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June 21, 2003

Media Ownership: shooting from the hip

I read this by Ken Parish on the proposed changes in the bill on media ownership that has just come before the Senate.

Ken is in a bit of an irritable mood these days. He says:

"I wonder when the lefties are going to wake up and start focusing on this vital issue instead of carrying on with an interminable and largely pointless carping monologue about Iraq and WMD."

(The Iraq stuff is about accountability Ken, and the making sure the Senate does its job as a countervailing power to a dominant executive. Democracy Ken democracy.)

Well, I've been keeping a bit of an eye on this media business myself because it also has to do with democracy. Tim Blair, of course, only sees the media only in terms of the market not democracy. Tim Dunlop rightly picks him up on it. But he reads the negotiations around Alston's legislation as bad news with only The Sphinx standing firm. This article in the Sydney Morning Herald by Geoff Kitney seems to be what Ken and Tim are working off. Farifax is runnning hard on the issue.

However, I thought that Ken's post was over the top. Mind you, I have another bout of the flu, so I'm not seeing things straight and my mind goes blank every now and again. So Ken's post could be just the public mask worn by Ken --you know stirring things up etc. by being outrageous. But then again it is a text that has its own autonomy irrespective of the author. The author's intentions are irrelevent. Its the text that matters.

So what does the text say? The key issue in the media ownership debate is nailed by Ken:

'...this should not be seen as a left-right issue. Freedom of speech and diversity of viewpoint are core liberal-democratic values irrespective of one's views on social democracy versus "market forces"'.

Well said. It is somemthing that those reductionists who assume that Australia is just the free market, then write about society and politics in liberal democracy, are blind to. They have no conception of civil society or deliberative democracy.

It was this paragraph in Ken's text that struck me:

"Communications Minister Richard Alston is on the verge of clinching a deal with the 4 Independent Senators which would see the effective abolition of Australia's current foreign and cross-media ownership laws, albeit with some minor concessions to the Independents which sound on their face to be almost meaningless."

Almost meaningless? Let us turn to a journalist who keeps a close on the political happenings in Canberra, is respected by the politicians, works hard and is in daily contact with the independents. That's Michelle Grattan. Not the headline of her text---Alston's media dream hits Senate reality. That is a very different interpretation to Ken's.

Michelle says about the substance of the demands made by the quartet of Indepndent Senators:

"The Government has already agreed to insert stronger local news content rules for regional TV broadcasters, and to extend to all markets a prohibition on owning a TV licence, a radio licence and a newspaper in one market. Under discussion is a demand for a specific amendment to ensure no one newspaper proprietor can have more than one metropolitan paper in one capital city."

Now that means something in Adelaide. It means that Channel 7 10 and 9 must have local news content rather than running news out of Melbourne with one regional story for local colouring. Giving our federal democracy a hand I would have thought.

And the extension of the prohibition bit ensures regional diversity in places like Eyre Peninsula, the Riverland or Mt Gambier. Regionalism is important in a globalised world---as Ken well knows being in Darwin.

And the specific amendment to ensure no one newspaper proprietor can have more than one metropolitan paper in one capital city? Well Ken, that means that in one newspaper towns, such as Adelaide, there is a future protection for a second newspaper starting up. As you accurately observe:

"The cost of media technology and the ability of large media proprietors to achieve economies of scale by leveraging content across a wide range of media formats mean that this is an industry with huge entry barriers and therefore extremely susceptible to monopoly (or duopoly) control."

So why do all the hard yards only to have Murdockh come and gobble you up? That little amendment prevents Murdoch from taking over the startups once they are up and running. It actually fosters competition and protects cmedia diversity.

In the light of these diversity considerations that foster regional democracy Ken's judgement, that:

"Scrapping of the existing rules would almost certainly mean that all electronic and print media would rapidly become completely dominated by just 2 major players: Packer and Murdoch"

is too one sided an interpretation. Ken's text implies that the Senate is buckling under the demands of a dominant executive to "deregulate media ownership almost completely," rather than using its power to enhance media diversity.

And that is not all. Ken's a'lmost meaningless' remark is misleading in relation to the ABC. Ken rightly says:

"In this context, the ongoing campaign to abolish or "gut" the ABC by the Tories and their pundit and blogosphere apologists takes on a particularly sinister tone. This situation exposes the neo-liberal "invisible hand" of the market mantra for the pernicious nonsense it is."

So what are the quartet of Independent Senators doing? Lets turn to Michelle Grattan who says that some of what Senator Lees wants for the ABC must stick in the Alston craw.

'She insists the national broadcaster has to get more money. "If Alston won't deal on the ABC, there'll be no deal," Lees said. "If the minister is not prepared to acknowledge the need for extra ABC funding we won't be proceeding."

She wants not only the extension of ABC news radio's coverage from about 70 per cent to more than 90 per cent of the country - which Alston is thought likely to give - but also extra funding so the ABC can restart its transmission from Townsville, where its station is mothballed, and can restore and extend its digital multichannelling, in particular resurrecting ABC Kids and Fly TV.'

