Best of the Week: Ten finds a place in the Paramount family; meet Unmade's new recruit
Paramount is making a six billion dollar bet on content; how politicians and blackmailers weaponise the media; Damian Francis joins Unmade
Welcome to Unmade, partly written at Melbourne Airport on Friday afternoon, and wrapped up in the early hours of this morning, under a bright full moon at Sisters Beach, Tasmania.
Today’s writing soundtrack: Smokey Robinson & The Miracles - Make It Happen
Today’s topics: Paramount’s plan; amplifying the China scare; and Unmade welcomes a new team member.
Ten’s local role within a global behemoth
They do things differently in the US media.
Australian investor calls are generally dowdy affairs. Diffident investment analysts who dare ask a question during the conference call tiptoe around the awkward bit. Those calls are not particularly slick. Back when Enero was still called Photon Group, I remember one such call being abandoned because somebody was blasting hold music that drowned out chairman Tim Hughes.
That wasn’t so much the case for the company formerly known as ViacomCBS, which became Paramount Global on Wednesday. It was a highly produced and (at nearly two-and-a-half hours) long affair, more like an Upfronts presentation than the year end results.
The Paramount investor event opened with a cheesy car chase video of chair Shari Redstone and CEO Bob Bakish racing in a Transformer through the streets of New York, while quoting lines from Top Gun. I suspect the budget was bigger than an entire season of Have You Been paying Attention. It would be more likely for Mike Sneesby and Peter Costello arriving at Nine’s black tower in North Sydney on a tandem for their results next week.
And while most of the event was tailored for the mainly US investor audience, there were also hints about what life will look like for Australia’s Ten as part of the Paramount empire now that CBS and Viacom are fully integrated.
You’d think that rather than accidentally ending up the owner of Ten as one of the biggest creditors when the administrators were called in five years ago, it was all part of a slick global strategy.
The owner of Channel 5 in the UK, CBS in the US and Ten in Australia, Paramount has concluded that its future growth (or at the very least the growth story investors want to hear right now) is all about a globalisation.
The broadcast television operation acts as a profit centre, and as a vehicle to promote subscription service Paramount Plus. (CBS promotes Paramount Plus on average once per hour, investors were told. I wonder how far off that Ten is.) And Pluto TV is the third leg of the stool, with a global ad-supported streaming offering which will likely launch in Australia quite soon, as the company attempts to keep its promises to investors about Pluto user growth.
For now broadcast advertising is where the organisation makes its money (US$9bn in 2021, while streaming subs delivered $2bn and ad-supported video another $2.1bn.)
But the fastest growth is coming from streaming subs - up 79% for the year and 84% year-on-year in the last quarter. Meanwhile broadcast advertising only grew 1% in the last quarter.
Some of that globalisation comes from producing content in one market that will work everywhere. Hence this week’s announcement of NCIS Sydney, and a local version of reality show The Challenge.
Inevitably it means that the way Ten is operated will diverge from that of its locally owned rivals in Seven and Nine.
It’s a small part of a much bigger operation. Paramount turned over $29bn globally last year, and reported a profit of $6bn.
For the most part, I suspect that is good for local advertisers in Australia. Ten will see access to a big content pipeline, and more resource than it would have done as a third place network in local ownership. But it also means that it will be run according to Paramount’s global priorities which can be summed up as streaming, streaming and streaming.
I wonder whether Nine and Seven will be able to move faster than Ten on local opportunities that don’t play into a global picture. Locally Ten may have less to say in its annual upfronts going forward. I bet a shiny dollar coin that this year’s will be all about Pluto.
Based on the questions at the end of Wednesday’s event, analysts didn’t particularly like hearing that the company plans on investing $6bn in creating content globally - much more than it had previously flagged. In the short term Paramount’s profits will go down. The share price fell by about five per cent.
It’s an unpalatable (for investors) reality that for companies to win the streaming fight, they need to invest heavily, as not everyone will win. Audiences go where the content is, then move on to the next service. Nine’s share price sank six months ago when Sneesby flagged the need to continue to invest with Stan. The same happened to Netflix stock last month.
