It has to be said, B&T was in the lap of media royalty today at Cannes as WPP CEO, Mark Read, hosted the youngest of the Murdoch media barons, Lachlan. Here’s an abridged version of their breakfast chat…
Read: Let’s kick-off by talking about Fox. What are the standouts in the newtork? Like, take sport, practically every innovation in TV these days is driven by sport.
Our business is sport, news, entertainment and then the local stations. Our revenues are spilt about 50-50 between subscription revenues and 50 per cent advertising.
The remarkable thing about our advertising model is that 70 per cent of those revenues come from live television.
We’re talking absolutely instantaneous live news, sports, opinion. That’s where it is, it’s where you have your most highly engaged audience…
Read: Obviously, for our clients having access to live audiences, it offers more reach; it’s critical right?
Absolutely. As media gets more fragmented the value of live TV is only going to get more important. Take the Women’s World Cup at the moment, it’s doing phenomenally well for us… and that’s in part to the [US team] doing very… and its been very well supported by a number of your (WPP) clients and it’s been very successful.
Read: As sport right prices going up, can you monetise them by increasing the value of the audience?
By revenue, sport is our biggest business, but by profit it’s one of our smallest. The margin is relatively small because of the rights. The revenue we bring in tends to go back to the stakeholders such as the NFL, Major League Baseball, USPGA Golf, FIFA. But it’s really important for subscription revenue.
News [reporting] is the opposite because with news we create, own and control the content everyday, so the margins are much higher.
Read: Talking about your news brands, you’ve got Fox, you’ve got News Corp and a lot of people have called for the death of press, if you like – it’s yet to happen – and I think if you’re in the quality end of the news business there will be continued growth. How do you see the growth of the news business over the next few years?
If you look at our newspapers, our quality broadsheets have transitioned to digital very well, and seamlessly. And it’s clear our readers are very highly engaged with our mastheads and are willing to pay, be that The New York Times, The Sunday Times, The Australian or The Wall Street Journal.
The Wall Street Journal has something like 2.6 million subscribers, but 1.8 million of those are digital-only subscribers.
Read: It’s a best cost business?
It’s not bad, but the margin could always be higher [laughs]. People still regard the WSJ as a print business, but it’s far more a digital business these days.
On the tabloid side, the mass-market side, they’re far more of a free model.
Read: Initially, you tried to put [UK tabloid] The Sun behind a paywall, but that didn’t work, did it?
What’s driven tabloid newspapers for all of history, since the advent of the printing press, has been sports, news headlines, gossip and opinion. But so much of that is now available free online. So, to move our mass-market publications to the free model has worked incredibly well. But then you have to tailor them to digital and drive new businesses from that.
Read: How do you balance editorial/advertorial debate?
You have to be very careful. You have to look at what reinforces the brand and what’s in your audiences’ benefit. If you try and push your audience to a place they don’t want to go then that ultimately damages your own brand.
Read: That said, a lot of these adjacent businesses can then fund the journalism in a way that advertising used to do?
Journalism is our core business. Whether that be in Dow Jones, The Wall Street Journal or on Fox News. Our core business is the engagement we create with our audiences. How you montise that, we need to be all the more creative about. Clearly ad loads are too high in many mediums.
Read: How important in this era of social media is trusted journalism?
I’ll give you two examples. The WSJ is the most trusted news brand in the US. And what we do is keep our news journalists well away from our opinion piece writers. If you keep those separate and you respect your reader’s intelligence, they know what’s news and what’s opinion and that serves you incredibly well.
Take Fox News, it’s the number one news brand across any medium in the US and again we keep news and opinion very well segregated.
There is a growing sense among middle America that the news sites are no longer serving them and they’ve become disengaged from the ideals and aspirations of middle America.
They think there’s few news services that speak to them. So we launched a streaming service called Fox Nation that doesn’t have live news or opinion blocks…. the programmers in LA and New York aren’t thinking about middle America.
What Fox Nation’s success has taught us is that news cycle is very “spikey”. So, it’s all about what you do in-between. So what Fox Nation does is use a lot of our hosts, a lot of documentaries, a lot of historical documentaries; deeper dives into the bigger issues and it’s been incredibly successful and it shows middle America is hungry for non-news-come-lifestyle history channel.
Read: How do you see the tech giants shifting the news model? They make it harder for news outlets to get funding, right?
Absolutely, the news model, the funding of journalism, which is the core of democracy. And what the tech giants have done is they’ve taken our content and they’ve targeted our audiences, then they’ve targeted our advertisers to monetise their audiences, and what that means is that we can’t afford the journalism, the quality journalism, the investigative journalism that we rely on.
Read: What can be done about that?
It raises a broader question about what’s happening around the bigger technology companies. It’s a whole broader issue around trust and what its led to is a bipartisan focus on how to regulate. Or, do you make more dramatic steps to pull some of these technology platforms back?
Read: One of the best business books I’ve read in a long time – and I don’t read a lot of business books – was Bad Blood [about the rise and fall of the firm Theranos, the multibillion-dollar biotech startup headed by Elizabeth Holmes]. Your father lost a lot of money there?
Yes, and that books 100 per cent true. And what that story says is that your readers always come first.
I remember when I was a teenager in Australia and I had a summer job from uni and I was with my father and I was invied into a meeting with him and one of our largest advertiers at the time threatened to pull all his advertising if we didn’t pull a story we were investigating. And my father just turned to him and said, “OK, take all you advertising.” And I’ve always rembered that.
Read: I read somewhere that Rupert used to drag you all in at the crack of dawn every day to read the newspapers?
My father is a business genius, but he comes at everything from a creative angle. And so under the penalty of death we had to have breakfast very early and we went through all the newspapers. We’d talk about the stories, how they were written, the headlines, and that imbued in us an appreciation for the print business but an appreciation for the creative process, too.
Read – Final question, your advice for adland?
It’s all about the creativity. And creativity can be a piece of incredible art or an incredible campaign or a newspaper or a TV broadcast. Creativity is about engagement and the more adventurous we can be the more we can cut-through what’s bland and be exciting in our creativity and the better for all of us – better for us as media owners, the audience and certainly the advertising and marketing industries.