Australia’s Nine signs Facebook, Google deals under new licensing regime
SYDNEY: Australian broadcaster and publisher Nine Entertainment Co. Holdings Ltd. said it signed multi-year content-supply deals with Google and Facebook Inc, harnessing tough new licencing laws to bolster profit.
The step means that all of Australia’s three largest media
firms now have deals with US tech giants that had until this year fiercely
opposed laws making them negotiate over the fees they pay for the links driving
clicks to their platforms.
The owner of the Australian Financial Review and Sydney
Morning Herald newspapers and the Nine free-to-air channel said it would
provide articles and clips for Google’s News Showcase platform for five years,
and to a similar Facebook product for three.
“These deals will contribute to supporting the world-class
journalism on which our business thrives,” Nine Chief Executive Mike Sneesby
told staff in an email, reviewed by Reuters, adding they would also help the
firm pursue growth to underpin its strength in the long term.
A Google spokesman declined to comment, while Facebook was
not immediately available for comment.
Rivals Seven West Media Ltd. and Rupert Murdoch’s News Corp,
which dominate Australia’s traditional media market, along with Nine, have signed
similar deals in recent months.
Like the others, Nine did not disclose financial details of
the deals.
But it said it expected them to help grow pre-tax profit at
its publishing unit by up to A$40 million ($31 million) in the year to June
2022, making it the first company to put a dollar value on the new
arrangements.
The unit’s pre-tax profit was A$68.1 million in the six
months to end-December.
In a client note, Morningstar analyst Brian Han called
Nine’s deals “juicy high-margin arrangements which finally shift the image of
the much-maligned and structurally-challenged division to one that can now much
better monetise its (albeit still dwindling) journalistic resources.”
Nine shares rose as much as 5 percent to stand up 1 percent
in late afternoon trade, in a flat overall market.
Since a bitter dispute with the government over the laws
that briefly led Facebook to block all third-party content on its platform in
Australia, the so-called “Big Tech” firms have signed up to pay for content
from dozens of smaller regional and specialist providers.
Last month the managing director of Australian Broadcasting
Corp. told a parliamentary hearing the state broadcaster was among the media
companies to have signed letters of intent for deals with Facebook and Google,
but has yet to finalize the arrangements.
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