Best of the Week: Why Rupert sold to the Mouse; Circ audits’ death blow; The rise of Nick Garrett; Atomic’s awards boasts; Media alliances

[View web version]( BEST OF THE WEEK And another thing... Welcome to Best of the Week, where it would seem that Christmas goodwill and cheer is breaking out across the media, with traditional rivals announcing alliances left, right and centre. But more on that later. And regular readers of this email may have noticed that my writing soundtrack can be somewhat predictable, consisting mainly of Bruce Springsteen and the E Street Band albums. But Christmas means ringing the changes. Which means in this case [Springsteen’s 2001 Christmas show](. Who said people can’t grow? This week, as it so often is, it’s been all about News Corp - with Disney deals, audit exits and some intriguing new alliances. Murdochs and the Mouse Yesterday we woke to the news that the deal between the Murdochs and Disney is on. They will be selling most of 21st Century Fox’s assets to Disney On day one, it means little for Australia. In time, I suspect it will mean quite a lot. In essence, the Murdochs will continue to be a major global player in news. But their influence in the film and TV entertainment industry will be indirect, through shares in Disney instead. The move has its origins in a decision a little over five years ago to split the original News Corp into two companies - 21st Century Fox, containing most of the company’s TV and film assets, and a new News Corp which would hold its news publishing assets. The logic at the time was seen as an opportunity to please investors who didn’t want to be propping up newspapers’ fading business model. But arguably, 21st Century Fox couldn’t quite find its way to the scale needed to be a winner in the TV entertainment battles yet to come. And the deals that could have got it here didn’t happen. Australia was something of an exception when the split occurred, with the company’s 50% stake in Foxtel remaining within the News Corp arm of the business rather than sitting inside the Fox arm. This could have been for reasons of scale - it makes sense to have all of the assets in the smaller Australian market to sit under one umbrella. But others assumed it was to help News Corp Australia not be too dependent on a transitioning newspaper business model to survive. Logically, it would have always been a better fit for 21st Century Fox though. Since then, Foxel has been as disrupted by the rise of streaming services as any subscription satellite or cable provider around the world, meaning it’s not the reliable source of cash it once was. The last few days’ events also throws new light on the decision to merge Fox Sports (which News Corp owns 100%) - into Foxtel. The plan was (and probably still is) to float the new larger Foxtel, with many assuming Telstra would exit at that point. But possibly it’s the other way round. News Corp’s renewed focus on news, not TV entertainment, may well have been new information for the top ranks of Telstra. I’m sure they’ve at least run the numbers on a full acquisition. The argument against being that subscriber churn will only get worse, and it doesn’t feel like a business that has turned the corner on its disrupted business model. Which is also why a float on the ASX looked (and looks) tricky. With the Disney deal, the importance of News Corp’s taking full ownership of Sky News Australia from previous partners Seven and Nine becomes clearer too. Particularly if Fox News - which Murdoch is hanging onto - comes back into the News Corp portion of the empire. The other factor is the family one. The succession planning seems to have begun to resolve itself. James Murdoch may well end up moving across to the Disney empire, while it certainly looks as if Lachlan Murdoch’s future remains with News Corp. Locally, none of this week’s dramas are going to feel like a retreat. News Corp clearly intends to remain a force in news in the UK, US and, yes, Australia. End of the audit? Sticking with News Corp, [the company kicked off the week by exiting the Audited Media Association of Australia’s circulation audit](. The consequence of this will be that the market will no longer be able to see how the company’s papers are selling. With News Corp Australia’s biggest newspaper publisher, that’s a blow for transparency. But I’m not surprised. The newspaper data used to provide little more than a quarterly reminder to the market about changing consumer habits, as numbers consistently fell. With little obvious signs from media agencies and advertisers that they are willing to reward transparency, why spend all that money on such a painful process? It’sthe same decision that was taken by all the major magazine publishers this time last year - in a series of choreographed manoeuvres which I was surprised didn’t attract the attention of the ACCC for the apparent collusion involved. At least this time round, Fairfax Media didn’t follow News Corp out of the door a day or two later. Instead, the only metric available will be readership, although there’ll be a choice between Roy Morgan Research’s numbers or those of the Ipsos-supplied EMMA, which is owned by industry body Readership Works. On the one hand, RMR is independent. But on the other, there’s a widespread perception that over the years the company has been arrogant towards its existing and potential customers. The downside of EMMA (back-engineered to stand for Enhanced Media Metrics Australia), meanwhile, is that it is a creation of the publishers, rather than a genuine joint industry initiative. I’ve never been able to fully shake the sense that at least one motivation for its creation was to try to put Roy Morgan out of business. And instinctively, it’s always felt more like a marketing tool rather than planning tool. It’s all very well having an impressive figure available for what a masthead’s cross platform readership might be, but how does that actually help an advertiser who wants to know how many people are likely to see the full page ad they’ve booked on page seven of Tuesday’s Tele? But I suspect the time is nearing when I may need to concede that I’ve lost the circulation audit argument anyway. If Fairfax exits the audit, the game