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21 December 2001 New media, old claimsFor the last decade, sections of the major media have advocated relaxing media-ownership rules on the grounds that the ‘New Media’ has increased source-diversity. Supposedly, the Internet and cable networks—with video-on demand, Internet radio, and news-informational web sites accessible worldwide—provide the public with the required range of media influences, and this is enough to preserve our democracy—it is said—without placing ownership restrictions on the major mass media companies. Following the Coalition win in the Federal Election, there is a wave of media sentiment promoting the idea that the government should lift both the cross-media and foreign-ownership limits, and allow Australia’s mass media moguls to engage in takeovers in publishing, and expansions into the electronic media. I must admit I have never understood where the claimed public benefits lie in allowing takeovers of the mass media. My impression is that the gains are entirely financial, and only made by the media moguls and their shareholders. Even here, the benefits are minor. Economic synergies may result in corporate efficiencies and some improvement in the quality-of-governance, but I can only see minor efficiency gains made by merging news gathering and advertising sales departments, and none at all in production. Much of today’s newspaper and broadcasting content is outsourced from wire services or global distributors, and much of the rest is rehashed or rip-and-read local press releases. News ‘products’ need to be tailored for both the medium and the audience, so there is not likely to be much in the way of synergy here. Advertising sales and cross-media promotion may produce synergies in a minor way, but even this is doubtful. And, if all the major players in any market are of roughly the same size and have the same range of outlets, then all competitors have the same synergies so any market advantage gained by owning different forms of media outlets are effectively countered by the competition.
Then there is the claim that media takeovers increase ‘competitiveness’—using this term to mean ‘in competition with overseas threats’. If you believe that competition is global and exerted on Australian media from outside, then ‘increasing competitiveness’ means permitting, indeed encouraging, domestic domination by one or two big corporations. But this, of course, means reducing domestic competition. A third angle is to play on the idea of a ‘New Media’. Yet despite the Internet and progressive globalisation of telecommunications I do not see more diversity in the media today; I see less. The same processes that encourage the exchange of private ideas—via e-mail, chat rooms and Internet forums—also increase the availability of low cost syndicated journalism. And so in the major newspapers, articles from the UK magazine The Economist and The New York Times occupy editorial space once filled by Australian commentators. If you relate data bandwidth to economic and social benefits, you find that services such as Telex and e-mail, with the smallest of data requirements, provide the most benefits. Only a few people benefit substantially from broadband technologies, and most of those benefits are entertainment in nature. So the Internet and the services it provides have hardly made a dent on media diversity as it applies to political and economic information, opinion, and substantial content of other kinds, because they substitute mainly for Telex, telephone and letter-writing rather than newspapers or television. Without the vigilance of the Australian Competition and Consumer Commission (ACCC) the range of options for expressing opinion in Australia would be much more restricted than it is today. The claims of increased competition and diversity, said to result from relaxing the rules even further, appear to be aimed squarely at boosting the power of the incumbents while creating a self-regulatory environment with less need for Professor Alan Fels. Moreover the mass media does not just present news and views as ‘evidence’; it also sets and reinforces public attitudes by selection, repetition and shaping. For example, in the recent Tampa episode, the news outlets might have called the boat-people ‘emigrants’ or ‘refugees’ rather than the term ‘asylum-seekers’ that they ultimately settled upon. This colouration effect in reporting is diffused subtly and without design, and is not dissimilar to the media’s agenda-setting role. When cross-media synergies reduce the number of news sources, these floods of pre-digested attitudes can only get worse. Such problems are not solved by increasing the number of channels while decreasing the number of information sources. We must reject the correlation that is often drawn between the number of media channels and the degree of diversity.
