BotW: What's really happening to news on social media; A royal PR disaster; and a new takeover development for SCA
Welcome to Best of the Week, written in Evandale, Tasmania.
Today: A bad week for PR professionalism; new evidence that the public still relies on social media for news, despite what Facebook says; the SCA takeover approaches the endgame; and a battle of wills between nations and platforms.
Happy Save the Panther Day.
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On tour
I’m on the road next week. I’d love to catch up with anyone in the industry who’d like to do so.
As previously mentioned, I’m in Perth from Monday to Wednesday, March 18-20. My schedule is almost full, but please shout out if you’d like to say hello.
I’m then spending all day on Thursday March 21 in Melbourne, and Friday March 22 in Hobart, ahead of Saturday’s Diemen Awards ceremony.
If you’d like to grab a coffee in any of those cities please email me at tim@unmade.media, or via this fancy button.
The evidence suggests Facebook is wrong to claim consumers don’t want news on social media
Om Tuesday, in a piece of content available only to our paying members, we shared data from the latest wave of the Australian Communications and Media Authority’s annual research into audience behaviour.
The research, which had been quietly sitting on the ACMA website since December, showed that according to the government’s research, for the first time paid subscription streaming services were bigger than broadcast TV (via both airwaves and online). A similarly significant milestone came for the audio industry where for the first time more people said they listened to a music streaming service than to radio.
I also came across a second piece of research, based on the same panel of 3,572 respondents, which has been on the ACMA website since last month. Again, nobody yet seems to have written about it until today. This one - titled “How we access news” - explores how Australians get their news and information.
Alongside Meta’s coming withdrawal from the news ecosystem, it’s even more relevant. On Thursday night, Meta published a new blog post arguing that news plays little role on its platforms. Soon, when the platform is likely designated under the News Media Bargaining Code, that will be central to Meta’s legal argument.
This research suggests otherwise - indicating that the number of people treating social media as their primary source of news actually increased over the last year.
Frustratingly, the research does not drill into individual social media platforms, but does reveal that when the annual survey was taken last June, 48% said they had used social media as one of their news sources in the previous seven days. That was down just one percentage point on the year before.
Meanwhile, those getting information from professional news sites had fallen from 58% to 53%. Free TV was still a news source for 53% of people (down from 59% the year before).
Those three source of news - social, TV and news sites - were well ahead of radio (37%); podcasts (10%) and print newspapers (18%).
The data also dove into what was the main source of news. This wa where social media grew in relevance.
Free TV was the main source for 26% of people (down from 28%); news websites were the main source for 23%, and the number of people citing social media as their main source actually rose from 17% to 20%.
The biggest jumps in those treating social media as their main source of news were in the younger demographics.
The survey also dives into the types of news content people are finding on social media.
The biggest type of news content (at 68%) was still professional news of the type that will likely disappear from Facebook. My hypothesis - which has no empirical evidence to back it up - is that the reason it fell from 78% the year before represents Facebook downgrading news in its algorithm in preparation for the coming battle.
Other “official or reputable sources of information” also fell, from 51% to 43%.
As I say, the research does not break down social media by individual platform. While it’s reasonable to take Facebook as a proxy for social media in older audiences, the rise of TikTok as a news source for the young would be fascinating data to have.
Away from social media, there’s also a ranking of news sites most relied on. In other words, the ones seen as most authoritative. Only nine local sites are seen that way by more than 1% of respondents.
ABC News is the most reliable website choice for 33% of people; News Corp’s news.com.au comes second on 16%; Nine’s 9News is next on 10%; then comes The Guardian on 8%, ahead of Seven West Media’s 7News (5%).
In TV, the ABC is top again, with 34% ranking it as the one they most relied upon for news.
But Seven jumps ahead of Nine for second place.
Meanwhile, ABC is most trusted in radio. Fascinatingly, more people (13%) cited ABC News Radio, run on a shoestring, over the much better resourced ABC Radio National (9%). Local ABC stations were most relied upon by 12%. And 8% cited Triple J.
A question I’ll be asking the ACMA is whether the data exists on individual social media platforms. Given that individual news sites were featured, I suspect the question may have been asked. Watch this space.
