Jake Challenor August 26, 2016
Authentic CEO Tony McGinn: “It was a f*cking nightmare”
You don’t have to be Einstein to work out that the media industry is going through some dramatic change, but according to Authentic Entertainment CEO, Tony McGinn, it’s “structurally driven.”
With the Government’s imminent change in legislation, McGinn believes that bigger media conglomerates will snap up smaller niche players through strategic mergers and acquisitions. And he’s right, it’s already happening, and McGinn’s business is the most recent example.
“You’ll find that there’s going to be an ongoing consolidation in this space. Not that there’s a lot of independent media businesses in Australia. We would have been one of the largest and longest standing independent media businesses,” he said
Earlier this month TMN broke the news that 33-year-old Authentic Entertainment was to offload its Vevo rights to Southern Cross Austereo (SCA), along with three decades worth of rich radio history; think Take40, Cover to Cover, The Motown Story, Lost Lennon Tapes, Rock Sat, Planet Vevo and My Generation.
“If you follow the pattern of what’s been happening, a lot of the smaller media specialist businesses, Pedestrian.TV bought by Nine Entertainment, you then had Allure Media bought by Fairfax. More recently, Junkee, which was the old Sound Alliance, was bought oOh Media,” he said.
On the commercial terms of Authentic’s sale of assets, McGinn said he’s happy with the outcome and believes it’s a good deal for both its stakeholders and purchaser, but that “it’s not a sell at the top deal.”
“Does it mean buying new cars and new houses? No, we’re not. It’s a good deal for the time and what I’m most happy about is the business operations will continue,” he said.
Among that biggest changes that McGinn has witnessed in radioland since founding the company in August 1983, the media mogul cites the formation of radio networks as the single biggest game changer.
“There weren’t networks back then. When we started, Austereo had one radio station, an FM in Adelaide and I pretty much sat back and watched Paul Thompson and Glenn Wheatley, the investment backers that they both had, buying radio stations and creating networks,” he said.
“Obviously, as things change, you find that radio is now certainly to SCA, delivering a fair amount of that footprint through one organisation. It was probably inevitable that, at some point, we would get together again with SCA, having been in a joint venture with them for ten years, from ’95 to 2005.”
Potentially the most important win for Authentic in recent years was securing the local rights to represent premium music video platform Vevo, five years ago. But before the major label funded platform, McGinn had a good crack at monetising music videos, under The Digital Entertainment Network (DEN).
“We were developing the very technology that would manage streaming video on multiple devices. No one else in the country went to the trouble of doing this, and we went out and negotiated all the rights with the labels to be able to stream videos. We did that and built a very, very, very successful market.”
When McGinn first heard about Vevo, he was sitting in Universal’s New York office with Rio Caraeff, Vevo’s founding CEO then a UM digital head, discussing his global expansion plans for the DEN. It was this very meeting that led to Authentic shifting gears to the Sony and Universal-owned, Vevo; Australia was one of the first territories to launch the platform, outside of the US and the UK.
“We knew Vevo was always going to eat our lunch. Why? Because it’s sitting on the YouTube platform, and the YouTube platform is ubiquitous. We were obviously not on the YouTube platform; we were on Take40, the Hot Hits, Planet Rock, Movideo and we were also syndicating, but we were not on YouTube.”
Looking back on Movideo, McGinn recalls the rights negotiations as difficult, but equally satisfying and, at that time, ground-breaking on many levels for the Australian music business.
“I couldn’t put it more succinctly, it was a fucking nightmare,” McGinn said of his effort to secure the necessary rights from the Australian major labels. He added: “I think I’m still in therapy for it.”
According to McGinn, the labels were going through considerable change: “They were wounded organisations back then, and when someone is wounded they might bite the very hand that feeds them.
“We were pioneering. The labels were doing new deals they’d never done before, and we were doing new deals we’d never done before. They didn’t fully understand the business model we were trying to build and while we had a vision for that business model, it wasn’t clear as water.”
When McGinn returns from a well-earned family holiday, it’s straight back to business, creating content: “We’re not just looking at content on an Australian level; we’re looking at content internationally. We’re talking to the gurus of the world, we’re talking to the Googles of the world, we’re also talking to television networks.”
With no immediate pressure to return profits to shareholders, or worry about next month’s sales targets, McGinn appears to be genuinely excited in returning to what he does best; creating world class content.
“We’re in no mad rush. It’s not like we have to get something on the air in the next three months if it takes nine months, great, so long as it’s the right idea.”