Media essays

The Australian newspaper industry: What role do media ownership laws play in regards to the diversity of content of Australian newspapers?

By Rob Stewart (essay 2005)

The power of the media to influence community attitudes and beliefs prompts the Government to legislate ownership and control of media businesses. Currently this legislation is under review and these proposed changes raise many questions. Amending the laws might encourage further investment in Australia and possible even strengthen local media companies, but will it reduce diversity and mean a loss of local identity? Can diversity of content only come from a having a variety of sources for the information, or can it be achieved through concentrated ownership?

There is regulation of ownership, through legislation, in the Australian newspaper industry also. This legislation is in place to provide diversity of opinion and a free expression of information in everything presented to the public for consumption. The big question is will any changes to the laws that govern media in Australia automatically lead to more diversity of content in our newspapers?
 
Two key areas need to be analysed before any debate can move forward on media ownership laws, particularly in regards to newspapers. Firstly, an evaluation must be undertaken on the current media ownership legislation to make sure it best serves the interests of the Australian people. Secondly, an examination of the current ownership structure in newspapers must be performed to gain a full understanding of how deep the concentration of ownership really is.

(The record of direct proprietor intervention in publishing in Australia is patchy. Owners and their editors are not insulated from each other. More subtle controls may include executive appointments and the reward of staff, however examples are relatively few. Therefore any argument around ownership and its effect on editorial content is best left to another debate.)

Current Media Ownership Laws

An understanding of the legislation that covers media ownership is necessary to fully grasped just how many parties there are involved in this controversial issue. According to Federal Parliament Library and Communications Law Centre websites, three areas of legislation cover media ownership in Australia and all will be discussed in terms of their impact on the newspaper industry. Firstly, the Broadcasting Services Act 1992 (BSA) covers ownership and control of licensed commercial, community and subscription broadcasting and narrowcasting services. Under section 60 of the Act, a person is prevented from controlling, in the same area, either a commercial television broadcasting licence and a newspaper or a commercial radio broadcasting licence and a major newspaper. This relates to the cross-media rules introduced to Australia in 1987 and then re-written under the BSA in 1992.

Secondly, the Foreign Acquisitions and Takeovers Act 1975 (and policies published by the Foreign Investment Review Board) covers the acquisition of Australian property and businesses by foreigners. Foreign ownership limits exist to allow single foreign shareholders to only hold up to 25 per cent of the shares in a mass circulation newspaper, with a maximum of 30 per cent for all foreign interests. Proposals to establish ethnic newspapers in Australia will not generally be approved without substantial local ethnic community involvement and local control of editorial policy.

Finally, the Trade Practices Act 1974 covers the activities of Australian corporations to prevent anti-competitive conduct and to ensure that the interests and welfare of consumers are adequately protected. The Trade Practices Act stops mergers which are likely to substantially lessen competition and prevents the misuse of market power.

History Of Change

Debate on media ownership issues is not limited to the Federal Government, with a stage one report being tabled to the Attorney-General of Victoria as far back as 1990. The report titled, Working Party Into Print Media Ownership, concluded that concentration of print ownership in Victoria had worsened since the last inquiry some ten years earlier. The report highlighted the possible effects of further concentration being insufficient channels for expression of opinion, barriers to entry for new players, diminished localism of content, conflicts of interest and concentration of power. It was recommended that ownership and control be regulated to dilute existing concentration, prevent further concentration, lower barriers to entry, prevent cross ownership of newspapers and avert conflicts of interest.

News and Fair Facts -  The Australian Print Media Industry was a report released by the House of Representatives Select Committee on the Print Media, in March 1992. This report acknowledged the importance of editorial independence, but concluded whilst the relationship between proprietors and editorial staff was relevant to the debate on media ownership laws, it was a very difficult subject to legislate. Graeme Turner argued in his book, Making it National: Nationalism and Australian Popular Culture, that the recommendations of the report was largely ignored by the government and that the formation of a national identity is held back by the anti-democratic and organised structuring of the media by owners and governments.

