV and Choice TV.
Glen Kyne has been appointed General Manager of TV, a role that will continue under Discovery post-completion. Discovery’s Australia and New Zealand operations will move under Simon Robinson, president APAC, and, following completion of the sale, Kyne will report to Robinson. Gareth Codd has been appointed Acting commercial director for MediaWorks Group in the interim. Rebecca Kent, GM of Discovery Australia, New Zealand and Pacific Islands, will continue to oversee the New Zealand pay-TV portfolio and free-to-air channels Choice and HGTV, and the Australia operations.
MediaWorks Group will continue to focus on its radio and out-of-home media businesses.
Jack Matthews, MediaWorks chairman, said: “MediaWorks has made great strides over the past several years and I believe Discovery is the ideal new owner to continue that momentum across the TV business. The sale will enable MediaWorks to have a greater strategic focus on the long-term future growth of its highly successful and market leading radio and out-of-home business, offering effective advertising solutions to our customers and great news and entertainment to our audiences.”
Simon Robinson, Discovery president APAC, said: “This is an exciting moment for Discovery. MediaWorks TV is New Zealand’s leading independent free-to-air commercial broadcaster, with popular shows and great brands. Discovery is a global content creator, a major free-to-air broadcaster across several European markets, including the UK, Germany, Italy, Poland and the Nordics, and has expertise in evolving our linear business to direct-to-consumer. With a 26-year heritage in the New Zealand market, we are committed to drive MediaWorks TV’s future growth and success, delivering increased value to audiences and advertisers across all screens in New Zealand.”
Michael Anderson, MediaWorks CEO, said: “We are very pleased to have reached a sales agreement with Discovery and to share this news today. This is the best possible outcome for the future of MediaWorks TV and its passionate and dedicated people who work tirelessly to make it a unique and special business. Under the ownership of Discovery, Three, Newshub and Bravo will have a long-term home and continue to play a vital role in New Zealand society.
“The ongoing success of our radio and out-of-home business demonstrates that MediaWorks has a very bright future and with this unique and powerful combination, our focus now is to accelerate the opportunities that exist for our clients.”
Glen Kyne, general manager of TV, said: “I will be thrilled to lead the Three and Newshub brands in the market as well as collaborating with NBCUniversal on the Bravo JV, on completion of the sale. Our very talented teams continue to focus on bringing New Zealanders trusted, local news and current affairs and quality entertainment content.”
Ryan Stokes dampens Seven West privatisation rumours
Seven Group chief executive Ryan Stokes has poured cold water on a capital injection from the diversified investment group into Seven West Media or his family taking the free-to-air broadcaster and publishing business private, labelling them extreme scenarios, report AFR’s Max Mason and Brad Thompson.
Seven West Media, which appointed James Warburton as chief executive 12 months ago, has been selling off assets and slashing costs in an effort to stabilise the company.
There has been constant speculation about the future of Seven West after it held negotiations with Fairfax Media from late 2017 through to mid-2018 regarding a merger of the two businesses but failed to come to a deal. It saw Nine swoop in and do a deal with Fairfax.
During the pandemic, there has been speculation around whether Kerry Stokes would privatise Seven West via his private investment vehicle Australian Capital Equity or potentially take West Australian Newspapers private and sell the TV network to News Corp.
News Corp has dampened rumours it was looking to buy Seven and was focusing on turning pay TV business Foxtel around.
Ryan Stokes, whose father Kerry Stokes is chairman of Seven West Media and Seven Group, said Seven West was continuing a “transformation journey”.
Asked if the Seven Group would inject capital if needed or the Stokes family would look to take Seven West private, Stokes said they were extreme scenarios.”
‘Manipulative’ Google’s misleading ads ‘aim to create fear’
Google has been accused of deliberately misleading users by claiming in “manipulative” new advertising that a proposed revenue-sharing deal with media companies, backed by the nation’s competition regulator, would fill its search results with junk, reports News Corp’s Kieran Gair.
