News Corp’s Michael Miller warns of cluttered media market

The Australian media market has become cluttered with too many new entrants, and the industry faces an ‘uncertain future’.

News Corp Australaisa executive chairman Michael Miller: ‘I don’t think the Australian media is out of the woods, and in fact, the landscape remains very unstable.’ Picture: Liam Kidston.

The Australian media market has become cluttered with too many new entrants, and the industry faces an “uncertain future” as consumers become more circumspect with their subscription choices, News Corp boss Michael Miller has warned.

The executive chairman of News Corp Australasia (publisher of The Australian) said while the nation’s media landscape had never been more competitive and diverse, the sector was struggling to accommodate the recent rush of fresh entrants, and some players would need to change their business model in order to survive.

“As more players enter the market, there are fewer people to go around. Advertising dollars are decreasing and subscriber dollars are very competitive to earn,” Mr Miller told The Australian.

“I’m a strong believer in diversity and relish the competition, but that also puts a degree of financial challenge on all businesses in the sector.

“I don’t think the Australian media is out of the woods, and in fact, the landscape remains very unstable.”

Mr Miller said while “consumer behaviour” was still the great unknown factor in terms of revenue, it was “unsustainable” for the industry to expect that households would continue to invest in multiple news, sport and entertainment subscriptions.

“There will be a point soon where consumers will have to make a choice,” he said.

“The reality is they probably can’t afford all the choices that are available.”

Mr Miller warned that the overheated media landscape could result in some streaming services or publications being forced out of the market.

“You could see some consolidation or rationalisation, you could see some exits, you could see some closures. It’s an uncertain future,” he said.

“In their current form, not all will survive. That’s my thesis. To survive, some will have to change their business model, and change their content offering, and be a bit more focused on different audience groups.

“While there’s so many players there, I think there’s going to be some tough times ahead.”

Mr Miller said the rise in the number of international players in the market was predominantly hurting local media companies.

“We have seen a rapid change with all the new entrants … in the sports space, for example, spread across Amazon with swimming, A-League moving to Ten, Stan Sports emerging. These things weren’t there 12 months ago. Kayo wasn’t there two years ago,” he said.

“We have seen The Washington Post and The New York Times enter the news media space, along with the UK publishers.

“The uncertainty of 2020 is still to play out and a lot of these services that have launched in Australia have only just launched elsewhere, so this is an emerging model.

“But it’s putting pressure on Australian media businesses that are invested in Australian stories for Australian communities, unlike some of the new entrants.”

Mr Miller’s comments echo sentiments expressed by Foxtel CEO Patrick Delany at a Senate committee hearing last week.

“Our industry in Australia has been significantly impacted by competition from unregulated global streaming services such as Netflix, Amazon Prime and Disney+,” Mr Delany said.

“Given the massive shifts in the competitive landscape, we do not believe the current regulatory environment for Foxtel is sustainable. That is not good for any Australian who believes in the importance of local media companies.”

Commenting on the recent agreements reached by major Australian media companies with the digital giants over the use of journalism content, Mr Miller said the deals – which are reportedly worth tens of millions of dollars each year to the media majors – would help “stabilise” news organisations.

“They are not ‘go out to lunch’ payments. They are an opportunity to right-size and stabilise the business. They’re welcomed, they’re deserved but they are not so substantial that we can just sit back and count the pennies.”