The Howard Government has long realised that a change in media ownership laws may be necessary due to new media technologies and a number of inquiries proposing regulatory changes. The Parliament of Australia library website states “Australia's media ownership laws have remained unchanged for almost a decade. The justification for the rules is that the effective functioning of a democracy requires a diverse ownership of the daily mass media to ensure that public life be reported in a fair and open manner. The Government has long indicated that it believed the rules to be anachronistic.”

Many amendments and policy statements have been made in this area over the past ten years. In October 1996, the Government announced a review of the cross-media rules and released an Issues Paper on the subject. Changes were introduced by the Broadcasting (Ownership and Control) Act 1987 which amended the Broadcasting Act 1942. This was the birth of the cross media rules, particularly in relation to television licences and newspaper ownership.

Further changes to cross-media regulation were contained in the Broadcasting (Ownership and Control) Act 1988. This Act related to radio licences and newspaper ownership. Other minor changes to the media ownership rules occurred in 1989, 1990 and 1991. As always, the purpose of the changes “was to support competition policy, discourage concentration of media ownership in local markets and enhance public access to a diversity of viewpoints, sources of news, information and commentary.”

Finally the complete rewrite of the Broadcasting Act 1942 was contained within the Broadcasting Services Act 1992, which altered the limits on cross-media ownership for a newspaper proprietor from five per cent of a television licence to 15 per cent.

The Productivity Commission Inquiry Broadcasting was released in April 2000. Part V, 'Diversity, Concentration and Competition', dealt with ownership and control regulation. The report stated that “the likelihood that a proprietor's business and editorial interests will influence the content and opinion of their media outlets is of major significance. The public interest in ensuring diversity of information and opinion, and in encouraging freedom of expression in Australian media, leads to a strong preference for more media proprietors rather than fewer. This is particularly important given the wide business interests of some media proprietors.” 

Concentration in media markets was discussed in the report as a significant economic, social and cultural issue in Australia. The Commission noted however that it was not necessary for proprietors to be heavy-handed about editorial direction. Self-censorship by journalists in Australia was seen to achieve similar outcomes. The inquiry concluded that diversity of opinion is more likely with diversity in ownership.

In August 2001 the Government stated it would consider a comprehensive review of the cross-media and foreign ownership rules, if it received undertakings that companies would maintain existing levels of locally produced news and separate editorial processes. This position formed part of the Government's election policy of that year on broadcasting. The Policy also stated that foreign ownership restrictions on television and newspapers would be removed.

The Broadcasting Services Amendment (Media Ownership) Bill 2002 was introduced by the Government in March 2002 to implement its election policy commitment. The Government's preferred position is that media acquisitions should be governed by the Trade Practices Act and the Foreign Acquisitions and Takeovers Act and that the restrictions on foreign investment, ownership and control in the BSA be repealed.

Industry Authorities and Bodies

There are four industry bodies directly relevant to the debate on media ownership laws and its impact on the Australian newspaper industry. They are the Australian Broadcasting Authority, The Australian Communications Authority, The Press Council of Australia and The Media Entertainment and Arts Alliance.

The Australian Broadcasting Authority (ABA) was established by the Broadcasting Services Act 1992, and began operations in that year. The BSA defines the role of the regulatory authority, gives the ABA a range of powers and functions, and sets out explicit policy objectives. One of these objectives is limiting the concentration of ownership and foreign control of the mass media. The ABA monitors compliance with the ownership and control provisions of the Broadcasting Services Act, including the cross-media rules. It can allocate, renew, suspend and cancel broadcasting licences and collect any fees payable for those licences.

One of the ways the ABA monitors the concentration of ownership in the media is via the Associated Newspaper Register, which assists the ABA in monitoring compliance with the cross media provisions of the Broadcasting Services Act. The Associated Newspaper Register is updated as required. “Newspaper” means a newspaper that is in the English language and is published on at least four days in each week, but does not include a publication if less than 50 per cent of its circulation is by way of sale. Inclusion on the Associated Newspaper Register occurs if the ABA is satisfied that at least 50 per cent of the circulation of a newspaper is within the licence area of a commercial television broadcasting licence. The 50 per cent criteria also applies to commercial radio licence broadcasting areas. However, for commercial radio there is an additional criterion for inclusion on the register.