The technology giant, which generated $4.8bn in local revenue last year, released a series of new ads on the weekend claiming the new regulatory code would give media organisations an “unfair advantage” over others by allowing them access to the company’s secret algorithms.
“If we talk about our search signals too much then people will manipulate them and that breaks search entirely,” Google vice-president of engineering Dave Besbris says in one ad.
In separate videos, Google claims the proposed revenue-sharing deal is not connected to paying for news but about “being required to give an unfair advantage to news companies in search”.
Google, Facebook’s $6b tax break
Australian media groups pay a tax rate up to 100 times greater than Facebook and Google on their local earnings with an estimated $6 billion in Australian-sourced earnings not taxed here, latest corporate filings show, reports AFR‘s Neil Chenoweth.
The vast disparity in tax rates makes it almost impossible for any level playing field to exist in negotiations between local media companies and the two US tech giants, which have threatened to limit or block Australian news stories over new rules that will force them to share income.
Last year President Donald Trump‘s administration successfully pressured Australia and the UK to drop plans for a 3 per cent digital tax on turnover.
Both Facebook and Google reported paying more than the standard 30 per cent Australian company tax rate on their local profits in the year to December 2019 – 33 per cent for Facebook Australia and 36.7 per cent for Google.
This is more than the 29.3 per cent tax reported by Nine Entertainment, the publisher of AFR Weekend, on earnings before impairments in the year to June. News Corp Australia pays little or no tax besides the $137 million paid by its subsidiary REA Group, but the level of financial engineering in the News accounts makes it unclear whether the newspapers actually make any significant profit to pay tax on.
But the similarity between traditional media and tech is illusory on two grounds: Google and Facebook report less than a fifth of their Australian-sourced income as local sales; and they pay no GST on most of that.
While Google and Facebook had estimated Australian sales of $7.4 billion in the year to December, Google and Facebook reported local sales of only $1.4 billion as taxable, representing a $6 billion tax break.
ACCC stand against Facebook and Google backed by international media
International groups representing publications across the US and the UK have thrown their support behind Australia‘s “big tech” bargaining code, calling on the federal government to hold firm and declaring that if successful, a similar mechanism should be implemented in their jurisdictions, report’s News Corp’s David Swan.
The overseas push comes after Facebook last week threatened to stop Australians sharing news articles on its platform if the Australian Competition and Consumer Commission’s draft bargaining code becomes law.
The world-first news code would allow media companies to negotiate with Google and Facebook over payment for news content on its platforms.
The boss of international trade association Digital Content Next, which represents publishers including NPR, CBS Interactive, Condé Nast, The New York Times, The Guardian and News Corp, told The Australian that Facebook and Google had attempted to paint Australia as an “outlier” on tech regulation.
“This couldn’t be further from the truth,” DCN chief executive Jason Kint said.
“What is happening in Australia after a robust multi-year investigation of the digital advertising market is a sign of things to come, as the rest of the world across oceans and political ideologies attempt to unlock competition and innovation again to breathe oxygen into dependent businesses and information markets whether small or large.”
Indebted rural council asked to help pay for News Corp ‘bush summit’, documents show
The Daily Telegraph and Sky News asked the Snowy Monaro regional council for $15,000 in cash and services to help pay for the newspaper’s “bush summit” conference in Cooma last week, according to council documents, reports News Corp’s Amanda Meade.
The request was approved a week before the summit despite objections from two councillors, John Castellari and Bob Stewart, who argued the money should go to needy community groups in a region that was devastated by the bushfires and Covid-19.
The bush summit is the Sydney newspaper’s major branding event and Daily Telegraph editor Ben English hosted prime minister Scott Morrison, state and regional politicians and business leaders last Friday “to brainstorm a future driven from the bush”.
Domain dismisses reporter for fabrication
Domain has dismissed a junior lifestyle reporter after an investigation revealed she was fabricating quotes in articles that appeared on the real estate listing website.
Kate Bartels, who joined Domain in April 2019, wrote two articles that quoted Melbourne-based clinical psychologist, Dr Sarah Barker. However, Dr Barker was not interviewed for the articles and the quotes were not provided by her.
