BOTW: Foxtel puts on subscribers as News Corp advertising turns 'insipid'; Glass houses; Yet another big AI week
Welcome to Best of the Week, written on an icy morning at beautiful Sisters Beach, Tasmania.
Today: Foxtel finds more subscribers as news advertising slows; a big week for Google’s AI ambitions; media glasshouses; and a moving Campaign of the Week.
Happy International Hummus Day to those who celebrate.
Today’s writing soundtrack: Deacon Blue - When The World Knows Your Name
Unmade’s paying members receive benefits their peers do not. They get access to our paywalled archive and exclusive Tuesdata reports. They receive cheaper tickets to our events, including humAIn. And we hear they’re kind to animals.
News Corp slows too
With quarterly reporting season beginning to wrap up, it was News Corp’s turn to update the market yesterday.
With the company reporting at a global level, and in US currency, understanding the local performance of News Corp can take slightly more digging. The most straightforward place to start is how things are going in the company’s video segment, because that’s only in Australia, with Foxtel Group, in which Telstra is a minority partner.
A lot can happen in a quarter. Last time round, Foxtel Group’s number of paying streaming customers went down for the first time. This time, they hit a new high.
There are now 2.963m paying subscribers to Foxtel Group’s streaming services.
That was thanks to sports service Kayo delivering its annual third quarter bounceback as AFL and NRL got under way, and Binge remaining in growth.
Foxtel’s profit for the quarter looks less impressive, although some of that is because of the weakened Australian dollar. Nonetheless, the quarterly profit number for the group of $68m is the second weakest in the five years the data has been available in this format. Those new subscribers were expensive. Increased rights costs for cricket, NRL and AFL have kicked in.
Meanwhile, it was something of a standstill quarter for News Corp’s news division. with revenue and profits in almost the same place they were the same time last year.
Locally, digital subscribers to News Corp titles rose to 1.043m. Taking the news mastheads alone, the number rose to 937,000, getting tantalisingly close to the !m milestone.
For News Corp as a whole, it’s looking inevitable that the company’s full year numbers will be poor. Chief executive Robert Thomson said that advertising was “clearly insipid”.
In the quarter, revenues were down by 2% to US$2.447bn, and profits fell 11% to $320m.
With three of the four quarters done, News Corp is so far 3% down on revenue and 20% down on profit. Given the state of the global economy, the quarter we’re currently in is unlikely to see much improvement on that
Glass houses. Stones. Everywhere
Speaking of News Corp, today’s Weekly Mumbo email from Mumbrella’s new editor Shannon Molloy is an intriguing read.
Like many a former News Corp staffer, Molloy belatedly spies hypocrisy .
As Unmade wrote on Thursday, News Corp’s boss Michael Miller spoke out against Qantas’s attack on coverage in The Australian Financial Review, owned by rival group Nine. Miller warned that this was a form of cancel culture.
Molloy reveals that when he was News Corp’s TV writer in 2015 he was instructed not to give any publicity to Channel 9 shows. “Not a single story about a show, a personality, an executive… nada. Everything to do with the nation’s second-biggest broadcaster was off limits.”
Media organisations in glass houses should not throw stones, he argued.
I wonder whether the Mumbrella offering this advice on avoiding media cancel culture is in any way related to the Mumbrella which recently informed Unmade that we would not be issued a press pass (previously freely available to all trade press) to cover the Mumbrella360 conference in July. Glass houses.
The Week In AI : Degenerative decisions
Cat McGinn and Tim Burrowes write:
Market mix modelling on the AI agenda
Another session for humain | human creativity x AI was revealed this week, with local marketers discussing how they are already using the emerging technology in media planning and buying, generating insights from data and optimisation in real-time.
“Decisions at speed - AI for market mix modelling” will see Melody Townsend, GM of Retail Marketing for BOQ Group, and Liam Loan-Lack, head of APAC marketing for CMC Markets, discuss how they are using the marketing investment analytics platform Mutinex. They will be joined on the panel by Mutinex co-founder Henry Innis.
Tickets to humain, which takes place on July 12, can be booked at a discounted price for the next four days.
