The Australian Media Industry
In this unit students
Examine the role of the media in democratic societies.
To identify and understand the nature of Media Ownership in Australia
Investigate and understand why media ownership and diversity is important in a democracy
Investigate the rules for media ownership in Australia
Examine the debate about the diversity of media ownership and its relevance to democracy
Your investigation will first consider your own interactions with the media, before you examine the factors that influence the media’s role in a democracy. Through your investigation you will become aware that ‘freedom of the press’, as an ethic, is not accepted in all societies, and that journalists face many obstacles, and even personal danger, in reporting stories about powerful organisations and people. You will also realise that, while the media is a source of power, it is also open to powerful controls, and that both of these can have an effect on democratic societies.
While you may choose to undertake this investigation on your own, you may also do it with other students in your class
A Media Owner is a person, enterprise or organisation that controls, either through personal ownership or a dominant position, any media enterprise.
Owning or controlling a media outlet or corporation is considered to be a very powerful position, as it potentially enables the control of information and the shaping of popular opinion.
Diversity – A range of viewpoints and ideas that represent all people
Democracy- Government of the people by the people for the people
The Media in a Democracy
A free, open and diverse media that has the unrestricted power to inform the population on issues of public interest has always been a crucial component of a functioning democracy. A free and diverse media sector can enforce transparency and accessibility in politics and can help to ensure that leaders within government and business are accountable for their actions.
In countries that are not democracies, or that do not share Australia’s liberal democratic principles, the media operates under restrictions with respect to what it can report. Editors and journalists may face prison, or worse, if they report unfavourably on the government, politicians, or other powerful interests, such as businesses or corporations.
Read the article and write responses to the following questions:
1.What impressions do the stories give you of the purpose of journalism and the news media?
2.What are the responsibilities of journalism?
3.Make a list of the main opponents of press freedom in the article, and explain how and why they seek to influence the media
Reporting and presenting your findings
Discuss your responses to the questions with members of your group. Conduct an internet search to find other articles about violations of citizens rights and the media then write a persuasive newspaper article based on one of the following statements.
1.In the battle to protect freedom of speech, journalists are the first line of defence.
2.The extent to which a society is democratic can be measured by the degree of freedom the media enjoys
In many countries, there are restrictions, not just on what can be published in the media, but on the very ownership and establishment of media outlets or corporations. It is usual for governments to run radio and television programs, and, in some countries, even ‘official’ newspapers.
In countries that are not democracies these restrictions and controls operate to support the ‘official’ or government point of view, to the exclusion of other perspectives or criticisms.
In Australia however, media laws regarding ownership are enforced to ensure a diversity of choice of media, so that there can be a plurality of views, and the extent to which they can or should do this is often the source of public debate.
Plurality – a large number or variety
However some people assert that the choice of media has gradually declined. In 1926 Australia had 21 capital city daily newspapers with 17 different owners. Gradually the number of newspapers began to decline and so did the number of owners. By 1993 there were only 12 capital city newspapers to the extinction of the afternoon paper and the dominance of just one newspaper in some Australian capitals.
In 2015 News Limited controls the majority of the newspaper market in Australia with almost 70 per cent of the market-share within the capitals compared to 21 per cent for Fairfax. The two big organisations also own many smaller papers as well as the majority of suburban titles.
Others, however, see in the rise of new media, such as the Internet and digital broadcasting, as opportunities for a diversity voices and opinions to be heard.
Media ownership in Australia is distributed between commercial, national public broadcasters and not-for-profit community broadcasters.
Australians rely on the media to provide facts and interpretations of the world. The information we receive from TV, newspapers, radio and the internet allows us to understand our world and provides us with the information we need to make social and political decisions.
The increasing complexity of these decisions in the last decades has meant an increased reliance on media sources. Democratic countries encourage and enforce diversity in media ownership because diversity minimises the risk that the information their citizens receive is adversely influenced by the interests of the media organisation which provides it.
While Australia has some rules encouraging media diversity by limiting concentration in media ownership and limiting foreign ownership of media sources, it is doing badly in both areas by international comparisons. Australia is ranked 26th in the world for media freedom, a ranking influenced by media diversity. Currently two newspaper groups (News Limited and John Fairfax Holdings) account for over 90 per cent of the circulation of daily newspapers, and Australia has only three commercial television networks
Australian media organisations
The Australian media landscape has a combination of styles and models of ownership. The current mix of commercial, public, community and even alternative media outlets influences the nature and production of the information distributed to the public. These models, in turn, will appeal to different audiences with diverse sets of needs and wants. Apart from the print and online sectors, all Australian media organisations are constrained by government regulation, which aims to enforce strict controls and review standards on the industry. It is important to understand who owns and controls the media, and how this relates to power and influence in Australian society.
