The big look like getting bigger, writes Jock Given..
THE future is supposed to surprise us.
Since the government?s legislation passed the Senate late last week, the detail of the moves in the media market has. But the broad shape of the new landscape starting to be sketched has not. The only surprise there is that it took the weekend for the first lines to be publicly visible.
Twenty years ago, Rupert Murdoch bought the biggest media group in the country, the Herald and Weekly Times, on the basis of a press release from government. The laws themselves had not even been drafted. At least this time the media proprietors waited until the bills had made it through the Senate, though not until they actually became the laws of the land.
The new landscape, so far, finds a Packer making a lot of money out of changes to the law. Nothing too surprising there. Another Packer did it with Channel 9 in the late 1980s, soon after Murdoch?s acquisition of the Herald and Weekly Times. The older Packer kept a stake in the assets he sold that proved crucial in getting them back a few years later. PBL will hold 50 per cent of the new entity PBL Media.
It also finds three of the country?s biggest media proprietors acquiring, or positioning themselves to acquire, more media assets.
Kerry Stokes, who controls the top-rating TV station in Perth, has acquired a stake in Perth?s daily newspaper, the West Australian.
Rupert Murdoch, who controls much of the metropolitan daily and weekend press, has bought a holding in the country?s second-biggest newspaper company, Fairfax. The Trade Practices Act prevents him taking control of Fairfax, with all its current assets, but perhaps not each individual asset. Just as important, the minority stake positions Murdoch to be part of a more complicated trading of other media properties, including the Ten Network, where Murdoch?s 20th Century Fox programming will he heading from mid-2007.
The same James Packer, seller, says he is restructuring his interests in a way that releases cash at a time when there is a land-grab underway for gaming and entertainment assets around the world. That sounds like James Packer, aspirant buyer.
Some think he is selling down his media interests, moving out of low-growth print and free-to-air television businesses, and further into gaming. But it seems just as likely that the new PBL Media will take advantage of the changed rules to buy more local media assets, to integrate with the Nine Network, ACP magazines, ninemsn and carsales.com.au for good, to prune and carve up, or to hold for a time.
Anticipating the repeal of specific restrictions on foreign ownership of commercial TV stations, the new landscape also finds foreign capital coming in to buy a stake in major local media assets. But the money for PBL?s media assets is private equity capital, not the experienced foreign media organisation who some imagined would be tempted into the Australian market to provide vigorous competition for the local moguls.
You can bet that when the idea was floated with overseas private equity groups, they weren?t asked how much of their loose cash they wanted to spend improving opportunities for Australian journalism.
In 1986 and 1987, the cross-media rules were said to force players to choose which of the three regulated media they wanted to specialise in: TV, radio or newspapers. But the rules didn?t cover all kinds of media even then, and many new forms have emerged since pay-TV, the internet, mobile telephony and other kinds of mobile media devices.
The most powerful media organisations in the country now are those that found other ways to expand in the era of Princes of Print and Queens of the Screen. The cross-media rules never touched Telstra, or its predecessors Telecom and OTC. It took a big stake in pay-TV, through Foxtel; made a business of the telephone directories it once regarded as a costly public service; became the biggest provider of internet access; bought content to deliver to its internet and mobile telephone customers; and expanded and re-engineered the physical networks that are still so vital to everyone else.
PBL expanded its magazine business, also not covered by the cross-media rules, took a stake in Foxtel, and built and acquired online businesses. News Limited also bought into Foxtel. Kerry Stokes bought magazines and tried, so far unsuccessfully, to establish a foothold in pay-TV.
It has been these players who have dominated the early moves in this latest government-induced reshaping of Australian media. Seemingly unrelated to the passage of the legislation through the parliament, Telstra announced its high-speed mobile broadband network.
The rest of the industry is still trying to catch up with what it means for them. When the government auctions frequencies for two new digital channels in the new year, one for services to fixed receivers in homes, the other for mobile TV, Telstra will not be far from the top of the bidders list for one of them. In short, there are no real surprises at all unless you believed the government?s claims that its media reforms were about diversity and encouraging new entrants.
There is a long way to go, but so far, we look like getting consolidation. Worse, it is consolidation in the hands of the already large, the big getting bigger.
Jock Given is the author of Turning off the Television: Broadcasting?s Uncertain Future. He teaches media law at the University of Melbourne. An earlier version of this article appeared in the Canberra Times.