Sounds like trying to defend the public broadcaster to me. That doesn't strike me as "almost meaningless."

Posted by Gary Sauer-Thompson at June 21, 2003 02:25 PM

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I might have shot from the lip too, but I'm still inclined to agree with Ken's pessimistic take. So far as Lees's position goes, this seems like a hell of a way to get more funding for the ABC!

Posted by: Tim at June 21, 2003 02:32 PM


Most capital cities have only one significant daily newspaper anyway, so a prhibition on owning more than one is irrelevant.

Similarly, insisting on local news content when almost everything is owned by just 2 proprietors hardly provides any meaningful diversity of viewpoint or emphasis. This is mere window-dressing designed to gull the punters into thinking it's not a complete sell-out.

As for Meg Lees holding out for more ABC funding in return for her vote, it brings to mind her deal for the GST as Dimocrat leader, where she was comprehensively outsmarted by Costello and never actually got many of the trade-offs they promised. Even if ABC funding is increased in the next budget, what's to prevent them taking it away again in the one after? And are you seriously suggesting they wouldn't? It'd be just another "non-core" promise.

I think Michelle Grattan is too sanguine by half (as are you).

Posted by: Ken Parish at June 21, 2003 02:38 PM


How else do you do it as a Senator?

(This has been quietly going on for some time with a lot of briefings and negotiations etc So they are informed. Its the media who has been quiet and not doing its job).

As a Senator you negotiate and try to use whatever power you have got to cut as good a deal as you can get in the particular circunstances.

You do the best you can with what you've got.That is the realpolitik of liberal democracy.

If that is not enough, then the Senate needs even more power.

And the media needs to become more self-reflexive and address the way it is failing to act as a watchdog for democracy.

Posted by: Gary Sauer-Thompson at June 21, 2003 02:51 PM


Some further thoughts on your fond imaginings about a possible second newspaper for Adelaide (possibly owned by a Spanish mogul). A few years ago the Peter Isaacson group (not without resources and financial clout) tried to start up a Sunday newspaper in Darwin, at a time when the local Murdoch monopoly didn't bother to publish one at all.

Murdoch immediately:
(a) suddenly started publishing a Sunday paper the week before Isaacson was to go to press for the first time;
(b) delivered their newspaper free of charge to every home in Darwin until Isaacson went broke and withdrew; and
(c) approached every advertiser in the Isaacson paper and offered them spots for half the price in the Murdoch paper.

The Isaacson paper lasted 6 months before they withdrew licking their wounds and with huge losses. It was rumoured on good authority that Murdoch had bankrolled his local Darwin subsidiary to the tune of $10 million to do whatever it took to send the competition broke. When you have 2 proprietors with the power of Murdoch and Packer, even now let alone after Alston's "reforms" go through, any prospect of new entrants to the marketplace (except in tiny niche markets) is fanciful.

Posted by: Ken Parish at June 21, 2003 02:58 PM

sorry. I beg to differ on this.

1. From an Adelaide perspective it is significant that Adelaide--unlike Sydney and Melbourne--has the Advertiser and nothing else. Another newspaper would make a difference, as it can help to counter the lap dog.

2.local news content is important. The states have an existence of their own. Australia is just not Canberra, Melbourne & Sydney. And point I above counters the view that there are only two proprietors. If there are only 2 then you bring in another one. The media lwas prevent that and so they act to prop up the Murdoch monopoly.

3.As for the Independent Senators etc.Wrong target.If the disparate group of 4 Senators are engaging in negotiations, then it means the ALP has dealt itself out.That means no money for the ABC. This way there is something --and it has been turned into a fight around public broadcasting. They have made this an issue. The Senate is doing its job.

4. Here you have 4 Senators fighting to give the ABC want it needs--extra money--and to increase the powers of the ACCC. And you kick them for it? Funny sort of politics.

5.Shouldn't the politics be directed at finding suitable ways to ensure that the increased funding for the ABC remains so that it is can grow and change as a public broadcaster instead of being slowly starved.

6.The issue is about finding ways to make the executive more accountable and responsible by constraining to power to do what it dam well likes when it likes. On this issue you are blaming the Independent Senators for the Senate's lack of power vis-a-vis the Executive.

Posted by: Gary Sauer-Thompson at June 21, 2003 03:18 PM


re your new entrants post.
I do not disagree with your account at all. Given that reality how do you enter a regional market? It is strategic thinking not fond imaginings.

The proble with your account is that your example is not the only way to enter the market. Another strategy is suggested by your last words 'tiny niche market.'

1.enter the niche market in the capital city, or pick up some of the small regionals outside a capital city like Brisbane.

2.grow the niche market making sure you have the income flow to stay afloat.

3.put legislation in place to prevent Murdoch from taking you over.

4.make sure the ACCC has a covering brief to break up the anti-competition practices under the Trade Practices Act.

