What you need to know:

• Former Fairfax and Nine exec Chris Janz predicts “consequences” ahead should Meta not renew contracts with publishers under the News Media Bargaining Code. It won’t, he suggests.
• Via new publishing venture Scire, Janz is readying for launch of a new business-focused publication, the first of a VC-backed push to show traditional news media there is a market that will pay for trusted, smart content without partisan dilution or click-seeking padding.
• He thinks Australia’s major masthead owners may rue boasting about how many log-ins they have amassed as audiences question data harvesting and regulators sharpen their instruments and appetite.
• They can’t compete with Meta and Google in that game either way, per Janz, and further erode trust – which he says is, or was, their main differentiator.
• Scire won't collect any subscriber data, he says, walking the talk on trust, nor run traditional ads.
• Janz and outgoing Guardian Australia MD, Dan Stinton say the economics of scale and programmatic ad-focused business models are long-busted – notable given Janz architected the “deal of a lifetime” with Google to sell all of Fairfax’s premium ad inventory in 2017.
• Over the last five years, Stinton has steered the Guardian’s local operation almost out of open ad exchanges and direct response-type ads. He thinks those models are only good for “selling widgets”. Brand dollars are where the growth opportunity lies, he suggests, and diversification is critical for publishers given platform and regulatory shifts.
• Guardian ad revenues have slowed, but are still growing, per Stinton, though more than half of its circa $50m Australian revenues now come from reader donations via 150,000 paying punters.
• It’s now trialling a wall within the Guardian app to see if audiences will pay for curated content.
• But Stinton won’t be there to see the results. He’s off to spearhead Sequoia Capital, Telstra and Seven West Media-backed booking app Health Engine.
• Listen to the punchy, unfiltered podcast with Janz and Stinton here. 

“We think that there's an audience opportunity – and we also believe in the business of journalism. It’s that simple,” says former Fairfax and Nine publishing boss Chris Janz when asked what secured weighty VC backing for a new publishing venture, with 20 journalists on board even before launch.

The first publication out of the stable “is focused on business, politics and power”. It will launch in the next few months and Janz and his backers are betting it will quickly become the choice of a new generation. Though it's not chasing everyone under 40. Just the smart ones that want to pay for news, insights and deeper analysis without the empty calories. He won't commit to a subscriber target for the broader venture, but it's understood to be in the thousands, not the millions. For now.

“If you look at the Australian business community, it's changed markedly over the last decades. Millennials have grown up. They're now in the C-suite. They're in the boardroom. They're making significant decisions; they're leading change,” says Janz. “At the same time start-ups have grown up. There are multiple examples of Australian start-up businesses posting multibillion dollar valuations, leading the charge around the world, competing at scale. We think there's an opportunity for a digitally native, future-facing publication that speaks to that generation of commercial leaders.”

Market incumbents would say they have that covered. Janz is unconvinced.

“There is a great deal of excellent journalism happening in newsrooms around the country. But there's no denying that news media has a trust problem. And survey after survey is telling us that problem is getting worse.”

Edelman’s annual trust barometer paints a grim picture. Per its 2023 survey, more than half of the country think journalists are a dividing force, with 72 per cent citing the rich and the powerful – which own or control much of the mainstream media – as the only group as more divisive for society.

Janz sees demand-driven opportunity.

“If you look at the broad themes, readers are telling us they're concerned about proprietorial influence, they're worried about concentration of ownership," he says. "Media is even more concentrated than it was when the Guardian launched a decade ago.”

Blurred lines bite

Janz thinks some mastheads are suffering the consequences from pivoting to digital business models and socially-driven traffic in a bid to stay afloat during the first wave of disruption 15 years ago – and failing to recognise that the world, both audiences and advertisers, has moved on.

Programmatic advertising yields on a CPM basis for scaled players are now barely a tenth of what they once were and Google and Facebook have flipped their approaches, turning the commercial tide, stranding the likes of Vice and BuzzFeed News, once the faces of the new digital news model.

Meanwhile, he thinks audiences are growing sick of being duped.

