The queens of screen no longer want to be princes of print and the princes of print no longer want to be queens of screen.
Rather they both want to be nobles of the net.
It is now nearly 20 years since the last major change to media ownership laws. The Howard Government has made a couple of moves to relax the rules since it came to office in 1996 but they have fallen foul of the Senate and opposition by one or other media proprietor who felt hard done by.
Now Communications Minister Helen Coonan is about to release a discussion paper on changing the rules. Her office would not give a precise timing, indicating that there is more tinkering to be done or that the Prime Minister’s office is yet to give it the final tick.
Under present rules a proprietor cannot own only one of a newspaper or a television licence or a radio licence in any one city. Foreigners are precluded from owning broadcast licences. They are limited to a 15 per cent holding supposedly a non-controlling 15 per cent, but with clever share classification that can and has been got around.
Foreigners can can establish new newspapers but are subjected to restrictions if they want to take over existing newspapers.
Judging by statements to date, the discussion paper will recommend removing restrictions on foreign ownership and easing the rules on cross-media ownership.
Under the new rules it is likely proprietors will be able to own a newspaper, a television licence and a radio licence in any market, but would not be allowed to own more than one television or radio licence in any market.
But there will be some over-riding restrictions to ensure diversity of voices in the media. The five most populous cities will have to have at least five separate proprietors and other cities will have to have at least four have four.
In addition, there may be some rules on independent newsrooms where a single proprietor owns more than one type of outlet in a single market. This was proposed in previous attempts at change.
In is uncertain what the fate will be of the existing rule preventing a broadcast proprietor reaching more than 75 per cent of the total Australian market.
Previous attempts at change also had rules about datacasting over the internet, but technology has made them irrelevant.
The changes could be in force this year with the Government having the numbers in the Senate. Under the new rules it would be possible for Rupert Murdoch’s News Ltd to buy a television channel in every city – if any were for sale. In the US, Murdoch has successfully established Fox television and would no doubt like to move into television in Australia if the rules were changed.
A sleeper here is the timing of the switching off of the analog television network which would make room for a fourth commercial television channel on the spectrum.
If the Government were serious about diversity it could move than project along, but the existing proprietors would resist it vigorously – and governments have always been scared of angry media proprietors.
By international standard, Australian television ownership is reasonably diverse. But in newspapers the story is completely different.
In the eight capitals and the national market every daily newspaper is owned either by Murdoch or Fairfax, except Canberra (The Canberra Times) and Western Australia (The West Australian).
Changing the rules on cross-media ownership will not change this. It might mean that James Packer’s PBL which controls Channel Nine might be able to launch a takeover of Fairfax, but Fairfax is unlikely to be broken up to yield more diversity of newspaper ownership. And none of the Murdoch papers are for sale. Moreover, it is unlikely we will see new entrants to the major-city newspaper market. The start-up costs are prohibitive and the dominance of existing players would be hard to break down.
Sydney has 12 proprietors and could lose up to seven under the new rules. Melbourne has 11 and could lose six. Canberra has eight and could lose four.
In Canberra, Rural Press, which owns The Canberra Times, could buy a television and radio channel if an existing player would sell. Indeed, that was the position from earliest days of television until 1986. John Fairfax and Sons owned The Canberra Times, CTC-7 and 2CA.
It was not a big problem because there was plenty of diversity of opinion within each medium.
Indeed, there is far more diversity of opinion now in Australia’s highly concentrated print media of four owners of 12 capital-city and national dailies than in, say, 1923 when there were 21 owners of 26 capital-city dailies.
Will the new rules produce greater concentration? There are several reasons why it is unlikely to be a drastic concentration.
First, it may well be that a newspaper proprietor might want a radio station and a television station, but it is unlikely that the remaining two television stations would each want a radio station.
Most likely, the newspapers in each city will seek a television and a radio station each. That indeed, was the pattern before the 1986-87 changes to legislation and ownership.
Secondly, It is unlikely that much will be for sale in the immediate future.
After the legislative changes in 1986, there was a mad scramble for assets as newspapers had to divest themselves of broadcast licences. Twenty years later buyers are likely to be more reluctant and existing owners are not being forced to sell. Moreover, the experience of Alan Bond and Frank Lowy, who both lost small fortunes over television purchases will encourage caution on the part of potential buyers and their financiers.
Existing owners are doing very well. For example, just this week, the Seven network posted a record half-year profit of $66 million. So why sell?
Thirdly, the biggest dampener on further concentration is that existing players are far to busy looking at new media. Entrepreneurs are attracted to growth industries, especially the internet and pay TV.
For example, earlier this month Fairfax paid $675 million for a New Zealand classified internet site.
Packer and Murdoch have bought job and property sites.
But whatever the ownership rules, technology and the rules on how it can be used (if any) are more likely to have a greater impact on diversity.
Technology would allow much greater diversity and variety of television if the Government had the spine to stare down the Nine and Ten networks and allow multi-channelling (four or five different digital programs where there is now one). Maybe now Kerry Packer is dead it might. It must also have the spine to stare down the Australian public by turning off the analog network, which would force people to buy digital boxes or new TV sets.
The internet might make cross-media rules redundant as broadband enters more homes and is more capable of delivering video quality into the lounge rooms. Already, the television networks produce the equivalent of newspapers over the internet contrary to the spirit of cross-media rules. And newspaper sites are providing video and sound bites of news events.
The Government has been pouring a great deal of money and effort into rolling out broadband in rural and regional Australia. Last year broadband subscribers grew 80 per cent to 1.67 million. Pay TV grew just 6.3 per cent to 1.69 million. When the vast majority have broadband with video, it will almost impossible for Governments to make rules about who sells or delivers free what content into the home.
Television executives see the danger. Foxtel chief executive, Kim Williams, told the Australian Subscription Television and Radio conference this week, “There is no regulatory impediment to broadband taking out a whole football code’s content exclusively and in its entirety.”
He said, a broadband provider could deal directly with studios, cutting pay TV operators out.
On the print side the internet poses threats, but it would a mistake to think that print is dead. More than 800 million newspapers and 230 million magazines are bought each year in Australia. The newspapers generate more than $5 billion in revenue from advertising and circulation. People like to read the printed word on paper which can be so easily carried about.
Still, newspapers are facing several problems. If they have a big internet presence some readers do not bother with the printed version and they lose revenue from circulation. The evidence for this is that newspaper circulations, on average, have been falling since the mid-1990s, but readership has been going up. Clearly people who are reading on the net are telling the readership surveyors that they are readers of the “paper”. The good news for newspapers for now is that these changes are only a few percentage points.
Newspapers are also losing market share in classified advertising to the internet – particularly in jobs and to a lesser extent in property and cars.
The third problem is that advertising revenues on the news part of internet sites are nowhere near has high as paper advertisements. Internet readers are apparently more focused than the typical newspaper reader who is more of a browser and more likely to look at advertisements.
The present rules on cross-media and foreign ownership make less sense in a world of converging technologies. If internet platform can deliver printed words, sound recordings and videos, shouldn’t the regulatory environment be encouraging newsrooms that can produce and deliver all three?
The ultimate question in a democracy is whether the technology and rules will provide the means for proprietors to make the money and have the incentive to produce quality journalism.