On 1 July 2005 the Australian Broadcasting Authority will merge with the Australian Communications Authority (ACA) to create the Australian Communications and Media Authority, or ACMA. The decision to merge the two organisations recognises the work done by the ACA over the last seven years in putting a strong self-regulatory regime in place. The merger is a response to the flexibility needed to operate on the regulatory policy set out by Parliament.

The Australian Press Council (APC) is the self-regulatory body of the print media. It was established in 1976 with the aims of helping preserve the traditional freedom of the press within Australia and ensuring that the free press acts responsibly and ethically.Unlike the ABA and ACA, it has no legislative powers, however anyone may take a complaint concerning the press to the Council. The Council is funded by the newspaper and magazine industries, and its authority rests on the willingness of publishers and editors to respect the Council's views, to adhere voluntarily to ethical standards and to admit mistakes publicly.

Various submissions have been made by the APC to the Government in regards to media ownership laws. In 1999 the APC made a series of recommendations to the Productivity Commission Inquiry into Broadcasting. The key arguments were the promotion of the plurality of media ownership and of media outlets; an awareness that there are benefits which can flow from globalisation; that the Trade Practices Act constitute the only law governing competition in the media market; foreign investment in new media outlets should be allowed and that freedom of speech and of the press always be promoted in application of competition law.

In 2002, the APC submitted recommendations to the Legislation Committee on the Inquiry into the Broadcasting Services Amendment (Media Ownership) Bill. The APC stated that it foresaw problems if the proposed bill became law. It submitted that the proper ownership regulator should be the Australian Competition and Consumer Commission (ACCC) using existing legislation supplemented by a media-specific public interest test, with changes that ensure the media is regarded as a single market for the purposes of mergers and acquisitions.

The APC believes foreign takeovers and acquisitions in the media should be subject to the Foreign Acquisitions and Takeovers Act with regard for Australian content in the media. Overall whilst not opposed to the bill in general, the APC has concerns it only “adds another level of bureaucracy and entrenches government regulation into the editorial processes of the print media.” The APC therefore concludes that it is especially important no actions of government have the effect of impeding, limiting, distorting or lessening the diversity and freedom of print media news sources.

The Media, Entertainment and Arts Alliance is the professional association of trade unions for people working in the media and entertainment industries and includes the Australian Journalists Association. The Alliance has a long-standing commitment to promoting diversity in the Australian media industry and as such has recommended that the Senate reject the Media Ownership Bill because it will increase concentration of ownership and reduce diversity of information. “Other changes need to create more players, not fewer.”

Overseas Media Ownership

Studying overseas examples of ownership laws may help to understand the uncertain future faced by the Australian media. In Canada, the Canadian Radio-Television and Telecommunications Commission (CRTC) recently ruled to allow common ownership of newspapers and television stations as long as separate management and presentation remain in place. In 2001, CRTC approved media giant CanWest Global                Communications’ bid to buy out the large Southam chain. According to the Canadian Journalists for Free Expression, it has not proven a successful ploy and Canada now faces one of the largest media monopolies in the developed world. (CanWest currently holds a 57.5 per cent economic interest in the Ten Network)

The debate over media ownership laws in Britain has focused at times on the possible influence exerted by the proprietors. Ten years ago the issue was discussed in The Cross Media Revolution: Ownership and Control, by Tim Congdon. It contended that the main objectives of any public policy of media ownership must be to secure a variety of sources of information and to provide editorial control over that information. The BBC was seen as providing a leading role in providing the public with an assortment of views in the UK. Too few owners may lead to political influence, described as affecting news, current affairs and wider cultural material; and / or commercial influence, encompassed in the ability to pursue a corporate agenda through the media industries.

