Media Reform – The solution to an industry in crisis?

2 October 2017
Nick Xenophon speaking outside parliament. Credit: Diane Bell
Nick Xenophon speaking outside parliament. Credit: Diane Bell

The Federal Government’s bill for media reform that abolishes the longstanding 'reach' and 'two-out-of-three' rules has opened the doors for a swag of mergers and aquisitions as media owners consider their options.

The amended legislation passed the Senate on September 14 with 31 votes to 27 after a deal made with Senator Nick Xenophon secured an innovation package to assist regional and small publishers.

But critics of the reforms have argued these changes do nothing to solve the financial woes of an Australian media sector whose economic model is collapsing. 

Major Changes

The Broadcasting Services Act 1992 was created before the widespread use of the internet but print, radio and television are no longer the only source of news.

In today’s digital age people are accessing news in more ways and on mobile devices. The changes are designed to reflect this.

Previously, under the two-out-of-three rule a single person or company could not control more than two media platforms. For example, they could control television and print but not radio. This allowed for diversity within the media region. 

After the amendment a single person or company can control all three forms of traditional media within a radio licence area. This means that there is potential for only one media voice in any given area. 

Labor and the Greens opposed scrapping the 'two out of three' rule, arguing it would lead to a higher concentration of media ownership. 

A similar concern exists in relation to 75 per cent rule. Before the amendment a single person or company could only control a broadcast licence that reached 75 per cent of the Australian population. 

Now a single person or company can control television licences that cover the entire Australian population.  The concern here is that so called 'local' news will actually be produced in regional centers and will not properly cover local news and issues.

How will changes to Australia's media laws impact on the diversity of the ownership of country's media outlets? Credit: Narelle Johnson. Data Source: Broadcasting Legislation Amendment (Broadcasting Reform) Bill 2017

Safeguards

To counter the abolition of the 'reach' and 'two-out-of-three' rules, a new framework for local television programming in regional Australia will also be established.

Legislation will set a minimum amount of local programming per week which must be broadcast by licensees based upon a point system.

The incentive to broadcast a locally produced product will be built into the points system, the more local content provided the higher the points.

The Long Road

Media reform in Australia has had a rough and rocky road with the Turnbull government lobbying hard to secure the support of minor parties.  

In August they secured the 'conditional' support of Pauline Hanson in exchange for a 'competitive neutrality inquiry' into the ABC and $12m in funding for community radio.

It took longer to gain the support of Nick Xenophon, who pushed for a more rounded package to support regional and smaller publishers, and which seemed to be gaining support until it stalled ahead of a Senate debate.

With the government pushing ahead with the media reforms, the proposal made by Nick Xenophon was accepted and the amendment to the bill was made. 

There are three parts to the Xenophon package:

  • The establishment of a one-off Regional and Small Publishers Innovation Fund involving $16.7 million worth of grants a year over three years, from the 2018/19 financial year, totalling $50 million. This will be overseen by the Australian Communications and Media Authority with input from bodies such as the Press Council.
  • Two hundred cadetships will be available for funding over two years, with 100 cadetships available each year. Eligible organisations would be able to apply for a wage subsidy or grant of up to $40,000 per cadet.
  • Thirty university journalism scholarships per year will be made available over two years commencing in 2018/19, with each scholarship valued at $40,000 and able to be expended on related expenses including tuition fees and accommodation costs. An additional 60 regional journalism scholarships will be available to encourage journalism in regional areas.

Innovation or Band Aid?

Rudi Maxwell, editor of the Koori Mail, the largest Indigenous owned and focused newspaper in Australia said the cadetship program would mean that they could employ and train another young journalist.

“I think the deal will help some regional and remote media organisations," she said.

"But I don’t know that - and this doesn’t apply to us - in the circumstances where you have a large corporation able to control commercial TV, radio and print, that a smaller independent media organisations being supported to employ a cadet is going to make an enormous difference.” 

With ongoing cuts to jobs in the journalism sector including at Fairfax, News Corp and the ABC, there is concern that the newly trained journalists will not have jobs once the government subsidy runs out.

The Conversation editor Misha Ketchell said the cadetships will provide a "valuable opportunity" for young journalists.

"What happens after that is anyone's guess. The media world is changing so quickly, only the deluded would pretend to know what is coming next.” 

In an interview with ABC Radio, Greens leader Richard Di Natale argued that there is no point training cadets if there are no jobs for them. 

The Elephant in the Room

However, the main problem facing Australian media companies is the disintegration of their advertising-based business mode, as US tech giants Google and Facebook gobble up advertising market share.

In 2016, an industry estimate put Google and Facebook's combined share of global advertising revenue at 70 per cent.

That is a huge amount that is taken from media companies in the Australian context and, as has already been seen, when cost-cutting is required the jobs of journalists are the first to go. 

The Media, Entertainment and Arts Alliance, the journalist's union estimates that, since 2011 more than 2000 journalism jobs have been lost.

According to journalist Ben Eltham, the Australian Competition Consumer Commission inquiry into the impact of the new digital environment on the media – forced on the government by minority parties to secure the media ownership changes - should have preceded the discussions on media reform, but did not. 

Eltham hits the nail on the head in a recent piece for New Matilda:

But the bill does nothing to address the basic and insoluble problem that is destroying the Australian commercial media: the disappearance of advertising, their primary source of income.

The bill won’t achieve any of the aims advanced for it by Communications Minister, such as propping up the sustainability of big media companies. It can’t do that, because ownership is not the main problem facing the Australian media.

So, Australia has a new set of reforms that do not address the main problem facing the country's media industry.

It is hoped that the current Senate inquiry into the future of journalism, which will release its final report on December 7, will shine some light on a potential solution, but until the issues related to loss of advertising revenue are faced, it is doubtful that a way forward will be found.