News Corp on ACCC, sports rights, audiences, Nine, growth & 2019

Q&A with Michael Miller: Full transcript from Your Money interview.

Last Thursday we sampled part of Michael Miller’s TV appearance on Your Money with Mediaweek’s James Manning. Today we have the full interview transcript for readers.

What are your initial thoughts about the ACCC’s preliminary report into the review of the digital marketplace?

At 374 pages, we are still reading through the report. It is a very good executive summary, and the ACCC has highlighted the issues. It has said there are issues, but it is not clear yet what to do about them.

That’s part of the responses that we, and others, will be supplying by mid February.

The ACCC has raised issues such as transparency, market entrants – the difficulty in terms of entering the market. It is looking at the amount of advertising dollars that are going to both Facebook and Google. Digital advertising dollars is where growth is, and the report reveals how small the pie is for the rest of us to compete for.

The preliminary report has done a good job in understanding the issues. Now it’s into what can we fairly do about it. That’s going to be a role for both the ACCC and the government. Ultimately the ACCC is guided by what are the consumer’s needs, and how they’re being treated, and that they have choice. The companies that look to service [those consumers] can compete competitively, but also be able to react to market changes in a way that ensures that in media there is that choice.

Could there be an impact advertising revenues out of this investigation and its recommendations?

Advertising is definitely a part of the report. It’s also the sourcing of journalism, and I think someone pointed out this week that even though The Australian broke the story, within two hours they weren’t being credited for breaking that story. For those of us spending a lot of money investing in journalism, not being able to be remunerated for that investment is a concern. That’s where the music industry and the film industry have also previously had concerns. Now we are highlighting the return for the investment we’re making. That investment just isn’t in journalism, but it’s in Australian communities, and it’s in the campaigning that our titles undertake.

One of the 2018 company highlights has to be your acquisition of cricket rights. And that has an impact across the company?

It’s not just the broadcast rights that are on Fox Cricket, but also now on Kayo Sports. It’s the digital rights, which we’re able to share across the group. Being able to bookend our AFL rights with cricket rights for a 12-month offering of Australia’s most loved sports is part of the rejuvenation of the Foxtel business. Cricket has been one of the highlights for the year, as well as the launch of Kayo Sports, and that is in its early days, but it has had a good start [just] a few weeks in.

How concerned were you that having a cheaper subscription product like Kayo Sports could impact the Foxtel customer base?

Foxtel has done a great job, reaching a third of the population. But we also understand that Australians are among the highest in the world in terms of propensity to pay for content – and we’ve seen that across our newspaper businesses. So how do we capture a greater share of that in the broadcast space? Kayo Sports is designed to increase the consumption of Fox content across a number of devices. So you don’t have to have a [set-top] box now, although the box definitely gives you an experience through catch-up, through 4K, through the library that is on demand. It’s also an aggregator of not just sport, but also entertainment, lifestyle, news, of documentaries and kids content.

Kayo Sports, as an example, is on demand anywhere, in the home or in the park, at the game, wherever you wish.

The single biggest News Corp audience is visiting news.com.au and the business has had a good month.

It’s been a great week for news.com.au, for both Kate De Brito and her team. Passing 10 million users in a month for the first time for an Australian news brand, but also encouragingly extending its lead over their competitors in the category. And that is a combination of great journalism and telling great stories. It has been growing steadily now for a number of years, and they’re the clear leaders in this space.

What are some of your other 2018 success stories?

There have been quite a few great examples with local content, unique content.

You’ve seen aspects such as the Telegraph’s coverage of Barnaby Joyce, which is a story that has just kept on giving. And what’s going on in Melbourne at the moment, with witness X, which has been many months in the planning and investigation.

There is a range of examples, market by market, which would include issues around schools, or around health, around the courts, covering development applications.

We are able to tell stories that are unique to our markets. We’ve always known people will pay for great content, and that’s what we’re really focused on in terms of moving our business into more of a consumer rather than advertising revenue business.

What has been happening regarding ad revenues?

Ad revenues have been under pressure for a number of years, but SMI figures have shown in the past couple of months there’s actually been growth year-on-year in terms of print advertising. What’s encouraging is that the advertising pendulum is always changing and moving, and there’s been a bit of a move back to main media. I wouldn’t say print’s the only beneficiary of that – there’s other main media as well. Marketers are turning to trust as a key attribute. Having that context of understanding and trust in trusted environments has definitely been a theme of 2018 and has been part of swinging the pendulum back to main media, and particularly news media.

What are your thoughts about having a new-look Nine Entertainment Co as a competitor?

I look at the Nine group now, and we’ve probably got more in common [with it] than there are differences. I think competition is healthy – we like to win. But it’s good to have a competitor who does value journalism. As they promote journalism, that’s good for all in the category. If we can grow the category, then that’s good for all the players in the category. Our growth in terms of advertising won’t come from each other, it will come from others outside the category. So bring it on. Nine is formidable, but we tell great stories, and we’re confident in the content and the journalism we have within the company.

Could Nine divesting assets have an impact on News Corp?

Our priority this year has been the integration of Foxtel and Fox Sports, and in Australia, the mastheads, digitally and in print throughout the country. We are ensuring we’re making the most of what we have today. There’s more we can continue to do, rather than increasing the size of the pool in our case.

How open are you to partnerships with other media players?

We have a partnership with Nine for Your Money, and with WIN TV where Sky News now appears.

With Seven now too, where we have some advertising packages focused to the car industry. For that partnership [we can offer advertisers] five cap city print and five cap city broadcast. Great brands being able to have one conversation with motoring advertisers definitely starts a conversation. We are able to roadblock and amplify a new car message very quickly.

Is the future about managing existing assets, or does News Corp too look for growth opportunities?

Part of our DNA is to grow the business, and that’s what I challenge every one of our teams to do every day. That collectively is how we grow our business, and that appetite has not changed. Australia is a market that continues to punch above its weight. The importance of Australia in terms of News Corp – and the News Corp culture is very much an Australian culture – is that we can continue to work with our peers globally. We definitely take a lot of learnings and lessons from them, but if we can put some of it back to them in what we’re doing here and how we can share, then that makes the company a lot stronger.

What are the things in 2019 that’ll sort of keep your focus?

We’re coming up to a very important election in 2019. We’ve had a decade of some disruption, and I think the Australian public is looking for some certainty. Until we get through that election, whenever it may be, we’ll have both consumer and business uncertainty. That will impact the real estate market, which they’re very close to, and it’s definitely been impacted by the banking royal commission. Global events and regional events could play a more important role in terms of our economic fortunes.

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