Cause and effect

In February 2018, the CEO of Multi Channel Network (MCN) Anthony Fitzgerald – then jointly owned by Foxtel, Ten and Telstra – delivered a blistering keynote address and action plan for broadcasters to start unprecedented collaboration to counter a wave of new rivals, still largely unknown, that would be aggressively coming for their once untouchable advertising base.

The collective broadcast industry could not, he said, through “ambivalence or negligence” allow itself to wither.

“As an industry we need to do much more than marketing and research because if we are not careful, we will have multiple systems competing in dynamic, programmatic and addressable TV, using different metrics, competing not just against the Silicon Valley interlopers, but with ourselves. It’s all creating unnecessary system duplication and complexity. It will fracture the TV market further and will only serve to set our cause back.” 

And the killer line: “If we don’t take the challenges today and in the future with a profound sense of collective urgency, I fear we face ongoing declines, or worse, a structural breakdown in the ad-funded TV model.”

Yep and yep. Six years on, about $600m will have fled free-to-air TV in the past two years alone. Another round of the same gets to a billion in three years – that’s about as close to crunch time as you can get.

MCN has since been rebadged Foxtel Media after News Corp took up Telstra’s equity sell down in Foxtel, but Fitzgerald’s partner in crime on that industry blueprint was Mark Frain, now Foxtel Media CEO. And Frain just delivered in large part on that plan to hedge against broadcast’s barbarians. Except he’s doing it with them. 

Now or never

There’s something long and niggling between Foxtel and the TV networks – perhaps that it was a typical establishment-fighting Murdoch-backed pay-TV venture which in the day was the first real competition broadcasters had on their turf since commercial TV launched in 1956.

Whatever the cause, it was those ignored calls by broadcasters for some challenging, uncomfortable, industry-wide collaboration and change to head-off the barbarians at the gate that had already started the frustration inside Foxtel. Then a fatal decision by the broadcaster-controlled board at its audience measurement arm OzTam to refuse Foxtel a board seat and keep it in observer status triggered a two-year game plan to switch sides and join the newly emerging subscription streaming services offering ad-supported tiers. Well, that and the subsequent tit-for-tat OzTam audience reporting discrepencies across the Foxtel platform were the two catalysts which inflamed the exile to a point it spent two years quietly working with Kantar to devise a measurement alternative to the broadcaster system. Frain was blunt last week on stage - to the point it elicited a "punchy" quip from Foxtel CEO Patrick Delany.  

The Video Futures Collective, essentially spearheaded by Foxtel Media, housines Amazon’s Prime, Disney, Samsung Ads, Vevo and yes, even YouTube, (Netflix is coming) and would be a much harder proposition without the nuance still required in the Australian market from a local media operator seasoned in mastering local relationships. 

To be clear, we’ve heard the collaborate and win line before from sector alliances – but this one might be different. Might. There’s some big globally ambitious players in this new streaming alliance – all of them used to having it their way and quietly. 

Nine’s Upfronts is this Thursday – terrible timing given the revelations last week around its culture – and the rumblings are that it will announce some bold initiatives. It needs to, but somehow the sector needs to actually find its collective mojo before it’s cut by a thousand. Some say it’s too late – another year of the same may prove the point. 

The new competitive framework, predicted six years ago, is coming to pass – what happens next?

Paul McIntyre was Editor-at-Large at MCN 2015-18.