Commercial radio: behind the figures

As the U.K. 's Daily M ail Group quietly consolidates its Australian radio holdings, converging technologies are allowing incursions into media content which cross existing media boundaries and throw up important challenges to the intentions of the cross-media laws 1 ■■■998 was an interesting year for commercial radio for two reasons: among the most interesting develop­ firstly, the Macquarie Network, cut up and sold off by Warwick ments in 1998: formerly a client of the Fairfax more than 10 years ago, suddenly rose from the dead; ARN news service, Singleton has and the London-based Daily Mail Group (DMG) continued to revived the Macquarie News Service expand through purchases from Rural Press and a marketing as a fourth syndicated service, and partnership with the Grundy network (see CU 151, February recendy announced an associated 1999, Media Ownership Update, pp 14-21). "Easy Listening" music service. But this revival was accompanied by Capital city networks "downsizing" at ARN and the end of The basic structure of the capital city networks was established 2WS' newsroom, so in effect, this was more than a decade ago but consolidated with the Broadcasting a rearrangement, rather than the Services Act 1992 , which allowed overseas ownership and the creation, of new jobs. relaxation of ownership limits - licensees can now own two sta­ The star strategy followed by the tions in each market with no overall national limit. major networks is important: faced The three major metropolitan networks - Austereo, Australian with a future where any small station Radio Network (ARN), and Lamb/Southern Cross - quickly estab­ can use low-cost computer technology lished national networks, each with integrated radio syndication to automate production - with pro­ facilities. The basic pattern is simple enough: the major stations gram material downloadable to hard produce expensive programs like news and star format comedy disk, and infinitely variable in its and talk programs (like John Laws, Martin and Molloy, Doug programming mix possibilities - the Mulray) and network these to the smaller stations as core pro­ only future-proof product that an gramming. The smaller stations then either purchase other spe­ Australian network can market is cialty programs or produce their own to construct a unique mix. original material, and this in turn depends for its general acceptability Austereo dominates the younger music markets, with a soft rock on having nationally-known stars. format (targeting younger women) and a harder rock format (targeting younger men) station in each capital city. A second interesting development is the expansion of two regional net­ ARN, joindy owned by Tony O'Reilly's Irish-based global media works into capital city markets. group and the U.S. radio/TV group Clear Channel moved Grundy's Capital network acquired quickly to purchase two stations in each capital city, and now Sydney station 2SM. DMG's purchase dominates the family audience spot. of Adelaide station 5AA also brought The third major network, Skyradio (2UE/3AW), is a coalition of them into the capital city markets. the Lamb family's stations in NSW and Queensland, and DMG has also indicated strong inter­ Southern Cross's Melbourne and Perth interests. Skyradio targets est in bidding for further metropoli­ the growing older audience and the format is news/taik - the talk tan licences as these become avail­ hosted by strong "beast" personalities. They remain the dominant able through the Australian force in this field, with their star, John Laws, networked to 90 per Broadcasting Authority's planning cent of non-capital city markets. process. There was speculation through 1998 about the possibility of Similar (non-networked) formats are used by other talk stations a Grundy sale to DMG, but this did targeting older audiences, for example, the ailing Sydney stations not happen. Instead, the two estab­ 2GB and 2CH. Their acquisition by John Singleton has been lished a joint advertising sales office

JB in July 1998 - a "one-stop shop" control of the station and the change is the development and which claims to represent 90 authority is about to embark on an testing of digital audio broadcast­ regional stations, according to a investigation. The Ten Network is ing systems (DAB). 