Foxtel’s services risk being stranded if local content investment doesn’t ramp up. But that’s tricky when trying to navigate an ASX float in the coming weeks.
Chastened by spooking investors last time, it will be interesting to see whether Nine’s Sneesby persists with the strategy for Stan when he speaks next week.
An additional question I have about the globalisation of streaming, is whether that will have an impact on how sporting rights deals are done.
The Paramount preso made a lot of its European Champions League rights, which are actually held by Stan in Australia. I wonder if the pressure will increase for global sports deals, perhaps with an ability for the winner to sell on some rights to local players where they don’t have the appropriate outlet in a given market.
Australia’s anti-siphoning legislation is looking (as usual) out of date.
Perhaps the movement towards global deal making explains the delay in the International Olympic Committee in taking the rights to Paris 2024 to market.
TV is going big again, and the models are changing before our eyes.
The amplification dilemma
One of the contradictions of Donald Trump’s tempestuous relationship with the media was that the more outrageous his behaviour became, the more his critics served his agenda by amplifying his messages.
Trump might not have got to be president at all if it had not been for the often outraged coverage of his claims about Barack Obama not having an American birth certificate. Good or bad, it was all free media for Trump.
That’s one of the dillemmas journalists have always faced; by reporting a story, they can change the story.
There were a couple of examples of the media being weaponised this week.
One came from Canberra, where the election is already being fought, even if it’s not yet been called.
Facing bad polling, the Coalition has opted for a strategy of suggesting that Labor will fail to stand up to Australia’s biggest trade partner, China.
This week Scott Morrison used Parliamentary privilege to accuse Labor’s deputy leader Richard Marles of being a “Manchurian candidate”.
Or not quite. Morrison’s microphone was cut off midway through, so he only got to call Marles “a Manchurian can…”
You wouldn’t know it to read the media coverage though. Google News returns more than 1,000 results on the search “‘Manchurian candidate’ AND Marles”.
Much of the reporting focuses on the risk to national unity of allowing divisive rhetoric about foreign interference. There was even an unusual intervention from Mike Burgess, the director general of ASIO, the Australian Security Intelligence Organisation who went onto the ABC’s 7.30 to warn against the politicisation of national security.
And of course, all of the coverage amplified the central message. By reporting Morrison’s comment, the media played into his agenda. Implicit in every article is the question somewhere of whether Labor will stand up to China. Morrison’s plan worked.
There was a second example outside of politics too.
On Wednesday Geoff Bainbridge, the CEO of whisky maker Lark Distilling, resigned. He revealed that he had been subject to a blackmail plot over a video of him taking drugs some years previously, which had been used to extort him. When he stopped paying the blackmailers, the video eventually ended up in the hands of The Australian’s investigations editor Sharri Markson, who subsequently published it after Bainbridge’s resignation.
Other outlets followed suit.
On the one hand, the resignation of the boss of a big company after a blackmail plot is clearly a legitimate news story. But on the other, the coverage must have been exactly what the blackmailers wanted.
The media’s relationship with its audience is at what is beginning to look like a critical point.
This week PR agency Edelman published the Australian findings from its annual Trust Barometer.
Public trust in Australian institutions fell by more in the last year than in any other country except Germany.
Public trust in government fell by nine percentage points, and in the media by eight percentage points.
Perhaps most notably, 55 per cent of Australians agreed that media is a dividing force in society. Only 26 per cent saw it as a unifying force. The deficit was nearly as bad for government.
In Australia, only 38 per cent of people said they trust journalists - a fall of 12 percentage points in a year.
Business as usual is hurting journalism.
Newsfeed:
ACM gears up real estate push
Nearly 12 years after smashing Fairfax Media’s Melbourne real estate monopoly with the launch of The Weekly Review, Antony Catalano revealed plans to do the same again. His publishing company ACM will launch The Inner East ReView, targeting Richmond, Cremorne, Burnley, Abbotsford and East Melbourne, next month. The brand ties in with his real estate platform realestateview.com.au.
