News

As the ABC faces down sustained attacks from News Corp and other outlets, the government is in the process of changing journalism for good. By Martin McKenzie-Murray.

Making war with the ABC

The Bananas in Pyjamas at the ABC’s parliamentary showcase, with Labor senate leader Penny Wong.
Credit: TWITTER

On Wednesday evening, ABC chairman Justin Milne gave something of a history lecture in Parliament House. The occasion was the ABC’s yearly parliamentary showcase, ordinarily a simple affair, but held this year against a dramatic backdrop – the senate debate on media reforms. Only the day before One Nation had triumphantly declared a deal with the government, one which would see support for reform in exchange for a range of amendments, mostly concerned with altering the charter of the national broadcaster. The Australian Financial Review called it, “the biggest assault on the ABC’s independence in decades”. 

In the months preceding this week’s debate – and the private wrangling attached to it – the ABC has faced withering criticism. Most heads of media have at one point or another publicly questioned the appropriateness of the publicly funded institution, untouched by commercial responsibilities, intruding in competitive markets. Especially now, in an age in which the internet is hoovering up advertising revenue.

“The advertising pie is shrinking, and revenues in print and [free-to-air] TV are declining and not accelerating in digital,” News Corp Australia’s executive chairman, Michael Miller, told the Melbourne Press Club last month. “June’s [Standard Media Index] numbers showed another 10 per cent decline in the agency ad revenue. There are more players than ever before competing for this decreasing pie. The cost of entry and to operate are lower than ever, enabling start-ups and pop-up publishers to compete for eyeballs, ears and dollars.

“Then there are the international streamers such as Netflix, Amazon Prime and YouTube, who continue to dilute local broadcast audiences. The Daily Mail, The New York Times, The Guardian and many others are taking share in the news category. Global digital advertising players such as Google and Facebook dominate the new advertising landscape, accounting for 85 per cent of new digital revenues over the past year.”

Exactly, media leaders echoed. “The Australian Broadcasting Corporation is creating additional pressure on local commercial media by aggressively competing for the same audience that commercial media rely on by providing online content for free, undermining our ability to create a sustainable model,” the chief executive of Fairfax Media, Greg Hywood, told a senate inquiry in May this year.

“The ABC also, out of taxpayers’ money, pays Google, who pay negligible tax and spend nothing on local content provision, for search engine marketing,” Hywood said. “That means that the ABC stories appear higher on key search terms … and restricts our ability to generate revenue from our audience.”

To Justin Milne, these anxieties sounded familiar. His speech on Wednesday was short but unusually strident for a senior ABC figure. The broadcaster has, typically, stayed above the fray. “While we might receive some attention in the press from certain quarters – allegedly venturing into territory where we have no business – I assure you that this couldn’t be further from the truth,” he told the audience.

“I will say this about some of the noise of recent weeks. As one of the world’s most successful democracies, Australia has benefited from a dual media system for 85 years, with public broadcasting existing alongside commercial media. This media environment has ensured vibrancy and diversity, for the good of all Australians. And while I am sympathetic to the concerns of the commercial sector as it seeks new business models in a severely disrupted media landscape, criticising the ABC is not the solution to their problems.

“It never has been. The ABC has been the subject of criticism by the commercial media since it was first created in 1932. The then media barons opposed the ABC’s entry to radio on the basis it would destroy their commercial stations. It didn’t. The same occurred with the advent of television in the 1950s. And the same again in the 1990s when the ABC was mandated by government to use the internet as a means of extending its trusted, independent and impartial voice to new audiences over new platforms.” 

 

For some time, The Australian has been running a campaign against the ABC with a ferocity that betrays not mere ideological distaste but commercial anxiety. This, industry insiders say, is the salient point: News Corp regards the ABC as a powerful rival. It isn’t hard to see why. Legislation requires the ABC to reach as many Australians as possible; media ownership laws restrain the reach of private organisations. This has long been a sore point for media proprietors, but with advertising revenue rapidly evaporating and newsrooms shrinking, and Fairfax and News Corp staring each other down, neither willing to be the first to stop the presses and publish solely online, attacks on the ABC have become more urgent. Even more so in the months preceding this week’s senate debate on media reform.

