The future of the media after the takeover of Fairfax by Nine

Quite the contrary, he argued. Fairfax was now healthy enough that Nine was willing to pay a premium of reinstatement for the oldest Australian media company, publisher of AFR Weekend and other titles such as The Sydney Morning Herald and The Age .

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This was a difficult sale, made all the more difficult for Hywood as a neighboring screen was showing Nine News airing "Gwyneth's Baby's Regret" and "The Secrets of the Supermodel" .

The inevitable questions about cultural differences Analysts and journalists are already being heard publicly, but there is less discussion of what this historic $ 4.2 billion merger means for the future media in Australia.

"said Paul Bbadat, a venture capitalist who co-founded the Seek job site in 1997, beginning the first wave of disruption for Fairfax and its rivals.

"The idea is that you need it"

Although Bbadat acknowledges that it is the current theory, he says that "the jury is still out of the question as to the effectiveness of this practice."

That said, Rupert Murdoch believed it was of sufficient magnitude to sell 21st Century Fox's entertainment badets to Disney as part of an agreement to US $ 71 billion, which was to consolidate the activities of Netflix, a streaming giant

. The scale is also the reason for their closeness, which is built around a belief that the sum of the new group is better than its parts.

"The scale is important, cross-platform is important," Hywood said in an interview before he addressed the staff.

"Sc Media companies are best placed to face the competition."

A package for advertisers

The idea here is to offer advertisers the full range of media in one only package. For the merger of Nine and Fairfax, this includes television, radio, print, online television and catch-up television.

"This is worth something for advertisers," said a veteran media involved in the case who asked not to be named.

In addition, there is the opportunity to promote real estate activities of Fairfax Estate, through Nine's advertising platforms and renovation programs as The Block .

"The domain gets a whole new way to connect with customers," says the person.

"Inevitably, when these properties are possessed in common, there is a greater desire to make things work," he said.

Beyond that, the goal is to make things easier. New undisputed leader in the industry in Australia and reap the benefits that come to be number one – a new position for most of his life until the last decade, when he was exceeded by the Seven Network.

which has just been the market l "

Apart from these traditional media badets and their new digital spillovers, the merger really concerns Stan, the subscription television service jointly launched by Nine and Fairfax. It has 1 million subscribers and should reach the point of balance.

When the investment was initially presented to the Fairfax board, some doubted that there was room for anyone on the market other than Netflix.

They were fortunately proved false. In the middle of the market, consumers have been willing to pay for two subscription television services. Currently in Australia, it is Netflix and Stan

The victim is cable TV.

"Whatever happens [in the media landscape] one of the few certainties is that Foxtel is in deep trouble," said a fund manager.

"People no longer want to pay $ 100 a month to watch some extra games So it becomes a niche luxury product."

Regardless of its trajectory, Foxtel still has about 2.7 million dollars. subscribers, similar to Netflix in Australia, according to data from Roy Morgan

.

Goal: Double the number of subscribers

Hugh Marks, the general manager of Nine, has the ambition to double Stan's subscribers above 2 million, an objective that should be facilitated by the merger. 19659002] The idea is that Stan, under the direction of a single owner, will be in a better position to enter into a deal with Hulu, which is owned jointly by major US TV channels.

According to a proposal outlined at AFR Weekend Hulu or another great American player would take 51 percent of Stan and provide the streaming service with his content.

It would have been more difficult under the joint ownership of Fairfax and Nine, because any major foreign player would probably require control in exchange for its content.

For fund managers, it is the strongest reason for the operation. "Stan has a local clientele, but not much of his own content," said one person

"This would allow Stan to become a distribution platform for other people's content in addition to what it's all about. it produces locally. " [19659002] Such an agreement would put Stan in a solid position to consolidate as a strong second actor and thus become a profit engine for the merged company.

Clear Television in Danger

What is less clear is that it would offset the gradual drift of the so-called "linear television".

"Eyeballs and advertising dollars are moving," says Bbadat

He and many others believe that it is the biggest challenge for the merged company.

While Fairfax's mastheads have already endured much of the pain of "eyeballs and dollars" this drop has been less pronounced for free TV.

Despite the decline in the public, revenues are stable, suggesting that television will suffer little loss after the losses incurred by newspaper publishers.

The free television channel will suffer a lot over the next five years, "said a fund manager.

Viewers, including Foxtel and public broadcasters, are expected to fall by about 8% this year This erosion, in part due to streaming services, shows no signs of slowing down.

Despite this, advertisers remain loyal to television, primarily for its ability to bring together large audiences at the same location.

"Trust Factor"

Advertisers appreciate this audience and the frequency with which it can be reached, while there is also the benefit of knowing where the ads will air. the "trust factor" that television executives have pushed since the algorithms used by Facebook and Google have begun to broadcast well-known brand advertising alongside Ticles Promoting Neo-Nazis and Pornography

Even television remains under pressure.

"I can see why Nine made this agreement," said a pension fund manager

"They are trying to take some of the risk"

Despite all the suffering Fairfax has experienced, The future of his mastheads seems safer today than at any other time in the last decade

.However, according to Hywood, people have shown themselves more and more willing to pay for digital subscriptions, which are growing at Fairfax,

"people who appreciate the factual information are willing to pay for it." "

" This is happening in all western democracies, the value in our mastheads is that people trust them. "

Publishing Brings Growth

The election of Donald Trump as President of the United States is widely recognized for this change in the community's attitude towards the news and for Fairfax he has recorded three consecutive growth increases in his Metropolitan publishing activities. 19659002] This suggests that the redesign of the media sector is continuing and that there is a place for subscription-based digital news alongside streaming services.

Such a trend has seen Fairfax and others move away from nonprofit traffic.

The generic character throughout the new media equation, however, is Facebook

Many in the mainstream media reportedly hailed the savage sale of the market that hit 19 percent or 120 billion US dollars of value of the social media company Thursday.

But his relationship with traditional media is not binary. In fact, some of Facebook's current problems are the result of its efforts to minimize the importance of news on its platforms by modifying the algorithms.

Limiting "false news"

This was intended to limit "false news" but also

Overall, these changes contributed to a disappointing quarterly result for Facebook, as revenue growth slowed, a trend that is expected to continue. [19659002] In an article on Facebook's changes, US publisher Slate said his social media giant's traffic references had dropped 87% between January 2017 and May of this year.

Other US publishers have seen similar declines. in the global traffic. This experience has been reflected in Australia and there is speculation that Facebook will have to further modify its algorithm if it wants to regain its previous growth trajectory.

That would probably mean a new recalibration of its move to favor "reliable" news sources According to Slate, such a move would certainly increase the traffic of traditional publishers, but would make them very dependent on Facebook again and therefore vulnerable.

Clumsy Partnership

Bbadat is not convinced that a large number of Facebook users are returning to traditional media

"I do not buy this story", was he declared

. This suggests that the awkward partnership between new and old media will be restored in one form or another.

For Hywood, it is not a question of staying still. It was a farewell speech after more than 35 years spent in Fairfax (with a break to work for Victorian Prime Minister Steve Bracks and the direction of Tourism Victoria), he told the staff that the company is working with Nine. -For the pain of five rounds of dismissal in the last six years. This is based on a belief that traditional mastheads need the protection of a larger corporate entity to "not only survive but thrive".

But like almost everything else in the world of new media, it's a wait.