In the early 1970s one of the nasty chores for junior journalists at The Canberra Times was to “”do the radio news”.
It meant writing radio bulletins for several of the stations in the region. In those days there was no cross-media ownership rules. Fairfax owned radio, TV and newspapers in several markets, including Canberra. Indeed, in the early days of TV, it was encouraged on the grounds that only established, responsible newspaper companies would be capable of fulfilling the public trust required in owning a TV licence.
Nowadays, in the interests of diversity, the newspaper proprietor is not allowed to own television or radio in the same market. So what happens? In many markets, a large amount of radio and television news comes either as straight rip and read from the newspaper or as slightly jazzed up or developed versions of newspaper articles. Most talk-back and current affairs radio (including the ABC), most regional radio news bulletins (perhaps excepting the ABC), and much of what constitutes commercial television news has its origin in newspaper work.
This led the chair of the Press Council, Professor David Flint, to argue this week that newspapers should be allowed to derive the full economic benefits of their news-gathering efforts. They should be allowed to own and control the radio and TV stations that at present rip off the work done in newspaper newsrooms.
He also argues that we now have converging technologies _ under which sound, video, printed words, graphics and photos can be delivered together down cable or via satellite. Newspaper proprietors should be able to engage in that.
In short, newspaper proprietors should be allowed to derive maximum economic benefit from their great news-gathering engines. That is, the cross-media-ownership should be scrapped.
The argument has some superficial morality.
Flint argues that in place of these rules would be a slightly revamped Trade Practices Act to deal with media mergers and takeovers. A media-competition commissioner would look at whether the proposed merger or takeover would substantially lessen competition both in the total media market and in each of its segments _ radio, TV and newspapers.
This, he argues, would let the government step back and not be seen to favour one of other of the major players.
It has some superficial appeal.
But the Government, as it weighs up what to do about media ownership in Australia should not be swayed by either argument.
It is no argument for newspapers to say we should be able to derive maximum economic benefits from our activities by buying radio and TV stations. The very reason we have anti-monopoly laws is to prevent large players from extracting maximum economic benefits from their efforts, because if they are allowed to do so, they will inevitably abuse their position.
As to allowing trade practices law to be the sole arbiter of mergers, takeovers and ownership, it fails to see the special position of media in society and the imperfect nature of media markets. Media products are not margarine. For a start the airwaves spectrum limits the number of radio and television stations that can go free to air. If there is not to be a jumble of static, the government has to do the rationing. You can have an indefinite number of margarine producers producing an indefinite amount of margarine and the market will sort it out. With the electronic media, the government has to do some rationing. It means, therefore, that the holding of a licence becomes a public trust.
The other imperfection is the huge start-up costs for a daily newspaper. Unlike many other products, you cannot start small and work your way up.
The failure to see that practical argument will cause strife if the government pursues another possible replacement for the cross-media-ownership rules. Present rules prevent Packer (owner of the Nine Network) controlling the Fairfax newspapers (Sydney Morning Herald, Age and Financial Review) and prevent Murdoch (owner of virtually every other daily outside of Canberra and Perth) from controlling the Seven network.
But the idea has been floated that this sort of cross-media ownership should be allowed provided the new owner is restricted to only one newspaper per market. Apparently, the Government likes this idea. But it is not especially workable because it fails to take account of the practical elements of newspaper production.
It would allow Packer to buy Fairfax provided he got rid of the Financial Review because it would be a second newspaper in Sydney and Melbourne. But the Financial Review (circulation 80,000 nationwide) is virtually inseparable from the Fairfax group. It shares presses, library, building, computer system, advertising staff, production staff, delivery systems, marketing staff and so on with the other two main Fairfax papers: The Age and The Sydney Morning Herald. Without them it would die.
The Financial Review is more than just a masthead. It must have a home within the infrastructure of a newspaper plant. (Perhaps Kerry Stokes could buy it and house it in Canberra with The Canberra Times).
As for Murdoch buying a controlling interest of Seven under this new proposal, he would have to either sell the Australian or both his Melbourne and Sydney dailies (the Herald Sun and the Telegraph Mirror).
The Australian is less integrated than the Financial Review, but its economic viability or at least its profitability is dependent on sharing the economies of scale with the rest of the Murdoch empire.
So if the Government wants to allow Packer to have Fairfax and Murdoch to have Seven under the sop of a one-newspaper-per-market rule, it may well cause the destruction of one or both of Australia’s quality national dailies. (I seriously doubt whether Murdoch would sell the Australian under any conditions, thought he lure of television is very strong.)
Alternatively, the Government could order that the new owner be allowed to print the Financial Review on Farifax presses for a reasonable fee, but that would open a pandora’s box of all sorts of new newspapers wanting to print on competitors’ presses.
The current controller of Seven, Kerry Stokes, who is also chairman of The Canberra Times, would have difficulty maintaining that control if the rules were changed to allow Murdoch to buy a greater share.
For the past two decades, virtually every change in media-ownership rules has favored further concentration of ownership, fewer outlets, and more foreign ownership. And in the past half decade that has been concomitant with an ever weakening financial base for the ABC.
Some of the ideas floated in the past week suggest the next round will follow the pattern.