“Some publications blend gossip, opinion, partisan coverage and clickbait, alongside award winning journalism. Sometimes readers can't tell the difference,” says Janz.

Data danger zone

With the public increasingly wary of wholesale data harvesting, Janz suggests some publishers would be wise to steer clear of the public arms race on user log-ins.

“At a time when we’re really sensitive to cyber attacks and the sharing of personal information, some are bragging about the billions of data points that they collect on people and how they track and then sell against that data. So it's understandable how we got here, and how that we do have a trust issue in media,” says Janz.

“You can either bury your head in the sand and pretend that it's not happening, or you can address it. Readers are telling us they want us to address it; we believe it is commercially right to address it. So in the way that we go about building both the business and our journalism, trust will be at the core of what we do,” adds Janz. “That's not to say it's not at the core of the broader industry. But there are those pockets that have led to the concerns that people have.”

Chasing fool’s gold?

He thinks trying to compete with the likes of Google and Facebook on data, targeting, segmentation and tracking is a mug’s game.

“It's playing in a game that has been won by Google and Meta. They have such incredible size, scale, impact and the ability based on that size and scale to set prices. So if you're playing a game that doesn't value context, doesn't value trust and doesn't value the investment that your organisation makes in quality information, then you're playing someone else's game, and not necessarily taking control of your own destiny.”

So Nine, News and the rest racing for the biggest logged-in audiences have it all wrong?

“I don't think it is the long-term solution to funding news media. And I think there are going to be changes imposed on the industry around targeted advertising and the ability to opt out,” says Janz. Moreover, he suggests trying to build out an audience pool of every Australian aged 15-plus “is not a point of differentiation. The point of differentiation for these [news-driven] organisations is context and trust.”

Scire won’t even collect user consumption data – or any data at all, beyond payment data, claims Janz.

“Commercially, one of the things that we're looking at doing differently is building the business off the back of great journalism, not off the back of user data. So if you subscribe to our property, you'll give us your email address, your credit card details, and that'll be it,” he says. “We won't collect anything about you.”

Turn back time

While it will “absolutely have commercial partners in place,” Scire will likewise eschew now standard approaches to digital advertising as it “delivers perverse incentives to produce journalism that isn’t worth paying for,” per Janz. Quite the reverse from the man who brokered Fairfax’s deal with Google to cede control of its premium inventory in return for net annual revenue gains rumoured to be north of $40m. Janz, however, says that was a deal of its time – and would do it again.

“Everything you do in the media business is in response to the situation that you're in at the time. And at the time, we were facing a declining digital advertising model, real issues with our digital advertising business and we were looking to build a subscription business,” says Janz. “There was an agreement to be had that made a lot of sense for a commercial partner in Google and made a lot of sense for us; it allowed us to focus on building a digital subscription business. So if I had my time again, that was the deal of a career. I'd absolutely do it,” he says, “it was so good.”

Killer blow

Google never struck that kind of lucrative arrangement again and it remained something of a blot on its local P&L, at least at face value. But it did kill off any hopes that AppNexus had of breaking Google's adtech hegemony, so perhaps it was a price worth paying. AppNexus, since subsumed by AT&T and housed within Xandr, had struck deals with News Corp as well as Fairfax and had not given up hope of architecting a coalition of publishers that could have seen Google largely shut out of the premium masthead market.

As a result of the agreement, Fairfax went back to the Google ad stack, and additionally took on Google productivity software, and any hopes of a premium private exchange faded.

Scale game over?

Either way, Guardian Australia MD Dan Stinton agrees that the response by publishers to disruption – chase scale, clicks and go all out for programmatic ad revenue – has itself been fully disrupted.

“When I started in digital, we were complaining about $30 CPMs. I would love to be complaining about $30 CPMs [today]. Now it's 10 per cent of that programmatically, sometimes less,” says Stinton.

“When that was the mechanics of the industry, it made perfect sense to go after scale, because there was enough advertising revenue behind it. That is not the world we live in now. The yield that you earn from programmatic is much lower, the dominance of the platforms is much higher and they've changed their algorithms, therefore they're less reliable partners in terms of sending traffic.”

