Major premium news publishers in Australia are working on a new way to maximise non-advertising revenue, by striking direct licensing deals with media monitoring companies, say industry insiders.
Publishers have previously relied on a blanket licensing deal through the collecting body the Copyright Agency.
News Corp, and soon Nine Entertainment, want to go direct market with their flagship titles, seeking better prices.
With accelerated change from COVID-19, circulation and subscription revenue is now outstripping advertising, the traditional flow of cash from news. The media groups need to squeeze as much as possible from non traditional sources of revenue.
News Corp is leading the way by insisting that media monitoring companies sign a direct agreement if they want to send clippings of The Australian, with its national coverage and extensive business news section, to their clients.
Industry sources say Nine Entertainment, which declined to comment for this article, plans to test direct deals for the AFR, a must-have title for companies seeking alerts via media monitoring, from 2021.
The Copyright Agency‘s latest annual report, for the 2019 financial year, shows $17.6 million revenue from media monitoring firms.
Industry sources say News Corp is about to hire an insider to push revenue from licensing. It is in the process of appointing Ross McCaul, a former senior sales executive of the Copyright Agency, as the media group’s head of licensing in Australia.
Robert Thomson, the global CEO of News Corp, plans to extract more value from content via licensing agreements, an area largely ignored by newspapers in the past as non core audiences.
“These include leveraging existing content to source incremental licensing revenues,” he told market analysts in a briefing post the fourth quarter results.
“We believe that we are very well positioned to benefit from incremental licensing revenues as early as this fiscal year, which should have a meaningful impact on EBITDA (earnings before interest, taxes, depreciation and amortisation).
“Our biggest source of revenues in the News Media (not including Dow Jones) segment is now circulation and subscription. We expect continued growth in our digital subscriptions, and we will be looking at cover and subscription prices to help offset print advertising declines.”
Isentia, the biggest media monitoring player in Australia, declined to comment for this article.
However, Elgar Welch, the CEO of challenger media monitoring group Streem, says publishers need to think beyond paid media to the earned media space.
“The key to unlocking this value is for more direct deals between publishers and business,” he says.
“This would replace the existing opaque licensing arrangements collected via the third-party Copyright Agency.
“Direct agreements would allow publishers to prosecute the value of their unique information to enterprise. They would also give business customers greater, more open access to news and analytics, opening up a range of potential benefits and strengthening their relationships too.
“Like it or not, the pandemic has accelerated the need for new business models to guarantee long-term sustainable access to accurate news. It’s time to reimagine the relationship between publishers and business audiences. Enterprise is critical to news.”
In the meantime, both News and Nine are in talks with Google and Facebook for payment for usage of their premium news, following the federal government’s moves to force the digital platforms to the table.
Hugh Marks, CEO of Nine Entertainment, told AdNews his group is in informal discussions.
“There’s more work to do,” he says.
“We're focused on, in particular, the commercialisation point, the value exchange that is there between our content and most platforms. There's certainly recognition now that there is value exchange.
“I would be hopeful of getting to some reasonably positive outcomes within the next six months, but more work to do to get there.”
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