3V and Merlin Integrated Media
Submission to
the Productivity Commission Broadcasting Inquiry,

May 1999.

Part 2

Overview

2.1 This paper is presented from the viewpoint of small to medium independent media producers and distributors who either sell their material (content, production services) to a third party distributor (such as a TV or cable network, "large" internet group, or other "large" distributor using the internet, CD ROM, video or similar electronic media distribution platform) or who independently distribute their material through the internet, CD ROM, video or similar electronic media distribution platforms. They include both new and smaller independent media companies and also relevant non-profit media organisations who are mostly overseen by the Community Broadcasting Association of Australia (CBAA).

2.2 Further, we consider that the Broadcast Services Act 1992 (BSA), is legislation whose ambit affects and therefore includes those industry sectors that produce or distribute all forms of media. Due to the wide range of influence the broadcast industries exert over our lives and culture, and the interrelated nature of media, technology and broadcasting, the BSA also has influence over the working of Acts related to media, communications, telecommunications and cultural support sectors, a fact sensibly reflected in the mix of economic, social and cultural issues outlined in the Broadcasting Inquiry Issues Paper.

2.3 As such, these smaller media players have a direct and vital role to play in the future of broadcasting, the new media industries and the media and information economy and hence this inquiry, their unique circumstances and contribution affording them significant economic influence on the industry and our cultural environment as a whole out of proportion to their relatively small economic size.

2.4 These smaller companies would fit into the SME category, are the primary employers for the sector employing an estimated 65% of the workforce of the broadcasting and new media industries, a figure increasing as the trend to outsourcing and contracting continues, and also increasing as the costs of production of electronic media continue to fall.

2.5 It is our contention that these independent electronic media producers are a leading indicator of and powerhouse behind the development of new media production and distribution forms, as they were for computer-based communications and for the film and television industries in the 70's and early 80's, and that their views are undervalued and consequently overlooked in the development of policy and legislation for broadcast and new media industries. This omission results in poorly framed legislation that leads to inefficient and anti-competitive practices by large media companies in areas such as the Broadcast Services Act, the Telecommunications Act and the Trade Practices Act that would not have occurred if the views and special needs of this independent sector where properly taken into account and reflected accordingly in policy and subsequent legislation.

2.6 Smaller media companies are truly innovative in ways large, mainstream companies cannot be, are flexible and can best deal with ongoing cultural and technological change, and so can provide a leading indicator for not only the broadcasting and media industries, but for sectors as diverse as the financial, IT, education, leisure, and manufacturing sectors.

2.7 Smaller media companies are, in effect, a necessary research and development "arm" of the larger companies.

2.8 Smaller independent media companies provide many benefits to Australia's media and information economy including:

a) access for smaller educational providers, contemporary arts groups and artists, multicultural and Aboriginal groups and other similar groups and individuals;
b) a new model of efficient horizontal and scalable organisation utilising the latest in IT products and services;
c) training and work experience in production and distribution;
d) distribution of this independent material through the smaller window of independent media distribution channels, albeit access restricted by lack of financial and marketing strength.; and
e) the cultural infrastructure operated by Australians to produce and distribute definably Australian information, education and entertainment content.

2.9 It is the position of our company that:

2.9.1 accessibility to and meaningful engagement with new media technologies and forms is a necessary precondition if the wider Australian community is to benefit ("to make the most out of the opportunities presented by new technologies and new ways of doing things" p 9, Issues Paper, 1999, ) from efficient delivery of media and information, education and entertainment material;
2.9.2 that such efficient delivery depends, not only on the future efficient operation of the Australian broadcasting and communications regimes, but also on the recognition of and accommodation in policy and legislative frameworks to the needs of small to medium new media "players" (producers and distributors) whose experiences are vital to prospective analysis of the greenfields new media industries, and provide the most significant areas of product and service development innovation through research and development into "the opportunities presented by new technologies and ways of doing things" (p 9, Issues Paper);
2.9.3 that to deal with the ongoing and relentless dynamism of new media and technology that the government institute a regular formal review of relevant legislation and make allowance in other ways for this dynamism; and
2.9.4 that the existing broadcasting regime does not adequately deal with the needs of small to medium producers because of: the use of increasingly obsolete terms and concepts such as "broadcasting"; a failure of government and legislation to ensure open access for new players to the new technologies of delivery; and a failure of legislation to protect small business from anti-competitive activities of the large media companies.

2.10 We recommend that these smaller media companies be recognised for their benefits to the Australian community (outlined above) by policy makers and that therefore support for this vital part of the media and information economy should be reflected in policy and underpinned by legislation.

2.11 This does not mean that older, larger and more mainstream companies do not have an important part to play in innovation, but this part is primarily to realise economies of scope and scale in manufacture, marketing, distribution and other functions in exploiting the soft and hard assets developed, in the first instance, by smaller innovative companies.

2.12 For example, the three great barriers to the success of smaller media companies are:

a) a lack of access to economically viable independent distribution platforms that are genuine alternatives to those provided by mainstream or larger media companies;
b) the need for ongoing support for certain special kinds of services and content provided by a range of government production funding bodies; and
c) a lack of a comprehensive and coherent set of policies and legislative instruments to ensure the ongoing access and production support.

2.13 This paper will address only those questions raised in the Inquiry Issues Paper that relate to the linkages between, on the one hand, new small to medium media producers and distributors and, on the other, the "well-being of the community as a whole, rather than just the interests of any particular industry or group" (Issues Paper, p 6.). As such, only those areas will be discussed where a change to the government's policy on small players will benefit the wider community as a whole. Where appropriate, issues additional to the questions posed by the Issues Paper will be raised and discussed.

2.14 We do this in the knowledge that our experience in over 15 government inquiries has proven that our views will be largely ignored by this inquiry in favour of those of large media companies, and that this inquiry may therefore entrench inappropriate policies and legislation. Nonetheless, we do however regard as important the opportunity afforded by this inquiry for smaller players to put forward their views and wish to contribute as a matter of record.

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