Thursday, September 15, 2011

The Media Inquiry

Senator Conroy's media inquiry will at least go at least part way to the issues that I blogged recently were relevant.

It clearly addresses the question of complaint mechanisms. Andrew Bolt was actually right to note that not everyone could ring John Hartigan, like the PM could, to complain about the Milne article. Someone did pose though the question of whether the ACMA is any less toothless than the Press Council. At least we can frame the question "what would a well functioning complaints system look like" (might take some heat off telcos for a while too!)

The second ToR addresses the question of market structure but in a roundabout way;

The impact of this technological change on the business model that has supported the investment by traditional media organisations in quality journalism and the production of news, and how such activities can be supported, and diversity enhanced, in the changed media environment

Michelle Grattan has criticised the ToR for the fact that they don't address "the high concentration of Australian newspaper ownership." But that concentration is in part driven by the "business model." In fact to the <>last print inquiry twenty years ago the">News Ltd submission made the compelling case that the future was for only one newspaper in each city - a forecast that still looks increasingly likely for Sydney and Melbourne and applies elsewhere already.

As Wendy Bacon has commented;

It’s an opportunity for those who allege there is systematic market failure to deliver comprehensive news and current affairs from diverse view points to come up with evidence for that, in the way that Robert Manne has done in his Quarterly Essay. (must go read that now)

Malcolm Turnbull scoffed at the idea the inquiry could do anything to help make the business model for newspapers more sustainable.

However it is abundantly clear that shared printing facilities will go a long way to help the cost structures. There is a real difficulty though with the private incentives (each thinks the other will be forced to close first), and there are potential competition issues (the ACCC might view it as collusion, agreement very hard to write).

Government could intervene by (a) creating an "access right" to printing presses for third parties if you control over a threshold of readership in a market and (b) creating some explicit rules for the management of shared print facilities.

Such a proposal would change the incentives on voluntary co-operation and remove the impediment.

The same is true of a whole host of other savings by sharing. Chris Anderson highlighted the cost of duplicated TV news feeds in his Andrew Olley lecture. He reported on a study conducted by Kevin McQuillan from RMIT that found;

After reviewing the content of the news programmers, (we excluded SBS - as that is often not a typical domestic rundown), the report concluded:
1. That competition, fierce as it is, is often failing to produce significantly different news programs;
2. 'exclusives' rarely lead the network bulletins, or were good enough to be placed in the top four stories.
3. There is questionable value in the current system of each network sending a reporter and crew to the same event for what will inevitably be the same story.

It is interesting to note that the vertical integration of news media recently saw the disbandment of the New Zealand equivalent of AAP. The history of AAP itself is interesting having been formed as a cooperative of a vast number of news organisations to provide common news - especially from overseas. Today it is owned by just the three remaining big print players.

It is interesting also to note (as detailed by Ken Inglis in his two volume history of the ABC) that the ABC began its radio news services by simply reading the daily newspapers and then subscribing to the AAP feed. The newspapers fearing the competition denied the ABC the access thus triggering the decision by the ABC to deploy its own network of international correspondents.

A lot would happen to the media business model if this process were reversed, that the ABC was to take on a role as not just public sector broadcaster but the "official" newsagency and that its raw footage of anything it covered was available to other "subscribing" news organisations. (The subscription model needs to be well designed - but that's an economics blog post).

So we are going to address in more detail the right questions. The ToR also neatly explain that the media inquiry works as a sort of mini-inquiry within the Convergence Review with the final report of the CR to include the outcomes from the media inquiry.

And a final note, UNSW's George Williams backed up in the AFR this morning something I tweeted yesterday. The print media isn't a formal federal power, but the judgement in the Work Choices case indicates the Feds could easily use the corporations power to implement media regulation.

Novae Meridianae Demetae Dexter delenda est

No comments: