'Heartbroken' as a publishing model shatters and tech news sites close

Chris Pash
By Chris Pash | 9 July 2024
Credit: Julia Joppien via Unsplash

Digital publisher Pedestrian has finally pulled the pin on a business model which once delivered a desirable audience to enthusiastic advertisers with big pockets.

The sector is being squeezed by diminishing advertising dollars and by young audiences more interested in what's happening on social media than going to a news website.

And technology journalists, a close knit group in Australia despite being competitors, are heartbroken and angry at the closure by Nine Entertainment of some of the best sources for tech news.

The local versions of Kotaku, Gizmodo, Lifehacker, Vice, Refinery29 -- licensed from overseas publishers with added local content to create a vibrant Australian service -- are closing.

The decision is blamed on the downturn in the media industry which has been hitting the offshore media companies licensing the titles, the challenge from social media such as TikTok and Instagram and shrinking advertising dollars. 

"Given these factors, we've made the tough decision to focus on our wholly owned Pedestrian brands where we control the strategy, the content, the product, the sales and the outcome – the entire business," said CEO Matt Rowley, who announced his own departure at the same time as the closures. 

"This means that we will transition out of our current brand licences, which will reposition our business for the future."

The media group's titles are grouped under Nine's Pedestrian umbrella, which had been "highly" successful, according to Rowley, a high profile executive in the sector with his own successful record in publishing. 

However, Pedestrian is essentially a youth publisher, a sector under attack from youth social media platform TikTok which has sucked up hundreds of millions of dollars in display advertising in Australia. 

Young Australians aren't getting their news from websites anymore and social media isn't delivering audience to small digital publishers like it was three to five years ago. That well has been dry for a while now.

Scott Purcell, co-founder of digital news site Man of Many, is a huge fan of Lifehacker and Gizmodo

"They were big inspirations behind Frank (Arthur) and I starting Man of Many. It's sad to see them leaving the Australian market," he said.

However, content sites have seen a significant decline in audiences.

"If these sites primarily earn from display advertising, this decline heavily impacts their bottom lines," he told AdNews.

"The shift away from short-form news content, as highlighted by GQ's European director of audience development and social, reflects a broader industry trend. Publications are moving away from high-churn, short-form content that attracts fleeting visits rather than long-term engagement.

"With major tech platforms sending less traffic to publishers, there's a noticeable move away from the clickbaity low-quality social article content production.

"Publishers are now focusing more on their core audiences, delivering content that resonates deeply and fosters loyalty."

The size of the Australian market relative to the US is also a significant factor.

"The licensing costs, which I imagine are in the millions, may not be justified by the relatively smaller Australian advertising market," Purcell said.

"The million-dollar-plus campaigns common in the US are scarce in Australia, making the investment in licensing less viable."

The Pedestrian closures are part of Nine's cost cutting drive and redundancies in the face of stubbornly low advertising spend and the end of Meta paying for use of premium news in Australia. 

Pedestrian Group was created in 2018 when Pedestrian, wholly owned by Nine, came together with the Fairfax's Allure Media business, whose model was based on publishing licensed global brands in Australia. 

An industry insider suggested the licensed titles just didn't fit with Nine's strategy anymore. The group needed to focus on its core business. 

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.  

The closures sent a deep wave of sadness to current and former staff.

Athina Mallis, managing editor at Gizmodo Australia, says the closures are a massive blow to tech journalism.

"I won't lie, I am upset, angry, and sad that the digital media industry is shrinking," said Mallis.

"Good, hard-working journalists are losing their jobs. We work tirelessly to make sure the site looks good, copy is clean and the stories are factual and original. Let's hope our work is not in vain.

"My heart is breaking for this industry."

Mark Serrells, the editorial director at Choice and a former IT Journalist of the Year, said he grew up as a journalist and a human being at Kotaku AU. 

"I wrote over 11,000 posts on the site," he said. "No job ever meant more to me than being editor of Kotaku AU.

"Love and support to everyone affected. I loved the most recent version of Kotaku and everyone who wrote for it." 

Tegan Jones, a former Gizmodo editor and now a senior technology journalist at SmartCompany, was heartbroken.

"Most importantly, the people … are legends who deserve better," she said.

"I'm so sorry. Giz was my life for so long. I'll always love it and the special part it played in local tech journalism. The industry will be worse off without it" 

Alex Walker said being editor of Kotaku Australia was the most incredible jobs with some of the most incredible people.

"Seeing all of that shut down now?" he said. "Upsetting doesn't even begin to describe the depths of sadness of the situation. 

"There is a vibrant demand locally for more coverage of technology, games and how they intersect with our lives, but continually the writers serving those niches have struggled with a lack of support and challenging market dynamics that frequently get in the way.

"Audience demand for this coverage won't go away -- in all likelihood it will just start drifting to international outlets instead. There needs to be a better way, and conglomerates need to start thinking of different models that can empower people to fill the enormous void that is now left in the Australian media landscape."

Angus Kidman, editor at large at Finder, spent seven years at Lifehacker .

"Really sucks for all the folks I know working there," he said.

"It's not a surprise - the strategy of providing a local version for global brands started disintegrating as soon as Allure merged into Pedestrian, and the Gawker brands which Allure originally launched with aren't even under a single owner in the US anymore.

"The local site is already getting messed up. Everything I ever wrote for Lifehacker (some 10,000+ pieces) now lists johnsmithus as the author. That's really unethical and totally bites, but there's clearly not much to be done about it now."

(DISCLOSURE: Chris Pash is a former business editor at Business Insider Australia, which had been part of Allure Media.)

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