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media reforms--yawn « Previous | |Next »
July 15, 2006

The headlines in Friday's Australian Financial Revew say that Coonan's media reforms deliver a television revolution. What revolution? The reforms were a bit timid weren't they? They bowed to the political power of the free-to-air television oligopoly.

There was little attempt by Coonan to dismantle the free-to-air television oligopoly. They remained protected through legislation re multichannelling and delaying the introduction of digital television services until 2010-12. The free-to-air television oligopoly are the big winners in this package. Their fingers were all over the reforms. Their profits are safe Foxtel got very little--an easing of the anti-siphoning restrictions. And there is no fourth free-to-air channel. That really does protect the profits of the incumbents.

However, the grip of the free-to-air television oligopoly will slip as the new digital technologies the oligopoly have managed to keep at bay for so long begin to bite. This is a TV industry that is still reluctant to face the future. So the new digital technology is hobbled. Sensibly, the tight restrictions on what the ANBC and SBS can air on their second digital channels will be lifted, allowing them to show news, sport and drama. That's hardly a revolution. It's in line with a switch to the new digital technology that protects the favoured incumbents.

At the moment there is little for consumer choice. What we will have instead is lots of mergers, foreign takeovers and new media alliances leading to increased media concentration. amongst media public companies struggling to deliver growth for shareholders. The fear here is that a lack of competition will stifle dissenting voices, and undermine liberal democracy.

The increased choice for consumers is coming from the groundswell in blogs, wikis, podcasts, video-sharing websites and the like. The tendency for innovation is shifting from the publishers and broadcasters, who have historically controlled the distribution of information and programs, to the audience. If the mass audience is fragmenting - even the incumbent mainstream media will grant this - then what is not acknowledged publicly is that the segmented audience is leaving the mass media behind.

Meanwhile newspapers continue to cut jobs as part of a plan to reduce costs because net profit is falling because of a decline in newspaper advertising. The problem with just cutting costs is that it won't be enough to offset the inexorable decline in revenues and profits which are being eaten by the rise of new media. The old media is in decline, its growth is over, because mass media like big newspapers, commercial television and radio can no longer deliver increased mass audiences.

| Posted by Gary Sauer-Thompson at 5:18 PM | | Comments (0)