In the UK, the news media has a lot of power, but seems to have lost some of its credibility. The newspaper market is extremely competitive, with no less than 12 daily newspapers selling on newsstands. Interestingly all of these papers are published out of London. There appears to be a gentle decline in every paper in the British press. Recently on Radio National’s (RN) Media Report, John Lloyd, editor of FT Magazine said “there is a decline in the newspaper habit - getting news is a much more fragmentary occasional thing, partly because you can turn on a variety of sources and get the headlines whenever you wish it. All newspapers will have to move to a society of consumer choice.”

People still possess a serious interest in information and news, but are finding it in different forms than the traditional outlets, particularly upmarket newspapers. In the US, there is a decline in on the ground reporting, which has given way to market-driven, commercial and relentlessly “dumbed down” news. Also commenting on RN’s Media Report, retired former foreign correspondent for CBS News, Tom Fenton, said that the increase in news outlets has not led to a greater diversity of news. Most Americans, around 80 per cent, get most of their national and international news from repetitive, 24-hour, cable-based news television, which offers opinion and sometimes bias. He sited a recent poll that showed that “45 per cent of Americans believed little or nothing of what they read in their daily newspapers.”

Current Newspaper Ownership Structure

Julienne Schultz in The Press offers an insight into how newspapers survive in the current media market. The nature of the press is shaped by the role of journalists and the relationship between the newspaper and those in positions of power. Despite predictions as to its demise, the newspaper remains resilient because its position in society is more important than just another commercial business. The newspaper has a central and enduring role in public life, characterised at times by its label as the “fourth estate of politics.” Coupled with the increased likelihood of near monopoly ownership by large entertainment conglomerates, newspapers will remain an important part of the media.

According to the Australian Press Council (APC) website, newspapers are “the public's primary source of news and have special responsibilities.” They break the stories and provide the background information, and analysis of that information, on matters of public interest and concern. Newspapers also set the agenda for radio talk shows and for television news and current affairs shows. A PriceWaterhouseCoopers survey released on 25 March 2002 reported that 68 per cent of Australians use the newspapers as their primary source of information.

Appendix 1 provides a detailed table showing current newspaper ownership in Australia. This table covers all national newspapers, metropolitan daily and weekly papers, weekend editions and the numerous newspapers published under the banner of community newspapers. Every effort has been made to include every newspaper that could be considered more than just very special interest. For example, there are many newspapers produced in rural areas for farming communities etc. that whilst are important to those communities, are no more than newsletters. These are near impossible to catalogue and irrelevant for this discussion.

The table shows that the newspaper industry is dominated by only a few publishers, being News Limited, John Fairfax Holdings and the independents category. The independents incorporates publishers such as Rural Press Limited, APN News and Media, and West Australian Newspaper Holdings Limited.

News Limited (News) is an Australian subsidiary of News Corporation. News Corporation’s Chairman is US citizen, Rupert Murdoch. The company is by far the most dominant player in the Australian newspaper industry, with interests in more than one hundred national, metropolitan, regional and suburban newspapers throughout Australia.

In terms of major metropolitan newspapers, News publishes The Australian and  Weekend Australian at a national level. On a state metropolitan daily basis, it publishes the Daily Telegraph (NSW); The Herald Sun (VIC); Courier Mail (QLD); Advertiser (SA); Mercury (TAS) and Northern Territory News (NT). Supporting those publications are weekend equivalents in Sunday Telegraph ( NSW); Sunday Herald Sun (VIC); Sunday Mail (QLD); Sunday Mail (SA); Sunday Times (WA); Sunday Tasmanian (TAS) and Sunday Territorian (NT). In total these 15 publications account for a massive 61 per cent of the major metropolitan market and reach consumers in every capital city in Australia, in some form or another, on everyday of the week.

This dominance of the newspaper market by News Limited was highlighted over ten years ago in a discussion chapter titled, Do we have too few media proprietors in Australia? In his argument for the topic, economics lecturer Dr. Allan Brown stated “The control of over 60 per cent of metropolitan daily newspapers by Mr.Rupert Murdoch’s company raises questions concerning foreign ownership of the media. Although born in Australia, in 1985, he adopted American citizenship to pursue his business interests.” He argues the relevant legislation in this area was ignored by the government. “The Government had the power to prevent the establishment of increased concentration of newspaper ownership by a foreigner, but lacked the will to exercise the power.”

