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The ABC and Australia’s new media landscape

By the Hon James Spigelman AC QC, Chairman of the ABC – Address to Ripe@2012
Conference

THE digital revolution has undermined the business model of much traditional
media. Its effects are exemplified in recent dramatic announcements by Australia’s
two largest print media groups.

Broadcasters and pay-TV also face an uncertain future.

In such a context, we are now seeing more frequent expressions of anxiety about
public broadcasters competing with commercial interests. There is nothing new
about this. Public broadcasters have always had an adverse impact on such interests.

In 1933, when the ABC began an independent news service, the chief executive of one
of our major media groups was so concerned with the impact such a service could
have on his company’s print and commercial radio operations he called for a
reduction in the ABC’s revenue. That was Keith Murdoch, Rupert’s father. Some
things change very little over the decades.

It is perfectly understandable that commercial broadcasters and, in a converged
world, other media, should suggest the ABC refrain from providing services that are,
or might be, provided on a commercial basis. The first thing to say about such
arguments is that there has never been a time when the ABC was simply a market-
failure broadcaster, obliged to fill gaps in the commercial offering.

The ABC’s obligations are, and have always been, defined positively, not negatively.
Under current legislation, the ABC is directed to provide “comprehensive
broadcasting services” and to accept a “responsibility … to provide a balance between
broadcasting programs of wide appeal and specialised broadcasting programs”.
Unquestionably, a public broadcaster must program for minority audiences in a way
that commercial free-to-air broadcasters would never do.

Perhaps no better example exists than the ABC’s coverage of the Paralympics, with
which, it appears, advertisers would prefer to avoid any association – despite the
triumph of the human spirit that is continually on display.

However, the ABC must offer services to the community as a whole. One of the ABC’s
key roles is to ensure that all Australians have access to quality media services,
perhaps particularly reliable news and information about international, national,
regional and local matters.

We are seeing only the beginning of the impact of technological change on media.
New business models are being tried. While there are some confident assertions
about the prospects for these models, the truth is that no one knows where this is
going.

In such a context, the capacity of public broadcasters to ensure all Australians receive
a quality service with a breadth of content on all major platforms has become more
important than ever.

There is no public debate in Australia that seriously questions the continuation of
the ABC’s traditional services. There is, however, some limited commentary about its
expansion into online and mobile platform delivery. Computers, smartphones and
tablets are now so ubiquitous that delivery of a program, or cognate material, to such
devices is a form of broadcasting, in the natural meaning of the term. These
platforms are so available that they are becoming the same as traditional radio or
television sets.

Any suggestion that such delivery should be restricted because it is new is as dubious
as an argument would have been that radio programs should not be delivered to
transistor radios because they did not exist when radio broadcasting began.

That is not to say that the ABC’s determination to interact with its audiences in the
manner they prefer does not have adverse commercial consequences on existing or
potential service providers. It has always had such effects: whether use of public
funds constitutes competition that could be regarded as unfair is a matter on which
people can differ.

However, broadcasting encompasses delivery of programs to all platforms capable of
receiving them. This is how the ABC’s audiences see it and the ABC continues each
day to meet that public expectation.

One issue that has arisen in the present Australian debate is whether the public
broadcasters should be subject to exactly the same regime as that applicable to
commercial broadcasters. This has never been the case. Our entire 80-year history
has been based on ensuring that the ABC cannot be subject to pressure from its sole
shareholder.

One of the key recommendations of the Convergence Review is the establishment of
a new industry-led regulator to oversee journalistic standards on all platforms. The
review recommends that the ABC and SBS would not be subject to this new
regulator. This recommendation rejects the proposal of the prior report of the
Finkelstein inquiry for a statutory regulator. It was disappointing that this prior
inquiry, on which the Convergence Review was asked to report, had recommended
the ABC should be subject to the media standards regulator which that inquiry
proposed. This is particularly so because, when the earlier inquiry had sought the
assistance of the ABC, it expressly stated in writing that it was not investigating the
standards or behaviour of the ABC.

The rejection by the Convergence Review of the earlier proposal is consistent with a
similar rejection by the Australian Law Reform Commission. Any appeal to a so-
called “level playing field” with respect to media regulation, by subjecting the ABC to
the same regulation as is applicable to commercial broadcasters, is fundamentally
misconceived. The government response to these two reports is still awaited.

Sydney, September 5, 2012 – http://about.abc.net.au/speeches

Full text of the speech here:

The ABC and Australia’s new media landscape

New media rules get harsh review from networks

A proposal by the federal government’s Convergence Review to create a new
regulatory watchdog has received a harsh welcome from media companies who say
such a move would create excessive regulation and compliance costs for the media
industry, according to a report by The Australian Financial Review.

The review’s final report introduced additional regulation intended to force more
media groups to produce local video content.

The report, released Monday, also abolished existing ownership rules and
recommends a “public interest test” for big media mergers and acquisitions. “Foxtel
is concerned that overall the review recommends needless new regulation that will
stifle competition and innovation and does not recognise market reality,” Foxtel chief
executive Richard Freudenstein said, according to the AFR. “In particular, a new
public interest test would be broad and subjective, and by the review’s own
admission, it may increase regulatory burden.”

Ten Network Holdings chief James Warburton reportedly said there was “no
justification” for the proposed changes when free-to-air broadcasters “invest more
than $1.2 billion in local productions.”

The changes would define all major media companies as Content Service Enterprises
required to increase Australian video production, although digital companies such as

Google, Facebook and Apple would not be included in the definition.

The review committee’s head, Glen Boreham, defended the idea of a new watchdog.
“It’s not a super regulator,” he said, according to The Australian. “The new body may
be smaller than the existing one.”

