Two things have always been underplayed in
analysis of Coonan’s proposed media reforms. Together they may explain News
Ltd’s attack on the package, and give some hint of what is to come.

The first is the significance of the
datacasting licences, which Coonan hopes to allocate next year. She has made it
clear they will not go to the established television networks. It is important to remember that the main
difference between datacasting and fully fledged television is government
restriction imposed to prevent them from competing with traditional free to air
television. Coonan is involved in a
delicate balancing act: trying to free up the restrictions sufficiently to make
datacasting attractive, while also protecting the position of the established
television networks.

Fairfax is much more advanced in the battle to get a datacasting license
than News Ltd, something which Coonan tacitly acknowledged in this
. And Coonan favours using the datacasting spectrum for mobile television
services using the DVB-H technology that
has been on trial in Sydney for some time.

If Fairfax got a
licence to deliver news and information via mobile television in “snack
news” format it would be a considerable threat to News Ltd’s core tabloid
newspaper business. Why would young
people buy a tabloid newspaper when they can catch up on the headlines and
entertainment news on the way to work on their mobile phones?

Meanwhile, Fairfax could also
attempt to develop a pay-per-view business model for its traditional broadsheet
content online. Perhaps this is why News Ltd has lost
enthusiasm for the reform package.

News Ltd is getting up a head of steam in
its attempts to catch up to Fairfax in the online world. New
websites are imminent for the mastheads, and large staffs have been seconded and
recruited for the online presence.
Journalists are being trained in video editing, with streamed video
clips planned. It is understood that Rupert himself has been giving his local
troops a hurry up.

The other thing that has been greatly
overlooked is that Coonan has always had a face-saving “out” if
trying to push through cross-media ownership reform gets too hot to
handle. Her discussion paper nominated
two possible dates for the lifting of cross-media ownership restrictions: next
year, or when the analogue television signal is switched off, which will be
between 2010 and 2012. Most commentators
assumed that it would be next year, but given News Ltd’s breaking of ranks on
the issue, and National Party unrest, this must now be in doubt.

Rather than drop the whole thing, it would
be quite possible for Coonan to simply plumb for the later date, thus leaving
the essential digital action plan in tact and saving face. By the time we get to 2010, of course,
everything will have changed. The media
landscape will look very different, convergence will mean much of the heat will
have gone out of cross media ownership, and the government may not have control
of the Senate and may not even be in power.

Peter Fray

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Peter Fray
Editor-in-chief of Crikey