2KY, the report in the Sydney Morning part owner of Southern Cross Sydney racing station, has begun Herald (2/7/98: P28). Media, though at 14.9 per cent, the establishment of actual DAB this sits just below the cross-media facilities, and will shortly com­ Regional city networks rules' 15 per cent threshold. mence test broadcasts. The data and image capabilities of DAB will Outside the capital cities, the four On regional equity, the issues are mean that 2KY could commence main regional networks, clustered already clear - what do we do all kinds of new services, including in low growth Eastern state regions when some regions do not receive betting facilities (already a big - Caralis, Grant, Century and ACE a reasonably broad mix of ser­ growth area for the TAB via the - expanded slightiy. In the high vices, voices and political opin­ Internet), video feed of races, and growth regional centres along the ions? (Keep in mind that many other related information services. east coast, Reg Grundy's Capital remote areas do not get terrestrial network expanded strategically, television services, have few news­ Commercial radio stations now acquiring Sydney station 2SM and papers, and often have access commonly use web pages to pro­ three more regionals to its coastal limited radio service. Internet mote their services - with program network, which stretches from services are a long way off for information, fan mail facilities, Sydney to Cairns. some areas). email links, news tip pages and so on. But increasingly, Australian Regional small-town It is here that the expansion of radio stations offer audio stream­ netw orks DMG Australia is cause for con­ ing web broadcasts of their on-air cern: with 55 local stations stretch­ In the small rural towns of the programs, and occasionally, ing across virtually the whole of outback, DMG Australia acquired archived programs. Thus, time- inland, it is a fair conclusion that Rural Press's 33 country stations in shifting is becoming commonplace. its programs are heard in an infor­ 1997, bringing its network total to mation-poor environment. Also John Laws' Fortress site is largely 55 (including 5AA in Adelaide). It note that some DMG-owned sta­ promotional but also offers some also has the option of establishing tions have local news-sharing archived broadcasts, memorabilia, at least 10 additional (s.39) services arrangements with, for example, poetry and material from other in areas where only a single ser­ local TV stations - old loopholes media like Foxtel, his music vice now exists. sanctioned - "grandfathered" - by recordings, and press columns, an Policy issues the Broadcasting Services Act interesting multimedia mix which 1992. Now that these stations are crosses both copyright and media The general consolidation suggests part of large media organisations channel boundaries. Doug that the adequacy of cross-media with access to capital, rather than Mulray's 2WS site adds to this mix ownership rules needs to be care­ individually owned services, the some satirical horoscopes, news fully monitored. economic rationale for their local reports as well as live streaming Old loopholes remain - there are news-sharing is less convincing. audio and video: the audio of his still close ties between many coun­ 2WS broadcasts in drivetime; the try radio services, TV services and Is the quality high? video of his Foxtel appearances. newspapers which mean that the Journalist-shedding and "down­ These experiments are interesting intentions of the legislation are sizing" trends continued in 1998, as in that they blur the boundaries actually thwarted and ownership the big networks combined their between the old commercial limits are effectively breached. The two stations' news teams, and cut media and the new medium of the O'Reilly family's ARN holds two back in the smaller centres. There Internet Personal websites repro­ major Sydney radio licences, and a are reports of further losses in duce exacdy the content on these third Western suburbs licence country stations as well. While old media but allow the user a few which overlaps substantially, a these cuts may have reduced some more apparendy interactive situation de facto permitted by the doubling-up, there are genuine choices - like sending their host an legislation but unlikely to have concerns that it has reduced some email, filling in an online survey, been intended by the legislators. journalists from investigators to making an instant entry in a com­ assemblers of other people's sto­ Southern Cross Media held the petition, requesting background ries. licences of three radio stations in information, and media-hopping - Perth until November 30, 1998 Rehearsals for from John Laws' Foxtel show to his when it sold the 6IX licence to digitisation radio program to his newspaper Radio Perth Pty. Ltd. But it was column, to his poems or trucking still deemed by the ABA to be in The most obvious rehearsal for songs. This is, in a sense, a ... continued on page 11 communications update a. work. It can also undertake work for As in Australia, billing is one of the other companies. major sources of complaints by Commercial customers of the companies sur­ Although the trend to liberalise radio veyed. In the U.S., "slamming" (the access to telecommunications mar­ ... continued from page 9 unauthorised switching of a cus­ kets is apparent in all the surveyed tomer's pre-selected long distance markets, it is significant that con­ rehearsal for some of the possibilities carrier to another carrier) and sumer