Meta gears up for advertisers
Meta introduced what it’s calling an AI Sandbox for advertisers. The tools will allow brands to customize ads for different audiences and formats. It uses AI to generate alternative copy, background image creation, and image cropping features for Facebook and Instagram ads.
The service will expand to all self-serve advertisers from July. The move highlights the growing adoption of generative AI in media and marketing, as ad tech startups like Omneky and Movio leverage similar technologies to create ads and marketing videos.
Meta also released a new AI model, ImageBind. It differs from other generative AI in that it can use and retrieve different types of media content, creating new possibilities for media production. ImageBind can enhance a video recording by combining it with an AI generated audio clip, or segment and identify objects in an image based on audio to create animations. The creators believe that introducing new modalities will enable even richer human-centric AI models. There is still much to uncover about multimodal learning, but ImageBind is a step towards evaluating them and showing novel applications in image generation and retrieval.
Google catches up
Google made several significant strides forward in the AI wars, releasing its AI large language model Bard to all users, and announced a plethora of new features during its I/O conference.
Adobe's image generative AI, Firefly, is joining forces with Google's chatbot, Bard, to enhancing its capabilities with an emphasis on what it terms “commercially safe” production. Users will be able to generate images with Firefly and modify them using Adobe Express, gaining access to templates, fonts, stock images, and more. The partnership means brands can use generative AI for content production with fewer copyright concerns about the legal grey area represented by platforms like Midjourney, Stability and DALL-E et al.
EU focuses on copyright in AI
The EU released its AI guidelines. The mandate introduces obligations for providers of generative models to disclose copyrighted content used in training AI. The implications for AI use in media and marketing could be significant, impacting data handling, ad targeting, and customer interaction with AI.
News Corp on ‘degenerative AI’
News Corp’s global boss Robert Thomson flagged how AI is going to change the company, telling the company’s quarterly investor call yesterday: “It's not only going to have an impact on content, it will clearly have a profound impact on the management of the business, whether customer service or billing or whatever.
“The one contradiction of any business is that the more you customize, the harder and more expensive it is to scale. And that contradiction can be overcome with AI.”
Earlier in the same call, Thomson said: “We see three areas in which our content will be used by generative AI creators, whose products will be enhanced by our IP, for which we should be compensated: Firstly, our content will inevitably be used, as has already exploited, to train AI engines; secondly, specific examples of our content will be surfaced in response to users’ AI queries; and, thirdly and crucially, our content will certainly be aggregated and synthesized, and those answers monetized by other parties - we expect our fair share of that monetization. Generative AI cannot be degenerative AI.”
Unmade Index finishes week on the up
The Unmade Index improved for a second day in a row yesterday, growing by 0.67% to 641.8 points.
The biggest rise came from Ooh Media, which improved by 2.78%, although its market capitalisation is still down more than 20% since last week’s Macquarie conference profit warning. Thursday’s Ooh AGM saw CEO Cathy O’Connor offer “additional context” on the Macquarie update, saying May and June bookings are up on last year.
Meanwhile, the share price of The Market Herald did not budge on yesterday’s announcement that the company has refinanced its $46m debt facility to pay Adevinta for Gumtree. The update did not explain why the new debt facility, with CommBank, is directly with Gumtree, and not parent company TMH. It also did not disclose whether any TMH shareholders are guaranteeing the loan.
The market is currently waiting to see the outcome of the Takeovers Panel’s investigation into whether the company’s shareholders have behaved within ASX rules on control.
Campaign of the Week: Carry the Courage
In each edition of BOTW, our friends at Little Black Book Online highlight their most interesting marketing campaign of the week
LBB AUNZ reporter Casey Martin writes:
This week’s campaign comes from DDB Sydney for Ovarian Cancer Australia.
Released on World Ovarian Cancer Day, “Carry the Courage featured the stories of Kristen Larsen and Jill Emerson to show the impact on lives cut short by the disease.
Directed by Good Oil’s Renee Mao, hours of family videos were used to tell the women’s stories.
Read more about the campaign at LBB
Time to leave you to your weekend.
Abe Udy and I will be back on Monday for Start the Week.
In the meantime, one more reminder: Earlybird ticket sales for humain are closing. You really should be there.
Publisher - Unmade