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6.1 Convergence brings together the broadcasting, media and communications
industries. It encourages consolidation and reduces diversity. "Reduced
diversity" actually means vital smaller players, such as our company,
are threatened with loss of business and eventual closure in this country.
6.2 Convergence, in bringing together the broadcasting, media and communications
industries, encourages consolidation and reduced diversity precisely because
of the many different Acts that govern and regulate these previously largely
separate industries. The formulation of Acts, primarily the BSA, the TCA
and the TPA, has been manipulated by the large broadcasting and media
companies through the "capture" of the regulatory bodies in the full knowledge
that such manipulation provides effective legislative sanction for anti-competitive
practices, too subtle to be caught by the Acts. For example, the television
industry here and in the US supported the idea of a split between "narrowcasting"
and "broadcasting", thereby quarantining any competition to narrowcast
services, and maintaining the oligopoly in television broadcasting.
6.3 Therefore, we recommend that the consolidation occurring in the media
industries must be, as far as possible, reflected in a targeted consolidation
of the Acts currently regulating those industries. This will mean that
only the areas common to these converging industries is commonly regulated,
whilst areas that are wholly or substantially different remain regulated
by Acts that currently address these different domains.
6.4 It is our opinion that the area common to all these industries, and
not yet recognised in policy or legislation, is the common media content
"language" of the digital domain. We also appreciate that what we are
about to propose is a major shift in the strategy for fostering and maintaining
Australia's media and information economy and its benefits for the Australian
community.
6.5 We recommend that this common or shared digital language of the broadcasting,
IT, media, communications, and telecommunications sectors be the prerequisite
for an industry to be called a "broadcasting" or "media" or "communications"
company in the first instance, and hence would become the prerequisite
for inclusion within the ambit of a revamped Digital Distribution (Broadcasting
and Datacasting) Act, overseen by a suitable regulatory Authority whose
aims are clearer due to the clarity of definition achieved in this strategy.
6.6 A consequence of this action would be the potential for a complementary
Digital Production (Broadcasting and Datacasting) Act that regulates content
industries. This would also afford the opportunity of consolidation of
existing government support for the ABC, SBS, the AFC, the FFC, the AFTRS,
and others.
6.7 While we predict that changes such as we have proposed will very likely
be forced on our economy and culture eventually we feel that it would
be timely to make a move such as this now to maintain a leading position
on the world stage. We are also aware that the political realities of
change have before now meant a laborious incrementalism in policy development
and a slow pace of real change. This legislative inertia plagues our broadcasting
and communications policy development. Such legacies in the fast moving
world of the media and information economy also represent a significant
competitive disadvantage for Australia.
6.8 For our smaller media players' sector, convergence simply means more
competition from larger players in areas that are traditionally ours.
For example, large advertising companies had no direct involvement with
the internet until convergence allowed them to repurpose or reuse already
existing systems of client networks and contracts to move onto and take
over the majority of work in new media production work on the internet.
6.9 Currently over 75% of the revenue from publishing on the internet
in Australia is taken by just five or six large players. We can predict
that within two years, over 95% of internet production and publishing
revenue will be made by just two or three large players forming an effective
oligopoly. We can also predict that there is a significant likelihood
that these two or three companies will be existing large players currently
regulated by the BSA.
6.10 We anticipate both the further consolidation of large media, advertising,
telecommunications, publishing and broadcasting companies, together with
an influx of large overseas media companies that will accelerate this
consolidation. This will greatly diminish the likelihood of profitable
operation for smaller companies with the consequent lessening of innovation,
diversity and potential for a leading edge development base for local
media and information industries.
6.11 We recommend that broadcasting and related legislation must take
into account this strong tendency to consolidate brought on by convergence,
ideally at the level of tax incentives for small business and disincentives
for consolidation, or failing that, at intervention at the level of direct
government support through research and development funding targeted at
smaller players, and continued support for government organisations such
as the Australian Film Commission, the Australian Council, Cinemedia,
NSW Film and Television Office and other similar organisations fostering
innovative content production and cultural infrastructure.
6.12 Better co-ordination between government entities that regulate media
and communications, and those that support the production of content for
these industries, would also improve the situation provided the social
and cultural dimensions of such regulation and support are balanced with
that of the economic dimension, as suggested in the Issues Paper.
6.13 However, although we propose some level of consolidation in the Acts,
the government regulatory and "content" bodies, we would not recommend
that consolidation be taken to a point where the very different circumstances
of companies that work in different industries, even those sharing the
core digital systems, and the very different needs of different States
and regional areas, be forgotten. If fact, we recommend that particular
and increased attention be given to the unique needs of:
a) different geographical areas and socio-economic circumstances of the
audience;
b) different economic strengths of organisations; and
c) the different aims and objectives of for-profit and non-profit media
organisations, including libraries.
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