Plus, people rarely subscribe to junk-grade content.

“Consumers will not pay for Kim Kardashian’s latest outfit or latest scandal,” he says. “In the long term, it's just not a business model.”

Hence diversification as well as heading upstream editorially is key, per Stinton, with the bulk of Guardian Australia’s circa $50m annual revenues now coming from direct donations via around 150,000 recurring supporters. The publisher is now trying to push into subscriptions for curated content, and has put a wall on its app to test the waters.

Programmatic pull-out

The Guardian’s advertising revenues are still growing, but not via open exchanges, which Stinton has actively pulled away from. For one thing, the yields are much higher away from open exchanges, while publishers maintain better control of what appears on their sites.

“When I started at the Guardian five years ago, about half of our advertising revenue was coming from the open marketplace, from real time bidding. Now that's down at about 10 per cent,” says Stinton. “We're all for the efficiencies that come with digital advertising, but we're primarily doing that through PMPs [private marketplaces] or programmatic guaranteed direct buyers.”

Circa 90 per cent of ad revenue therefore comes via direct conversations between buyers and its sales teams – and Stinton argues the approach has taken it upstream. “We’re doing brand advertising now as opposed to the DR [direct response] type advertising that dominates the open marketplace,” says Stinton.

He thinks that’s where mastheads should be playing – because the platforms can’t.

“What publishers have to realise is we're never going to have the first party data of a Google or a Facebook, which reach pretty much every Australian. But what Google and Facebook lack is the really strong affinity with the brand that certainly the audience of the Guardian, other news mastheads have – and that just really suits brand advertising,” says Stinton.

“If you're selling widgets, and all you care about is selling widgets, then a publisher is probably not the place to do that. If you want to build a brand, a publisher is a fantastic place to do that.”

Targeted targeting regulation

Both Stinton and Janz think incoming privacy reforms and regulation of targeting will force a market-wide change of tack – with contextual targeting rising to the fore. Stinton welcomes reforms he feels are long overdue – but urges regulators not to go scorched earth. Targeting by postcode level, he argues, can’t do any harm.

“I've heard for years that consumers don't care about privacy. I just don't know if that's true anymore. The more data breaches there are, the more that consumers care and the more people are asking the question around, what is what data is being collected, and being uncomfortable with what's happening. So … we have to accept that the way we've done businesses has to change,” says Stinton.

“The issue we have with what has been proposed by the government is that it is broadly defined ... Tracking someone's every moved is classed the same as targeting an ad to someone who lives in Surrey Hills. Those two things are obviously very different. One of them has the potential for consumer harm, the other one doesn't. What I’m hoping for is a regime which allows for sensible targeting, down to a postcode level, because of the opportunity for harm there is quite small, but restricts some of the really invasive data practices where the term surveillance is actually appropriate,” he adds.

“Following someone’s every movement is genuinely surveillance and consumers are uncomfortable with that. So it shouldn't be allowed. Even with consent, that should just be outlawed.”

Data limitations call

Stinton urges regulators to clamp down on big tech using data collected in one business to feed another. He believes purpose limitations are required to rein-in surveillance while preventing further competitive data disadvantage.

“I've been banging on about this concept for years. No one seems to listen … but you shouldn't be able to track someone's every movement because you control a mobile operating system and use that to sell targeted advertising in a completely different environment,” says Stinton.

“You shouldn’t be able to read someone's emails and sell them targeted advertising somewhere else. And the advantage of purpose limitations are both privacy enhancing for the consumer and also competition enhancing …  If there are purpose limitations which say you can only collect and use data for the purpose that a consumer would reasonably expect, that’s going to make it easier for smaller players like publishers to compete in digital advertising and move more towards a contextual-based model.”

Bargaining code crunch

“The clock is ticking” on ad approaches based on personal data, reckons Janz. He sees several waves of disruption rolling rapidly towards Australia’s big publishers.

“Privacy reforms are just one of the big icebergs that the news media is facing in a short period of time,” he says, with News Media Bargaining Code renewals coming up within the next 12 months. That’s $200m in play, per former ACCC chair Rod Sims’ calculations – and it doesn’t look like Facebook is playing.

