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Media

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.

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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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