OPINION: How desperate is Nine Entertainment?
Last week they were using their digital assets to try and take down rival Seven West Media following the Bruce Lehmann case, this week it’s back to telling the Federal Government that things are so desperate at free to air TV stations, that they need protection, as consumers dump free to air TV’s and their cheap content, for apps, and streaming which are seen as the future.
Using publications such as The Age, Sydney Morning Herald and the Australian Financial Review, Nine Entertainment and the free to air TV networks, have again taken to claiming that the government must address two big gaps in its latest media reforms if Prime Minister Anthony Albanese wants to stay true to his “Future Made in Australia” vision.
This is a strategy that some claim is already doomed as Albanese found out last week with the failure of Tritium, the local electric car charger Company that was founded in 2001 and worth $2 billion only to be placed into administration on Friday with debts in the tens of millions.
What the free to air TV Companies fear is the watering down of Labor’s proposed communications bill, the anti-siphoning list and their implementation of the “prominence” rules that will ensure free-to-air networks are given prime placement on smart televisions.
What they fear, is local Company Foxtel, Kayo and various International streaming platforms as well as Foxtel’s new Hubbl that brings together a multitude of streaming platforms in one $99 puck.
Then there are the likes of Samsung, LG Electronics Google, Amazon with their Fire Stick and TCL who now selling advertising on their streaming devices.
The big battle for free to air TV networks is competition and trailing revenue with big retailers such as Harvey Norman and JB Hi Fi now researching how they can get a click of the ticket from advertising generated via devices they sell; they also want to access to the data generated via these devices.
In the USA retail giant Walmart, the biggest retailer in the world has recently acquired their own TV Company with the acquisition of Visio in an effort to get their advertising on TV screens while also getting access to key consumer data.
Mike Sneesby, chief executive of Nine – which owns the digital media assets and newspapers, threatening the Labor Government is urging the government to amend the bill now.
“There is a moment in time right now where our government has the opportunity to make the right decisions in the interest of the Australian public. If we don’t, we will reflect on those in the future and regret the actions we didn’t take,” Sneesby said.
This is not a case of looking after the Australian public, this is an out and out case of Nine Entertainment using media force, to protect Nine Entertainment a commercial entity from competition and consumers who are deserting their content and the network in droves.
For the six months to 31 December 2023, Nine Entertainment Co reported an 11% dip in broadcast revenues as advertisers chose other platforms to invest in other than Nine Entertainment assets.
The company reported revenues of $1.4bn, a modest increase of 2% compared to the same period in the previous year.
Group EBITDA, was down 15% on H1 FY23, reflecting weaker economic and advertising market conditions.
Profit After Tax was $134m, a significant drop from $183m in the corresponding period.
So, what do you do when competition gets tough, you go cap in hand to a Labor Government for protection who after lobbying from the Free to air TV networks introduced the Communications Legislation Amendment (Prominence and Anti-Siphoning) Bill 2023 in November.
For the last few months, the Senate has been debating the bill.
What they want is the prioritisation of their free to air apps over other apps and programs.
They also want Foxtel and Kayo to local Australian Companies, prevented them from buying the rights to major sporting events, including the Olympics, AFL and NRL grand finals and FIFA World Cup, before free-to-air networks have had the chance.
This is despite the fact that the free to air TV networks are not putting sport to air in Australia in 4K because they have refused to invest in the technology needed to broadcast live sport in 4K.
In 80 days’, time the Nine network will air the Olympics and despite most networks in Japan, China, Europe, the UK and the USA airing the event in 4K the Nine Network will only air it in high definition and not Ultra High Definition which most TVs in Australia today are designed for.
Foxtel is the only network putting AFL, NRL and Formula One to air in Ultra High Definition and the difference is significant.
Sneesby, claims that the scheme does not cover the rights for digital streaming through local free apps such as 9Now, 10Play and SBS On Demand,
What his publications are not saying is that more people watch live sport via Foxtel and Kayo, than the TV Companies own streaming apps for which he is now begging for protection from his competitors.
The “prominence” lever will ensure those apps get prime placement on the home screens of new smart televisions and plug-in devices such as Apple TV and Google Chromecast.
The committee delivered its report on Tuesday last week, backing the legislation while recommending that the adoption time for prominence be reduced from 18 months to 12 months for manufacturers to comply.
Sneesby and the other free to air TV networks are quite happy stifles free-market innovation by limiting potential revenue opportunities for major sports to their assets.
As for the Federal Labor Government and the bulk of politicians they fear a backlash when it comes to election time with the free to air networks in a powerful position to influence the vote.
Currently Prime Minister Albanese is plugging “a future made in Australia”, encouraging greater incentives for local investment which is admirable, but what if his strategy is not viable and we have a situation similar to the Tritium disaster where Companies are simply not viable and go broke with thousands dumped on the jobs market.
Sneesby claims “It’s one thing to say a future that’s made in Australia is what we’re aspiring to, but we have to back it up with very clear action.”
What he missed out was that the Free To Air TV networks appear not to give a stuff about consumers and the fact it’s them that are driving the migration away from TV networks, he also wants Federal Government intervention in commercial business in Australia with Governments both local and State, acting as interventionists.
This is the same CEO and network who wants the Federal Government to step in, and demand that Meta the owners of Facebook fork out millions to keep their newsrooms afloat.
Seven West Media shares have halved in value over the past year and analysts don’t see anything on the horizon to revive the stock’s prospects Nine Entertainment is struggling to see a future where ad re4venue increases and more people watch their shows, while Network 10 owners are up for sale.
The desperation to cut costs is showing up in the nightly news of all three free to air networks, with their nightly lineup primarily based on cheap fire and ambulance stories using mobile camera video grabs sent in by consumers, with a couple of overseas news stories thrown in. Then there is the sanitised video supplied by various police forces with all networks often getting the same footage.
With free-to-air advertising bookings remaining weak and the upcoming Paris Olympics on rival Nine, there’s little for the market to get excited about with Seven with Ten still trying to sort out their massive multimillion dollar legal costs as a result of the Bruce Lehmann case.
