Feb 28, 2013

Media ownership: ‘controlling the news’ in a fragmenting industry

Media ownership is a notoriously difficult issue -- both for politicians and the press. Bernard Keane explains why governments today face challenges their predecessors didn't have to deal with.

Bernard Keane — Politics editor

Bernard Keane

Politics editor

At some point the endless succession of newspaper articles about media reform proposals going to cabinet "today" or "this week" or "in the next fortnight" may finally be proved correct and a media reform package might emerge. Or, given the timing constraints of a September election, it might not: it will be very difficult to get any substantial legislation in this most controversial of areas through Parliament with only seven sittings weeks left. Media ownership is also one of the hardest areas in which to have a coherent debate. Commercial media are almost incapable of reporting the issue objectively, politicians struggle to assess the issue objectively, and there are few other stakeholders who don't have a rigidly fixed position. Moreover, few participants and journalists actually understand what regulation of ownership is about. So, while everyone agrees diversity of media voices is important, that means different things to different people. And there are different forms of diversity. Most people are thinking of diversity of voice when they use the term -- particularly around news and current affairs. But there's diversity of content as well. Hotelling's Law -- the one with the example of ice cream stands on the beach that both end up in the middle -- tells us that more competition and diversity of ownership can offer less diversity of choice. In contrast, in media, a single owner of two different media outlets in the same market has an incentive to differentiate the outlets' products, so they don't compete against each other. And not all media outlets are equivalent anyway -- how influential is a sporting radio station, compared to an FM radio station, compared to 2GB? And those differences between individual licensees can change markedly over time. That's why, in addition to diversity of ownership, Australian politicians have sought to regulate diversity of news and current affairs itself (the ABC and the SBS are the most fundamental form of this). You might have noticed an excellent yarn by David Crowe in The Australian today about internal government discussions about regulations to prevent media organisations outsourcing news programming to other companies -- regulation aimed, potentially, at the Ten Network's outsourcing of Meet The Press to News Ltd, an act that has turned one of Australia's few substantial political talking head shows into another arm of the government's most bitter media foe. The Australian's editors saw fit to headline Crowe's piece "Conroy's pitch to control the news", as though this was some novel form of intervention into journalism. In fact, the Howard government not merely considered "controlling the news", it actually did it: in 2006, it imposed ludicrously restrictive requirements relating to local news content and other local content on regional radio licensees if they changed ownership, in effect requiring broadcasters to maintain their existing operations rather than outsource them to a parent company or other broadcasters that might have been able to provide news and local content more cost-efficiently. The requirements were imposed at the behest of the Nationals, who refused to support the broader media ownership reform package unless they were indulged on regional radio (though Barnaby Joyce crossed the floor and refused to support them). Despite this being exactly analogous to the proposal reportedly put forward by Conroy, there was no Australian headline in 2006 about "Coonan's pitch to control the news". Nor was Richard Alston accused of seeking to "control the news" when he proposed in 2002 media ownership reforms that would allow mergers if companies promised to maintain "separate newsrooms" in the merged companies. As the Coonan and Alston examples demonstrate, any attempt to "control the news" is intensely bureaucratic and highly interventionist, because it seeks to dictate the way companies operate. But politicians resort to it because they're aware regulation ownership by itself doesn't necessarily guarantee diversity of voice. The other problem with the diversity-ownership debate is that it assumes a stable media industry in which diversity can be protected. In fact, Australia's media industry has already lost nearly all of its diversity: there are only six major media groups or families left in Australia across all media, in addition to smaller players that can be highly influential in certain areas, like 2GB in Sydney. The traditional goal of our media ownership regulatory régime is thus no longer attainable. Unless you are prepared, like the Greens, to force divestment to regenerate diversity, our approach to regulation must be different now -- and even if you do embrace forced divestment, given the fragmenting media market, how many potential buyers are there out there for newspapers or even TV networks? The Convergence Review proposed a long-term shift to a regulatory framework in which, inter alia, diversity would be regulated simply based on influence, rather than the current model in which diversity is regulated based on influence but differently regulated across different media -- including no regulation at all in new media. The Convergence Review proposed a model in which any media that were influential - whether Google, Telstra, Foxtel, newspapers or free-to-air broadcasters - would become subject to media ownership laws once they reached a certain threshold in size. It was a clunky model but represented an effort to get to grips with media ownership regulation in an era when the media is fundamentally changing. Regulating the ownership of the mainstream media like it's still in the sort of rude health it was in 1985 is likely to increase uncertainty and reduce the value of incumbents, placing what little diversity of ownership we have left at further risk, and putting pressure on governments to ease current ownership restrictions -- which is why Stephen Conroy wants to remove the old 75% audience reach limit on the networks. But even that may not be enough to save Ten. It's amazing how media ownership regulation always comes back to the interests of the incumbent, and particularly the most influential incumbents, the TV networks. Just ask News Ltd. Despite its size and power, for most of the last 20 years, it has been dudded by media regulatory decisions such as the Howard government's cave-in to Kerry Packer on digital TV and the 2006 ownership changes for which all News Ltd got was "use it or lose it" on anti-siphoning. So if and when a media reform package appears, reflect on these basic questions: what sort of diversity is the government trying to protect, and how is it trying to protect it. Oh, and whether the commercial broadcasters will yet again do better than News Ltd.

