The point of cross-media regulation is not, as its opponents argue, what these laws might have meant in 1987; it’s how they work today. Last week’s outcome at Channel Ten — where CBS Corp outbid News Corp to buy the embattled network — shows how these laws work: they work to promote diversity, at least at the national level.
After the failure of the Australian competition regulator the week before to regulate for, well, competition, it fell to the cross-media legislation to sustain at least the number of traditional media players in Australia.
It’s probably a good outcome for Channel Ten as well. As consumers, we shouldn’t be naive. Ten will change and we may not like all the changes we see. It may well become more American, although it will be constrained by the local content rules that mandate minimum levels of Australian production. How will the CBS focus on news programming play out in the Ten network?
We do know the counter-factual: if News Corp had effectively ended up controlling Ten, it would have been run as a low-cost network, recycling programming from within the News Corp network. Its news programming may well have been — absorbed in fact or in practice — into Sky News, with the loss of jobs that would have involved.
This reinforces what decades of media consolidation tells us: fewer owners mean less diversity and, for journalists at least, fewer jobs. We’ve seen this over the past couple of years with the job losses that have flowed from the absorption of The Sunday Times in Perth into West Australian Newspapers, and of Queensland regional newspapers into News Corp.
The size of the Australian market means that any significant business trends to oligopoly — usually duopoly: two airlines, two telcos, two big miners. It is only ever regulation that halts the flow. We have four banks not due to market forces, but due to successive governmental support for the four pillars policy. Governments support that policy because they know without it, competition law on its own doesn’t get there.
In its support for eliminating cross-media regulation, the government and the media owners don’t even pretend that it’s about diversity; it’s about removing a bar to further consolidation. While consumers (and journalists and other workers) inevitably lose from consolidation, there are two winners: large shareholders who get a chance to off-load their stocks in a declining industry at a bonus, and senior executives who get an opportunity to boost their pay or their payouts.
In that sense, the Prime Minister was right when he said the changes the government is pushing were not Ten specific. They give Fairfax Media and either the Nine Network or Seven West Media the opportunity to merge. Even post-Ten, it would give News Corp the opportunity to merge with either Nine or Seven, given that the company has had historic dealings with both.
The abolition of the so-called “reach rule” (which restricts companies from broadcasting to more than 75% of Australians) would give the regional owners the opportunity to cash out by selling to their metropolitan network parents.
In all, it would mean we’d see what were nine or 10 significant publicly listed media companies of two or three years ago, reduced to just three independent players.
The cross-media regulations may not be the most elegant. They probably never were. The companies and the political parties who now cry “anachronism” are more or less the same companies and parties who never wanted them in the first place. Their protests at regulation are the same as they were always were: regulation gets in the way of making money through buying and selling media organisations and cutting costs through consolidation.
They oppose the rules for the simple reason: the regulations work to restrain oligopoly.
It is true, as the de-regulators argue, that the cross-media rules come from an age when media was divided up into distinct mediums: radio, television and print. And it’s equally true that the media world now is more divided into social, social and social media.
In that social media environment controlled by the large platforms like Google and Facebook, we need diverse and creative content. And that means more voices, not fewer, generating content that feeds into the new means of delivery.
It also means that the focus of the Senate’s Future of Public Interest Journalism inquiry is the right one. Rather than worrying about current regulation on our traditional media corporations, we need to be asking: what are the right regulations for the new world of the giant platforms?