Good people go as Meta cash dries up and ad spend dips

Chris Pash
By Chris Pash | 1 July 2024

A stubborn slide in the local advertising market and the final stop in the flow of cash from giant social media platform Meta pushed Australian news companies to cut costs and jettison jobs.

Seven West Media last week dropped 100 roles and took an axe to its market and sales departments. 

Among the high profile casualties are chief revenue officer Kurt Burnette, CMO Melissa Hopkins and head of sport Lewis Martin. 

Nine has 200 jobs in sight, including newsroom cuts, in a review of its operations.

Industry analysts say the cuts were expected as media companies transition to more digital and subscription revenues, from traditional media. 

"In order for us to be able to keep investing in digital growth opportunities across Nine, we must continue to responsibly manage costs through the cycle," said Nine CEO Mike Sneesby in a note to staff. 

Nine is favoured among market analysts because of its spread of business and its increasing share of revenue from digital businesses. 

The redundancies were announced the same week Nine’s deal with Meta ended and the flow of “significant” revenue dried up.

The size of the hole left isn’t known for Nine but is reported to be as much as $100 million in total to Australian publishers. 

Senior executives from News Corp, Nine and Seven West Media had earlier last week warned of risk to local news coverage and newsroom jobs  if the government fails to ensure Meta renews its agreement to pay for news content.

Nine and Seven had also been strictly managing costs with free-to-air television revenue under pressure. 

Seven reported a steep drop in net profit after tax, down 52% to $54.46 million for the half year to December, reflecting "weakness" in advertising. 

Nine Entertainment reported falls in revenue and profit in a "weak" advertising market for the half year to December. Revenue fell 2% to $1.37 billion in the six months. Net profit after tax was down 21% to $149.5 million.

And advertising revenue, as measured by media agency bookings, have failed to lift so far this year.  

Analysts expect ad spend to improve as the economy lifts.

“We believe FTA TV is facing the most trying time it has ever faced," said media analyst Steve Allen at Pearson.

"This will pass. It remains the most powerful  communicator.”

The latest job cuts are also linked to the disappearance of that extra revenue from Meta.

“We are witnessing the destruction of the Australian media industry,” said Ben Shepherd, adman and CEO of Swartz Media.

“Good people lost their jobs. Good businesses were forced to become smaller. Large international businesses grinfucked the Australian parliament.

“And all whilst this is happening there's a complete lack of action from the government to create any sort of level playing field which could help protect a valuable local industry.”

The redundancies coincided with Meta’s appearance before Australia’s Joint Select Committee on Social Media and Australian Society.

Meta confirmed to the parliamentary inquiry hearing last week its decision to not renew commercial news deals with publishers. 

The reason: No-one (or not that many) want news. The social media giant reiterated that the number of people using Facebook News in Australia and the US dropped by over 80% last year. 

“As a company, our time and resources need to focus on things people tell us they want to see more of on the platform, including short form video, like Reels,” Mia Garlick, Meta’s regional director of policy, told the inquiry. 

“Currently, news is still available in people’s Feed on Facebook and publishers are still able to post links to news articles at no charge if they wish to drive traffic to their news pages.” 

Garlick acknowledged debate about whether Australians get news on social media.

“The reality of our business is that there has been a marked shift in recent years to short form video, and repeated and sustained feedback from consumers that they want to see less and not more news on our services,” Garlick said. 

“To remain competitive with numerous apps growing in the digital space, we must prioritise experiences most relevant and valuable to our users.”

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