Environment and Communications Committee Senate Inquiry Media Diversity

Leon Gettler

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I am a journalist with 40+ years of experience in the industry. I have worked for newspapers, the last two being the Sun News-Pictorial and The Age. I have covered all areas including industrial relations, state and federal politics, communications including the newspaper industry, business, finance and economics. In the last 12 years, I have worked a freelancer. I have worked for The Australian, AAP, Business Spectator, BRW, CRN, ProPrint, Charter, In The Black and Public Accountant. For the last seven years, I have also worked on community radio at J-AIR 880. I produce a weekly podcast by myself Talking Business which covers the week’s news in business finance and economics, in about 30 minutes. I work as a research assistant, journalist in residence and podcast production manager at the RMIT Blockchain Innovation Hub . I am doing a PhD on what innovations newspapers can use to connect with their communities. It includes a chapter on the impact of COVID-19 on the media, particularly country newspapers. My supervisors tell me it is the first piece of academic research into this issue. I am making this submission to the Senate inquiry because I have read Kevin Rudd’s petition. I did not sign it. I do understood where he was coming from. I worked at the Herald and Weekly Times when Murdoch took it over and I could see the transformation of the newspaper’s coverage. It was not just political. The coverage became less serious and more superficial focusing on television and lifestyle stories over serious news. I left the Sun News- Pictorial as a result. I too have concerns about News Corp’s disproportionate control of Australian news media. In no other country in the world would one entity be allowed to control 65% of print newspapers let alone being the controlling shareholder of Foxtel and owning 24-hour channel Sky News in Australia. However, I did not sign Rudd’s petition because I cannot see how any government can address this problem. No government can force Murdoch to divest of his assets. Rather, I think the Senate Committee should make recommendations to increase diversity at the other end. This is now a critical issue when COVID-19 has seen more than 100 regional and community newspapers in Australia ceasing printing. Some have shut down altogether and there have also been significant redundancies at major media employers because of sharp declines in advertising revenue. There is evidence that the impact of COVID-19 on

1 newspapers worldwide has been even more profound than what occurred with the global financial crisis. The country and community newspapers are critical. There is data showing there were about 2340 regional journalists across the country and, more importantly for the communities they served and civil society generally, these journalists produced stories for local media outlets that sometimes functioned as the main source of news for thousands of towns and regions. Some of Australia’s rural newspapers had been printing for over 100 years. They were often owned by local families and formed the backbone of the community, bringing together local business, politics, social life, and entertainment. They sponsored sporting teams and neighbourhood charities and provided a space for the exchange of ideas. Crucially - especially as the world battled COVID-19 - the local paper was a regular, reliable source of information for residents. The local paper created the public space for community debate and exchange, so important for political life and society, envisaged by Habermas. If newspapers are to innovate and flourish beyond the pandemic, they need to be acknowledged and supported as an essential service. So far the government response has been inadequate. In response to the problem facing community news outlets in Australia, the Department of Infrastructure, Transport, Regional Development and Communication announced a package that included a $50 million public interest news gathering fund, it brought forward the release of $5 million from its Regional and Small Publishers Innovation Fund and tax relief for commercial television and radio broadcasters. But a big chunk of the funds went to large conglomerates such as ACM, Southern Cross Austereo and Seven West Media to support their regional operations. The federal government has not made the full list of recipients publicly available. The MEAA pointed out that only $5 million of that money would go to supporting regional and small publishers and the government had yet to outline a process for applying for these funds. Furthermore, it is not clear to what extent the papers would resume again once the pandemic had passed, as in addition to the coronavirus impact, news outlets were citing pre-existing issues affecting their viability.

Local, state and national levels of government have long supported local newspapers through advertising – in fact, they have often been required by law to do so.

This funding stream has indirectly supported local newspapers for more than a century. However, increasingly councils are shying away from advertising in newspapers in search of a better deal, such as on Facebook or through free publicity on their own websites. These websites are often run by public relations professionals whose job it is to spruik rather than scrutinise council matters.

Certainly the business models of the news outlets were already struggling as most digital advertising revenue went to Google and Facebook. The Australian Competition and Consumer Commission, under direction from Treasurer Josh Frydenberg who had come under pressure from NewsCorp, released a “mandatory code of conduct” that (if the legislature approves) will establish a bargaining process between digital platforms and local news organizations. The stated goal is to determine how much the latter should be compensated for the snippets of news that the platforms display to their users, on the premise that an imbalance of competition has led to the publishers’ decline. If the two sides fail to agree, an arbitration panel will decide how much the platforms have to cough up.

