Yes Minister The proposed New Media Framework for Australia is a very brave attempt by the Communications Minister to reform the media industry.
The big surprise was the Minister enabling the commercial free to air television broadcasters to provide a second digital channel each from 2009. This approach is similar to that proposed by the Cox Media submissions, sponsored by the Australian Association of National Advertisers, to the DCITA Digital Reviews advocating multichannelling for the FTAs. In presenting my recommendations to the Minister I pointed out, as I have done publicly on many occasions, my belief that FTA multichannelling was the only practical way to drive digital penetration in Australia as had happened in the UK with Freeview. The Minister was to travel to the UK soon after and I am sure she was impressed by the Freeview story as presented by the UK regulator Ofcom. Though Senator Coonan did not move for as many new multichannels in the short term as I advocated, her policy would lead to a doubling of the number of commercial networks, the first increase in channels for over 30 years.
This will be an amazing achievement for Senator Coonan if it survives what I would expect to be determined opposition by the Packer interests in particular.
The proposal to relax foreign ownership and cross media rules had been widely discussed and may have to run the gauntlet of a few disaffected Senators. It will definitely lead to a further concentration of media ownership but in reality can the Packer or Murdoch exert any more political influence than they do already.
The Murdoch Factor
In a recent visit to Australia Rupert Murdoch told reporters that the government should “Tear up everything and make it an open go, otherwise leave it alone.” Though one can totally agree with his rhetoric that the Government protects the three commercial TV networks from competition the only competition he encourages is a fourth commercial network. The idea of multichannelling by either the existing FTAs or using the spare spectrum that might support at least 10 channels he opposes because that would provide competition to Foxtel in which he holds a 25% interest.
Spare Spectrun
In its efforts to protect the existing FTA networks by not allowing a fourth commercial network or any datacasting service that looks like a FTA channel, the Government seems to be in some confusion over the spare spectrum. The Minister spoke of not allocating two unassigned digital channels for a fourth commercial network. Even in analog the two 7MHZ channels could support two new commercial television networks but as they are going to be digital the spare spectrum could support up to 30 services according to the minister. To use the spectrum for transmission of existing FTA channels to mobile or to limit the genre of services permitted just to protect the FTA and Pay TV industry could be a waste of valuable spectrum that could provide alternative services to the 75% of Australians who do not get Pay TV.
New Media Framework – Winners and Losers
Winners
The Prime Minister – a win-win situation. If the legislation goes through he has delivered as requested by the industry, if it fails in the Senate then it was the fault of those pesky senators and the inability of the media industry to convince them to support the changes.
The Minister – if the legislation passes Helen Coonan has been rewarded for all her hard work and tenacity. If it fails then she is out on a limb as was her predecessor, Richard Alston.
Murdoch – despite a smoke and mirrors campaign advocating a fourth commercial television network and failing he will be able to buy one of the commercial television networks as long as he gets it past the ACCC. Also Murdoch is a winner by preventing wide scale FTA multichannelling threatening Foxtel, getting more sport for Foxtel with the “use it or lose it” system and more profits for his highly profitable sports channel supplier with PBL, the Premier Media Group.
Packer – the ultimate winner, he can either sell Nine or buy Fairfax and his FTA asset is protected from a fourth commercial channel, FTA multichannelling or serious datacasting.
Stokes-partial victory with one additional channel from 2009. He could always sell but highly unlikely now with Seven rating well.
TEN- choice of selling freeing up capital for the Canadian owners or perhaps merging with Fairfax and/or a radio network.
Foxtel- hopefully the relaxation of sports anti-siphoning regulations will lead to greater subscriber penetration.
Regional TV operators- opportunity to sell out and realise the capital value gained from aggregation.
Losers
Murdoch- the Government has continued to protect the incumbent television network owners against a fourth commercial channel as proposed by Murdoch.
Foxtel-if increased sports programming does not generate increased subscribers but only leads to increased programming costs.
Seven-strongly sort a position in multichannelling to compensate for not being in Pay TV
Public Interest
The public has been deprived of choice - multichannel environment with a wide choice of programming as exists in the UK and other countries.
Media Interviews
I have had a very busy couple of days with interviews on ABC National, ABC AM, SBS TV News, Seven News, Sydney Morning Herald, The Age, Australian Financial Review, B&T, AAP, Bloomberg and radio stations in Perth, Cairns, Canberra and Sydney