I do not see that this is fond imaginings--romantic dreaming---as you call it. It is governing the market so it works for diversity.

Posted by: Gary Sauer-Thompson at June 21, 2003 03:32 PM


To put it gently, you're being extremely naive. Both Packer and Murdoch maintain very large regional freebie newspaper empires precisely to ensure that no new entrant can succeed in achieving viability by the backdoor and eventually get big enough the threaten their capital city dominance.

Another real life example (one that's fairly often repeated throughout regional Australia). My mates Dawn Lawrie and John Berry started up the Palmerston Herald a few years ago (early 90s). Murdoch sent them broke by similar methods to those used on the Isaacson paper - drastically undercutting advertising rates to ridiculous loss-making rates for as long as it took to drive them out of business. Palmerston is Darwin's main satellite city and is growing rapidly, so a newspaper there was seen by Murdoch as a real threat to its monopoly. On the other hand, more recently an ex-Murdoch editor named Jack Ellis started the Litchfield Times covering Darwin's rural hinterland. It's rumoured Ellis promised Murdoch he wouldn't attempt to expand or move into the metropolitan market, ans so Murdoch has let him survive.

This is the way monopolies operate. Robber barons didn't die out with JP Morgan. It isn't Marquis of Queensberry rules. Moreover, quite apart from overt overbearing commercial pressure, there are the "natural" barriers to entry arising from the fact that Murpack can leverage content across a huge range of titles where a new entrant can't.

The bottom line? It IS fond imagining.

Posted by: Ken Parish at June 21, 2003 04:26 PM


The importance of the Senate when it comes to keeping the Robber Barons and their political servants accountable cannot be underestimated. Hopefully more and more readers get the opportunity to properly digest what Harry Evans has to say


This might be out of context, but this entry reminded me of Vaclav Havel and his observations about civic society...
(I believe, I promised, noncore promise, sometime ago to provide you with some bibliographical references in relation to Vaclav)

As a result, I am posting a link to his ideas:

http://www.nybooks.com/authors/207 Bibliography of books and articles by Vaclav Havel, from The New York
Review of Books ( as at June 2003)]

PS:BTW, I have not seen many links to Paul Krugman recently ...Paul wrote a thoughtful story in New York Times entitled: Who is accountable?

Posted by: Jozef at June 22, 2003 03:39 PM

Gary, listen to Ken, one doesn't really appreciate the power of a monopoly until exposed to all the horrible ramifications of monopoly. Simple things like being blacklisted. Imagine the only paper not accepting advertising, let alone letters to the editor, from those who criticise the Murdoch empire. How much worse would it be not being able to advertise your business in the paper or on the TV. These are the harsh realities of media monopoly! There are a lot of disgruntled AFL supporters who complain about Channel 9 televising the football since it was changed from CH7. Censorship is not far behind. Viva the ABC I say, and don't let the media magnates buy have any more than they have now. BTW Ken, Ellis has the LT on the market doesn't he ?

Posted by: woodsy at June 22, 2003 04:33 PM

I accept Ken's account. It is deadly accurate and I am not quibbling with Ken's very good description of the power of the media Robber barons.

But I do reject his strategy of the Senate saying no to more deregulation.The Senate is all we have got to help a liberal democracy stand up and resist the power of the Robber barons. So we should get behind them.

I also reject Ken's account that the Senate should not have ago at preventing Murdoch from destroying the Jack Ellis's of the world. Startups like the Litchfield Times should be protected from predatory behaviour and given legisative support to encourage them to grow from their regional base outside the metroplitan centres.

Ken calls this strategy naive. I reckon is a better way to go to increase competition than bringing another robber baron to counteract the two we already have; or sticking with two robber barons we have.

The key to my positon is the role that should be played by the Senate. What the Senate should be doing is putting pro-competition or anti-trust legislation into place; or bringing the media into the domain of the Trade Practices Act and giving the ACCC powers to intervene into the media marketplace to ensure that the Jack Ellis's survive and flourish.

So we use politics to shape deregulation so that the market actually does what it is supposed to do---encourage competin and a diversity of media players.

Posted by: Gary Sauer-Thompson at June 22, 2003 05:15 PM

We are operating under a monopoly here in Adelaide too you know.

I've long been concerned with the effect of a newspaper monopoly on governance but since this is the natural order of things outside Sydney and Melbourne, all we can do is live with it.

In Adelaide the net result is that the Advertiser is irrelevant. It has no credibility at all.

Posted by: Scott Wickstein at June 22, 2003 07:09 PM


After reading through all of the posts and then finally reading yours. I wonder how you can so complacent, and happy to just live with it.
I don't live in Adelaide, but I can't believe the Advertiser is irrelevent. It may have no credibility amongst a select few, but surely the vast majority of its readers take what it says at face value. Given the demonstrated willingness to wield this clout I wonder why are you not angry about this?


Posted by: Rex at June 23, 2003 09:11 AM

I've posted about this at my site Rex...

Posted by: Scott Wickstein at June 23, 2003 01:16 PM

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