In conversation with WPP chief executive Mark Read at the Cannes Lions festival, Lachlan Murdoch offered his take on pressing media matters including the relationship between publishers and platforms, the crisis of disinformation, and where advertising growth will come from over the next few years.
The sale of 21st Century Fox to Disney earlier this year was interpreted many different ways. For some, it was the capper on a series of divestments that indicated the empire-builder Rupert Murdoch was now a seller rather than a buyer. For others, it was proof that media consolidation has reached the point that even relative giants cannot compete with the larger players in the media world.
At a session on the WPP Beach at the Cannes Lions Festival of Creativity, Lachlan Murdoch, the heir apparent to the diminished Murdoch media empire, argued instead that the divestments are in service of refocusing the business around the areas in which it sees revenue opportunities.
That’s the power of live
Murdoch argued that, over the past few years, the company has been divesting in areas that don’t align with its core focuses. He noted that of the roughly 50% of its revenue that comes from advertising, 70% of that spend is around its live programming in news and sports:
“Of the advertising revenue, the remarkable statistic is that 70% of that revenue is derived from live television, and the reason that we’ve structured a company for that is because… when we are talking absolutely instantaneous live news, sports, opinion is where these people aren’t delaying; they’re highly engaged. As media gets more fragmented, the value of live is only increasing.”
That is more true for news content than sports, as a necessary result of having to pass a proportion of revenue back to the partners – Murdoch named NFL, Major League Baseball, USPGA Golf and Fifa as examples – while news is wholly created, controlled and owned by the company itself, so the margins are much higher despite revenue for news being smaller than around sports content.
Read questioned whether that focus on live content would ultimately be replicated across the industry, to which Murdoch replied that despite the disruption of the traditional cable bundle, the value of live content has remained consistent.