Inside Story

Dance of the elephants

Despite Nick Xenophon’s efforts, less powerful players were squeezed out of the media reform deal

Matthew Ricketson 18 September 2017 2781 words

Hobson’s choice? Senator Nick Xenophon (left) with communications minister Mitch Fifield after the passage of the Media Reform Bill in the Senate last Thursday. Mick Tsikas/AAP Image

What do you know about the federal government’s media package, passed last week by the Senate?

Probably: that the votes of the Nick Xenophon Team’s senators and the amendments of their leader were crucial to the bill’s passing.

Probably: that the “whole media industry” supported this “reform,” which promised to bring analogue-era laws into the digital age.

Probably: that the new laws will enable the local media industry to compete against the new tech giants, Google and Facebook, who are “hoovering” up millions of dollars of advertising revenue that previously went to said local media industry.

Maybe: that the removal of legal restrictions on the ownership and reach of local media companies could lead to a rash of mergers that will somehow favour Rupert Murdoch’s News Corp Australia.

Maybe but not likely: that while all the negotiations were going on, a committee of the Senate has been inquiring into the future of public interest journalism in this country.

Even less likely: that the two biggest commercial media companies in Australia — News Corp and Fairfax Media — didn’t see fit to make a written submission to that inquiry into the future of the very activity they’ve been insisting is threatened by outdated media laws and the rise of Google and Facebook.

If you’re confused by any of this, don’t blame yourself. You’ve been victim to the mainstream news media’s permanent blind spot — reporting on itself. Or, to be more precise, reporting on power plays between governments and media companies.

The two groups are perennially locked in an ugly dance. Both have a deep interest in and an intimate knowledge of how the other operates and both have difficulty separating their interests from any broader commitment to the electorate and the public. Yet both play a vital role in holding the other to account: where politicians have the power to legislate, the news media has the power to expose, ridicule or influence.

Like companies in any industry, media companies lobby governments in pursuit of their interests; but unlike companies in other industries, media companies have a 24/7 megaphone at their disposal.

Here, as always, it is important to separate the business of the media companies from the activity of journalism and to understand that when media companies and journalism are discussed in mainstream media, the interests of the former almost always overshadow the latter. This is why mainstream media coverage of the latest instalment in what Margaret Simons has called “the long, sad and sorry saga of media regulation in Australia” has been sorely lacking.

When the government and its supporters in the media claimed that the “whole media industry” supported the government’s proposed legislation, this simply meant that the government was doing what the major media companies wanted. The views of those who didn’t support the legislation, or who questioned aspects or proposed extra measures, were barely reported.

By my reading, the coverage of the government’s media package has been, by turns, missing in action (commercial television, with the exception of the emotive, context-free pleas to viewers by Ten presenters fearful about the network’s survival), relentless lobbying masquerading as reporting (News Corp publications, especially the Australian), exclusively business-oriented (the Australian Financial Review), constrained (Fairfax Media’s two metropolitan daily newspapers, whose national affairs coverage is now largely indistinguishable), and cautious to the point of being cowed (the ABC, with the exception of Media Watch, but not with the exception of a Radio National that no longer airs The Media Report).

Yes, outside the mainstream news media there has been more searching and thoughtful coverage (Nick Feik’s cover story for the July issue of the Monthly being a good example), but for many people evening television remains a primary source of news and, in any case, as Nielsen’s ranking of news websites shows, the most popular are owned by the biggest, best-known media companies.

Whatever else has been happening in the media landscape — and there’s no doubt a lot has been happening — journalism’s role both as a vehicle for, and as an engine driving, the free flow of information is as important as ever. In the past, media companies made money by connecting advertisers to the readers/listeners/viewers the companies attracted through their journalism; advertisers were willing to pay a lot for this access. It’s not that the journalism was unimportant for companies like News or Fairfax, but when the bulk of your revenue comes from advertising, then advertisers unavoidably become the higher priority.

Now that advertisers have found more effective ways of reaching audiences, they have been abandoning the traditional media companies. These companies are fighting desperately for commercial survival, which is why they have been lobbying the federal government to allow commercial broadcasters to reach the entire population of Australia, rather than 75 per cent of it, and to lift restrictions preventing any media company from owning more than two out of the three traditional media platforms — newspapers, radio and free-to-air television — in any market.

