Media ownership: diversity for diversity’s sake is not enough

Picture a newspaper group where the vast majority of stories are produced by ‘rounds’ reporters or taken straight from the wire services, with little or no opinion pieces, investigative reporting or coverage of local issues.

Or a television network that is ‘dumbed down’ with minimal news and current affairs, no local information, and an overwhelming emphasis on productions done ‘on the cheap’ or purchased from overseas.

Neither are attractive prospects. Yet the current cross media rules confine traditional media in Australia to their own little boxes, preventing them from pursuing business strategies that reflect new media realities.

If Australia does not modernise its media ownership regime, these companies will stagnate and be forced to resort to the only option available to them in an increasingly competitive information market place, namely cutting costs. Ironically this will, in time, result in the demise of all those attributes that Australians hold so dearly: quality programming, local news and information, diversity of opinion and an emphasis on innovation.

There can be no doubt that, in the absence of any compelling public interest justification, cross media rules constitute an unacceptable restraint of trade. Diversity for diversity’s sake is not enough. Guaranteeing diversity of entertainment options can safely be left to the marketplace.

Indeed digital Pay TV offers the prospect of hundreds of different channels on a variety of competing cable, copper and satellite platforms. The only legitimate public interest lies in maximising the diversity of news and current affairs so that the population can be exposed to a wide range of competing news sources, facts and opinions – the essential pre-requisites for an informed citizenry in a modern democracy.

Before 1987, there were no cross media rules, yet people got their news from a wide variety of sources. Since that time the information world has changed dramatically providing a plethora of new information offerings for increasingly discriminating audiences.

In 1987 there was no Pay TV, let alone the Internet. There were far fewer commercial, community and narrowcast radio stations, and specialised information magazines.

Australia is the only western country with two government-funded national public broadcasters. This ensures that all Australians have independent, high-quality sources of news and information, distinct from the commercial networks’ ratings-driven current affairs programs. Since 1987, ABC NewsRadio has commenced providing in-depth coverage of local, national and international news while SBS television is now widely available outside the capital cities.

Other countries such as the US and the UK are looking to liberalise their cross media rules. Even Paul Keating, the architect of the original regime, recognises the need for change. Strip away the political bluster and he is not dying in a ditch to defend the status quo. Instead he says ‘OK’ if we allow unlimited competition for television licences.

This disingenuously ignores the fact there have always been strict limits on the number of commercial free-to-air licences in exchange for compulsory high levels of Australian content (currently 55 per cent) resulting in probably the best quality free-to-air television in the world.

The media now operates in a highly competitive, global environment driven by consumer demand for content customised to meet specific needs. To succeed in this marketplace, media companies must acquire and produce a much wider array of content than ever before, while benefiting from the economies of scale and scope that increased commercial flexibility would bring.

It is this new media reality that drove the recent AOL Time Warner merger and is resulting in companies like Bell Canada and CanWest expanding across traditional media markets. It is the primary rationale behind the proposed Foxtel/Optus Pay TV arrangement, with the participants recognising the importance of offering consumers a wider array of content choices across various platforms. It has also led the ABC to pursue its One ABC strategy, which seeks to adapt and exploit content across mediums, including through the provision of digital multichannels on Pay TV.

It has been suggested that change could be limited to removing the existing foreign ownership limits on traditional media, potentially increasing competition and diversity. However, without exemptions to the cross media rules, this would give large foreign-owned media companies, often unencumbered by cross media rules in other markets, a major competitive advantage over Australian-owned media outlets. It would also mean that neither Australian nor foreign-owned media companies could grow and expand effectively in the content-driven digital media environment.

Some have claimed that the Government’s proposed requirement for co-owned media outlets to have separate editorial decision-making responsibilities amounts to a regulating of newsrooms. This is untrue. News selection and content will remain entirely the responsibility of individual media outlets, as will editorial decisions. The ABA will not monitor or interfere with these decisions.

The Senate Legislation Committee on Environment, Communications and the Arts has examined the Government’s media ownership legislation, and the Coalition members of the Committee have made a number of recommendations that are worthy of consideration.

First, the Coalition members recommended that in regional markets, the relaxation of the cross media rules should only allow a media company to control outlets in two of three mediums of newspapers, free to air television and radio.

This recommendation is driven by a concern that in regional markets there often are a smaller number of total media outlets, and that if one media company has outlets in all three mediums, this may result in an undesirable loss of diversity of opinion.

The Coalition members also recommended that when a media company has cross media holdings, it should be required to declare publicly its commercial interests whenever it produces news or comment about those cross media holdings.

This is similar to what frequently occurs now in newspapers where journalists declare their interests if they hold shares in a company they are writing about. While such a requirement would not prevent comment about cross media holdings, it would ensure the public is aware of the commercial interest of the media company involved.

Finally, the Coalition members recommended that consideration be given to extending the minimum local news and information requirements that would apply to cross media holders in regional areas to all free-to-air television providers in those areas. The Government is awaiting a report from the Australian Broadcasting Authority on this issue, and will consider such an extension at that time.

Unfortunately the Labor members of the committee made no recommendations other than to say that there should be another inquiry into the media in Australia.

The Government is open to all sensible enhancements to its proposed legislation that will help ensure that these crucial changes do not adversely impact on diversity of opinion. But the need to modernise Australia’s media sector is indisputable, and the Parliament will be doing a national disservice if it continues to hamstring our media companies, and ultimately the Australian public, with these outdated rules.