One of Australia’s biggest media companies is being pulled in two directions at once. Generative artificial intelligence is quietly reshaping how audiences find and consume news, chipping away at the referral traffic and advertising that has long underwritten mastheads and broadcasters. At the same time, the question of who should actually pay for the journalism those AI systems feed on remains stubbornly unresolved. For Nine Entertainment (ASX:NEC), the owner of The Sydney Morning Herald, The Age, the Australian Financial Review, the Nine television network, a stable of radio stations and the streaming service Stan, that collision is no longer theoretical.
A recent market analysis published by Kalkine frames Nine as a company navigating structural AI disruption at precisely the moment the national conversation about news funding is sharpening. It is a neat summary of a genuine bind. The tools that promise efficiency in the newsroom are the same class of technology threatening the economics that keep the newsroom open.
The news underneath the news
The immediate pressure is coming from how people discover stories. For two decades, publishers built their digital businesses on search and social referral, trading free access to headlines for the clicks that arrived from Google and Facebook. Generative AI is unpicking that arrangement. Chatbots and AI-generated search summaries increasingly answer a reader’s question directly, drawing on published journalism without necessarily sending anyone to the original article. When the answer sits inside the AI product, the visit that would have carried an ad impression or a subscription prompt never happens.
That matters enormously for a company like Nine, whose publishing division depends on a mix of subscriptions and advertising, and whose masthead journalism is expensive to produce. Every percentage point of lost referral traffic is a percentage point harder to monetise. Layered on top is the broader advertising cycle, which has been soft, and the ongoing cost of competing in streaming and broadcast. AI is not the only headwind Nine faces, but it is the one that touches the core value of its content most directly.
Two ways to read the disruption
There are, broadly, two views on what this means. The pessimistic reading holds that AI accelerates a decline already well under way. If large language models can repackage the substance of a news story into a summary, the argument runs, the marginal value of the original drops, audiences fragment further, and traditional publishers lose both traffic and pricing power. On this view, Nine’s challenge is defensive: protect the content, litigate or negotiate against unlicensed scraping, and hope the courts and regulators move faster than the technology.
The more optimistic reading treats AI as a tool as much as a threat. Newsrooms are already using automation for transcription, translation, data analysis, personalisation and the grunt work of production, freeing journalists for reporting that machines cannot do. In this framing, publishers who own trusted, verified, original journalism hold something increasingly scarce in a world of synthetic content, and that scarcity has commercial value. The bet is that quality and authority become a moat rather than a liability, provided the business can license its archive and live output to AI developers on decent terms.
Both readings can be true at once, which is why the funding debate has become so central. If AI companies build products on the back of Australian journalism, the reasoning goes, some of that value should flow back to the people who paid to produce it.
The Australian stakes
This is where the local context sharpens the story. Australia has form here. The News Media Bargaining Code, introduced in 2021, was designed to force the big platforms to strike commercial deals with news publishers, and for a time it delivered meaningful revenue to outlets including Nine. That model has since frayed. Meta signalled it would not renew its Australian news deals when they lapsed, prompting the federal government to float a News Bargaining Incentive late in 2024, a mechanism intended to encourage platforms back to the negotiating table or face a charge. The policy detail is still being worked through, and the arrival of generative AI has added a fresh and more complicated layer to it.
The stakes are not confined to shareholders. Nine’s mastheads produce a large share of the public-interest journalism Australians rely on, from federal politics to corporate accountability. When the funding base for that reporting is uncertain, the consequences reach well beyond a single ASX line item. Regional and independent outlets, with far thinner balance sheets than Nine, are more exposed again. A settlement that works for the big players but leaves smaller publishers out risks hollowing out coverage in the very communities least able to afford it.
For Australian investors, Nine has become something of a bellwether for how a legacy media business absorbs a technology shock. Its Domain property listings arm and Stan give it diversification that pure-play publishers lack, but the market is watching how quickly management can turn AI from a cost into a revenue line, whether through licensing deals, efficiency gains, or new products built on its own trusted content.
What comes next
Several threads will decide how this plays out. The first is licensing. Major international publishers have already signed content deals with AI developers, and the question is whether Australian outlets, individually or collectively, can strike comparable arrangements that reflect the local market. The second is policy. The design of the News Bargaining Incentive, and whether it explicitly captures AI companies alongside social platforms, will shape the bargaining power publishers bring to the table. The third is legal, as the boundaries of copyright and fair dealing in an age of machine training are tested here and overseas.
For Nine, the path forward is likely to run through all three at once: defending its journalism against unlicensed use, pursuing deals that put a price on it, and deploying AI internally to lower the cost of making it. None of that is simple, and none of it is guaranteed to fully offset the erosion of the old referral economy. What is clear is that the debate over who pays for news in Australia is no longer only about platforms and clicks. It is about the machines learning to answer the questions news once answered, and whether the country decides that work is worth paying for.
Sources: Kalkine via GNews.
