It’s certainly big news that Nine Entertainment and Fairfax Media are set to merge.
There’s been much rhetoric about why this move will be great for both businesses, but I’m not convinced.
What we have are two media giants with their roots firmly in the past. And what this merger means is that there will be a mega business lead by a free to air TV network, a newspaper empire, a majority share in a radio network, as well as some digital assets.
Despite all the talk of the digital future that this merger enables, the new Nine will be significantly encumbered by its extensive legacy of traditional media assets – TV, print and radio.
The disrupter of the media model was not competition from traditional media outlets. It was a technology-led revolution that enabled brands like Google, YouTube and Facebook to become the powerhouse media brands of today. And in the process, to capture the lion’s share of Australian advertisers’ revenue (digital ad spend is predicted to be 54%, that’s $8.69 billion in 2018).
In contrast, the Australian TV networks lost around $1 billion last year, newspapers have lost even more over recent years and profitability of radio businesses have been flatlining.
Sure, in the short term there will be positive financial outcomes with this merger as costs are slashed and jobs disappear. But what’s the long term plan?
Neither Fairfax nor Nine Entertainment has in the past demonstrated a clear vision or roadmap for the future. Rather there has been almost twenty years of denial and resistance to the change that has swamped the media world as we know it.
Building a new age media business is about more than just the acquisition of already struggling media companies. It’s about vision, clarity about the potential opportunities, a clear understanding of the market and what it wants and needs, and the intestinal fortitude to throw out what’s holding the business back. It is not for the faint hearted.
What will be required for Nine’s future success is total reinvention and very deep pockets to invest in the technology required to deliver what consumers demand today – timely, relevant content delivered where ever and whenever it suits.
What we all should be asking (especially shareholders) is are they up to it?
Time will tell.
Jo Stone is Director of Media at BCM