will be over. If advertisers and agencies aren’t bothered and publishers don’t want it, then audit will indeed die, and readership will be the only game in town. Friends like these Having spent my entire career in newsrooms, I’ve been taught one thing: media is a zero-sum game; in order to win, your competitor has to lose. It’s only gradually dawned on me over the last few years, that this isn’t actually correct. In a journalistic battle fo a one-fact story scoop, that may be true, but in most cases it’s not. Yet in an industry where so many of the senior executives started on the newsroom side of the business, it’s an attitude which underpins the culture. News hates Fairfax. Nine hates Seven. And so on. But only gradually has it occured to me, that none of our failures were as a result of the actions of our competitors, and neither were our successes. I suspect it’s the same for most media. And it feels like we’re seeing increasing recognition that the external pressures on media businesses are greater than any local rivalries. Which was one reason, I was fascinated to see this week’s announcement that[News Corp, Fairfax and Nine are working together on a technology solution to allow advertisers to target users across]( their platforms without using cookies. Admittedly, the less-than-snappy press release headline did appear to have been written by a committee: “FAIRFAX MEDIA, NEWS CORP AUSTRALIA AND NINE TO EXPLORE CREATION OF ANONYMISED DIGITAL IDENTITY CO-OP TO DRIVE AUDIENCE ADDRESSABILITY”. The initiative is interesting for a couple of reasons. First, it feels like the message that not all digital audiences are of equal value is finally beginning to take hold. And audiences who have shared their email address, and possibly some additional data, with a publisher are the types of audience that can be more valuable. There is a genuine opportunity for publishers to prosecute the case that it’s worth paying more to advertise to audiences within high quality digital environments. Sometimes it’s worth paying a $70 CPM rather than a $7 CPM. And this coming together of three commercial rivals is just the latest example of cross-owner cooperation. These days Seven and Nine share news choppers to save costs. We’ll probably see News and Fairfax finally cooperate on the newspaper distribution side of things. And of course, the success of streaming service Stan came about because Nine and Fairfax both brought something to the party. I hate weak Game Of Thrones analogies. But one can’t help thinking of how the warring families come together - just in time - to stand against the White Walkers ready to invade from beyond The Wall. In this case, the invaders being the FANG gang of Facebook, Amazon, Netflix and Google. Mind you, Fairfax is doing deals with the White Walkers too… it also emerged this week that [Fairfax will be working more closely with Google](. In all honesty, there isn’t enough detail available yet to understand what that means in practice. I understand that we’ll learn more in mid January. Atomic 212 latest A quick update on Atomic 212, while I’m at it. My colleague Steve Jones’ investigations into their awards exaggerations continues this week after [he got hold of their B&T Awards entry which helped them win B&T’s independent agency of the year]( a fortnight or so. Part of the entry claimed the agency had made an unprecedented “clean sweep” of agency of the year awards in 2016. They claimed to have won Mumbrella’s agency of the year, which actually went to Cummins & Partners; and AdNews agency of the year, which actually went to The Monkeys. New York Festivals also went on the record that Atomic hadn’t won their agency of the year either. In all honesty, when we revealed to CEO Jason Dooris the depth of findings of our investigations, I’d anticipated he would probably resign prior before we published. It would seem that I was mistaken. The rise of Nick Garrett Over in adland, [Clemenger BBDO’s promotion of Nick Garrett this week, adding Sydney to his remit,]( is a most intriguing move. For starters, it’s a vote of confidence for the wholesale changes he’s been making at Clems Melbourne. Garrett took on what looked like something of a thankless task about two years ago. Thankless because on the surface, the agency was in great shape - with massive respect for its creative output and an admirable set of clients. Yet its great work had also made it slower to pursue the sort of integrated offering being adopted by the best agencies elsewhere - including Garrett’s former home at the brillliant Colenso BBDO in Auckland. Since arrival, Garrett has united P&Ls, moved on people (and seen some people move on) and put in place the beginnings of a structure that should better prepare the agency for the future. The changes have created a degree of anti-Garrett gossip, which I suspect can be attributed to those disaffected by the changes he has been making It’s also a strong sign that although chief creative officer Ant Keogh left during the remaking (and found a good new berth at The Monkeys in Melbourne) , creative chairman James McGrath has stayed on board for the project. The addition of Sydney to Garett’s remit, replacing the departing Andy Pontin, suggests that we’re most of the way towards Clems becoming a national operation, rather than two strong city operations in Melbourne and Sydney along with a smaller operation in Brisbane. Certainly, there’s never been a point over the last decade where Clems Sydney has felt like it’s been running at 100% of what it could be. I can’t think of many agencies where I’ve head the phrase as many times “You should see what’s in the pipeline”, only for it never to quite emerge. I’m looking forward to seeing what Nick can do. And speaking of looking forward to things, We’re off to put some dollars into the Disney coffers. The Last Jedi starts at 10, so I’m sending you this email slightly earlier this week. My colleague Abigail is on duty over the weekend if you have a yarn for her - abigail@mumbrella.com.au. Enjoy your weekend. Toodlepip... Tim Burrowes Content director - Mumbrella Mumbrella | 46-48 Balfour Street Chippendale NSW 2008 Australia [Unsubscribe](| [Manage Subscriptions]( [Facebook]( [LinkedIn]( [Twitter](