As can be seen from these pre-internet terms, the existing late-1980s laws had nothing to say about online media or, for that matter, subscription television. Governments thought or hoped that the subscription television sector would extend competition in the media landscape when it was introduced in the 1990s, but over time it has come to be dominated almost entirely by Foxtel. Foxtel’s ownership is shared by News Corp and Telstra, but it is the former that effectively runs the network.

The largely unregulated development of subscription TV is important for what’s happening now because it has enabled content- and talent-sharing to weaken media diversity. This phenomenon could well be magnified when the biggest companies act on the federal government’s new media laws.

We might not see a repeat of the rash of media mergers that accompanied Labor’s new media laws in the 1980s, but we could well see mergers between the three commercial television networks and the three main regional commercial television networks. Equally possible are mergers between the two big print/online companies, News Corp Australia and Fairfax Media, and commercial radio and television networks.

It is certainly true that the mainstream media companies face an existential crisis. And it’s true that legislation was needed to give them a chance of competing with the new tech behemoths. But it’s also true that the government could aim to regulate Google and Facebook, and set in place a mechanism so that at least some of the money they make from journalism could be funnelled back to the companies whose journalists create the content in the first place. This would provide those companies with an incentive and a means to continue producing journalism.

It’s not as if the big tech companies can’t afford it. Google and Facebook are among the biggest companies across all industries anywhere in the world. Their market capitalisation dwarfs even that of Murdoch’s global media empire.

A content tax or levy on Google and Facebook was briefly aired by the Senate inquiry into public interest journalism in June 2017 and received some support from media executives. But at the inquiry’s most recent public hearings, in Melbourne in August, Senator Xenophon bluntly told witnesses appearing before the committee (whom I was among, on behalf of the university where I work) that the government was not interested in such a proposal. And that, it seemed, was that.

Since then, however, the government has given ground and agreed to set up an inquiry into the impact of the new digital environment (that is, the impact of Google and Facebook) on media, to be conducted by the Australian Competition and Consumer Commission. Depending how jaundiced you are about government-ordered inquiries, this is either a necessary step to develop the public policy groundwork or a handball into the too-hard basket. It could be both, of course.

It’s also true that even the federal government’s repeated affirmation of its commitment to media diversity reflects a somewhat undernourished understanding of the term. For a start, communication minister Mitch Fifield’s repeated assertions that there is more diversity of opinion online than ever before ignores two facts: that there is less diversity of news reporting because the big media companies have been sharing more and more news copy across their mastheads; and even if we limit the field to opinion, the newspapers and news websites that reach the most people are exhibiting less diversity.

In the pre-internet age, Andrew Bolt’s influence was confined largely to readers of the Herald Sun in Victoria. Today, his columns appear across many more News Corp Australia outlets, including newspapers in other states, on his company-published blog, on his eponymous program on Sky News, and on the Fairfax-owned 2GB. That’s quite a reach, taking up space that other voices might have occupied.

The minister also appeared to conflate the prospect of any government support for media diversity with support for existing mainstream media companies. Incentives to encourage new entrants or support small, recently established media outlets didn’t come into his equation. Some new outlets have certainly emerged, whether they’re specialist titles like Crinkling News or local editions of established overseas outlets, such as Guardian Australia and the New York Times, but the experience of the past decade has underscored the stony fact that if the big media companies in Australia are struggling, so too are the smaller ones.

There is much to be said for the agility engendered by the internet, but a good deal of evidence also shows how difficult it is to marry journalism with commercial success, especially journalism of the kind that requires original reporting, which can be time-consuming and resources-intensive.

While the minister has been negotiating with Senate crossbenchers to secure passage of his media bill package, Labor backbencher Sam Dastyari has been chairing the Senate committee into the future of public interest journalism, which was set up in May 2017. Mitch Fifield has largely ignored the committee’s work, partly because it is chaired by an opposition senator and partly because he has been fiercely focused on getting the media package passed. Yet many of the seventy-one submissions received by the committee offer thoughtful, well-researched ideas about how to solve a public policy problem facing the nation: namely, that journalism conducted in the public interest is under severe threat in Australia.

The crisis besetting the major commercial media companies has meant that an estimated 3000 journalists have taken redundancy packages since 2012, according to the New Beats research team (of which I am a member). Some have found work at other news outlets, but it is undeniable that an enormous pool of journalistic talent and experience has departed at the same time as newsrooms are expected to produce more stories across more platforms. Not at all surprisingly, increased demands on journalists have led to thinner reporting and the eradication of most levels of sub-editing has led to more errors.