For News Corp, it is hardly just its legacy broadsheet that is threatened. Recent data seen by The Saturday Paper shows how badly Sky News is faring. In the year to date, the ABC News channel reached, on average, 14 per cent of metropolitan audiences – Sky News averaged 3 per cent. A broad comparison is unfair, given Sky is a subscription service, but even among households with pay TV almost the same number of people are watching ABC News. “ABC News reach has increased in Pay TV homes as Sky News has decreased,” the data reads. “In 2017 [year-to-date], ABC News reaches 7.5 per cent of Pay TV subscribers, with Sky News at 8.6 per cent.” Meanwhile, Sky’s weekly viewership has shrunk 561,000 in 2015, to 537,000 last year.

Implied in the figures is the failure of Sky’s “after dark” programming – the assemblage of ill-prepared and rambling provocateurs, such as Mark Latham and Ross Cameron. Latham was sacked by Sky following bitter on-air spats with colleagues, and his joking about a teenager’s sexuality. Buckley versus Vidal it was not.

Sky’s domestic carrier, Foxtel, has been haemorrhaging subscribers for years. They are turning to Netflix and other internet streaming services – legal or otherwise. In the past four years, Foxtel has received $30 million from the government, ostensibly to help its coverage of women’s sports. But the deal is murky – an ABC freedom of information request into the payments revealed there was no paper trail between News Corp and the Department of Communications. Despite this mysterious state patronage, Foxtel recently suffered a write-down. It is hardly the only of News Corp’s assets that is impaired. In the last financial year, the company posted a $820 million loss. Newspaper advertising revenue fell 7 per cent. A glimmer of hope may be found in the healthy increase of digital subscriptions to Australian publications – up by almost 100,000 since last year. But the signs are bleak.

It is in this context that one might view The Australian’s campaign against the ABC. Media analysis shows its scale: in the first six months of this year, the broadsheet published 214 corporate stories about the ABC – more than one a day. Half were considered to be of a neutral tone, 30 per cent negative, and just 1.8 percent positive – the discrepancy is made up by stories which make only glancing reference to the broadcaster. Of these 214 stories, half were considered “main” stories – of which 50 per cent were negative, and less than 2 per cent positive.

Earlier this year, News Corp instructed Pagemasters – a media company that performs the subediting of newspapers, and is responsible for their television guides – to remove reference to ABC News from all guides in its metropolitan publications, replacing it with Sky. Regardless, this campaign against the national broadcaster doesn’t appear to be working. The yearly ABC Appreciation Survey found 86 per cent of Australians were of the opinion the broadcaster performed a “valuable role”.

The threat to News Corp – and Fairfax – is not the ABC. While The Australian is free to run whatever campaigns it chooses, this one is hysterical. The existential threat to it, most simply, is the internet – an advent for which traditional media proprietors were woefully unprepared. A more specific threat, one vastly greater than the ABC, is presented by Google and Facebook, entities that are “vacuuming” up its advertising dollars. Neither attract the same sustained, contemptuous coverage as the national broadcaster.

Greg Hywood is right, though: “commercial organisations need to be as healthy as possible”. The above figures for News Corp should give no one pleasure. These are perilous times for journalism, and the danger won’t be relieved by either anti-ABC or anti-Murdoch zealotry. Nor will media diversity be served by the collapse of Fairfax and News Corp mastheads. 

 

News of the government’s media reform bill, debated this week in the senate, was obscured by the spectre of nuclear war, the prime minister’s invocation of the ANZUS Treaty, and the farcical ambiguity that now settles on the government’s legitimacy. It is not an exaggeration to say that, if passed, the reforms would be the most significant media legislation in a generation. But so strange has the week been in Canberra, so beleaguered by weird crisis, that it was of secondary interest. While the foreign minister was accusing the opposition of improperly colluding with its New Zealand counterparts, the other principal of the ANZUS Treaty, the United States, watched its leader equivocate about a murderous Klan rally.