Published 5:06 AM, 1 May 2012 – Business Spectator

Convergence Review strongly supports Australian content

The final report of the Convergence Review strongly supports the social and cultural
value of Australian content and makes it very clear that, without intervention, it will
drop to unacceptable levels. It is proposed that the current rules applying to free-to-
air and subscription television be repealed but that a new technology-neutral regime
be uniformly applied to all players, including the networks’ digital multichannels,
internet-delivered channels with television-like content and on-demand services.

To be one of the “content service enterprises” subject to the new regime, a service
must be screening or offering professional television-like drama, documentary

and/or children’s programs, and meet not-yet-determined minimum revenue and
audience thresholds. This means that platforms that predominantly run user-
generated material and social media sites escape the recommendations. If a service
falls into this category it will be required to invest a percentage of its revenue into
Australian drama, documentary and children’s programs, or into a “converged
content production fund” with a very broad remit.

Having a transitional period is recommended on the Australian content front, during
which subquotas on the main commercial free-to-air are increased by 50 per cent —
to make up for how little local content is on the multichannels – and the 10 percent
minimum expenditure requirement on eligible drama subscription channels is
extended to children’s and documentary programming.

The review committee states that there is a continuing case for government support
for Australian production – again, it is drama, documentary and children’s
programming that needs intervention – and it has stuck by its guns in
recommending that the value of the producer offset should go up from 20 to 40 per
cent for “premium” television content, putting it on the same footing as features.

More Here:

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By Sandy George – INSIDEFILM – [Mon 30/04/2012]

Content quotas will cost, say free-to-air networks

A ROW has erupted over the size of the production windfall the Australian TV
industry can expect to receive if quotas on drama, documentaries and children’s
programs are imposed on free-to-air TV networks. Under proposals before the
Communications Minister, Stephen Conroy, the TV networks will have to increase
the number of hours they devote to those genres by 50 per cent a year.

They already exceed their quotas in documentaries – airing 90 hours between them
each year – and face an extra $40 million to $60 million in programming costs to
make up for the shortfall in children’s and adult drama. The production funding body
Screen Australia estimates an additional $10 million is needed to reach their quota of
144 hours of children’s programming a year, and an extra $30 million to reach the
new target of 540 hours of adult drama.

One hour of Australian drama can cost between $350,000 and $1.4 million to
produce – roughly three-and-a-half times as much as an hour of imported American
TV, Screen Australia says. But the commercial TV networks say they already spend
$1.2 billion a year on the production of Australian content – about a third of their
revenues – while their profits are falling.

”As far as I am aware we are the only country where quotas are being increased on
broadcasters,” said Julie Flynn, the chief executive of TV lobbying group FreeTV
Australia. She said Screen Australia’s analysis was ”simplistic” because it ignored

increasing production costs, yet her body does not have figures of its own to support
its argument.

The body representing the production industry, Screen Producers Association of
Australia, predicts the content quotas will be one of the first recommendations from
the Convergence Review that Senator Conroy will implement.

The SPAA executive director, Geoff Brown, estimates it will cost the networks an
extra $60 million a year which, he said, is negligible given that at some point in the
future the networks will be relieved of the $280 million licence fee. ”They are
whingeing but they’ve had a lot of upside in all this,” he said. ”This is the economics
of television. They are getting released from hundreds of millions of dollars in licence
fees so this is an obligation on content.”

The Screen Australia chief operating officer, Fiona Cameron, stood by her figures and
said: ”This is sensible progressive regulation that has an eye on the reality of the
market – that is who is watching now and who are the most influential players.”

Julian Lee – SMH – May 2, 2012

Convergence Review: At a glance

The Convergence Review is 177 pages and covers a wide range of issues facing the media.

Here is a short summary of some of the report’s main recommendations:

-Recommendation for establishment of two separate regulatory bodies: one a statutory body and the other self regulated.

-The Statutory Regulator is to replace the Australian Communications and Media Authority; incorporate Classification Board and make rules on Australian content.

-The industry led body will cover TV, radio, online and print and will review news and commentary standards.  It will replace the existing Australian Press Council.

– ABC and SBS are not required to participate in the industry-led  body but must develop their own codes that take into account the new body’s standards

–  ABC and SBS Charters to be updated with a requirement that 55 per cent quota apply to Australian content on the  ABC and half that for SBS

– Rejects Finkelstein report recommendation for outlets which distributes more than 3000 copies of print per issue or a news site with a minimum of 15 000 hits per year on the grounds that it is “far too low” and very “resource-intensive”

– The licensing of broadcasting services to cease Commercial free-to-air broadcasters licence fees, calculated as a percentage of revenues, would be abolished in favour of a market-based approach to pricing broadcasting spectrum.

– Regulation of media ownership, media content standards and Australian and local content to continue

– Major media outlets to be classified ‘content service enterprises’ (CSE) and regulated based on their size and scope, rather than how they deliver their content

– A CSE is defined by: the professional content they deliver; large number of Australian users of that content; high level of revenue

– All CSEs contribute to a “uniform content scheme” for the production of Australian content.

– Review recommends threshold levels for CSE initially should be around $50 million a year of Australian-sourced content service revenue and audience/users of 500 000 per month, thus potentially excluding Google, Apple and Telstra

– Major international online and media enterprises, such as potentially YouTube, would be required to contribute to producing local content

– A ‘minimum number of owners’ rule and a ‘public interest test ‘ replace the current ‘75 per cent audience reach’ rule, the ‘2 out of 3’ rule, the ‘two-to-a-market’ rule and the ‘one-to-a-market’ rules of media ownership.

– Convergence Review findings to be implemented three stages.

 From: The Australian   April 30, 2012