Commercial media organisations are those set up to make a profit from their operations, with much of their income coming from advertising revenue. Commercial media organisations exist to make
money, and this profit motive shapes the content they produce and distribute to the public. Commercial media organisations are rarely owned by an individual; they are usually part of a larger company, corporation or conglomerate, which may own a number of media outlets either within the same medium (such as television) or across media types
(such as television, radio and newspapers).
Most people are familiar with commercial television whether in free-to-air, subscription or online format. In Australia, commercial television is consolidated into a number of networks. In the capital cities, the free-to-air networks are Seven, Nine and Ten.
In regional areas, the networks share the same content as their urban counterparts, but often provide some additional services, such as local news. In Victoria, these networks are Prime, WIN, and Southern Cross (partnered with Seven, Nine and Ten respectively).
Imparja Television is a commercial television company that operates out of Alice Springs, Northern Territory.
The company purchases programming from the Nine Network and locally produces Indigenous programs to promote Aboriginal culture and values.
The commercial aspect of these television networks is that they exist to make a profit for the companies and shareholders that own them. Profit is generated by selling commercial break advertising that goes to air during the broadcasts. Advertising rates vary according to the time of day the commercial is shown, the type of audience likely to be watching and the total number of people expected to watch the program.
A program that is screened at two in the morning will attract few viewers; therefore, the cost of advertising will be less compared to a program that airs at eight in the evening to a projected large audience.
Advertising in television is generally sold in thirty-second sections or ‘slots’. A thirty-second slot during the AFL Grand
Final broadcast can cost up to $100 000. All the major television networks also run additional niche stations, such as 7mate, GO ! and OneHD, which run alongside and complement their main channel programming. The networks also provide an online presence with websites that offer viewers additional content, and create another avenue to sell advertising slots and promote major programming.
Subscripti on television
Subscription television is another form of commercial television. In this case, the television signal is not broadcast free-to-air; viewers are required to pay afee to receive the signal, either by satellite or fibre optic cable.
FOXTEL is the largest pay television provider in Australia. When it was first introduced in 1995,
subscribers received content without advertising, their subscription fees were covering the cost of the service. However, increasingly, paid advertising is being seen on subscription television channels.
Television content is also provided online by commercial media organisations, usually via a partnership with an online or digital provider.
Partnerships include networks Nine and Microsoft® and Seven and Yahoo!®, which work together to deliver supplementary content to audiences such as sneak previews, behind-the-scenes footage and fan forums for their favourite programs. Telstra is also a commercial media distributor via its BigPond service that streams media content to users’ televisions, such as films, sport, news and music, through a broadband internet connection.
Income and television programming
How a media company receives its income/funding has a profound effect on what content is made and delivered to Australian audiences. In the case of commercial television, ratings and popularity drive the type of program that is broadcast. The increasingtrend has been for major commercial networks to purchase content from outside production houses, both locally and overseas, rather than produce their own material. No matter where the work is produced, the networks buy what they believe will be popular and rate well with audiences, which will give
their advertisers maximum exposure to their target markets. Subscription television does have the ability
to produce some niche programming, as advertising is not their sole source of income.
Learning acti viti es
1 How do commercial television networks obtain their income?
2 What role do ratings play in commercial television?
3 What advantages and disadvantages for both viewers and producers can you identify when television content is driven by ratings?
4 Why do you think the major commercial television networks have smaller subsidiary stations, such as 7mate, GO ! and OneHD?
5 Imagine that you are working for a major commercial television network and you have been given the task of creating a new, top-rating series.
You will need to write a one-page proposal of your series to submit to network bosses that includes information about:
• the content of the series (what it is about, who will star or present it)
• the intended audience and why they will want to watch it
• the potential advertisers that you believe will be interested in purchasing commercial slots
• what makes your series unique and worth producing.
The major players in print media are the companies News Limited and Fairfax, who, between them, own
virtually every daily newspaper and suburban weekly, and dominate the Australian commercial newspaper
industry. Magazine production is also in very few hands with News Corporation, PBL and Pacific
Magazines producing most of Australia’s magazine titles.
As with commercial television broadcasting, the main purpose of the commercial print media is to make a profit. This profit largely comes from selling advertising space in the publication. However, unlike free-to-air television, print consumers generally pay for the product, although this fee does not reflect the true cost of producing the publication. Some print products are free to the public, such as mX (owned by News Corporation) and suburban weeklies (most of
which are owned by News Limited and Fairfax). These publications are sustained solely by advertising.
