2.1
This chapter provides the contextual background to the inquiry, including the trend toward greater concentration of media ownership.
2.2
The following chapter then provides additional background information on recent relevant Commonwealth legislation and policy, as well as the current regulatory and oversight mechanisms for news media content in Australia.
Background
2.3
It is widely recognised that Australia has one of the most concentrated news media markets in the world. At the same time, Australia's traditional media sector is facing an unprecedented challenge of reduced revenues from increased competition from online platforms, such as Google and Facebook. In announcing the inquiry, the Committee Chair, Senator Hanson-Young, stated the inquiry would:
...analyse the impact that such a concentrated media has on our democracy and the public's ability to access independent and reliable sources of news.
It's been clear for some time that the business model for news media in the digital age is broken and this inquiry will investigate what the key barriers are for small, independent and new publishers in Australia. We will also look at the impact that global technology giants Google, Facebook and Twitter are having on the sharing of news in Australia.
2.4
The Chair noted that the issue of an increasingly concentrated media sector is clearly of great concern to the Australian public:
Recently, half a million Australians signed a record-breaking petition calling for a Royal Commission into media diversity. The massive support for this petition showed just how concerned the Australia public is about the influence that media concentration has in our democracy.
2.5
This petition was instigated by the Hon Kevin Rudd, former Prime Minister of Australia. When it closed for signatures on 4 November 2021, the petition had attracted more than 500 000 signatories—the largest electronic petition to the Federal Parliament in Australian history.
2.6
The petition requested that the Parliament support 'the establishment of such a royal commission to ensure the strength and diversity of Australian news media'. The rationale for this request was that:
Our democracy depends on diverse sources of reliable, accurate and independent news. But media ownership is becoming more concentrated alongside new business models that encourage deliberately polarising and politically manipulated news.
We are especially concerned that Australia's print media is overwhelmingly controlled by News Corporation, founded by Fox News billionaire Rupert Murdoch, with around two-thirds of daily newspaper readership. This power is routinely used to attack opponents in business and politics by blending editorial opinion with news reporting. Australians who hold contrary views have felt intimidated into silence. These facts chill free speech and undermine public debate.
Powerful monopolies are also emerging online, including Facebook and Google. We are deeply concerned by: mass-sackings of news journalists; digital platforms impacting on media diversity and viability; Nine Entertainment's takeover of the Melbourne Age and Sydney Morning Herald; News Corp's acquisition (and then closure) of more than 200 smaller newspapers, undermining regional and local news; attempts to replace AAP Newswire with News Corp's alternative; and relentless attacks on the ABC's independence and funding.
Professional journalists further have legitimate concerns around unjust searches, potential prosecution, whistle-blower protection, official secrecy and dispute resolution that should be comprehensively addressed. Only a Royal Commission would have the powers and independence to investigate threats to media diversity, and recommend policies to ensure optimal diversity across all platforms to help guarantee our nation's democratic future.
2.7
In tabling the petition in the House of Representatives, Dr Andrew Leigh MP, noted there had been a deteriorating coverage of important types of public interest news from concentrated ownership, declining numbers of journalists, and cuts to public broadcasters:
From 2006 to 2016, the number of journalists fell nine per cent. Health reporting is down 30 per cent. Science reporting is down 42 per cent. Hundreds of local newspapers have closed. Yet the Morrison government is cutting the ABC. There are now over 20 'news deserts' in Australia, which weakens the community and raises the risk of corruption going unchecked. Diverse choices of reliable, accurate and independent news are fundamental to our democracy.
The importance of a healthy and diverse media sector
2.8
A common thread throughout the evidence was the importance of a diverse media sector in healthy democratic systems. Many submitters noted that the media plays an essential role in keeping the public informed with a range of viewpoints, providing choice to consumers in content and platform, and in holding governments and influential private sector entities to account.
2.9
The Public Interest Journalism Initiative (PIJI), for example, submitted:
An informed community is crucial to our democracy.
Public interest journalism–the news and current affairs media that has the primary purpose of recording, investigating and explaining issues of public interest or significance–plays a critical role in ensuring that the community is well and fairly informed. Without it, citizens' ability to engage in public debate and informed decision-making becomes challenged.
The importance and fragility of public interest journalism to our community have been held in sharp relief over the past year through national bushfires, the global pandemic and political disconcert amid rising misinformation and disinformation.