protection regulation is prov­ of the new digital broadcasting envi­ "cramming" (submitting unautho­ ing more durable than the regula­ ronment; in another sense, it is rised, misleading or deceptive tion of access to markets. Indeed, already with us through these experi­ charges for inclusion on a there are elements of the customer ments. customer's bill) have been the focus relationship which have become of particular regulatory attention in There are plenty of other commer­ more regulated as a response to the recent years, with a number of cial radio sites now providing live potential impact of more liberal actions commenced and settled by webcasts, including some markets. the FCC about slamming, and vol­ unexpected smaller sources like For example, the U.S. federal com­ untary guidelines to address cram­ Edge-FM from Wangaratta, Victoria, munications regulator introduced ming issues announced in July 1998. and SA-FM from Adelaide, which quality of service monitoring for have both experimented with radio Other important areas of complaints local exchange carriers in 1991 as broadcasting on the Web. in different territories included part of the liberalisation of price unsolicited faxes and emails and the regulation (replacing rate-of-return Where to from here? effects of tariff rebalancing, particu­ regulation with price caps). This larly for some customer segments. Interestingly, these webcasts have mirrors the Australian experience of already crossed the media boundary the introduction of a "customer Improved quality of service has into the assembly of images - many service guarantee" and the been an important element of com­ of them moving images, and some, expanded jurisdiction of the petitive service offerings in some relays and archives of video from Telecommunications Industry areas, notably pay television services other sources entirely - as in Doug Ombudsman (to include Internet delivered in competition to incum­ Mulray's case. What we are seeing access services) as part of the regula­ bent cable operators in the U.S. by here are convergent technologies tory reforms which accompanied satellite providers and cable "over- and convergent media. While some the privatisation of the incumbent builders". of the smaller services are only web­ telephony operator, Telstra, and the Customer service guarantees are casting their existing broadcasts, the introduction of open competition. very common among companies in big services have framed their exper­ In the U.S., it appears that the very all product lines surveyed. As in iments around their name stars, in light-handed regulation of DBS and Australia, they most commonly the process creating new cross-media Internet service providers stems provide a rebate in the event of a associations through their webcasts. from confidence about the competi­ failure to install or repair a service These rehearsals for the digital com­ tiveness of these markets. But the within a particular time frame, or to munications environment of the new treatment of cable TV operators keep appointments. Other areas century may not be rehearsals at all and local exchange carriers suggests include rebates for incorrect direc­ but important incursions into media the durability of traditional forms of tory listings and automatic, standard content which cross existing media consumer protection where effective (pro-rata) rebates of access charges boundaries, throwing up important competition is slow to develop. where a service is non-operative for challenges to the intentions of the a period of time. Many companies surveyed stressed cross-media laws - which are to stop the advantages of new technologies Some industries or individual opera­ concentration of control flowing in facilitating improved customer tors have self-imposed quality of across all media. If Foxtel content is relationships: better and more acces­ service guarantees: America On- rebroadcast with 2WS programs on sible information about individual Line's money-back guarantee if the the Internet, then a new kind of customers; the flexibility to structure customer is not satisfied with an on­ association has been made - and that service functions to suit customer line purchase and the U.S. cable TV is precisely what policy analysts must demand rather than geography industry's On-Time Guarantee for now examine. (although geographical proximity installations and fault rectification. Peter Collingwood is a lecturer In the may be an important element of the Copies of the report are available from Department of Social Communication and service demanded by some cus­ the Communications Law Centre for $35. Journalism at University of Technology, tomers); better and more up-to-date Sydney Telephone (02) 9663 0551, or order information about new products; online at www,somglattprg,aH/pumga: automated service ordering and tions/pu&Kcatlpna listhtml < modification and bill payments.

communications update 11