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Panpa Bulletin : April 2006
26 | PaNPa bUlletiN april 2006 coVer StorY And the winner is… amid the welter of opposing views about the merits of Communication Minister Helen Coonan's proposed new media ownership laws, which could trigger the industry's biggest shake-up since the Hawke govern- ment's reforms of 1987, there is one area in which Australia's publishers and broadcasters are in complete agreement. It is that the crucial role in de- termining outcomes will be played by ACCC chairman Graeme Sam- uel. And until Samuel explains the rules, there can be no certainty about what will be allowed under Coonan's sweeping deregulation proposals to allow take-overs and mergers. Any consolidation moves will be subject to no fewer than five media players remaining in the mainland state capitals and four in regional markets. Whilethemajorgroups have been mainly support- ive of deregulation, there is growing concern as to how Samu- el's blocking powers might prevent companies owning a newspaper, a television station and a radio sta- tion in a specific market. A new element in the over- all equations is the extent to which major publishers have been increasing their grip on the internet news, classified and advertising display market, partly by acquisition of independ- ent operators. Excessive "control of content" is something that Samuel has publicly highlighted as a po- tential snag in approving merger or take-overs. Samuel has promised to outline his approach to mergers once the Federal Government has agreed on the proposed reforms -- still a long way off, as Coonan will spend some time assessing the responses she has requested to her blueprint, and needs to consider objections by the Nationals, who fear regional areas will suffer under the new re- gime. The blue-print, issued as a dis- cussion paper, also links the com- plex ownership reform package to changes that will encourage take- up of free-to-air digital TV. Submis- sions on the proposed reforms are due on April 18 Samuel, who believes the media sector is ripe for change, has point- ed out that while the ACCC doesn't provide guidelines in any other market, intense public interest will see them attempt to put out some guidance in this issue. "We will make a qualitative as- sessment about whether there are any consequences for competition -- looking at the control of content and advertising," he said. The ACCC had to be cautious about giving guidance because the market might "extrapolate and interpret" its approach, and that could affect the share price of companies in the sector, as inves- tors ruled in or ruled out different transactions. Market analysts are generally agreed that, because of its open share register Fairfax, publisher of The Sydney Morning Herald, The Age and The Australian Financial Review is a likely target for preda- tors. So, too, because of its wide spread of shareholders, is WANH, publisher of TheWest Australian. While media organisations have been guarded in their comments, Harold Mitchell, chairman of me- dia buyers Mitchell & Partners, produced one of the more shrewd assessments of the likely outcome of the changes. Mitchell considers Coonan's discussion paper "clever, in that it gives many something of what they want, but not everything, and ingenious in that it brings a greater control of the media to the government." He considers the paper "a clear sign that the government is serious about ensuring Australia does not remain a dinosaur of the analogue age, and the winners would be present media owners, as a frenzy may ensue among the cash-rich superannuation funds looking for value. "The proposals will pave the way for a new digital world, in which mass media audiences will decline in favour of consumer- driven digital media options." Among the list of implications that would follow the changes, Mitchell listed: * Fairfax becoming a take- over target, "but David Kirk's recent changes will help de- fend it" * Investment funds such as Macquarie Bank could come into play as serious op- erators in Australian media * Phone companies would want to become media compa- nies and they will be pressing for control over the content in their growing medium "The winners in this media rev- olution will be owners of content. Those who can predict the de- mands of the on-demand digital audience will win," said Mitchell. "As this legislation moves forward, we will see an acceleration of the trend to shrinking but increasing- ly valued audiences, supported by an ever-growing number of new players offering targeting opportu- nities for advertisers. We now have a positive start to the new digital era. We are in for an exciting ride." Coonan, responding in parlia- ment to concerns expressed by the Nationals about loss of media diversity in regional areas, and made it clear she is "not interested in more regulation." "We must consider models which move away from simply controlling market structures... and allow for some efficiencies of scale and scope," said Coonan. The Nationals want to see "edi- torial separation" to keep news- rooms separate in their print, ra- dio or TV units after any mergers. Their opposition is beginning to be seen as putting the government's broader media reforms at risk. as the federal Government begins the process of reforming media ownership, Jack Beverley looks at the potential consequences, winners and losers. art by harry afentoglou