The reply against the topic, comes from Mr W R McComas, the chairman of the Trade Practices Commission, at the time of the takeover by News Limited of the Herald and Weekly Times in 1987. Not surprisingly he claims the legislation is fulfilling its intent. While acknowledging that further changes in ownership of newspapers are likely to occur, he concludes that there is ample competition for News Limited in all Australian markets. However he does mention that the takeover may not have been in the public interest. “Analysts should have looked at the Foreign Takeovers Act, which empowers the Treasurer to block a takeover by foreign interests, if it is contrary to the national interest.”

News has an extensive regional and suburban newspaper business also. News controls the Cumberland Newspaper Group (NSW); Leader Community Newspapers (VIC); Quest Community Newspapers (QLD); Messenger Community Newspapers (SA) and Perth Community Newspapers (WA). Numerous titles are published by each of these groups in their various markets.

John Fairfax Holdings Limited (Fairfax) is an Australian publishing group. Fairfax is the second major player in the Australian newspaper industry. Fairfax publishes one national title in the Australian Financial Review. A very different paper to any other national or metropolitan daily, it is heavily skewed to the business community.

Fairfax also publishes metropolitan daily newspapers at a state level – Sydney Morning Herald (NSW) and The Age (VIC). Supporting those two publications are Sunday equivalents in the Sun Herald (NSW) and the Sunday Age (Vic). In total these five publications account for 22 per cent of the major metropolitan market and reach consumers in Sydney and Melbourne only. In addition, Fairfax has an extensive suburban and regional newspaper business in NSW and Victoria through Fairfax Community Newspapers.

Other players in the major metropolitan newspaper market include Rural Press with the Examiner and Sunday Examiner in Tasmania and Canberra Times in ACT; and West Australian Newspaper Holdings with the West Australian in WA. Rural Press, West Australian Holdings, APN News and Media and other smaller independent publishers make up the bulk of the rest of the suburban and particularly regional newspaper market.

The Future

With the Howard government getting control of the Senate from July 1 this year, there is much speculation about cross media ownership and foreign investment rules being either slackened or abolished altogether. The Age has recently published many articles on the subject. Apparently the talk of abolishment is premature because the content of the legislation is unknown and despite the Senate position, national debate on any proposed changes will still continue. Prime Minister John Howard has told media owners not to expect changes to Australia's cross-media laws, unless they can first agree among themselves to potential new ownership structures. Minister for Communications, Senator Helen Coonan, concedes there are current constraints on the industry preventing its development, but has stated that no positions will be forced upon the industry without consulting a variety of views. It seems repealing current media laws is not a priority for the government.

John Howard has stated he will not waste any “political capital” on this issue and he is very aware that the players in this debate are extremely powerful people. Channel 9 owner, Kerry Packer, seems less eager to take over Fairfax due to the falling profits of classified advertising. Fairfax is rumoured to be the most active in the debate for change at the moment but analysts have stopped short of predicting its potential moves. Recently appointed Ten Network chief, Grant Blackley, has already confirmed that future acquisitions are on his agenda. He said recently that “we now have the size to make a push at very big companies like Fairfax.” With media proprietors seemingly unenthusiastic about pushing change at present, it could be another 12 to 18 months before any of Australia's media assets start changing hands.

BIBLIOGRAPHY

Books

Barr, T. Newmedia.com.au:the Changing Face of Australia’s Media and Communications. Sydney:Allen and Unwin, 2000.

Beesley, M. Markets and the Media:Competition, Regulation and the Interests of Consumers. London: IEA, 1996.

Brown, A. & McComas, W.R. “Do we have too few media proprietors in Australia.” In For and Against: An Anthology of Public Issues in Australia, edited by R. Giles et al, 216-217. Melbourne: Brooks Waterloo, 1989.

Congdon, Tim et al (eds). The Cross Media Revolution - Ownership and Control. London: John Libbey and Company, 1995.

Fientuck, M. Media Regulation, Public Interest and the Law. London:Edinburgh UP, 1999.