Domain has since publicly apologised for the two articles, but an investigation has discovered there have been multiple other incidents of fabricated quotes or interviews written by the reporter. Hundreds of articles written by Bartels have been taken down from the Domain website until the investigation is complete.
Boy George, Kelly Rowland set to get the axe in The Voice shake-up
British pop legend Boy George and ex-Destiny‘s Child diva Kelly Rowland are set to be the two main casualties when The Voice makes its switch from Channel 9 to Seven later this year, reports News Corp’s Amy Harris.
Sources close to the sing-off, which Nine has broadcast for the past nine years, say the two international ring-ins will be the first and obvious big-name victims of Seven’s cost-cutting axe.
Remaining Aussie judges Guy Sebastian and Delta Goodrem are believed to be safe for now however bean-counters at Seven are said to be taking a close look at Goodrem’s lucrative contract, believed to be worth a whopping $1.5 million a year.
George and Rowland pull down a combined salary of $5 million a year for their part on the talent show, which they both joined in 2017.
Two-thirds of that reportedly goes to George who is currently the highest-paid on-air celebrity at Nine.
Their departure will free up some funds to throw in the direction of Kylie Minogue who is believed to be at the top of Seven’s list of replacements.
It’s believed Seven is also in talks with US hip-hop superstar Usher, who acts as a coach on the US version of the show, as well as Queen frontman Adam Lambert and Aussie songbird Jessica Mauboy.
Tristan MacManus lands Studio 10 hosting gig after Kerri-Anne Kennerley’s exit
Network Ten has appointed Irish dancer Tristan MacManus as co-host of its television morning show Studio 10, alongside Sarah Harris following the axing of stars Kerri-Anne Kennerley and Natarsha Belling from the program’s line-up as part of wider cost-cutting, reports News Corp’s Lilly Viktorovich.
MacManus, who is best known to local viewers as a judge on 10’s dancing competition show Dancing With The Stars, will make his Studio 10 hosting debut on September 14
The decision to cut Studio 10’s panel of seven hosts to two co-hosts was reported by The Australian last month, and falls in line with a two-person format similar to Seven’s Sunrise and The Morning Show, and Nine’s Today and Today Extra.
The changes to Studio 10 are part of a restructuring of 10’s news operations across the nation, including the consolidation of its weather presenters to just one, in a bid to save money.
AACTA Reg Grundy Award to back new TV entertainment ideas
The widow of Australian television mogul Reg Grundy is looking to continue his legacy by helping to bankroll a budding entrepreneur with a new idea for a TV entertainment show, reports News Corp’s Lilly Viktorovich.
Joy Chambers-Grundy has partnered with Australian Academy Cinema Television Arts to create the AACTA Reg Grundy Award, consisting of an annual $50,000 prize, for the most original idea for a new entertainment program.
Chambers-Grundy said the award had been created to “help discover budding entrepreneurs of Australian entertainment” in her late husband’s name.
Fox still in hunt for rugby broadcast rights despite missing deadline
Fox Sports will continue talks with Rugby Australia over the coming weeks as it seeks clarity over what is exactly up for sale in the code’s new TV rights deal, reports SMH‘s Tom Decent.
The pay-TV network missed RA’s Friday deadline for formal expressions of interest in a new broadcast deal but discussions are ongoing.
The code’s existing free-to-air broadcaster, Network 10, also remains in talks with the governing body. Sources with knowledge of the negotiations suggest the network is keen on a discount from its previous rights deal.
Fox Sports, which as broadcast Super Rugby since its inception in 1996, are understood to be interested in rugby – particularly Super Rugby and Test matches – and have had meetings with RA over the past few weeks. There have also been internal discussions among executives to talk about the potential production costs associated with broadcasting rugby once again.
A source with knowledge of the negotiations said that while Foxtel didn’t formally express interest on Friday, they had a “foot inside the process” and that clarity was being sought as to what was exactly on offer.