Welcome to a midweek update from Unmade. Today: In an accelerating trend, every big dynamic affecting the local advertising ecosystem now its roots in the northern hemisphere. And the Unmade Index delivers a big rally.
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Forget the local players: Google, Amazon, Disney et al are now the dominant players in Australian media
It was easy to see it coming; it’s been in the post for the last couple of decades. But we’ve now reached the moment when most of the consequential decisions for Australia’s media and marketing landscape are being taken overseas, and mostly in the US.
Overnight, for instance, TikTok and its parent company ByteDance initiated a lawsuit against the US government. At issue is the new law which gives ByteDance until January to sell its stake in the world’s biggest short form video platform to a non-Chinese company. TikTok claims that breaches the US Constitution’s freedom of speech provision.
That case will likely decide what happens in Australia too. If TikTok gets banned in the US, it’s a virtual certainty that the Australian government will follow suit.
Also overnight, Disney released its quarterly numbers. Its streaming service Disney+ moved into profitability for the quarter. That helps set the mood music for all of the streamers. Disney+ is yet to introduce an advertising tier in Australia, but when it comes that will be another slice of the video market.
We’re also months away from Amazon Prime Video doing the same. Alongside its retail media offering, Amazon will soon be the biggest advertising player in the market behind Google and maybe Meta. And remember, Amazon only launched in Australia less than seven years ago.
Both of those launch dates will be decisions made in the US as part of bigger plays. In fact, the chances are, they’ve already been taken, they just haven’t yet got around to letting us know.
Similarly, at some point quite soon - certainly within a year - Warner Bros Discovery will finally launch its streaming platform Max in Australia. That will significantly undermine (or maybe kill) Foxtel’s Binge, which leans heavily of WBD’s HBO content.
Another hugely significant dynamic reaching its denouement in the US is the Justice department’s antitrust case against Google. After an eight month trial, the lawsuit reached closing arguments last week. A judge will now decide whether Google has abused its monopoly powers over search and the advertising alongside it. If he rules against Google, the remedies could include some for of breakup which would again have fundamental implications for Australia.
Just as big a dynamic is AI, which has potential to be media’s extinction-led event. Again, there’s no serious AI player locally. Every move is coming from the US.
More prosaically, but just as topical, comes the clash of titans in the fight to own Paramount, and ultimately its local Australian outpost including Network Ten. There are two serious bids - one from Apollo and Sony, the other Skydance and Larry Ellison - on the table, and neither of those will have factored in more than a passing consideration to what to do with their Australian interests if they win.
All three of the major free to air players will likely one day end up in global ownership. For now, their real value to streamers is the leg-up that the anti-siphoning laws give free to air broadcasters in sports rights negotiations.
That looks like the main future for most Australian media outlets: bargaining chips in an increasingly global game.
Unmade Index shoots up on interest rate decision
The Unmade Index roared upwards yesterday following the wider ASX north on the decision of the Reserve Bank to leave interest rates alone for now. The index rallied by 3% to 545.9 points.
Ooh Media had the best of it, gaining 6.93%. Domain gained 5.14% which also helped boost its majority owner Nine which rose 2.74%.
The only big media and marketing stock not to benefit was Seven West Media which lost 2.44%.
Time to leave you to your Wednesday. We’ll be back tomorrow with an audio-led update in which we talk to the founders of a fast-growing player in the influencer ecosystem.
Have a great day.
Toodlepip..
Tim Burrowes
tim@unmade.media
Sharp summary, if a bit depressing.
Suggests that all players in the game, domestically, need to think even harder about what they produce, their content IP and monetisation across others' platforms on an international scale.
Play to strengths of contemporary, irreverent, English-speaking creator, worldwide affinity for Australia and Australians.
Someone once described media as Pipes & Poetry. The Pipes are increasingly in the hands of others...time to double down on Poetry.
Also a healthy sprinkling on top of protectionism, France style, is perhaps in order.