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18 thoughts on “Media ownership: ‘controlling the news’ in a fragmenting industry

  1. Bill Hilliger

    Many people think Noos Ltd in all its forms is a pox on society. Fortunately, much of their product manages to alienate many who just stop buying their sh*tty products.

  2. el tel

    Very good summary of a complex issue, plagued with a lot of pre-existing positions.

  3. zut alors

    With skewed headlines such as “Conroy’s pitch to control the news” it looks pretty grim for diversified media.

    The one bright spark of hope is the example of Berlusconi’s vice-like dominance of Italian TV: eventually, not even a near-monopoly could save him. Press barons et al, you’re not on a sure thing.

  4. Hamis Hill

    On the subject of balance, all it takes for outlets to “control the news” on the government is to say that the opposition spokespeople were “unavailable for comment”.
    On the other hand this ploy is repeated when the opposition has something to say; then the government always, somehow, has “nothing” to reply.
    See, balance!
    So goes the “Belief Industry”. Out of control by regulation.

  5. Day Bliss

    The old media is interfering in our political process to unprecedented level, as their business mode is threatened by Labor’s NBN. The Dinosaurs will eventually die, but in the mean time what shape will out Internet Industry be in after the MSM get Abbott elected by be easy on the Liberals this year and a Wolf pack attacking Labor about everything.

  6. green-orange

    If News was prevented from providing content to Ten, or investing in TV, couldn’t they just sell their newspapers ?

    Its not that they’re any great prize anymore. Murdoch had no compunction about scrapping the Adelaide News or the New York Post.

  7. Suzanne Blake


    The Taxpayers own the ABC and they are allow to have their heavily left bias new reporting. It is lucky that their current affairs / insiders etc rating are falling, which is people walking with their remotes.

    On the Rooty Hill escapade. Gillard knows she has lost, and Rudd doesnt want it, cause he knows he cannot win the election. He is hell bent of seeing Gillard and Lanor get smacked so he can say I told you so.

    Its pretty to watch.

  8. Gocomsys

    “The old media (MSM/ABC) is interfering in our political process to unprecedented level …..”. Agree !
    By all means keeping this government (supported by Greens and Independents) on the straight and narrow is important but before publishing an article it is worth reminding oneself that there are potential undermining consequences for our nation and for an overall responsible progressive administration.
    I strongly believe it is obligatory for the few remaining journalists in the “free press” to take a stand, stop “fence sitting”, the “one bet each way” attitude and start making it plain to the electorate that there simply is no viable political alternative to choose from at present.
    I believe that it would be a travesty if a stumbling confused kid like Abbott and his underwhelming cohorts get into power. I fear that any gains achieved recently will be wiped out. Does anyone really think it necessary to relive the miserable destructive Howard years?
    The policy free LNP in its current state is dysfunctional and therefore unelectable. Also, if anybody thinks that someone like Turnbull using a magic wand will save the day is sadly mistaken.
    Note: The “Tea party” philosophy is dangerous and undermines democratic principles. Beware!
    Wake up before it’s too late.

  9. Gocomsys

    ‘Controlling the NEWS’? What news? To my mind there is no
    NEWS service available anywhere in OZ.
    I expect that at least the tax payer funded national broadcaster should be able to provide an hourly NEWS service on Radio National where:
    NEWS = researched FACTS presented by ABC staff (newsreader, reporters, correspondents). No need for anybody else to comment.
    what we are presently getting is mainly he/said she/said OPINION, gossip and spin. Often MSM headlines and tabloid talking points are copied apparently without a veracity check. Complaints to the ABC are either ignored or misinterpreted. In the run up to the election and in the name of so called ABC “balance” I am afraid every Tom, Dick and Harriet will be given a chance to spout their propaganda during the so called NEWS program. Apparently the flawed ABC charter insures that any garbage voiced is acceptable as long as an alternative view somewhere along the line is provided.
    That’s common practice during ABC opinion sessions, which I have been giving a miss for some time for this very reason.
    I expect the ABC to provide a professional NEWS service. I can get better Infomercials or Infotainment anywhere else.
    A terrible state of affair indeed.

  10. Gocomsys

    Good to see deep intelligent and well phrased commentary.

    “The Taxpayers own the ABC and they allow people walking with their remotes.”

    “On the Rooty Hill escapade Lanor get smacked!”

    “Pretty to watch.”

    Insightful contributions are so rare these days!

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