Tom Burton: getting real about news in a digital world

By Tom Burton

February 24, 2017

The Seven network might be grateful Australia doesn’t have a robust “fit and proper person” test any more. Its CEO and board have become entangled in a brutal and ugly fight with a former employee, who is calling out some of the deep machismo culture of Australia’s largest locally owned media group.

In the modern world, it is social media which largely checks this type of behaviour (Amber Harrison: five; Seven: minus three), but in previous times Seven would have been facing a “fit and proper” hearing, where the behaviour of those controlling the licence would have been publicly brought to account.

In the 1980’s there were a number of “show trials” around media licence renewals, where the personal behaviour of owners and controllers was publicly scrutinised. The best known were the renewal hearings of Alan Bond’s licence holding of the then-mighty Nine Network and Rupert Murdoch’s holding of the not-so-mighty Melbourne affiliate of channel Ten. In both cases the regulator initially found against the licencees, leading to successful appeals all the way to the High Court.

Australia long ago gave away such unseemly public character assessments of its media gatekeepers, in favour of structural ownership rules to limit the markets traditional media companies can serve.

Murdoch’s phone hacking scandals in the UK have resurrected calls for a full blooded “fit and proper person” test. But it is none other than the leader of the free world, Donald Trump, who has put the question of character fitness onto the table, declaring the media to be the “enemy of the people” and vowing “to do some thing about it.” How this works in a world of alternative realities is problematic to say the least.

Whether this leads to the US media regulator, the Federal Communications Commission, hauling the heads of ABC, NBC, CBS and Time Warner to Washington to explain themselves is yet to be seen.

But in the meantime Australia’s media ownership rules, put in place when media was gate-kept by a handful of very powerful media moguls, are yet again being tweaked, with Bills to enable greater reach and media mergers awaiting consideration before a sceptical Senate.

Media micro-management

The premise that underpins continued micro-management of the so-called traditional media seems to be that for as long traditional media continues to dominate citizen attention, governments should keep an eye on the gatekeepers. Regional media coverage and local Australian content get passing attention, but at core is the love-hate relationship politicians have with the media.

All that will be on show when the Senate finally debates the Bills. Labor, the Greens and some independents are resisting letting media groups merge, so how that goes is in the hands of the Senate independents. Whatever the result, the reworking of media ownership rules, for yet another time, is a poster child for the inability of government to manage reform and in particular to create a roadmap to modernise industry structures in a sector that has led the digital revolution.

When Malcolm Turnbull became Communications Minister there was much hope his forensic knowledge of media regulation and digital media would lead to the scrapping of the old analogue-based rules, in favour of a modern digital-centric framework.

But with the Seven Network opposed to any changes that would give a leg-up to its competitors, media regulation was put on the back burner. Turnbull as PM has become a self confessed incrementalist and sadly what is sitting before the Parliament is a classic case of regulating for yesterday.

In a world of massive content ubiquity and nearly 100% connectivity (albeit often at snail like bandwidth), we have demonstrably reached a time where trying to ring fence markets to minimise mogul overreach is absurd.

Print media has already seen its business model destroyed, first by the unbundling of classifieds, then by programmatic advertising now totally dominated by US tech giants, Google and Facebook. Both have bottlenecked distribution — Google through its powerful search algorithms, Facebook through its unique ownership of nearly a third of the world’s social graph.

Mobile has in a blink become the medium of choice, further turbocharging Facebook’s dominance. US figures suggest FB has become the source of news for nearly two thirds of Americans. In Australia the figures are less clear, but grosso modo news consumption splits roughly 50/50 between traditional media — TV, Radio and Print (including the popular news portals) and online sources such as Facebook, Twitter, Instagram, Snapchat, YouTube and via Google search. All the evidence is consumption from these surging US based digital platforms is continuing to grow.

Time to get real about whose news it is

The obvious point is that if there is public policy anxiety about media influence and concentration, then we need to get real about who is really deciding what news we get, and start to work through the many issues around the impact and influence of these seemingly all powerful social media platforms.

And finally get real about broadcast TV in the digital era.

Free to air TV continues to play a dominant role in news, with over a third of Australians citing the five networks as their primary source of news. How long free TV can stop the inevitable stripping away of audiences and key content genres is not agreed or known — but the speed in which Netflix and its like destroyed any last hold TV had on strip and feature length drama is a warning that it can’t be long before the business model that sustains TV is demolished. A ubiquitous NBN and a proliferation of smart TVs may well be what finally ends the game.

In the meantime the free TV industry continues to enjoy special status and privileges any other company would die for, the rules stopping the shift of live sport to pay-tv being the classic case in point. Free TV also enjoys remarkable and cheap access to the best spectrum in the land, and over decades proprietors have cajoled governments of all colours to keep their platform free from any new competition. Similarly that platform has been set up in a way that limits the number of channels. With a tiny regulatory change, broadcasters could be permitted to use a more efficient compression algorithm (MPEG4), easily doubling the number of channels consumers could get on most TV’s.

Any sensible attempt to modernise media ownership regulation would make the deregulation of the whole platform a condition of the market liberalisation they seek, removing restrictions that may have made sense when moguls ruled  — and where character mattered — but now looks like a cloistered garden stuck in another era.

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