An inescapable fact about advertising-supported mass media is that each new channel dilutes the funding available to the others—therefore each has less to spend on content, and more reason to rationalise news sources and promote ‘common-denominator’ programming. If we relax cross-media ownership rules at a time of digitisation it will mean that the increased number of broadcast channels will both scavenge the revenues available to each for the production of quality programming, and simultaneously scavenge the multimedia companies’ other media revenues. If new advertising funds are to flow into broadcasting, this can only come from newspapers and magazines. The most expensive (outright and per-viewer) English-language drama and documentary programs shown on Australian television are those produced domestically. In a deregulated market, these will be the first to disappear when profit margins decrease. Foreign-sourced media ‘products’ cost almost nothing to replicate after the original production process is complete. So once they have been utilised in their home market, television programs and newspaper and magazine feature stories are highly tradeable, zero-cost goods which can be dumped on any market—at a marginal price—and still generate additional profits for the originator. North America—with its 300 million audiences, multiple channels, capital resources and Hollywood—can reach break-even within its own territory for almost any high-quality series or blockbuster movie. The price then charged to Australian networks for replay rights bears no relation to the original cost of production—or the cost of production of anything similar in Australia. Except for news, current affairs and sport, serious local production on commercial networks depends for its survival entirely on content rules, subsidies, or import restrictions. Which leads to an inescapable conclusion: without substantial government intervention or massive subsidies (both totally unlikely), merging broadcast media categories (Pay and Free-to-Air) or removing cross-media and foreign-media limits will destroy much chance of high-quality Australian production. With the political clout of the media moguls, governments will not sustain rules for Australian drama content when the profit margins that once supported these pricey programs have disappeared. For political reasons they will not abandon the requirements for a category called ‘Australian production’, but they can allow the rules to be progressively bent to include material such as ‘Australia’s Funniest Home Videos’ and ‘Big Brother’. The obvious decline in Australian domestic television quality over the last few years has been due to this effect following the introduction of Pay TV, which diluted Free-to-Air (FTA) audiences and reduced advertising revenues while raising costs. Australian content rules were included in the new Pay TV licenses, but these turned out to be a joke. The discrepancy between content requirements on these two parallel (and competing) commercial television services is now the source of much political lobbying.
This is important because the first cross-media ownership restriction to disappear will almost certainly be that between FTA and Pay TV, perhaps with datacasting thrown in for good measure. But the reality of media ownership in Australia is that for this to happen, the Murdoch clan must be given access to television, and the Packer clan must be allowed to buy Fairfax. Both the Labor and Liberal Parties, in government and in opposition, know this is the inevitable outcome of relaxed cross-media and foreign-media rules. The only alternative is for the government to completely reform the whole area and allow numerous players to enter all markets, something no political party in Australia is likely to do for fear of the hostility of media moguls deprived of their goldmines. For instance, television channels 12 to 27 in the high (and best) end of the VHF spectrum have never been allocated in Australia. They are locked away by spurious claims of ‘defence requirements’ in a deliberate ploy to restrict the number of channels available for newcomers to compete with existing commercial operators. Moreover, channel availability is only ever a problem in high-density regions such as greater Sydney (including Newcastle and Wollongong) and the Melbourne-Geelong axis, where spectrum must be shared between two or more major transmission sites. This still leaves the smaller capitals and rural and regional areas with dozens of unused channels available for FTA, Pay, or datacasting. However ‘equalisation’ rules are used to block access to these wasted channels. Even in Sydney, 12 potentially available UHF channels are reserved for translators, to fill shadow areas in the normal television service area. These could easily be serviced by a Community Antenna TV service, with cable delivery to a few thousand homes in shadow. This would be a cheaper and better solution, but it would also transfer 12 now-unused TV channels back to the ‘available’ category. This has never been allowed, so the Spectrum Management Authority can claim there are no spare analogue channels available, only the existing five. Yet cities like New York are able to allocate twenty or more TV channels in the UHF-VHF bands. The years of allowing only a fraction of the available television spectrum to be used is now facing a much more serious crunch. Digital transmission, whether down cable or via the ether or satellite, allows approximately four times the number of channels to coexist in the same available bandwidth, and it simultaneously allows the use of adjacent frequency bands. In combination, the number of standard channels that can be carried has suddenly jumped by five to ten times. The government and operators have tried to hold back the tide of competition by insisting on High-Definition TV as the primary standard (it fully occupies one analogue channel). The government has also legislated to preserve the existing oligopoly for many more years, using as its excuse the enormous cost of digital conversion. But even that mogul emperor is strutting around with no clothes.
