Nine Entertainment runs the Sydney Morning Herald, The Age, the Australian Financial Review, Nine Television, and the streaming service Stan. It is the largest locally owned media company in Australia. This week, it announced around 30 more newsroom job cuts, following 200 cuts two years ago. The company's publishing director described the situation as an "extreme state of disruption" caused by AI.
The specific claim is worth taking seriously. Nine's digital subscription revenue dropped 6% last year. Reader revenue stalled for the first time in three years. Those numbers reflect a structural shift, not a one-bad-year problem.
The mechanism is straightforward. For over two decades, news organisations published articles, Google sent readers to those articles, and publishers made money from advertising and subscriptions. That deal is breaking down. When someone searches for a news story today, Google frequently places an AI-generated summary at the top of the page. Many readers read that and leave. According to Chartbeat data tracking more than 2,500 publisher websites, Google search referrals to news sites fell by a third in 2025. Studies tracking actual user behaviour found that when an AI summary appears in search results, users are about half as likely to click any link at all.
The scale of traffic losses at individual publications illustrates how serious this has become. One analysis found a major tech news site went from 8.5 million Google-referred clicks a month in early 2024 to under 300,000 by early 2026. That is not a rounding error. It is a near-total collapse of one revenue channel.
The audience shift is also structural. The Reuters Institute's 2026 Digital News Report, based on nearly 100,000 surveys across 48 countries, found that 10% of news consumers globally now use AI chatbots for their news at least once a week, up from 7% a year earlier. Among people under 35, the figure reaches 16%. Crucially, only 4% of all respondents say they regularly click through from AI chatbot answers to original news sources. For comparison, 19% click through from traditional search results. AI is not just taking readers: it is keeping them.
Nine's situation has another layer to it. Research from the University of Sydney found that Australian journalism is largely absent from AI-generated news summaries, with tools like Microsoft Copilot heavily favouring US and European sources by default. Australian publishers are losing traffic to AI systems that are not even using their content to generate answers.
Which is why Nine's move this month to sign a content licensing deal with Microsoft is notable. Under the agreement, Microsoft Copilot can reference Nine's journalism, including paywalled articles, when generating AI search answers. The companies described it as Microsoft's first deal of this kind in the Asia-Pacific region. Financial terms were not disclosed, and it is structured as a one-year pilot.
The deal captures the contradiction clearly. Nine is cutting the journalists who produce the content while simultaneously licensing that content to the AI tools that reduced the need for readers to visit Nine's websites in the first place. There is logic to it: licensing deals create new revenue as search traffic falls. But critics point out that even an attributed AI summary can satisfy a reader's curiosity without a click-through, which means the audience relationship keeps weakening regardless of whether money changes hands.
The Australian Financial Review is not affected by this week's cuts. Nine's publishing chief noted the AFR has operated behind a paywall since 2007, making it less dependent on search traffic. That detail matters. Publications with paying subscribers who come directly, rather than arriving via Google, are better insulated from what is happening. The SMH and The Age built their digital audience on free access and search traffic, and that model is now under serious pressure.
For any business that advertises with, subscribes to, or relies on quality local journalism for market intelligence, the direction is clear: fewer resources producing news means thinner coverage of local markets, local business, and local regulatory changes. That affects everyone who depends on that information, not just the newsrooms losing headcount.