Business of Media
Tech giants’ ad revenue bigger than Australian media companies
Google and Facebook together scooped up almost $400 million more in Australian advertising revenue than five major domestic media outlets combined last year, underscoring the significant market power to be targeted in a new code of conduct forcing the tech titans to share their revenue, reports The Sydney Morning Herald’s Fergus Hunter and Zoe Samios.
Treasurer Josh Frydenberg will unveil a draft code on Friday that seeks to rein in the might of the digital platforms and strengthen Australian media organisations that have lost hundreds of millions in revenue to the US companies.
Analysis of the companies’ financial results shows that in 2019, Google’s $4.3 billion and Facebook’s $674 million of Australian advertising income topped the takings of the country’s largest publicly listed media companies.
In that calendar year, Seven West Media’s revenue was $1.1 billion, Southern Cross Austereo’s was $633 million and Prime Media’s was $184 million.
In the 2018-19 financial year, Nine Entertainment Co generated $1.48 billion in advertising revenue while News Corp Australia brought in $1.2 billion in advertising income and revenue from readers.
In total, the revenue generated by the five media companies was about $4.6 billion compared to the two tech giants’ $4.97 billion.
Facebook tops 2.7 billion monthly users in latest quarter
Facebook’s business and user growth remained strong amid the coronavirus pandemic as the social media giant reported its second quarter financial results, which lifted its stock price in after-market trading reports The Hollywood Reporter.
On Thursday, the social media giant, led by CEO Mark Zuckerberg, said revenue was up 11 percent to $18.69 billion and it earned $1.80 a share, up 98 percent year-on-year, as it unveiled its latest quarterly financials after the market close.
“We’re glad to be able to provide small businesses the tools they need to grow and be successful online during these challenging times. And we’re proud that people can rely on our services to stay connected when they can’t always be together in person,” Zuckerberg said in a statement.
Advertising revenue was up 10 percent to $18.32 billion, while revenue from payments and other fees was $366 million, up 40 percent from last year. The social network has faced an advertising recession in the broader economy, and an advertiser backlash over how it moderates offensive content, including hate speech, on its platform.
And Facebook posted 699 million DAUs in the Asia-Pacific for the second quarter, against 678 million in the first quarter. The monthly active users came in at 2.7 billion, a slight beat on an analyst forecast of 2.63 billion. The social network had 2.6 billion MAUs at the end of the first quarter.
Facebook fake news spirals out of control amid huge profits
Facebook’s propagation of dangerous misinformation is out of control and the company is making huge profits from it, reports The Australian’s Chris Griffith.
That’s a charge that its CEO Mark Zuckerberg couldn’t adequately address at a mammoth four-hour hearing looking at the monopolistic behaviour of tech giants Facebook, Google, Amazon and Apple.
The four CEOs faced a grilling at the congressional antitrust hearing early Thursday AEST.
Zuckerberg couldn’t fend off claims that Facebook’s operation to remove this content simply failed. Facebook was accused of financially benefiting from it because it was the most engaging content. He had no answer to the charge that efforts to remove it often did not work – especially in the first hours after initial publication when major damage was done.
The Facebook CEO said he disagreed that this content was helpful to his business. “It is not what people want to see,” he said, adding that Facebook ranked its content on what it believes is most meaningful to people and creates long term satisfaction.
YouTube revenue falls to $3.8b as pandemic hits ad business
Advertising revenue for the Google-owned video platform YouTube fell to US$3.8 billion in the second quarter of this year, down from Q1, when it brought in just over $4 billion in ad revenue, reports The Hollywood Reporter.
YouTube’s ad revenue was still up from Q2 of 2019, when it brought in $3.6 billion, highlighting the rapid growth for the free video platform despite global circumstances impacting advertising sales and consumer demand for goods and services.
Despite the slowdown, executives at parent company Alphabet told investors in its quarterly earnings report that business was beginning to bounce back after the ad market hit the skids in mid-March, with Alphabet and Google CFO Ruth Porat saying that the quarter saw a “gradual improvement in our ads business.”
Alphabet only revealed YouTube’s ad revenue for the first time in February of this year, disclosing that the video platform saw $15.1 billion in ad revenue in 2019, up from $11.1 billion in 2018 and $8.1 billion in 2017. Despite the pandemic impact, YouTube appears poised to set yet another revenue record in 2020.
Sky sees £575m fall in revenue as sport is hit by Covid-19 lockdown
European broadcaster Sky has reported a US$750m (£575m) plunge in revenues as more than 200,000 customers switched off in the three months to the end of June while key programming such as Premier League football was off air during the coronavirus pandemic, reports The Guardian.
Sky, which is owned by US pay-TV giant Comcast, reported a 15.5% year on year fall in revenues from $4.8bn to $4bn in the period as coronavirus impacted sports fixtures, subscriber viewing and advertising.