Negative effects of media concentration on democratic processes
2.10
In September 2011, the government established an independent inquiry into the Australian media, led by former Justice of the Federal Court of Australia, the Hon Raymond Finkelstein and assisted by Dr Matthew Ricketson. Although formally known as the Independent inquiry into the media and media regulation, the inquiry is commonly known as the Finkelstein Inquiry.
2.11
In the inquiry report, Mr Finkelstein noted that there are three 'obvious dangers' of media concentration: a lack of diversity in the views that are given voice; the possibility that a handful of people (media owners or journalists) will unduly influence public opinion; and a decline in standards because of the absence of effective competition.
2.12
Submitters and witnesses to the Finkelstein Inquiry agreed that media concentration negatively affects democratic processes in these and other ways. For example, Dr Benedetta Brevini, Associate Professor in Communication and Media, submitted that a lack of media diversity:
reduces the plurality of voices, views and visions;
leads to market domination by a small number of large institutions that outgrow the regulatory infrastructure;
narrows the distance between politicians and media executives resulting in disproportionate influence on public policy;
diminishes a sense of public responsibility in media institutions; and
reduces transparency in media ownership.
2.13
GetUp referenced its 2021 report, Who owns our media? which examined media concentration in Australia before concluding:
…highly concentrated media ownership has had a corrosive impact on Australia's democracy. It has skewed public debate, favouring the interests of the wealthy and powerful over the public good. This has been clearly evidenced in the national debates on climate change policy, where the scale of News Corp's climate misinformation has hindered climate policy, encouraged negative sentiments towards climate action, and actively driven a political wedge into our public debate. This would not have been possible in a more diverse media landscape, where the excessive power of corporations like News Corp is diluted to make way for a media sector that not only holds the government to account, but itself too.
2.14
GetUp further argued that media concentration can detrimentally affect the quality of journalism and lead to the production of misinformation:
[These effects include] reduced 'degrees of editorial freedom' and 'a perceived decrease in quality of the remaining newspapers serving local markets'. Moreover, media concentration leads to a 'reduced sense of responsibility in media institutions'—explored in depth in the 2012 Leveson Inquiry—and declining quality of news outputs, including a lack of fact-checking and editorial oversight. It is this environment that is critical to the production and spread of misinformation.
2.15
The committee notes, as highlighted by the Academy of Social Sciences in Australia, that in a depleted media industry there are also fewer jobs for journalists:
Fewer owners and services have led to fewer jobs [and] a significant loss in journalistic capacity in Australia. As many as 3,000 journalism jobs are estimated to have been lost in the decade to 2018, and further significant cuts have been reported due to the financial impacts of the COVID-19 pandemic. Sustainable media diversity requires a viable workforce.
2.16
GetUp went on to explain how cross-platform media concentration facilitates the spread of misinformation online:
It is this media environment—where ownership is concentrated across media platforms—that allows for the replication and spread of messages throughout the media, with few or no safeguards to ward against the propagation of misinformation. It is also in this kind of concentrated environment, with little media diversity, that it becomes more difficult for the public to contrast the quality of such sources.
2.17
Mr Rudd observed that social and online media reproduces some traditional media content, so amplifying it across Australia and the world. In this manner, he noted, for example, that News Corp printed titles can 'set the agenda' for the daily news:
…if you look at the impact of the Murdoch print media operation, it's a bit like this: print seeks to determine and drive the national news agenda on a given day. The electronics—go to radio—bounce their stories each day usually, not always, but usually, out of what's in print. The televisions, who do not have independent journalistic resources to do their own investigative programs much, are also directly influenced by what appears in print... [Then there is] the wash through onto online platforms—ironically Google and Facebook [from] the print origins of the story or the colouring of the story that day. That then completes the picture… [Murdoch] knows that by owning print, even if it no longer delivers profitable revenue lines, he has enormous influence over the nation's future political and policy agenda. That's why he's in the business.
Current diversity in the Australian media sector
2.18
There were many different views expressed as to whether Australia's media sector is sufficiently diverse, what diversity means in the news media context, and whether it is necessary for government to target policy or legal reform in this area.
2.19
Some evidence suggested that media diversity in Australia has never been greater, due to the expansion and democratisation of online media platforms that give voice to diverse communities and points of view. For example, Facebook submitted:
Technology has democratised the sharing of ideas and information. Australians are no longer dependent on a small number of gatekeepers in order to access information; they are able to access information about newsworthy developments from international media publications, freelancers and bloggers, or from direct contact with journalists or newsmakers.