Photoshop fails and other PR disasters
It has been the worst of weeks for the reputation of the public relations industry. On Thursday, it emerged that Liz Deegan, executive director of public affairs for the NSW Police Force had been dismissed by police commissioner Karen Webb.
As I wrote last month, Webb’s awful live TV appearances after the alleged murder of Jesse Baird and Luke Davies by a serving police officer, after three days of failing to front the media, were a woeful failure.
What it’s impossible to know from the outside is whether Webb was badly prepared by her team, or declined to follow the strategy they advised.
But that was as nothing to the self-inflicted PR disaster of the Royal Family, which ended up propelling a niche social media conspiracy theory to global headlines.
Princess Catherine of Wales, better known in headlines as Kate Middleton, vanished from the public eye in January after what Kensington Palace described as “planned abdominal surgery”.
Gradually the online rumours about whether that was the truth became wilder, but didn’t make it into the mainstream media.
That was until the spectacular own goal of the release of a photograph of the princess and her children timed for last Sunday’s Mother’s Day in the UK (as a side issue, I’d be in a lot less trouble if all that publicity about UK Mother’s Day had been in time to drop a card in the post - sorry, Mum).
Soon, social media went wild with theories about whether the photograph had been doctored, and when it had really been taken. Within a few hours the major photographic agencies which had been distributing it, issued a “kill” order, as they could no longer stand behind it as an authentic image.
That made it a legitimate mainstream media story, which was further fuelled when a new social media post followed, again purporting to be in the words of Kate Middleton.
The idea of Middleton firing up her Adobe Creative Cloud suite for a spot of Photoshop fun did not entirely add up.
And now it was open season. It became legitimate to question every aspect of her disappearance from public life, including whether her “planned abdominal surgery” was the truth.
Again, from the outside, it’s impossible to tell whether there were seasoned PR professionals who gave advice that was ignored, or simply people out of their depth when the press turned against them.
We also can’t know whether this will, in time, be an amusing PR cock-up, or a badly executed cover up of something sadder.
ARN closes in on SCA
The week ended with yet another development in the saga of ARN Media’s takeover bid for Southern Cross Austereo. On Friday lunchtime they upped the offer.
The announcement wasn’t a surprise, but the market has been waiting for the detail.
Like most aspects of the offer, there were lots of technicalities within the update.
Until now, the two sides of the potential transaction have been moving at different speeds.
When ARN Media and Anchorage Capital Partners lobbed in their non-binding proposal on October 18, they said they were aiming for a binding deed by the start of December.
Instead, SCA’s board argued it needed more information on the state of ARN Media’s business, because SCA shareholders would be issued ARN shares as part of the transaction. It took a full 20 weeks from the offer dropping for the SCA board to come back with a weak no.
That was part of the game. It took ARN just eight days to come back with yesterday’s higher offer. Instead of getting 0.753 ARN shares for each share they own, SCA shareholders will now get 0.870 shares.
They’ll also get the same amount of cash as previously on offer - 29.6 cents per share, plus franking tax credits.
According to ARN, that increases the value of its offer by about 10c per share. ARN shares are currently trading at 78 cents (they lost 5.5% yesterday, probably because of the dilution of the increased bid). SCA shares are 96c, and lost 0.5% yesterday.
The two companies’ market capitalisations are rapidly converging. SCA’s is $230m, while ARN’s is only just ahead on $240m. Mind you, SCA has bigger debts.
This time, the SCA board won’t be able to leave it another five months before responding.
One factor focusing their mind is the move by SCA’s 9.9% shareholder Spheria Asset Management to unseat chairman Rob Murray, which was formalised this week.
ARN confirmed yesterday that it would back that move and vote 8% of the shares it already owns in SCA to depose Murray. Another of those technicalities is that ARN Media isn’t allowed to vote with all its shares because of a Takeovers Panel ruling about the manner in which it acquired them.
Another factor is the ongoing tough, possibly still deteriorating, market. SCA will only hit its promised profit number by making cuts. I hear senior roles were chopped at its commercial creative arm The Studio this week.