In Australia, there are three different types of media organisations: government, commercial and community.
Government media organisations are those owned by the government. In many countries, government ownership equates to government control of the media.
In Australia, the Australian Broadcasting Corporation (ABC) and Special Broadcasting Corporation (SBS) are both owned by the federal government. The ABC’s editorial independence is enshrined in legislation. The act specifies that the ABC must maintain an “independent national broadcasting service”. The ABC is also prohibited from broadcasting advertisements to ensure that it maintains independent of commercial interests. According to the Special Broadcasting Services Act of 1991, the responsibilities of the SBS board include maintaining the “independence and integrity” of the organisation. The fact that the independence of these organisations is protected by legislation means that, although they are owned by the government, the government does not have the power to control content or editorial policy. The services offered by ABC and SBS aren’t limited to television. The ABC has forty eight local radio stations in addition to nationwide broadcasters like Radio National and Triple J. SBS has two radio stations in addition to its television presence.
The ABC Charter is outlined in the Australian Broadcasting Corporation Act of 1983. The ABC must provide an “innovative and comprehensive” broadcasting service of a “high standerd” within Australia. They are mandated to broadcast programs that contribute to “a sense of national identity and inform and entertain, and reflect the cultural diversity of, the Australian community.” They are also required to broadcast programs of an “educational nature.” As part of the charter, the ABC is also required to transmit material to other countries to encourage an awareness of Australia and allow Australian citizens who are overseas to obtain information about Australian affairs. The ABC is also required to “promote the musical, dramatic and other performing arts in Australia.”
Because the Australian government recognises the importance of the mass media to politics and society, the Australian Communication and Media Authority allocates television and radio frequencies to community broadcasters. Community media organisations are usually funded by the government, membership and advertising. Content is usually created by unpaid volunteers. Channel 31 is a community television station that broadcasts in a number of Australian cities, including Melbourne, Brisbane, Adelaide, Sydney and Perth. According to Channel 31 Melbourne’s constitution, the organisation aims to: “Encourage community based participation and training in the production and transmission of television programs and for the encouragement of art, sport, music, and culture sourced from and directed to community groups within the wider Australian context through community television programming”
Commercial media organisations are privately owned companies that compete to make profits through advertising and program sales. Here is a list of the main media owners in Australia:
• The Murdochs. International media mogul Rupert Murdoch owns a number of Australia’s major capital city newspapers, including The Herald Sun, The Daily Telegraph and The Courier-Mail. His son, Lachlan Murdoch, is a majority shareholder in Nova, Network Ten, 93.7FM and FiveAA.
• Fairfax. Fairfax owns a number of capital city daily newspapers, including The Age and The Sydney Morning Herald, as well as a number of smaller regional newspapers and radio stations including 2UE.
• Kerry Stokes. A major shareholder of Seven, The West Australian and WAFM.
• James Packer. Although the Packer family traditionally owned Channel 9 and Australian Consolidated Press, they sold up much of their media interests. James Packer now owns a substantial share in Network Ten.
• The Gordons. Bruce and Andrew Gordon own a number of regional television stations throughout Australia, including WIN, Ten Mildura, Tasmanian Digital Television and West Digital Television.
1. Think of as many Australian media organisations as you can and list them under the following headings: Commercial, Government, Community, Other.
WHY IS MEDIA OWNERSHIP IMPORTANT?
With the ability to sway public opinion, the media is widely seen as an important and influential industry
Here a number of reasons why media diversity is important:
• Decision making. We make important decisions about issues based on information obtained from the mass media. We need a diversity of views and opinions so we are informed and make the right decisions.
• Democratic process. In democratic societies like Australia, we use the news media to make decisions about who will represent us in parliament and pass laws on our behalf. A diverse and objective news media is crucial to help us make the right decision. According to the Centre for Democracy and Governance, the media is essential to a healthy democracy for two key reasons: “First, it ensures that citizens make responsible, informed choices rather than acting out of ignorance or misinformation. Second, information serves a “checking function”by ensuring that elected representatives uphold their oaths of office and carry out the wishes of those who elected them. In some societies, an antagonistic relationship between media and government represents a vital and healthy element of fully functioning democracies.”
• Political influence. Having a diverse media means that it is less likely that media moguls, like Rupert Murdoch, will be able to have too much influence over the electoral process.
• Political accountability. The news media also helps to keep our politicians accountable, scrutinising their decisions and policies. A diverse and tenacious news media helps to keep our leaders honest and ensures that they act in the public interest.