McGuinness, P. The Media Crisis in Australia:Ownership of the Media and Democracy. Melbourne: Schwartz and Wilkinson, 1990.

McQuail, D. Media Performance: Mass Communication and the Public Interest. London: Sage, 1992.

Scultz, J. “The Press”. In The Media in Australia: Industries, Texts and Audiences, edited by S.Cunningham et al, 23-59. Sydney: Allen and Unwin, 1997.

Turner, G. Making it National: Nationalism and Australian Popular Culture. Sydney: Allen & Unwin, 1994.

Western, J. Australian Mass Media:Controllers, Consumers, Producers. Australian Institute of Political Science, 1975.

Websites

“Corporate” <http://www.aapmedianet.com.au/html> (05 April 2005.)

“ABA Monitoring of Ownership and Control provisions of BSA” <http://www.aba.gov.au/owncontrol/limitations.html> (12 April 2005.)

“Corporate” <http://www.abc.net.au/rn/html> (19 April 2005.)

“Households Demographic Information and Newspapers” <http://www.abs.gov.au/html> (05 April 2005.)

“Corporate” <http://www.aca.gov.au/html> (12 April 2005.)

“MEAA Submission to The Senate -  Media Ownership Bill”  <http://www.alliance.org.au/html> (12 April 2005.)

Alston, Richard, “The Cross Media Laws Must Go For Diversity’s Sake”, (12 April 2002)<http://www.the age.com.au/articles/2002/04/11/1018333396039.html> (07 April 2005.)

Jackson, Kim, “Media Ownership Regulation in Australia”,(26 March 2002) <http://www.aph.gov.au/library/intguide/sp/mediaregulations.htm> (07 April 2005.)

“Publications” <http://www.apn.com.au/html> (07 April 2005.)

Baker, Russ, “Murdoch’s Mean Machine”, (01 March 2003)<http://www.comslaw.org.au/research/Ownership/19971119mediaownrules.html> (05 April 2005.)

“Who Owns What” <http://www.cjr.org/tools/owners/html> (12 April 2005.)

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“Corporate” <http://www.heraldsun.com.au/html> (19 April 2005.)

Kohut, Andrew, “Self Censorship:Counting The Ways”, (01 March 2003)<http://www.comslaw.org.au.html> (12 April 2005.)

<http://www.mediamonitors.com.au/html> (12 April 2005.)

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 “Overview of Australia's Media Ownership Rules”, (01 March 2003)<http://www.comslaw.org.au/research/Ownership/19971119mediaownrules.html> (07 April 2005.)

“Submission to Legislative Committee on Inquiry into BSA”, (2002) <http://www.presscouncil.org.au/pcsite/fop/fop_subs/crossmedia.html> (07 April 2005.)

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“Publications” <http://www.ruralpress.com.au/html>(19 April 2005.)

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Government Publications

House of Representatives Select Committee on the Print Media. News and Fair Facts - The Australian Print Media Industry. Canberra, March 1992.

Productivity Commission. Inquiry Report. Broadcasting, Report no.11. Canberra: AusInfo, March 3 2000.

Submission to the Senate - Media Ownership Bill. Media Entertainment and Arts Alliance, April 2002.

Working Party into Print Media Ownership - stage one report to the Attorney-General of Victoria. Melbourne: The Party, 24 December 1990.

Newspaper Articles

Jane Schulze, “Ten chief calls it a day, seriously,” The Australian, 19 May 2005, p.18.

Jason Koutsoukis and Christian Catalano, “I won't umpire media stoush: PM tells bosses,” The Age, 5 April 2005, p.5.

Mark Day, “Media braces for a bumpy ride,” The Australian, 27 January 2005, p.13.

Radio

“Journalism Under Threat” The Media Report. Presenter – Richard Aedy. ABC – Radio National, 0830, 21 April 2005.
 

“Media Landscape 2005” The Media Report. Presenter – Richard Aedy. ABC – Radio National, 0830, 27 January 2005.

“New Media Rules” The Media Report. Presenter – Richard Aedy. ABC – Radio National, 0830, 28 March 2002.

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