Tim Wilson (Goldstein, Liberal Party) Share this | Hansard source

Continuing on from my speech last night, I would like to start by just stressing how important this piece of legislation, the Broadcasting Legislation Amendment (Media Reform) Bill 2016, is as part of a forward-looking agenda of the Turnbull government. When you look at the challenges facing the media landscape across the world, one of the great challenges it faces is making sure that the industry can consolidate, can focus and can afford to be able to continue to produce high-quality content. That is only going to be achieved by removing barriers, regulations and restrictions that stop the media sector from flourishing, thriving and consolidating its investment to build the content that is needed into the future. That is extremely important not just for the survival of the industry and particularly around making sure that we have credible sources of information but also because we want the content that Australia can produce to export to the world.

If you look at the challenges and the opportunities of the 21st century for this great nation, they come from producing service-based content in the media market to be able to export to the world Australian stories, Australian drama and Australian news. That is what people want in Australia: to be able to see themselves reflected in media. But they also want to be able to export it to the world so our stories, our narrative and our perspective can be consumed by people all throughout the world. That is both a laudable objective and key to what this bill has the potential to achieve as part of the challenges facing the media sector.

The objectives of this reform are to enable media businesses to compete at an appropriate scale in an increasingly diverse international media environment. We know full well the challenges of technology and how that is increasing the sources of diversity and competition in the marketplace, something that I am very supportive of and very much encourage, but we should not ignore the fact that it has an impact on the challenges of the industry in Australia.

This bill will also reinforce continued diversity of news sources and information within the media industry, and that is why I support it. This reform is an opportunity to advance Australia beyond a framework that was designed in the analog era of media, and that is the problem with the opposition to this bill. It is based in a 1950s-style analog mindset rather than recognising the evolution, the diversity and the dynamic nature of media in the 21st century. The predictability of media sources meant that regulation in the past was able to be proximate to the number of diverse media sources and the structures that those media companies operated by, but, in the modern world, we live in a significantly different era. The volume of news sources enjoyed by Australians has expanded rapidly in the past 20 years. We have access to online content and subscription services as well as the traditional platforms of television and of radio. These digital platforms are not currently subject to operational or investment restrictions.

The objective of media regulation today should be to affirm media diversity, but it is not currently working. Instead, the restrictive regulation prevents local news sources and outlets from providing effective coverage while stifling their efforts to keep pace with the change the industry is experiencing on the ground. This bill primarily seeks to repeal two control and ownership rules that no longer make sense in the digital media environment of the 21st century: the 75 per cent audience reach rule and the two-out-of-three cross-media-control rule. These rules are antiquated anachronisms and do little to support media diversity. Their removal will allow regulated media companies to achieve greater scale in their operations and, subject to the general law, to restructure their businesses to make the most of opportunities as they emerge.

The 75 per cent audience reach rule prevents a person, either in their own right or as a director of one or more companies, from controlling commercial television broadcasting licences whose combined reach exceeds 75 per cent of the Australian population. This rule effectively prevents any major commercial television network—that is, Seven, Nine or Ten—from merging with or acquiring the regional television networks of Prime, WIN and Southern Cross or vice versa. In the digital media environment, the 75 per cent audience reach rule is simply redundant. The digital era has allowed content to be seen by viewers all over Australia and, of course, internationally, something that we should encourage. The consequences of these restrictions mean that television broadcasters have very little capacity to compete in the modern media environment.

The two-out-of-three rule also has harmful consequences. It prevents mergers or changes in control that involve more than two of the three regulated media platforms in any commercial radio licence area. The distinction between online media and traditional media platforms has become increasingly hazy. We know that. Anybody on the other side of this parliament who has consumed media would know that that has changed over time, yet only one platform remains regulated. Again, it is an anachronism of the past to do with an early 20th century mindset. Viewership from different media sources is as fluid as ever. For traditional media outlets to be restrained while online platforms are free to adapt and to emerge is both uncompetitive and unsustainable and does not reflect the reality of the environment that Australians are choosing to consume their media content.

It is important to note that the removal of the 75 per cent reach rule would have very little impact on cross-media ownership in Australia. Most of the licence areas do not contain all three platforms and therefore do not prompt the use of the rule. In a large sum of the remaining areas, further media transactions of any sort will still be prohibited due to the diversity floor requirement of a minimum of four voices under the five-four rule, which states that at least five independent media organisations must be permanently operational in metropolitan commercial radio licence areas and four such groups in regional commercial radio licence areas.

Each of these reforms will be instrumental in unshackling the traditional media outlets and allowing them to properly and fairly compete with their digital counterparts—something that the opposition, I would have thought, should support. The net result is a more flexible media market environment that encourages good journalism and investment in good journalism through product differentiation and delivers high-quality news and entertainment services to Australians.

The media landscape, as we know, is rapidly changing. It is therefore crucial that the law of the land keeps pace with the change that is already upon us. Over the past 15 years, as viewership shifted to digital mediums and traditional media assets declined, we have seen the emergence of a number of online giants who enjoy a massive market share of advertisement spending. Online platforms have grown from having a 6.1 per cent share of the Australian advertising pie to achieving the largest share of advertising revenues, capturing 36.2 per cent in 2014. Over the same period, television shares declined to 30.7 per cent while radio shares fell to 8.2 per cent. The share of newspaper advertising has fallen from 37.5 per cent to 15.7 per cent. Analysis by PricewaterhouseCoopers has shown that these trends will cause a concerning depreciation of revenue for free-to-air television stations in real terms. If we are to continue to enjoy a wide range of broadcast services with the content that Australians want, it is vital that our traditional stations are given the ability to simply be free to compete with other new sources of media.

Print media readership has also declined and rapidly changed over time. The fragmentation within the radio sector is evidenced most significantly between our regional areas and cities. Due to the vast difference in market size, metropolitan commercial radio services attract larger audiences than their regional counterparts. On top of this, there is also the growing divide between AM and FM stations. But perhaps the most recent digital disruption of recent years has been within the audio visual market. Video streaming devices are proliferating around the world at an incredible rate, and I am a part of the audience and consumer drive towards that. And a large part of that, I might add, is for Australian content—wanting to see high-quality productions from traditional media outlets moving into the digital environment so that I can see the future of Australia and see our stories.

The Australian launch and rapid consumer uptake of streaming service Netflix in March 2015 resulted in 11.4 per cent of Australian households having access to a prescription only seven months later. That means 2.68 million Australian's aged over 14 now have access Netflix and can stream media content on demand. That is an overwhelmingly positive outcome but, given the ability of competition to pressure companies into offering more for less, we must ensure our traditional platforms are on a level playing field. Because, when it comes down to it, we want Australian content to be on online subscription services and for them to produce the content that Australians want to see. We must ensure that whether it is through audio or through visual media, Australians are able to have the content that they seek and for it to be available in a sustainable way, in a way that Australians will invest in it compared to overseas counterparts. This reform is so critical because it provides the foundation for the continuation and investment in Australian stories, Australian music and Australian content so that this country's past can be recorded, its present can be projected to the world and its future can be captured for the benefit of all Australians.

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