In its original version – before the rolling snowball began accumulating detritus – the media reform package’s most significant proposals were, and remain, the scrapping of laws prohibiting the consolidation of media companies. There are two parts to this. The two-out-of-three rule, which currently prevents a person or company from owning the triumvirate of newspaper, radio and television station in the same city; and the “reach” law, which prohibits ownership of a commercial television licence that exceeds 75 per cent of the population. Once designed to encourage media diversity, these restrictions are now arguably diminishing it by preventing potentially life-saving mergers between media companies. “If the [two-out-of-three] laws change, the media companies in this country can have a conversation about the right mix of assets for media companies,” Hywood told the senate inquiry. “Basically, you have a situation where we have pre-internet legislation which was concerned about scale as an issue because diversity was at the heart of that argument, and now we have a situation where scale is the issue and the current legislation does not allow the industry to get the scale to effectively compete.”

Unsurprisingly, this reform package has the universal support of the media industry – a rarity. The opposition has said it will never support a bill that would abolish the two-out-of-three rule – The Saturday Paper understands this is in part due to an unwillingness to support any legislation that might strengthen Murdoch’s hand in this country – while the Greens have not automatically ruled out their support. Perhaps just a year ago, the abolition of the two-out-of-three rule would have been anathema for the party. Their support, however, would be conditional on tax incentives for those who invest in journalism, and increased funding for the ABC. But that support is not certain. Without it, and the Labor Party’s, the government requires 10 of the 12 senate crossbenchers.

 

Ours is an age in which we view political arguments as belonging to friend or foe, not to the astute or stupid. The quality of argument matters less than the person making it. I was thinking about this while watching Pauline Hanson’s performance in senate estimates. What is objectionable about the senator is not her suspicions of the ABC, but how narrow and facile her interest in the national broadcaster is. There are legitimate debates to be had about the ABC’s charter in a digital age, and about when its practices might unfairly distort commercial markets. But she is not making them. More broadly, on the substance of the media reform package – the removal of the two-out-of-three rule, for example – she has had little to say.

In recent senate hearings, Hanson has had the opportunity to explore, test and challenge the views of the country’s most significant media figures on the media reform bill her party is so crucial to passing. Instead, Hanson used her time to voice personal grievance – she remains bitter that the ABC ran legitimate but unflattering stories about her party – and to insist on the public disclosure of Tony Jones’s salary. It is an insultingly petty use of her power. A sample of this clownishness:

Hanson: “Let me help you, then. Around 2011 or 2012 Tony Jones’s wage was approximately $385,000 a year. Does that sound about correct?”

Michelle Guthrie, managing director of the ABC: “I do not know what you are referring to.”

Hanson: “ABC’s wages for the top 20 executives were about $25 million.”

Guthrie: “For the top 20, that is not possible.”

Hanson: “That is probably $25 million in wages.”

Guthrie: “For how many people?”

Hanson: “I will withdraw that. I am sorry; I did not bring my paperwork with me. But I am fully aware that Tony Jones was on that wage.”

This thoughtlessness, of course, does not diminish One Nation’s influence in a parlous senate. This week, the party exercised that influence by making their support for the bill contingent upon a set of demands to which the government agreed. A triumphant media statement soon followed,

“One Nation has been at the forefront calling for more transparency of wages at the ABC to start providing details of the wages and conditions of all staff, who’s [sic] wages and allowances are greater than $200,000, similar to what is being implement [sic] by the British Broadcast Corporation,” it read.

“The Government has also agreed to undertake a competitive neutrality inquiry into the ABC and to legislate a requirement for the ABC to be ‘fair’ and ‘balanced’. And most importantly, the Government has agreed to greatly enhance the ABC’s provision of services to rural and regional Australians.”

But it was short-lived. Nick Xenophon vetoed the Hanson-flavoured bill, as the government must have known he would.

“It’s fascinating,” the historian Tom Roberts told me, speaking with the authority of someone whose biography of Sir Keith Murdoch won the national biography award last month, “that the successful agitation [in Britain] by the right-wing newspapers, not least Murdoch’s titles, to get the government to reveal BBC salaries is now being replicated in the One Nation deal.”

Fascinating also will be the outcome of these backroom negotiations. You might not have known it this week, but the future of journalism in this country will be altered by them.

This article was first published in the print edition of The Saturday Paper on Aug 19, 2017 as "Making war with the ABC". Subscribe here.

Martin McKenzie-Murray
is The Saturday Paper’s chief correspondent.

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