Rivals 'must work together': Media CEOs on digital disruption

Competition within the media industry is far from over, however Australia’s media bosses believe 2018 has marked a turning point where historical rivals became closer than ever due to disruption from global technology giants.

A Fairfax Media survey of 14 Australian chief executives and company leaders from businesses in different parts of the media industry found widespread agreement that the perceived threat from offshore digital players has changed the way they compete.

Fairfax Media chief executive Greg Hywood and Nine chief executive Hugh Marks announced plans to merge the two media companies in 2018. Most media CEOs believe collaboration is the new normal.Credit: Louie Douvis

Among the panel was Nova Entertainment chief executive Cathy O’Connor, who said she has seen “most media companies very willing to engage in conversations around operational efficiencies” to grow the sector.

On this point, Bauer Media Group chief executive Paul Dykzeul seems to agree saying media companies are “facing challenges that are materially affecting their business” with digital disruption “challenging all traditional media outlets”.

“I believe that if ever there was a time where media companies should and must work together it is now,” Mr Dykzeul said.

Over the past year, Fairfax Media (owner of The Sydney Morning Herald and The Age) and free-to-air broadcaster Nine Entertainment Co have announced plans to merge. Seven West Media and News Corp are also working more closely together, launching an automotive advertising partnership. Nine and News Corp's Sky have recently launched a business channel together.

Fairfax chief executive Greg Hywood said the “biggest opportunity” for the newspaper publisher going forward was the merger, made possible by a change in media ownership laws in 2017.

As Nine's Hugh Marks says, "in the modern media landscape the notion of rivals who can’t work together ... is dead".

Mr Marks, Seven’s Tim Worner, Network Ten’s Paul Anderson and Foxtel’s Patrick Delany all said the opportunity for their businesses during disruption is “quality content”, with several mentions of the importance of the “big screen” of the television in peoples’ homes as opposed to solely the mobile phone.

“The opportunity we have is that in this fragmenting world, the value of mass reach will only increase, as will providing advertisers a brand-safe environment and the most rigorous and transparently audited metrics in the market,” Mr Worner said.

In the modern media landscape the notion of rivals who can’t work together with [each other] is dead.

Nine Entertainment Co chief executive Hugh Marks

Mr Anderson noted the importance of the size of a media company in 2018. “Scale has become incredibly important and this might have something to do with the gargantuan size of [Facebook, Apple, Amazon, Netflix and Google] and the eye watering amount of money they can pour into content and technology,” Mr Anderson said.

The ability to retain and attract customers with media has seen telecommunications companies taking steps to obtaining content rights, such as sport, which is a part of Telstra CEO Andy Penn’s strategy for the telco. Telstra has a 35 per cent stake in the recently merged Foxtel and Fox Sports.

“The availability of content anytime, anywhere across a growing number of international and local platforms is a clear benefit for our customers,” Mr Penn said.

The competition regulator will provide a draft report to the government in December about the impact of the digital platforms on traditional publishers.

See the full survey panel's answers here.