The SCA board may take the view that it will avoid a lot of angst all round to avoid the Spheria nastiness, accept the indicative offer and get down to the contractural stuff.
That stage will take a while. For example the gap from Nine announcing its takeover merger with Fairfax Media to shareholder approval was four months plus another month to complete the legalities. A similar timeline - even if SCA’s board gets a move on, might see things stretch into the next Australian financial year.
And then, maybe, comes the next big piece of the puzzle. An ARN Media - Seven West Media merger?
TikTok and Facebook versus the authorities
This week, developments in the US set up the latest, intriguing, test of the intersection between rules based order and governmental will. A bill which could ultimately see TikTok banned in the US if China-based owner ByteDance does not divest it, passed through the House of Representatives. If it clears the Senate, president Joe Biden says he will sign it into law.
The move happened suddenly, after being on the backburner for a couple of years.
TikTok was flatfooted and clumsy. Doing little to counteract fears that it could be used as a tool of propaganda for China, it sent unclosable popups to its giant young audience urging them to click a button and call their local congressman to protest. Hundreds, or possibly thousands, did so.
If you’re trying to argue you’re not a brainwashing propaganda machine, then activating your sleeper agents to exert your will on politicians is not the smartest move.
If the bill does make it to law, then the most likely outcome would be ByteDance selling. Last time this came up, in 2020, Oracle popped up as a potential buyer. But it’s also a (remote) possibility that, after exhausting all legal avenues, TikTok might simply withdraw from the market.
if ByteDance didn’t sell, it would create a question for Australian regulators. Chances are we’d follow the US.
All this comes against the backdrop of Australia’s battle of wills with Facebook owner Meta over the News Media Bargaining Code.
What currently surprises me is that some of the bigger media owners still seem to genuinely believe there’s a chance that Facebook’s exit from the news ecosystem can be stopped. In reality, it’s already made up its mind.
Ultimately, the government will soon have to decide whether it can designate Facebook under the News Media Bargaining Code, even if Meta has tried to take itself out of the news business. Otherwise ithe government may then turn to wider powers of the Australian Competition & Consumer Commission to investigate whether such a move is a misuse of market power.
No doubt Meta would fight that all the way. The courts would eventually have to decide. If it was ruled to be ongoing misuse of market power, Meta might face the choice of ongoing fines, or leaving the country.
A lot of planets would need to align, but there is, for the first time, a better-than zero chance that the two biggest social media companies might exit Australia.
Unmade Index on the down
The Unmade Index finished the week badly, losing another 1.2% and falling to 564.3 points, only just off Monday’s all time low of 562.6 points.
There were falls almost entirely across the board, led by ARN Media.
IVE Group lost 2.79% and Seven West Media found itself back on its $300m market capitalisation floor again.
COTW: Cardboard cakes
In each edition of BOTW, our friends at Little Black Book Online highlight their Campaign of the Week.
LBB’s APAC reporter Casey Martin writes:
Wholegreen Bakery has take a stand against the gluten-free naysayers in a campaign created by The Hallway.
The bakery has created "The Cardboard Cake", which it claims is in fact delicious. The campaign is cheeky, creative, and so much fun.
In Case You Missed It…
On Monday, our Start the Week podcast focused on the coming Melbourne radio war, along with a prediction from the founder of OpenAI that his technology would replace 95% of agency work:
On Tuesday we revealed in a post exclusive to our paying members that new research shows the TV and radio have finally been overtaken by streaming:
On Wednesday we crunched the new Podcast Ranker data which suggested that podcast audiences may be plateauing:
On Thursday, our podcast guest was Erik Jensen, editor-in-chief of The Saturday Paper. He made an inspirational case for the place of optimism in journalism:
On Friday, as the first radio ratings of the year arrived, we focused on Kiis stand-in Byron Cooke, who has the unenviable job of making sure his ratings are not too good before the Kyle & Jackie O Show comes to Melbourne:
Time to leave you to your Saturday.
Abe Udy and I will be back on Monday with Start the Week. Hopefully my body clock will still be on Tassie time, as I record before dawn in Perth.
Have a great weekend
Toodlepip…
Tim Burrowes
Publisher - Unmade
tim@unmade.media