Meta adverse
Facebook’s parent company Meta saw its share price fall further after Google said it would tighten Android ad-tracking settings.
It was yet another miserable week for Facebook with founder Mark Zuckerberg informing staff that they will now be know as “metamates” to derision from some quarters. It also renamed its News Feed simply as “Feed”. Overnight, the Washington Post revealed details of a complaint to the US financial regulator from whistleblower Frances Haugen alleging the company had misled investors about its efforts to combat climate change and Covid misinformation
Wattle mess
After 18 months work to replace the much criticised “golden wattle” Australian nation brand logo, which bore an unfortunate resemblance to a virus, the Australia’s National Brand Advisory Council unveiled a replacement yesterday.
The new logo, developed by Clemenger BBDO Sydney, Balarinji and Houston Group Sydney, features a kangaroo created from boomerang shapes and the word AUSTRALIA.
ABC boss makes the case
The boss of the ABC David Anderson launched a book on Friday presenting the case for the national broadcaster.
In an indication of the besieged organisation’s defensive outlook, the first words of the $19.95 publication’s description were “Disregard the critics…”
iView moves to mandatory accounts
The ABC said on Thursday that it will finally switch on mandatory logins for its iView streaming platform next month. Launched in 2008, iView was Australia’s first mainstream streaming platform.
Deloitte invests
The march of the consultancies continued in Australia with Deloitte Digital hiring the staff of thee seperate consultancies - digital experience and marketing consultancy Blended Digital; UX consultancy New Republique and digital experience consultancy Venntifact. The 70 new arrivals takes Deloitte Digital to a 1,100 person business, which it says is the biggest of its type in Australia.
Separately, Deloitte announced Jennie Morris as executive creative director. Morris was chief creative officer at Publicis in Singapore, where she previously worked at TBWA, SapientNitro and Saatchi & Saatchi.
Unmade Index:
The Unmade Index of Australia’s listed media and marketing companies followed the ASX All Ords down on Friday.
The biggest fall came from Australian Radio Network’s parent company HT&E, which dropped by more than 5.5%. HT&E, which unusually follows a calendar financial year, is due to share its 2021 full year results on Wednesday morning.
Domain, which is majority owned by Nine, dropped by another 4% yesterday. The stock was down by 10% for the week and nearly 30% for the year to date.
The only media and marketing stock to improve yesterday was research business Pureprofile.
And before I leave you to the weekend, I’m delighted to share a piece of news from Unmade Towers. Yesterday my former Mumbrella colleague Damian Francis signed on the dotted line. We will both be managing partners of Unmade.
My main responsibilities will be overall content and strategy, while Damo will be responsible for the operations of the business as Unmade gears up, along with developing specialised subscriber-only content.
Damian will also take a minority stake in the business.
I couldn’t be happier. Damo and I worked closely together for nearly five years at Mumbrella. You may recall that he took on the Best of the Week email after I moved on.
His arrival on the Unmade team means that we’ll be able to go much faster in developing a unique publication offering the kind of analysis not available anywhere else.
Our belief is that a paid subscription model incentivises us to deliver thoughtful analytical content, giving the context that may be lacking in publications that follow a press release-based agenda. It also offers an alternative to publications which focus only on that organisations that offer them commercial support.
To mark Damo’s arrival, we’ve created a 60% discount on our $650 annual subscription. Until March 12, you can save $390 by clicking the button below.
As Damian gradually develops our subscriber offering in the coming months , I suspect you’ll be glad you grabbed the discount while you could.
And finally, I’ve a slightly vague tip for advertising nerds. I recommend watching the ad break during Nine’s 60 Minutes tomorrow night. You’ll want to have a point of view.
Have a great weekend.
Toodlepip…
Tim Burrowes
Managing partner - Unmade
Tim, a bit confused over the discount offer. I renew in Sept, according to my profile, but this Damian Francis offer closes March. What sub price do I pay come Sept?