Radio National interview: The state of Australia startups and major online media players


Last Thursday’s Media Report on ABC Radio National features an extended interview with me on the state of Australian Web 2.0 and major online media (there is both a podcast and transcript available from the link). Some of the points we covered:

Major online media players

* The well-publicized challenges of NineMSN (the Australian 50/50 jiont venture between Microsoft and PBL Media) are partly company-specific, and partly a reflection of the difficulties of the incumbent position.

* Australia’s major media companies have done far better than their international peers in dominating online news (and other aspects of the online space including classifieds). Blogs and micro-publishing are now finally taking off, taking market share from the majors, leading to the major online publishers losing readers in a growing market. The long tail is the natural distribution of readers, and it has always been inevitable that the majors would lose their dominant market share.

* In media conglomerates that are experiencing revenue challenges in traditional channels such as TV, newspapers, and magazines, expectations for growth in the online business are often unrealistic, leading to disappointments when budgets are not met.

* PBL Media, which owns 50% of NineMSN, is 75% owned by private equity company CVC Capital Partners. Private equity companies, for reasons including their debt structure, are often biased to short-term over long-term revenue, relative to their listed company peers. This leads to pressures on management and staff, which can make attracting and retaining staff more difficult when other companies are enjoying participating in a rapidly growing market. The 50/50 ownership structure doesn’t make things easier.

Web 2.0 in Australia

* The last year’s proliferation of Web 2.0 applications has seen Australia catching up, and there are now a number of real international successes, but it is not playing beyond its weight.

* Ambitious Australian start-ups often need to seek overseas funding, and many are establishing bases in Silicon Valley.

* Success in online ventures – indeed in all business today – comes from trial and error, and Australian culture currently holds innovation back by seeing failure as bad.

[UPDATE:] The complete list of the Top 100 Australian Web 2.0 Applications is now up.

1 reply
  1. Andrew Knott
    Andrew Knott says:

    You point about NineMSN relying too much on display advertising is spot on but the big problem with NineMSN is that the major component of their audience is from the automatic traffic it gets from people dropping back to the homepage from Live and Hotmail users logging out or from people just not changing their default homepages. This audience isn’t a particularly high-value.
    Also, the site looks like it was designed in 1999.
    If you don’t add any value for your audience, you shouldn’t expect to keep it.

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