Ownership concentration dominates Australia’s Mass Media

The past 12 months have been a pivotal time for Australia’s mainstream news media. Having seen off controversial regulatory reforms that would have relaxed some cross-ownership controls (but also introduced more onerous oversight of press standards), harsh business truths and painful economic reality have returned, in the form of cost-cutting, new digital subscription models, and foreign competition.

The failed regulatory reforms generated public, industry and political debate around ownership concentration and the lack of media diversity; cross-ownership and the impact of media convergence; the need for revised rules around mergers and acquisitions; and calls for more control over media standards.

What does Australia’s Fourth Estate currently look like?

There are two daily national newspapers, and 10 daily capital city newspapers; all but one of these 12 titles are owned by just two companies: News Limited, and Fairfax Media. Only Sydney and Melbourne have more than one daily local newspaper. Together, News and Fairfax account for about 88% of print media. Both companies have significant interests in broadcast media. The sole “independent” daily newspaper is owned by Seven West Media, itself a major TV broadcaster. As further evidence of Australia’s concentrated content ownership, Seven West has a joint digital venture with Yahoo!, while its rival network broadcaster, Nine Entertainment has a similar joint venture with Microsoft. Prominent in the ownership mix are the names of Rupert Murdoch (News Limited), James Packer (Consolidated Press Holdings) and Kerry Stokes (Seven West Media) – each of whose companies have various interests in Australian pay TV. Meanwhile mining magnate and Australia’s richest person, Gina Rinehart has been buying into both Fairfax (along with John Singleton, a key figure in Australia’s advertising and radio industries) and Network Ten (along with James Packer and Lachlan Murdoch).

Another layer of complex media cross-ownership comes in the form of Australia’s regional TV networks. The main regional networks (WIN, Southern Cross and Prime) each have content affiliation agreements with one or other of the three metropolitan networks (Seven, Nine and Ten), and each have separate interests in radio. Just to confuse things even further, the owner of WIN, Bruce Gordon is a major shareholder in Network Ten, and in the past week it has been reported that he is open to merging WIN with either Nine or Ten. Not only would such a merger lead to further concentration (subject to regulatory approval), it would also see a re-alignment of the metropolitan and regional content agreements; and given past criticism of of reduced local and regional TV news content (and the closure or consolidation of local TV news rooms), I would imagine that without suitable regulatory provisions, local news content will be even further reduced.

What are the news media doing in response to current market challenges?

First, both News and Fairfax have announced staff cuts in an effort to offset declining circulation and advertising revenues from their print editions. The overall results have seen: departures by high-profile journalists; centralized news-gathering operations; outsourced sub-editing; re-alignment of print and on-line assets; and the closure of some local and regional titles. Most recently, Australian Associated Press (AAP) announced that newswire staff numbers are being reduced by 10%. AAP (whose largest shareholders are News and Fairfax) is a major provider of news content and sub-editing services to the mainstream media. The staff reductions among in-house editors and journalists have raised concerns about quality and diversity in Australia’s highly concentrated news media. Partly in response to this perceived decline in editorial standards, The Conversation (a not-for-profit venture, backed by a consortium of universities) was launched in 2011 as a platform for in-depth, objective and authoritative news analysis and commentary.

Second, both News and Fairfax are in the process of building subscription paywalls around their digital content. Fairfax has operated a paywall around its business title, the  Financial Review, for several years; but like News it is introducing freemium models for broader on-line news content. In their latest investor briefings, News and Fairfax have outlined a renewed strategic focus on digital platforms, although neither have given definitive timelines for sun-setting their print editions. Personally, I am somewhat confused by the different subscription models on offer (print, on-line and tablet editions) and what I can access as a subscriber to one or other platform (and as a domestic or overseas reader).

Third, UK publisher Guardian News and Media has launched an Australian edition of its online newspaper. Free to readers, the site is funded by local advertising, and supported by a combined UK/Australia editorial, production and commercial team. As with News and Fairfax, I’m confused by the commercial model for digital content – is there a dedicated Australian subscription within the tablet edition? – and I doubt whether the Guardian Australia can compete effectively with domestic news coverage. The Guardian claims that Australia is one of its largest markets outside the UK, but I wonder if that readership mostly comprises British backpackers wanting to check the latest results from the English Premier League… The Guardian Australia, along with The Conversation has benefited from the staff downsizing at News and Fairfax to co-opt some leading journalists and editors to its cause. Meanwhile, The Conversation has launched a beta site for the UK.

And the rest?

Elsewhere, News, Fairfax and other smaller publishers are building specialist digital content, particularly in business, finance, politics, property, motoring, careers and sport. Most of these assets are funded by advertising and sponsorship, or underwritten by cross-media promotion. A number of these outlets appear to source their content from unpaid bloggers and commentators, as a way of offering free marketing and audience exposure to their writers.

Despite the latest failed attempts at regulatory reform, I expect to see plenty of activity within Australia’s news media (once we get past the forthcoming federal election), fuelled by renewed debates over ownership concentration; the realignment of cross-media interests (especially among Australia’s media barons and billionaires); and the re-positioning of print vs online vs mobile.

Disclosure: the author does not hold a financial interest in, or have a commercial arrangement with any of the publishers mentioned in this article..