The Guardian used its multimillion dollar share of the spoils to help fund circa 60 staff hires and new product development. So what happens next?

“The short answer is I don’t know,” says Stinton. “But the Code is still in place and therefore my expectation is the deals will be renewed.” He talks up the Guardian’s relationship with Google as “better than it has ever been”, but doesn’t mention Facebook.

However, Stinton’s broadly in agreement with News Corp chief Robert Thompson that the next iteration of the Code should be applied to those feeding and training their large language models on publisher content.

Janz agrees “100 per cent” on the need to regulate the looming AI threat. But he thinks the next round of negotiations of the current code – which last year helped boost the bottom line of his erstwhile employer by $35.5m – are a more pressing concern.

“I think it's a really challenging time ahead. The first renewals are up in 11-12 months. Meta has been withdrawing from those agreements in every other part of the world. The mechanic in the legislation is that they'd have to be designated for the legislation to actually apply to them,” per Janz.

While Treasurer Jim Chalmers could decide to designate Meta, Janz can’t see the platform coughing up without another fight, if at all. And that could take years, leaving publishers and their new teams and products without the money to support them.

“Meta has been walking away from news in every part of the world. I cannot see them creating a difference for Australia. That leads to a significant amount of money flowing out of out publishers’ coffers at a time when there are other challenges,” says Janz. “I think we'll have some consequences.”

Political appetite required

Janz, who is advising the New Zealand government on its own version of the News Media Bargaining Code, expected shortly, thinks Australia needs to take a fluid approach to regulation.

“The Code was never meant to solve all the issues facing journalism, it was one of nine recommendations within the Digital Platforms Inquiry report. What it doesn't do is consider new entrants to the market and doesn't consider the situation that we're about to face where renewals don't happen. Do we then enter a phase of 24 to 36 month process of designation? There's a whole host of elements it doesn't consider,” says Janz.

“If you look at what's happening in Canada, with their legislation, and in New Zealand with the proposed legislation there, other markets are building on what's happened in Australia to reach what might end up being better outcomes. So I think this needs to be an open topic that we continually revisit, not ‘deals were done, case closed, move on, next’”.

Launchpad, poaching pushback

Janz says Scire’s first publication will be out well before Christmas. It wants to be, given the journo salaries he and backers are now paying. But Janz pushes back on recent swipes by soon-to-be rivals that he’s been trying to poach staff – and largely failing.

Direct approaches, he claims, have been few and far between. “We have gone down the very old school path of putting up job ads. People have applied for them, we've interviewed them, and we've made them offers. And if you look at our newsroom, there is one person in that entire team that didn't go through that process,” per Janz.

“That’s important, because we're not looking necessarily for people to do exactly the same work that they're doing today, we're looking for their broader approach and attitude. And the best way to express that is through an application,” he adds.

He suggests Scire doesn’t need to poach, because journalists are actively seeking out the firm.

“The one thing that I'd say is consistent [from candidates] is that people are looking for a publication where they can do their best work, and without the restrictions that exist in some of the other publishing houses.”

Stinton exits media

After five years at the Guardian Australia helm, Dan Stinton is heading to Health Engine, a booking app for doctors and dentists – a booming sector since Covid taught everyone how to use apps and the internet, and given the cost and time pressures facing clinics. It's backed by Sequoia Capital, Telstra Ventures and Seven West – Stinton's old stomping ground, and how he connected with the app's founders.

A co-founder of drinks inventory platform eBev and long-term start-up investor and advisor, Stinton wants to get back into the game and something "a bit broader" than media. His work at the Guardian is done.

"I've been here five years. I came in at a time when the Guardian had just broken even, we've tripled the revenue since then, we've grown the team more than double, and it's been a really good run," says Stinton.

"I wasn't itching to leave, but you have to be mindful of the fact that everything has a lifespan. Perhaps it's time for someone new to come in with some fresh ideas to grow the business over the next phase. I'm very confident that the Guardian has a really strong future and it will continue to grow. But I think it's time for someone else to do it."