Stirling Griff (SA, Nick Xenophon Team) Share this | Hansard source

A review of Australia's media environment is long overdue. Our current broadcasting and media ownership laws have been overtaken by the commercial realities of the digital age and are now serving to undermine, rather than underpin, a strong Australian media. Traditional media businesses are haemorrhaging profits. The once rivers of advertising gold have become a trickle, with online giants such as Google and Facebook now taking the majority share. With limited revenue from their digital pursuits, media organisations that are keeping their heads above water are doing so through ongoing cost cutting, by selling off assets or by tapping into shareholders that have very deep pockets. But, as we saw with the Ten Network, deep pockets can't be relied on indefinitely.

Ironically, to save itself, the industry is eroding its core product. It is trying to do more with less, with varying degrees of success. Nowhere is this pressure more evident than in the newsrooms of our free-to-air broadcasters, daily newspapers and commercial radio stations. In the past few years we have seen wave after wave of redundancies across print and broadcast media. The Media, Entertainment and Arts Alliance estimates that since 2011 an estimated 2,500 journalists, photographers and subeditors have taken a package and left the industry. Most of these were seasoned staff with a wealth of skill and contacts. Their loss represents a loss of knowledge and depth for newsrooms across the country. Their loss is a collective hit to broad-ranging, hard news, serious investigative journalism and intelligent, objective analysis, as opposed to opinion, which is flourishing in its place.

Obviously, no-one in this place wants to see the industry depleted any further than it has been. That is why this bill and the debate is so important. For politicians there are many occasions when we don't like what we read, hear or see in the news, particularly about ourselves, but we all accept that a robust, independent and free press is fundamental to a well-functioning democracy. Anyone who believes otherwise is very much deluding themselves. And anyone who thinks that mainstream media can survive and deliver quality and insightful news—as opposed to dumbed down, populist clickbait—without urgent legislative intervention is suffering an acute case of blind optimism.

Newsrooms are already using online clicks to determine what gets priority on their online sites. This is not a healthy trend. We already have enough stories about the Instagram photo Kim regrets most or the 12 practical uses of avocado oil that will blow your mind. Civic journalism needs to be safeguarded. We need a thriving media to bring important news, no matter how boring it might be, to a good chunk of its audience. We need to loosen the straitjacket that once served to protect diversity but now serves to shackle the industry to outdated operating models. We need to rein in the uncompetitive advantages that global internet giants, such as Facebook and Google, are exploiting. At the moment, these market-distorting digital dominators are appropriating unique, Australian-made content and profiting from it while also enjoying the lion's share of advertising revenue. They need to pay a fair price for unique content that is not their own.

If media organisations stop producing unique content, where does that leave the likes of Apple News and Facebook? They will probably have to put their hands in their own pockets to pay people to make shareable news and entertainment content, and that is way more expensive than pilfering it for free or for below-market rates. Their market-distorting powers are such that 2,000 news organisations in the US and Canada recently banded together to seek permission to negotiate collectively with Google and Facebook. What they want is simply to have a fairer share of the revenue and customer data that these giants collect in return for using their journalism. The Nick Xenophon Team agrees wholeheartedly with the industry that these online giants need to be called into account. That is why I and my NXT colleagues have pushed very hard for an ACCC inquiry that will lay bare, for once and for all, the tactics and conditions that search engines and social media platforms have imposed on Australian media organisations.

We have in-principle support from the government for an inquiry by the competition watchdog that will probe into the impact of these platforms on the media and advertising landscape and determine whether their practices impede media organisations from recouping their own costs. We hope that the government will proceed with the ACCC inquiry, regardless of the outcome of this bill, as it will be a very important tool for levelling the playing field and, ideally, making these digital giants pay their fair share for the valued content made by others.

Anecdotally, these digital platforms have media organisations over a barrel. The media businesses I have spoken to don't like the terms they are forced to accept. They receive very little, if any, benefits from them but feel very much powerless to challenge them. These obligations and conditions will now finally be weighed by the competition watchdog, and, unlike media and other third-party organisations, the ACCC actually has the power to address any uncompetitive behaviour it finds. I do hope these digital platforms are, in a way, sweating over this prospect. Their days of somewhat ripping off media organisations and disingenuously claiming that it's all fair play in an open market are hopefully very much numbered.

Getting fair compensation for the use of their content will assist the traditional media business model in an environment where they are fighting for every advertising dollar. According to figures in ACMA's most recent communications report, print media has been capturing less and less of the national advertising dollar. It attracted $5.3 billion in advertising revenue in 2011, but this collapsed to $2.3 billion by 2015 as more and more advertisers shifted away from traditional platforms in favour of digital. Digital advertising now accounts for almost half of the Australian advertising market. According to the Commercial Economic Advisory Service of Australia, online ad share grew by six percentage points last year to make up almost 49 per cent of the total Australian advertising market. This came partly at the expense of traditional media. For instance, the advertising spend on free-to-air television dropped by 21 per cent last year from 24 per cent the previous year.

