The Low Down
Communications Minister Malcolm Turnbull has proposed a shake up of the media industry in a private proposal to Prime Minister Tony Abbott last week. Turnbull was seeking approval for cabinet endorsement to abolish the reach rule and the two-out-of-three rule.
The reach rule prevents metropolitan networks Nine, Seven and Ten merging with regional affiliates by limiting the coverage of any commercial TV network to 75% of Australians. The two-out-of-three rule stops any company from owning more than two of a newspaper, commercial TV licence or radio licence.
The changes would likely trigger a flurry of mergers, which would better allow Australian news outlets to compete with unregulated digital companies such as Google and Netflix. The changes are supported by commercial outlets as it allows them to diversify and expand their audience base, and in turn gain more profits. Television networks Nine, Seven and Ten as well as regional networks are pleased with the proposals, as is Fairfax.
Murdoch Throws a Tantrum
However, Rupert Murdoch – owner of News Corp – is not a fan of the changes as Turnbull wants to keep the anti-siphoning list, which guarantees Seven, Nine and Ten first rights to show over 1300 sporting events. The regime prevents Foxtel – half-owned by News Corp – from bidding for sports rights. The recommendations also include retransmission fees that could force Foxtel to pay the free-to-air networks to air sporting events.
CEO of News Corp Australia, Julian Clarke, said he agreed that the cross-media ownership restrictions were outdate in the digital age. He added: “We do not support any change if it involves cherry-picking some policies and only changing these.”
Murdoch is kicking up a stink about the changes saying it suits Turnbull’s buddies at Nine, but clearly not his precious Foxtel, which is the driver of his profits in Australia. Whether Abbott will want to pick a fight with the media mogul remains to be seen.
Are the Proposed Changes Positive?
While the deregulation would better enable media companies to compete and survive in the digital age, concentration of ownership is a huge concern that threatens the diversification of the Australian media landscape. Concentration of ownership means that smaller, regional news companies disappear and only a few – basically two in Australia – huge companies have voices in the country.
However, the affordance of the internet enable smaller outlets to live cheaply online, which does lead to a more diverse presentation of news stories. But they have no where near the same budget or reach as the country’s major news companies.
There is no doubt that media legislation should be closely scrutinised and adapted to suit the modern media environment. But allowing the Australian media landscape to be completely dominated by just two corporations threatens the quality of Australian journalism.
Murdoch needs to stop diverting attention to his own issues, and having tantrums about politicians putting a few hurdles in for him to make his billions. The real debate here should be about creating fair and contemporary media legislation which will encourage higher quality journalism in the country.