Fairfax Media chief executive GREG HYWOOD reflects on the slow, but welcomed, reforms to media in Australia and the reasons why New Zealand needs to catch up.
Australian Communications Minister, Senator Mitch Fifield, has announced a media reforms policy that should have been delivered 10 years ago.
And I am by no means criticising the senator. To the contrary.
The senator has fought long and hard to get a comprehensive package up and within reach of passage through a reluctant and out-of-touch Parliament.
The very fact it has taken 10 years for politics to catch up demonstrates what a gulf now divides the worlds of media and public policy making. Where media companies grapple with structural changes that threaten their very existence, our policy makers seem to have little sense of the changing world.
The Fifield reform package simply acknowledges what everyone in the media has been fighting for, and fighting for years.
New Zealand, a generally well-governed country, is still to read the memo, as demonstrated by the fresh decision of the New Zealand Commerce Commission to reject the merger of the country’s two major publishers, Fairfax NZ and NZME.
Looking at Fifield’s list of reforms – two-out-of-three, the reach rule, licence fee relief and so on you can see their greatest relevance was five, even 10 years ago.
That was the time the industry should have been allowed a level playing field so it could prepare for the big global players.
It is a much tougher world now.
Google and Facebook hoover up the lion’s share of advertising in the Australian market, create no local content and pay little in taxes. By futzing around with notions of “diversity” that were made irrelevant by the emergence of the internet in the 1990s, our policy makers across all parties have threatened the depth and breadth of local news, information and entertainment.
Where at least the Turnbull government recognises the issues, the NZCC stands condemned as a regulator totally out of touch.
By denying Fairfax and NZME the ability to take back-end, non-content costs out of a merged business, it will force both companies into reviewing their editorial workforces and number of publications.
We wish it were not so. Media companies want to produce more content not less, employ more journalists, developers, producers, actors, artists, not fewer.
But look at our universe. Last year Morgan Stanley estimated Google and Facebook extracted $4 billion to $5 billion of ad revenue from Australia. That is a 35 per cent to 40 per cent market share. And their share is growing faster than the overall market.
Companies, such as Fairfax, that spotted the trends early and acted – reducing legacy costs and building new businesses like Domain can not only survive, but thrive in the new world. Because Fairfax Media has taken these tough but necessary decisions, its market capitalisation of $2.4 billion is greater than the three free-to-air TV companies – Seven, Nine and Ten – combined. But if our policy makers want strong local voices they need to stay tuned to the media and never again get caught so far behind the real world.
This article has been republished with the permission of Fairfax Media.
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