2 Facebook has since threatened to stop users accessing news if the government goes ahead with this

The ACCC’s approach misdiagnoses the problem. Journalism’s business model wasn’t broken by digital platforms. The internet unbundled many of the services — classified advertising, job postings, movie listings and so on — that newspapers once provided, ending their advertising revenues and eroding the local or regional monopolies that made them so profitable. The internet offered consumers a wealth of free news and opinion. It also gave advertisers options and audiences that traditional publishers haven’t been able to match. It’s true that Facebook and Google have capitalized on these trends, but they hardly caused them.

Moreover, for the platforms, news is an insignificant source of revenue. Only about 4% of Facebook’s News Feed is actually “news,” as opposed to posts from family and friends, while Google doesn’t even bother to monetize Google News; it reckons that only about 1% of searches in Australia have anything to do with current events. By contrast, publishers everywhere are hugely dependent on platforms to drive traffic to their sites. If anyone should be paying up in this relationship, it isn’t Google and Facebook.

But the best reason to oppose this approach is that it’s a proven failure and flies in the face of the ACCC finding that 50% of readers overseas get their news from Facebook, in Australia it’s 41%. And it’s rising.

By inducing platforms to do away with news snippets and previews altogether, the ACCC’s recommendation will in all likelihood reduce publishers’ traffic, depress ad revenue, erode competition, impede innovation and needlessly deprive consumers of a valuable service. The committee should look to Spain and Germany where similar rules led to steep declines in local news traffic and caused outsized harm to smaller publishers. Or they should examine what happened in France, where regulators took the extraordinary step of requiring Google to provide and pay for news snippets whether it wanted to or not — a policy so heavy-handed and obtuse that it stands out even by European standards. Good journalism is, of course, essential to democracy. If Australia’s government, or any other, wishes to subsidize newspapers for the public good, that’s worth debating. But demanding that two overseas companies do so on a false pretext hardly makes for sound policy making. More to the point, it won’t fix any underlying problems. Combined with the threats implicit in such rulemaking - the ACCC’s recommendation to impose fines on the platforms of up to $10m per breach, three times the benefit obtained, or 10% of annual turnover - this approach is more akin to racketeering. The ACCC has displayed ignorance and a lack of research in its recommendations.

Life hasn’t been easy for news organizations for some time. It’s unlikely to get much easier. We should welcome policy makers now wanting to help them find workable solutions. Their first responsibility, though, is to avoid making things worse.

To fix Australia’s appalling lack of media diversity, the committee needs to bring in recommendations that improve diversity at the other end of the Australian media market. I would make the following recommendations, and these are recommendations that have been well-canvassed by media scholars and the MEAA.

3 The recommendations are as follows:

 A review of government advertising legislation, practices and policies to ensure a level playing field.

 Repurpose unallocated funds under the Regional and Small Publishers Innovation Fund and Regional Grant Opportunities, estimated to be at $40 million, for immediate dispersal to regional and rural newspaper sites.

 A new fund to support start-ups that did not qualify for the $50 million of public interest journalism grants, and stronger aid for independent newspapers that serve as the primary source of local news for their towns and cities. This could mean the difference between fertilising new media growth across rural and regional Australia or news deserts. .

 The public release of all news outlets benefiting from government public interest journalism initiatives and the methodology for determining the value of allocations among recipients. We should also have a public assessment of how money is spent.

 As a bare minimum requirement, local new outlets that receive any form of government funding should be required to independently cover council meetings (not run rewrites of press release. It happens, trust me).

 A national body to help regulate and disseminate government grants — and to assess quality measures for local journalism — would also be essential. This would also help to ensure public money is being spent where it is needed most.

 Measures to ensure smaller regional and country newspapers rethink the traditional business model for newspapers and innovate by using the web, subscriber models, push notifications, newsletters, special features and services, social media such as Facebook, Twitter, Instagram and YouTube, and appoint digital specialists. These measure could include funding and bringing them together with universities such as RMIT and UTS, which have done extensive research in these areas. There could also be measures to ensure the regional newspapers collaborate in order to innovate and share resources.