Please find the transcript to the video below

Brian Han: Yes, at face value, the reason why they did it, they say is because news is not a traffic driver on their platform and it's not an audience-engager. But let's be frank about this. At the fundamental level, what they're really saying is that the value proposition is simply not there. We don't see the value of traditional media news the way other people do. And we certainly don't think that it's worth the millions that we're paying them now. And then finally, rightly or wrongly, what they're saying is that I know you guys are all upset, but it is not our job to uphold the business model of these traditional media news publishers. It's not our job to prop them up, and it's not our job to ensure the democracy or informational value or whatever it is that society needs in Australia. We are making a very pragmatic financial decision. And what we're saying there is that value proposition of traditional news is simply not there for our platform.

So, for smaller publishers, it can be really fatal. And we've already seen instances of publishers of The Saturday Paper and all the other niche publications already saying that they will struggle. But for all the listed media companies that we cover, the impact is not as fatal. For instance, let's take Nine Entertainment NEC. Publishing division contributes about a quarter of the group's total profit. And I think the Facebook deal contributes about $15 million to $20 million to the bottom line of Nine. So that's about 5% of the group total profit. So, it's not fatal. But I think the financial consequences go beyond that because most of our Australian media publishers exposed to Facebook META in Australia, they also have similar deals with Google. And those deals expire in the next couple of years. So now, we have a risk that that may not be renewed going forward. And all this is coming at a time when Australian advertising market is in a bit of a funk right now and there's no light at the end of the tunnel, at least in the near term, about when that advertising market will recover. So, it adds to the uncertainty of the whole sector.

Yes, definitely it has. It just increases the earnings uncertainty of listed Australian media companies and makes you question what earnings multiple should investors put on these media company earnings? So that's the first thing. And then the second thing is it just adds to a litany of technology-driven structural risks that these media companies have been facing. Because not only are they seeing eyeballs going to digital media, but on top of that, they have to worry about these digital platforms completely bypassing them. And then on top of that, they now need to worry about AI firms scraping their content and not compensating the media companies for that scraping. So, it just adds to a litany of risks that investors need to think about before they consider investing in media stocks.