Yet another streamer has entered the Australian market, with Max aiming to be profitable within the next 2-3 years.

Ben Willee, Executive Director of Media and Data at Spinach Advertising, discusses with Deborah Knight on 2GB Radio’s Money News, the new streaming service Max, the sales of Foxtel and Domain and more.

Listen to Ben speak here:

Check out the podcast here:

Ben Willee, Executive Director of Media & Data for Spinach Advertising

Or read the transcript:

Deborah Knight (Host)

There’s always lots going on in the world of media and marketing, and with us for our regular Money News session is our ad guru, Ben Willee, Executive Director of Media and Data for Spinach Advertising. Hello as always to you, Ben.

Ben Willee

G’day Deb. Great to be here as always.

Deborah Knight (Host)

So another week, another streaming option and the latest offering here in Australia. Max launch this week with a lot of fanfare. The stars of two of the hit franchises that will feature The White Lotus and The Last of Us. Great series there here in Australia. Max is free for Foxtel subscribers at least its lowest ad tier is free. But is its content going to pull in subscribers, do you think?

Ben Willee

Yes. Well, the arrival of Max already thrown a spanner into the local media works. They’ve waltzed in and yanked all the good stuff that you’ve just mentioned, including Game of Thrones, Succession.

Deborah Knight (Host)

It’s all that good HBO stuff, isn’t it?

Ben Willee

It is. And they’ve yanked it from Foxtel faster than you can say where’s the remote. So I think what’s interesting is we’ve already got a crowded streaming market and it’s dominated by Netflix, depending on who you believe, about 6 million subscribers, Amazon Prime, about 4.8 million and Disney 3.1. So 1.4 million new customers is a running start. It’s pretty handy, if you ask me.

Deborah Knight (Host)

And the global boss of Max, who’s also in the country, reckons that they’re going to turn a profit within 2 or 3 years. That’s faster than other markets where it usually takes about five years to be turning profit. Are we addicted to streaming Down Under? What’s going on?

Ben Willee

Yeah, we’re definitely addicted. And anyone or any of you listeners who’ve got teenage kids know what happens when you try cancelling a streaming service. You know, carnage around the house involving hoodies and slam doors. But, look, I really like an ambitious target. But the really interesting thing to me, and make no mistake Deb, is this is a global cage match now. So the streaming businesses are under enormous pressure to deliver revenue growth. And yes, there will be consolidation. It’s not a matter of if. It’s a matter of when.

Deborah Knight (Host)

So you reckon they’ll buy up some of the smaller players?

Ben Willee

Well I don’t know if it’ll be then be as the acquirer or the acquiry, but there is just not enough room globally for all of these businesses to be putting this much money into it. At some point, common sense has to prevail and we’ll say some consolidation.

Deborah Knight (Host)

Now, meantime, the deal to sell Foxtel to the global sports streaming giant to DAZN is all but done. It got the green light from the Foreign Investment Review Board and the British billionaire, who runs DAZN, is flying into Australia to sign off on it all.

Ben Willee

Yeah, just a lazy 3.4 billion Aussie dollars.

Deborah Knight (Host)

Small change.

Ben Willee

It is, for one of Australia’s biggest media companies. So they own pay TV businesses like Foxtel, streaming platforms like Kayo and Binge and this new TV operating system Hubbl that they launched. And it’s all going to be controlled ultimately by Ukrainian slash British billionaire called Len Blavatnik. I think that’s how you pronounce it.

Deborah Knight (Host)

Sounds right? Yep.

Ben Willee

So if you ever needed evidence, this is a global game, the sports investment arm of the Saudi sovereign wealth fund has also taken a minority stake in DAZN. Now the financial terms of the deal aren’t disclosed, but Bloomberg reckon that they put in at least 1.6 billion Aussie dollars. So, we won’t to see much change for Foxtel in the short term, but it just adds some deep pockets to the negotiating table for the impending rights for the NRL, which are happening at the moment for NRL games for 2027 onwards. So watch this space.

Deborah Knight (Host)

Yeah, very interesting. And in other big, big deals to Nine Entertainment is all systems go to sell off the real estate classifieds group Domain which will deliver a $1.4 billion payday for Nine. How’s that lump of cash going to be used do you think.

Ben Willee

Oh that’s going to be the question of the night Deb. I mean, we could talk about this all night.

Deborah Knight (Host)

I’d be due a pay rise. I might put it up to the bosses.

Ben Willee

What your bosses have got to do is they’ve got to balance the desires of shareholders who want some of that money back in their pocket, and then they sort of absolutely need to reinvent themselves in this really dynamic and ever changing media landscape. So if I was a betting man, I’d say they’ll be running the ruler over some radio companies and some outdoor companies. And the reason is, is that media companies are their own biggest clients. So the ability to promote TV shows and radio shows through your own network can be really powerful. So if you’ve got a radio station, a TV station, and a billboard, you get the sum of those parts becomes greater than the whole. Now don’t tell anyone at the ABC this Deb, because they might actually use some of this approach to promote their flailing, ABC radio networks.

Deborah Knight (Host)

Yes. Well, that’s been the question that’s been asked by many who have looked at the ABC’s operations. But yeah, we’ll see what unfolds for Nine. And look, this is the first week of the five week election campaign almost done. Elections always deliver ad revenue boost for media commercial. But is the fact that the result could be very close in this election mean that the parties are going to be spending even more on ads?

Ben Willee

Well, the short answer is yes. Political parties, industry associations, unions are going to pump hundreds of millions of dollars into media companies in the next few months, which is great news for media companies and their share shareholders. And there’s already some of this data coming out that government advertising, not political, so government advertising themselves is up 48% in January and February alone. So, what’s going to happen is as more people push money into this space, it’s going to get louder and noisier, and it’s going to feel like you’ve got a lawn mower going in a library and we won’t be able to get away from it.

Deborah Knight (Host)

There’ll be glad when May 3rd comes around as consumers. But the election this time, though, it’s different in that it’s the first time we’ve got younger voters outnumbering the boomers, and the influences are front and centre in this campaign, too. Traditional media Ben, no longer the main platform to get political messages out to voters.

Ben Willee

No. And, the prime minister himself has, he’s pushed very hard to have his new media people included in the budget lock up recently. And he has apparently has these unofficial millennial advisors in his inner circle. So, we’re saying a different approach, and you can make the argument that it’s actually quite clever that, you know, the Trump campaign used very similar approach in its recent, US election. And in Australia, we’re seeing both leaders of major parties in Australia spruiking themselves on podcasts, high reaching, engaged audience shout out to the people who are listening to this as a podcast, not just live, and very few tough questions for politicians. So at the moment, most people are exposed to politicians through soundbites in social media and the news. This is an opportunity for them to present themselves as a much nicer, warmer human being and hopefully build a connection with undecided voters.

Deborah Knight (Host)

Yeah, well, only four more weeks to go. Look out. Good on you, Ben. Thank you.

Ben Willee

Thanks very much for having me Deb.

Deborah Knight (Host)

Ben Willee from Spinach Advertising for our regular look at the world of media and marketing.