The company, which makes the lion’s share of its revenue and profits in the UK but also has operations in Germany and Italy, saw subscription revenues fall by 9.4% year on year to $3.5bn.
Sky blamed lower sports subscription revenues, as “crown jewel” properties such as the Premier League, Germany’s Bundesliga and Italy’s Serie A halted fixtures, as well as an overall decrease in the number of customers receiving Sky’s services, which include broadband and mobile.
TV advertising revenue plummeted by 43% to $321m, which Sky said was a combination of a generally weak market, exacerbated by brands freezing spending as high streets closed and travel, sports and entertainment events were stopped, as well as new, tighter laws restricting gambling ads in the UK and Italy.
JCDecaux reports revenue plunge: Asia-Pacific region down 41%
French-based global outdoor advertising company JCDecaux has reported a plunge in revenues in its first half 2020 results released overnight. The company doesn’t break out its results for Australia, instead including the performance in the Asia Pacific block. The figure for that region showed revenue down 41% for the half.
Global revenue was also down 41%, while the Q2 fall was -63%.
The biggest fall in the half was felt in the transport sector where impacted airports saw revenue down 44%. Street furniture dipped 39% and billboards were down 37%.
Commenting on the 2020 first half-year results, Jean-Charles Decaux, chairman of the executive board and co-CEO of JCDecaux, said:
“During the Covid-19 lockdown period, the temporary historic drop in urban and transport audiences as well as severe economic uncertainties led companies to react immediately and to reduce their advertising spend in an unprecedented scale. Once lockdown measures were lifted, urban audiences started to recover progressively in Street Furniture and in Billboard while Transport audiences are still lagging significantly, mainly in airports.
“Advertising revenue has, for the time being, not followed the same pace of recovery and we see an important difference between audiences’ levels, which are in some geographies close to pre Covid 19, and revenue levels which do not yet reflect the positive momentum in urban audiences.
“Looking forward, the global advertising market remains highly volatile with low visibility. Considering the risk of new waves of Covid-19 and new local lockdowns being implemented, it remains very difficult to give a guidance for Q3 2020.”
Titus Day drops AVO application against Guy Sebastian
Celebrity manager Titus Day has abandoned plans to apply for an AVO against Guy Sebastian after being charged by police over allegedly defrauding his former client for years, reports News Corp’s Derrick Krusche.
Police allege Day, 46, of Bondi, ripped off Sebastian to the tune of $1 million between 2013 and earlier this year when managing the income source of The Voice judge’s career.
In May, Day said he had filed an application in court for a provisional apprehended violence order against Sebastian before he was arrested by police and charged with 61 fraud offences a few days later.
Lawyer Daniel Wakim, appearing on behalf of Day, told Waverley Local Court on Thursday his client had decided to withdraw the application for the AVO.
“We would like to emphasise that the withdrawal was based on mutual and consented agreement between the parties with all parties bearing their own legal costs,” Wakim told The Daily Telegraph outside court.
Brisbane influencer has defended her call-out for birthday freebies
Brisbane influencer Miann Scanlan has stood by her 30th birthday gift grab, saying her social media platform could boost sales for brands. Reports News Corp’s Amy Price.
It was revealed on Wednesday that the Instagram influencer, who has 48,600 followers, sent an 11-page marketing proposal to top publicity agencies around Australia asking for freebies for her birthday, under the campaign Miann30, promising to spruik the brands to her followers.
Scanlan, who had not responded to requests for comment, shared an Instagram post defending the move today, saying her goal was to establish relationships with brands that would “resonate” with her audience.
Scanlan said Instagram was previously her main source of income but she stepped away from the platform, with which she had an “up and down relationship”, for a number of years.
She resigned from her full-time job earlier this year and returned to Brisbane to be close to her family as the COVID-19 pandemic hit, motivating her to return to Instagram “with hopes to secure paid campaigns”.
Meghan’s friends entitled to ‘super-charged confidentiality’, high court told
Lawyers for the Duchess of Sussex have claimed five female friends who spoke anonymously to a US magazine to defend her against British tabloid bullying are entitled to a “super-charged right of confidentiality” as she fought to protect their identities in her privacy battle against the Mail on Sunday, reports The Guardian.
Forcing her to make public their names was an “unacceptable price to pay” for pursuing her legal action over publication of extracts from a private letter she wrote to her estranged father, Thomas Markle, 75, the high court in London heard.
The duchess, 38, is seeking damages from Associated Newspapers Ltd (ANL), the publisher of the newspaper and Mail Online website, for alleged misuse of private information, copyright infringement and breach of the Data Protection Act.
The publisher is contesting the case, and denies the allegations, in particular that the letter was edited to change its meaning.
It claims the US magazine interviews first made mention of the existence and content of the handwritten letter, thus putting it into the public domain. It is seeking to publicly identify the friends, which Meghan has named in a confidential court schedule.