In terms of overall revenues and costs, the introduction of digital television transmission is not highly significant, when compared to replacing studio and production equipment and the sheer cost of program production. The claim that digitisation is making program production more expensive, although true for High Definition equipment, is actually not sustainable. In fact, the progressive digitisation of production in both television and radio occurred many years ago—mainly because digital recording and post-production techniques preserve the technical quality of sound and picture, and make complex program production cheaper. The personal computer is now the key production-editing tool, and good quality news and current affairs can be sourced from camcorders that are generally held to be ‘consumer’ products. The real value to be gained from digital television (transmission, as distinct from production) is therefore inproviding more channels. Yet even with existing analogue television, we have never used more than a fraction of the channel numbers available. So the social benefits must came from using the current transition from analogue to digital to correct the structural defects that have arisen in our old broadcasting system, and to free the sector from the constraints imposed by licensed monopolies over cables and restrictions on the channels and frequencies made available to terrestrial broadcasters. We need to face the fact that the restriction on competition has always been engineered deliberately by governments; it was never imposed on us by technical limitations. When a set-top box is required for digital conversion—as it will be for the next decade whether standard or High Definition is viewed—there is absolutely no reason to maintain the distinction between advertising-supported FTA and Pay TV, nor is there any reason to only permit Pay TV to be sold in multiple-channel bundles. Modern set-top boxes can record payment on single channels by the minute, so broadcasting services can be sold on an impulse-buy basis like newsagent publications, with FTA and Pay alternating on the same channels. There is even no real reason why the company that programs a channel must own the channel. A couple of spare channels could be made available for, say, seven small programming companies per channel, each holding the broadcasting rights for one night. We can go even further with this idea and suggest that, perhaps, one company could contract for the children’s television hours from 4pm to 6pm and another to run adult movies after 10.30pm—or even a sold-by-the-hour channel for Australian film producers to show their movies without the middle-man. The set-top box, with its smart card based ‘conditional access’ functions, finally severs any need for programming to be linked to monopoly rights over part of the radio spectrum, or to the legislated rights to utilise a publicly-owned street cable. This is one area of media controls where deregulation certainly has a place. Our current approach insists that a specific technique of collecting revenues (Pay or advertising) is only permitted in combination with a specific delivery mechanism (radio, cable, satellite). This makes no sense at all. All Australian states have dozens of spare broadcast channels that could be used for Pay TV, if the politicians wanted to provide these services. Datacasting is probably better confined to the radio frequencies, and there are dozens of these available also. So before the nation begins to spend billions of dollars in set-top boxes to bring digital television into 7 million homes; before we begin to look at the social value of wide-screen (as distinct from High Definition) television sets; before we allocate channels for datacasting; and before we try to predict whether radio internet services are commercially viable, or whether they should be open access—and if it so, which parts of the spectrum should be used—we need to open up the whole area of media regulation for serious public debate. This is what is missing here to date. What has passed for a debate has primarily been corporate lobbying of compliant government and opposition parties, accompanied by massive dollops of technical misinformation and spurious economic claims. The media has faithfully reported these fictions as fact. But as Mandy Rice-Davies once said: ‘Well they would, wouldn’t they?’ And despite the political predilection for taking the easy way out, there is little value in sending off a fact-finding mission to discover ‘World’s Best-Practice’, and copying that. The rest of the developed world has had the same historical evolution, and it often has the same media companies trying to maintain their economic advantage. Stewart Fist writes the Crossroads column in The Australian. He was the founding head of continuing and distance eduction at the Australian Film, Television and Radio School. |
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