Jane Prentice (Ryan, Liberal Party, Assistant Minister for Social Services and Disability Services) Share this | Hansard source

I am pleased to rise to speak on the Broadcasting Legislation Amendment (Media Reform) Bill 2016, and I thank the member for Gilmore for her contribution. This bill will remove two media control rules currently in broadcasting legislation. These are known as the 75 per cent audience reach rule and the two-out-of-three media control rule. The bill will also require those regional commercial television broadcasters, which are subject to certain media control changes referred to as trigger events, to provide additional levels of local content to local areas in regional Australia—the member for Gilmore was stressing the importance of regional content for regional areas.

Reform is necessary and, indeed, well overdue. The existing media control and ownership rules were developed when the media industry was dominated by just three established types of media—commercial television, commercial radio and associated newspapers. The modern media environment is significantly different as viewers move to online and mobile. Newspapers were the first to bear the brunt, with print readership plummeting over the past decade. News Corp and Fairfax have together cut thousands of jobs since 2012. In 2015-16, Fairfax reported a net loss of $893.5 million on the back of writedowns of close to $1 billion in the value of their publishing assets. Traditional television businesses are also in trouble. The audience for commercial television has been in decline since 2003, and there has been a drop of six per cent in revenue for the metropolitan broadcasters and 10.9 per cent for regional broadcasters between 2010-11 and 2015-16. Costs are also increasing.

As we look around the chamber, how many of us go back to our office or back home to sit down in front of a television to watch the six o'clock news? Normally, we either get the press clippings in the morning, already sanitised for us on what they think we need to know, or we watch things on our iPads or highlights of the news. We cut out the advertisements. Very few people these days sit down to watch the news.

Traditional television businesses are also in trouble. Seven West Media, Nine Entertainment and Prime Media Group recently reported falls in their operating profits in 2015-16 of 10.7 per cent, 7.1 per cent and 17.2 per cent respectively, continuing a trend of year-on-year profit erosion for all commercial broadcasters that has been evident, with few exceptions, since 2013-14. Clearly, that situation cannot continue.

These trends are forecast to continue as online sources of news and entertainment and businesses like Netflix capture viewers away from traditional media. Far from protecting Australian businesses and ensuring diversity for consumers, our media control rules now impede the capacity of local businesses to continue to provide quality professional journalism. Regional broadcasters and publishers are in particular trouble from high costs, falling revenues and online competition.    None of us will benefit if major Australian media companies go out of business because of outdated rules. There will be fewer Australian jobs, less quality journalism, fewer Australian stories, and likely less regionally focused news. As one of the most diverse countries, it is important, as the member for Gilmore said, that we do get that regional focus for regional centres.

The 75 per cent audience reach rule effectively prevents the owners or controllers of any one of the major metropolitan commercial networks—Seven, Nine and Ten—from gaining control of, or merging with, any one of the regional commercial networks, notably Prime, WIN and Southern Cross Austereo. It prevents people from controlling television licences that together reach more than 75 per cent of the population. This rule now has no practical value for the following reasons.    Firstly, viewers everywhere already get mostly the same television programs. This is because regional networks for the most part transmit programs from metropolitan broadcasters under commercial deals. Getting rid of the 75 per cent rule will not change what audiences see. Second, viewers can also receive streamed versions of two of the three metropolitan commercial networks' services, including in regional markets across Australia, online. Broadcasters also provide catch-up services which are available to national audiences. Through streaming, catch-up and other online services these broadcasters can already reach 100 per cent of Australians. Third, viewers can already receive a large number of competing online video and audio media services, including Netflix, Stan, Presto and Fetch TV, which are not limited by regulated audience restrictions.

To take a hypothetical example, removing the rule would potentially allow Nine and Southern Cross Austereo to merge, or for one party to take over the other. This would have little or no impact in terms of media diversity. With some exceptions, Nine and Southern Cross do not operate in the same areas. The combined Nine-SCA entity would replace the respective Nine and SCA services in each area, so viewers would continue to receive the number of television stations that they currently do, and Nine and SCA already share virtually all of their TV programs.

The two-out-of-three rule prevents a person who controls two regulated media platforms in the licence area from acquiring control of a third platform in the same licence area. For example, if the same person controlled a radio station and a newspaper in the licence area, they could not also control a television licence. The rule has only a modest impact on media diversity, particularly in the majority of regional and remote areas. In some two-thirds of regional markets no change is possible. In these areas either there are not three regulated media platforms, so the two-out-of-three rule is actually irrelevant, or no further changes are possible because other media control rules prevent new transactions.

The impact of removing this rule will therefore be limited to the metropolitan larger regional licence areas. For example, it might allow Fairfax Media to seek to acquire commercial television licences in Sydney or Melbourne, where it currently controls a commercial radio station and an associated newspaper. In Sydney and Melbourne there are multiple sources of news and information—nine voices in terms of the traditional regulated media—so any such transactions would not substantially affect diversity. There are also many other online media events such as The Guardian and The Huffington Post, news content aggregators such as Google and social media sites such as Facebook and Twitter. Many Australians are turning to these nonregulated media platforms for their information needs. Any changes would also have to pass the test of Australia's competition laws. These operate independently, so just because a media transaction would be allowable under media control laws does not mean it would automatically be accepted under competition laws.

The new obligations will apply to regional commercial television broadcasters who, as a result of changing control, become part of a group of commercial television broadcasters who together reach more than 75 per cent of the Australian population. This change of control is referred to as a trigger event. Continuing the above example, if Nine and Southern Cross merged, the resulting Nine-Southern Cross group would exceed the population limit, and therefore the merger would not be a trigger event. Regional broadcasters in eastern Australia are already subject to local content rules. The trigger event will impose new rules on top of these existing rules, and the existing rules will continue to apply if there is no trigger event.

The additional local content obligations are aimed at ensuring that the removal of the 75 per cent control rule does not result in changes that reduce the amount of local content, for example by the merged businesses stripping costs by reducing local content production. Indeed, it goes further by increasing the amount of local content required to be provided where a trigger event occurs. Some areas, such as regional South Australia, will have regulated local content obligations for the first time.

The Turnbull government is committed to reforming legislation in areas where archaic regulation is holding Australian businesses back. This bill is yet another step in removing restrictive and redundant regulation and ensuring independent sources of news, current affairs and similar programming continue to be available to all Australians, particularly those in regional areas.

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