Media laws - government just doesn't get it ...

The coming twelve months appear to be a watershed year for the media industry. Channel Nine has appointed one of its celebrities to run the network, the ABC will be looking for a new managing director - who will need to be pure of heart - and the Federal Government will once again try to change the cross-media laws.

Whether the network bosses and government are able to comprehend the changing way consumers access their entertainment will remain to be seen. Eddie McGuire is concentrating on cost reductions and chasing the retirement market. The ABC’s sole strategy seems to be to get more money from the government. Helen Coonan will look at changing the cross-media laws that will end up not doing much at all to help the industry or consumer. The signs that they will be able to comprehend the new media paradigms are not looking good.

No one seems to be focusing on delivery mechanisms of entertainment to consumers. An increasing army of consumers are turning to Peer-to-Peer (P2P) networks to get the shows they want as networks take anywhere from six months to two years to broadcast, and then at irregular, shifting times. Add to the mix the Internet (especially online communities, blogs and gaming), home theatres and game consoles, and one would question why the networks are moving so slowly to lock in their viewers from moving to other forms of entertainment and entertainment delivery.

Some of the reasons why people are turning to P2P downloads are they want to watch a particular show now, they forgot to set the VCR or they want to get the whole season and watch it over the weekend. People also want to watch old shows that have not been released on DVD or are too expensive on DVD.

Some have tried to offer downloads but have not understood the new paradigms. The most notable is Telstra’s latest attempt. It is about to find out that people will not pay video store prices for movies, released three months after they have been released to video stores, to be deleted within a few days and at download speeds which are 200 times slower than the OECD standard. Consumers will soon realise that for a few dollars more they can purchase the DVD. A subscription service with unlimited downloads might work though.

For the networks, a model that might work is as follows. The networks have a large back catalogue plus some great new shows. They need to get the new shows on air when first released. They should also look to allow their viewers to download these shows. The show can be in a proprietary codec with a rolling encryption algorithm to stop copying. The show will be viewed by a proprietary viewer on a TV screen.

By getting viewers to register for downloads, the networks could place themselves in a position to provide relevant advertising. When you go to downloaded the TV show, relevant advertising could be interlaced into the download. This way, consumers would not need to pay for the download. Networks would then be able to offer a much wider range of viewing schedule. A fast forward button would be a no-no and a click-here-to-know-more button would allow advertisers to really zero in on their prospective consumers.

One thing the networks need to realise is that the current advertising revenue model based on the ratings system is no longer relevant. The current ratings system does not give a true indication of the popularity of a show or whether the people watching are part of a target demographic. At the time of writing this article, Commander in Chief  is due to première; however, I know many who will not be watching and will not appear in the ratings, as they have seen the episode over a month ago via P2P.

The ABC is a problem child. The government is not happy with it, nor was the previous government. Many of the public are also not happy with being forced to be pay (via their taxes) for a network that less than one in five watch (fewer still for radio). The government is not going to give the ABC the funds it requires to move into the 21st century. The ABC will always have to defend itself against accusations of bias, but the idea that a government owns a media enterprise should be anathema to free speech advocates. All media outlets are biased to some degree, but they are not funded on taxpayer dollars.

The government should either make the ABC a true people’s network where all citizens have access to broadcast their views or it should set the ABC free. I believe it is time that the ABC was privatised. Then it would be able to stand on its own two feet, go in the direction it wishes and raise the funds it requires to reach there.

The government’s media strategy seems to be based on three outcomes: digital TV, cross-media laws and not upsetting the three commercial network owners. Digital TV or high definition TV is great; 16:9 format with surround sound is a true pleasure to watch. However, there are two problems with the government's version of digital TV. I am in an income bracket that can afford this luxury, but many are not. It will be a brave (and soon extinct) government that will switch off analogue transmissions before everyone is in a position to switch over. The government will either have to provide these set-top converters free or give set-top converters tax deductibility status. The second problem is that we, the consumers, are not going to benefit from the true advantages of digital TV such as multi-channelling. This is because the network bosses don’t want it.

I cannot see how changing the cross-media laws will benefit the consumer. We will still be stuck with the same TV stations, radio stations and newspapers with different owners. If the government were serious it would open up the media to competition. Iraq, where the population is only six million more than Australia, has 41 TV stations.

The way we access our entertainment is rapidly changing. It is likely that the existing players will be left behind as consumers abandon them and the government blunders through legislation changes that will benefit no one.