• Corporate accountability. Large multinational corporations play an important role in our lives. Unfortunately, they don’t always act in the public interest, doing what is best for their shareholders and the profitability of the company. The news media helps to monitor the behaviour of big business and ensure that they act in an ethical and responsible manner.
• Community voice. Having a diversity of media organisations means that the media will better reflect the needs of our community and culture. In Australia, for example, it is more cost effective for media organisations to have fewer newsrooms and source content from overseas. This could potentially reduce our access to Australian content. Similarly, smaller regional media outlets provide a voice for people living in rural and remote areas.
Media ownership in Australia
Australians rely on the media to provide facts and interpretations of the world. The information we receive from TV, newspapers, radio and the internet allows us to understand our world and provides us with the information we need to make social and political decisions. The increasing complexity of these decisions in the last decades has meant an increased reliance on media sources. Democratic countries encourage and enforce diversity in media ownership because diversity minimises the risk that the information their citizens receive is adversely influenced by the interests of the media organisation which provides it. While Australia has some rules encouraging media diversity by limiting concentration in media ownership and limiting foreign ownership of media sources, it is doing badly in both areas by international comparisons. Australia is ranked 26th in the world for media freedom, a ranking influenced by media diversity. Currently two newspaper groups (News Limited and John Fairfax Holdings) account for over 90 per cent of the circulation of daily newspapers, and Australia has only three commercial television networks
Media Regulation laws
The Broadcasting Services Act 1992 (the BSA) sets out rules that are designed to ensure that there are limits on ownership of media within specified licence areas.
These rules apply to commercial broadcasting licences and licensee companies, individuals and companies who control them and to directors of such companies.
The ACMA is responsible for monitoring and enforcing these rules. Acquisitions of controlling interests in commercial licences through share transactions, the transfer of licences or in any other way are not subject to approval by the ACMA.
The concentration or diversity of ownership of Australian media has long been partly limited in Australia by legislation. In October 2006, the Australian Parliament passed legislation for new media laws that commenced on 4 April 2007.
These amendments reformed the Broadcasting Services Act 1992 which regulates ownership and control rules for commercial television and radio broadcasting, subscription television broadcasting, international broadcasting, datacasting transmitters and newspapers. The purpose of the original Act was to encourage diversity and quality of media services, controlling access to the market and the services that are offered. The amendments, however, lifted foreign and cross ownership restrictions on media markets.
A new ‘two out of three’ rule meant that companies are allowed to own up to two media outlets – television, radio and newspaper – in a single area. Mergers are allowed if the transaction passes a media diversity test that ensures there are five remaining independent media groups in metropolitan markets and four in regional markets. Under the amended laws, media mergers are subject to the approval of the Australian Competition and Consumer Commission (ACCC).
These laws have allowed further concentration of media ownership. This has reduced the number of media owners in Australia and enriched a cabal of present media moguls, and enabled them to have two out of three ownership of a newspaper, television and radio station within a single area. This represents a serious potential threat to democracy
Licence area and audience reach
A person must not be in a position to exercise control of commercial television broadcasting licences whose total licence area population exceeds 75 per cent of the population of Australia.
Limitations on control of media operations in a licence area
A person must not be in a position to exercise control of:
· more than one commercial television broadcasting licence in the same licence area
· more than two commercial radio broadcasting licences in the same licence area.
A person must not be a director of a company or companies that are in a position to exercise control of:
· more than one commercial television broadcasting licence in the same licence area
· more than two commercial radio broadcasting licences in the same licence area
· a commercial television broadcasting licence and a datacasting transmitter licence.
Foreign ownership and control
The BSA does not restrict foreign control of commercial broadcasting licences or foreign directorships in companies which control such licences. Foreign ownership of Australian media assets is regulated by the Foreign Acquisitions and Takeovers Act 1975 and Australia’s Foreign Investment Policy.
In 2015 Communications Minister Malcolm Turnbull attempted to reform media ownership rules in favour of abolishing Australia’s platform-specific ownership rules regulating newspapers and radio and television. The Ministers proposals were to abandon the so-called reach rule and the two-out-of-three rule. He has long been a proponent of the view that these rules are outdated and have limited scope. He is also sympathetic to media companies’ claims that a lack of earnings growth, an uncertain advertising market, audience fragmentation across media platforms and the digital migration of advertisers have severely limited their capacity to grow.
The reach rule prevents metropolitan free-to-air networks merging with regional affiliates by limiting audience reach to 75 per cent, and the two-out-of three rule stops entities from owning more than two of a newspaper, commercial TV licence or radio licence in a major market.
The Government however elected not to proceed with the reform citing a lack of consensus in the industry.