In the absence of any substantial ideas from government, it has been left to the crossbenchers to use their voting leverage to push through at least some measures aimed at improving public interest journalism. Of these, the most active has been senator Nick Xenophon. After what he described as the most intensive and stressful negotiations of his two-decade political career, Senator Xenophon secured a three-year, $60 million package to support small publishers, assist media in regional and rural Australia, and help media companies to employ cadet journalists.

While the mainstream news media quickly began canvassing the possibilities for media mergers under the new laws, others began to raise questions about the deal Xenophon secured, including Tim Burrowes, founder and content director of Mumbrella, an online news and events company covering media and marketing, and Lenore Taylor, editor-in-chief of Guardian Australia.

Writing in his end-of-week newsletter, Burrowes pointed out that the regional/rural and small publishers fund won’t cover salary spending, despite the fact that salaries, especially journalists’ salaries, are the major outlay for many media companies. Capital expenditure, which is essentially all that will be supported by the new fund, is less urgent. As Burrowes put it, “Soon, there’ll be a podcast studio in every newsroom,” which would be fine if you have the funds to pay the people who make podcasts.

Burrowes also argued that supporting the employment of 200 extra cadet journalists in regional and rural Australia could well have the opposite effect to what was intended. “Given the choice between employing an experienced journalist at full cost, or a cadet with a wage subsidy of $40,000, which path do you think publishers will choose?” he wrote. “And where will be the senior jobs at the end of these cadetships?”

Taylor, an experienced, Walkley award–winning political journalist, went straight to the shenanigans that went on behind closed doors during the negotiations. In an article published over the weekend, she pointed out how carefully she believed the package had been crafted to exclude the Guardian Australia from being eligible.

She quoted Xenophon saying that during negotiations the government had been determined to exclude the Guardian Australia. He had faced the “Hobson’s choice” of acceding to the government’s “narrow, blinkered ideology,” he said, or losing the package of support he had developed for regional and rural media outlets. The government insisted that support for small publishers extend only to those owned and managed by an Australian company.

During last-minute negotiations, wrote Taylor, the need for those eligible to be Australian-owned was waived selectively:

Such a veto didn’t apply when the government gave $30 million to Foxtel during earlier media law wheeling and dealing, with the vague purpose of broadcasting more women’s sport and little or no documentation. Foxtel, of course, is half-owned by News Corp Australia, another Australian company with a foreign parent, Rupert Murdoch’s News Corp. (The $30 million was widely seen as Foxtel’s “compensation” for the fact that commercial broadcasters had won reductions in their licence fees).

Fifield confirmed to the Senate that News Corp would fail the new foreign-based parent entity “control test” established as a criteria for the three-year Xenophon fund.

That didn’t matter when it came to the $50 million “innovation” part of the fund because it was designed for smaller publications and News Corp and Fairfax were already ineligible. But News Corp–owned regional media did want some of the $8 million allocated to help employ trainee journalists, so for that part of the Xenophon deal the criteria became convoluted.

Taylor argues that if the package were really intended to encourage more local journalism, there were good arguments for including the Guardian Australia, which employs eighty people around the country and reinvests its revenue in Australian journalism.

The Guardian Australia has undoubtedly been a significant addition to the local media landscape. Apart from the number and calibre of journalists it employs, and the number of Walkley awards it has won in the short period since it was created in 2013 (seven, according to Taylor), it is an openly left-of-centre publication that will be attractive to some readers and the reverse to others. Its political stance undeniably puts it at odds with the Coalition government. Equally important, the Guardian Australia ranked sixth on the Nielsen top ten news websites in June 2017, ahead of both the popular Melbourne Herald Sun and the Melbourne Age, which is historically the home for left-of-centre readers.

Popularity is noticed by politicians; so, too, is journalistic clout. The Guardian Australia has published numerous articles that have earned the enmity of the Coalition, beginning with revelations in 2013 that Australian intelligence agencies looked to tap the phone of the Indonesian president and his inner circle. In other words, the detail of the changes reveals another sorry chapter in the history of media legislation.

The federal government certainly had difficult public policy dilemmas to contend with, and it is rarely easy to secure clear support for legislation from any commercially competitive industry. The legislation could well achieve some good, and its measures to assist small and regional and rural publishers are welcome, but its provisions are too narrowly drawn. They favour existing mainstream commercial media over new entrants, they punish an influential outlet that is seen as an ideological enemy, and they fail to take advantage of good ideas being aired to stop the erosion of public interest journalism. When governments and big media companies dance together, the picture isn’t pretty. ●