The latest issue of The Works, the quarterly news media audience report produced by NewsMediaWorks, is out now, featuring insights from Australia’s largest path-to-purchase studies, and lots more. Follow the links below to read other sections in The Works Q3 Quarterly Report: Section 1: Multiplatform Section 2: Print Section 3: Digital Section 4: Regional Section 5: Community Download as...
Editorial by NewsMediaWorks CEO Mark Hollands
Our politicians have been pondering the future of media regulation from the comfort of their ivory tower, wringing their hands no doubt about Murdoch domination, almost oblivious to how local media is in a commercial pitch battle against American companies.
The likes of Google and Facebook – unhindered by domestic regulation – are doing more to threaten diversity of quality journalism and opinion through their own commercial success than a Murdoch or Packer might ever have achieved back in the day.
These global tech platforms are not just threatening the established media channels but are likely to crush the media agency model too – a reality long acknowledged by the business leaders of that sector.
Media reform that would free local companies from arcane restrictions, such as being banned from owning a newspaper, radio station and TV station in one city – the so-called two-out-of-three rule – will come far too late. Already, hundreds of jobs have been lost and journalism diminished from the CBD to the country towns.
While regulation has strategically hampered local media owners, foreign companies have come into the market unfettered and done incredibly well.
Their success isn’t the problem – it’s the regulation that restricts the choices of how any of our local media companies might respond to these behemoths.
For politicians to be sitting in Parliament House and still be banging on about this stuff is ridiculous.
Fairfax Media CEO Greg Hywood has already stated that reform is too late. He told the Environment and Communications Legislation Committee late last month that regulation was a disincentive to invest and it inhibited his ability to compete.
Indeed, his company goes as close as any to breaking the 2-outta-3 rule – it owns metro papers, a majority share of a national radio network and is a JV partner in a Video-on-Demand service, Stan. Others, such as News Corp, also have interests across the spectrum.
Mr Hywood observed overseas competitors were not hindered by the restrictions placed on Fairfax, which invested in local content and journalists.
“Traditional publishers need to compete as well as they possibly can for a cut of the advertising pie, and at the moment they can’t. It’s as simple as that,” he said.
It is as simple as that.
In New Zealand, Fairfax and NZME (formerly APN News & Media) are pushing for a merger to simplify their commercial narrative and thus maximise their ability to compete against Google and Facebook, while publishing and broadcasting as efficiently as possible.
The Kiwis’ competition watchdog is pondering what this might mean for the nation. Hopefully, it is also considering what might happen if no merger occurred – two sets of infrastructure and costs battling for market share against global search and social solutions. Instead of one (hopefully) strong local media entity, they’d end up with two potentially dying the death of a thousand cuts.
Other media moves are in play. Still in New Zealand, Vodafone and Sky TV are seeking to link arms while in Australia, News Corp wants to snap up APN’s regional newspapers for a snip of $36 million.
Investment house Morgan Stanley has found that in the first three months of this year, 85 per cent of all new digital advertising revenue in the US went to Google and Facebook. It predicted some 40 per cent of all spend in Australia would line the pockets of global media companies.
It’s scary stuff. Not just for content creators, or media agencies but society as a whole.
For those who argue for a free market, the issue is not the millions of dollars being hovered up by these content platforms but the need for politicians and competition watchdogs to understand the severity of the situation.
The impact on local media and its suppliers is dire and they must be unshackled so they can have a fair fight.