The digital advertising sector is getting stronger and stronger. According to IAB Australia, the total online advertising spend grew to a whopping $7.4 billion last year, up a substantial 23 per cent on 2015. But this has proven to be a double whammy for media organisations not only because it's such a competitive space but also because the returns generated from online advertising are generally lower. Interestingly, the ABC is contributing in a small but arguably unnecessary way to this struggle. It spent $1.5 million last year on digital marketing to push its editorial content through social media and on search engines. Given the public broadcaster's main website is already ranked amongst the top sites in Australia, we question whether the public broadcaster should be using its scarce resources to essentially compete against commercial news sites. It is clear that action needs to be taken. Australian media companies cannot produce quality content with dwindling resources.

We are also particularly pleased that the government listened to us and industry and has scrapped licence fees for commercial television broadcasters and radio broadcasters. Licence fees were becomingly increasingly burdensome at a time when falling network advertising revenues has forced broadcasters to make difficult decisions about how to fund their operations. They were also increasingly unfair with commercial free-to-air broadcasters paying around $127 million a year in licence fees whilst their digital competitors paid absolutely nothing. The licence fees will be replaced with an interim transmitter tax regime, which will be levied to reflect spectrum use. It will not end the disparity with digital providers, but it will at least cost commercial free-to-air broadcasters less—about a third of what they are collectively paying now. They are very much the positives in the bill.

In turning to the rest of the bill, I acknowledge that there have been concerns by some in this place and in the community that scrapping our media control laws may harm diversity. In reality, the greater threat to diversity is the industry's steady erosion. We need to remember that the current rules were drafted for the analog era, and that time is forever gone. Our world has dramatically altered. Ongoing dynamic change in the media landscape is our new reality and there is no use pretending that laws made 25 years ago are still relevant today.

When the Broadcasting Services Act 1992 came into being, it would still be another four years before Google would surface as a PhD research project and 12 years before Facebook would come onto the scene. It was a time when most people only watched free-to-air television, listened to radio and read the daily newspapers. There were no podcasts, no on-demand content streaming, no online news sites, no social media, and advertisers flocked, in a big way, to mainstream media. The laws drafted then did not unfairly restrict competition or prevent media organisations from succeeding.

These laws no longer reflect the reality we all operate in, which is one where the internet is effectively the fourth unregulated media player. The net covers 100 per cent of the country, 100 per cent of the time, and makes a mockery of the 75 per cent audience coverage rule. The 75 per cent reach rule threshold came into force in 1993 and was established to prevent metropolitan commercial stations from merging with or buying the regional networks Prime, WIN or Southern Cross, thus having blanket coverage across Australia. However, affiliation agreements between the major and regional networks mean that, in practice, almost identical programming extends across metro and regional areas. Ten, Nine and Seven also allow viewers to stream much of their content for free, and let's not forget that pay television providers are at liberty to broadcast their content across the entire country without any similar restrictions.

The two-out-of-three rule is especially redundant considering consumers are no longer stuck with whatever their newspaper, local television station and radio stations decide to offer. There are no borders or barriers. You can find pretty well any kind of information you need, seek out whatever opinion resonates with you and stream or download a wide variety of entertainment, as long as it is legal and your internet plan allows it. In the end, it all comes down to choice, your choice.

Every major commercial broadcaster and publisher has an online presence, and whilst the majority of Australian online news services are still owned by the dominant players—namely, News Corp and Fairfax—there are plenty of alternatives out there. You can go straight to the source often on Twitter. There are citizen bloggers and eyewitness accounts in real time. There are a number of new players not associated with the majors, such as BuzzFeed, The Conversation, Junkee, or InDaily in my home state of South Australia and its affiliate The New Daily in Victoria. So consumers have no shortage of options, irrespective of the mainstream media licences covering their area. By the same token, the two-out-of-three ownership law was designed to protect media diversity by preventing ownership of more than two of the traditional regulated media platforms—namely, newspapers, commercial radio and commercial television—in the same market.

We understand the argument that it now risks inhibiting the ability of media companies to restructure or find economies of scale that will enable them to survive and hopefully thrive. However, we cannot simply repeal this rule and walk away. The so-called minimum voices test will maintain the diversity floor, and it is worth pointing out that the ACCC has oversight of mergers to ensure there is no detrimental market impact. Section 50 of the Competition and Consumer Act prevents mergers that are likely to substantially lessen competition. Even so, we can still be more proactive about protecting what we value. We can help protect diversity by taking some of the financial pressures off smaller players in order to help them thrive. We will keep negotiating with the government in good faith in order to achieve this aim.

To conclude, what we don't want is for the current laws to assist in the slow death of Australian news media. We need to act to provide Australian media with a more level playing field and a legislative environment that is more responsive to the modern operating landscape. If we don't, we may eventually be left consuming little more than mindless clickbait and fake news with our morning cornflakes or smashed avocado. My NXT colleagues and I agree it is time to substantially reform our existing media laws. This bill makes a sound start, but we believe that there is more that can be done and we reserve our final position for now.