2.20
Some submitters also suggested that recent changes to media ownership laws had not lessened diversity and competition in the sector, noting that traditional media organisations had an interest in maintaining a wide range of perspectives expressed across both new and traditional media platforms.
2.21
However, the majority of submitters and witnesses argued that more diversity was needed in the Australian media landscape. The Media, Entertainment and Arts Alliance (MEAA) cited one respondent to its survey of Australian journalists, who said:
Despite great hopes that the internet would see a democratisation of the media and a diversity of media voices, the opposite has happened. We are seeing mergers, partnerships and consolidations that all amount to fewer voices, not more. Small, independent players have no hope.
2.22
Another example came from Professor Allan Fels, Chair of PIJI, who commented on the importance and challenges of building a more diverse media:
News is an essential component of any working democracy. It's also a piece of critical emergency infrastructure, as seen in recent bushfires and floods. It assists community resilience and cohesion, particularly in rural and regional areas. However, the cost of producing public interest journalism is high and, as financial returns on this public good diminish, so too does the commercial incentive to continue its production. Yet sustainable public interest journalism relies on a thriving, diverse media sector that includes a variety of commercial, public and other operators. To ensure media diversity in Australia, a mix of fiscal measures is necessary to support transition, to stimulate existing news businesses and to encourage new entrants.
2.23
Other evidence noted that quality public interest journalism required significant investment of funding, time and expertise to produce, and that small organisations and new entrants to the market may not have the appropriate resources. For example:
Media institutions capable of reaching large numbers of citizens have generally been capital intensive so there have been significant barriers to new entrants. Even if the cost of printing has dropped massively and accessing the internet is very cheap, regularly accessing large numbers of citizens is expensive and is regularly achieved by those with large institutions and recognised 'mastheads'.
2.24
The Centre for Media Transition and Media Pluralism Research Project suggested that a healthy diverse media sector must be underpinned by consistent and equitable media standards across platforms:
Media diversity is inextricably linked with media standards; we cannot hope to foster a news media landscape exhibiting sufficient diversity without addressing the underlying issue of media standards such as accuracy, fairness, protection of privacy and handling of conflicts of interests. Media standards seek to create an ethical and equitable news media landscape.
2.25
Under the current Broadcasting Services Act 1992 (BSA), 'diversity' relates only to the quantitative aspect of media ownership and control, rather than to a diversity of perspectives, sources, accessibility or any other factors. However, some evidence argued that 'diversity' should be interpreted more broadly than simply considering ownership when looking at the health of media in Australia. For example, Mr Peter Fray, an experienced newspaper editor, journalist and founder of Australia's first fact-checking website, told the committee:
When we talk about diversity, we often talk about media ownership, and obviously we should [given studies that show the] overinfluence of News Corp in this country. But, when we talk about diversity, I think we should also talk about diversity of voice: which people's stories are told and who gets to tell them. We should talk about diversity of form and delivery… We need to talk about diversity of business models, diversity of demographics, diversity of literacies and diversity of forms of gender and sexual identity.
2.26
The News and Media Research Centre also submitted that diversity should be considered in a broader way than ownership alone, by looking three types of diversity:
Source diversity refers to the need for diversity in media content, outlet, and workforce; while content diversity refers to the need for diverse viewpoints, program types, and demographic representation in media. Exposure diversity is concerned with the diversity of content or sources consumed by audience members.
2.27
This model was also used by the Australian Communications and Media Authority (ACMA) in a 2020 analysis of the diversity of Australian news media, as set out in the table below.
2.28
Although the current high levels of concentration of ownership in few hands was recognised generally across the evidence, it was also recognised that fostering diversity in these broader categories outlined above is critical to the health of our media and democracy. For instance, submitters expressed support for:
Diversity of media that provides a full range of news, comment and opinions from mainstream and minority groups.
Reporting of news and the expression of opinion in the public arena through various platforms, is fostered, encouraged and promoted from a variety of perspectives and from a multiplicity of voices… across varying geographic, ethnic and socio-economic groups in our community.
2.29
Moreover, some evidence noted that healthy competition between media organisations was not equivalent to healthy diversity in the sector. For instance, the Chair of the Australian Competition and Consumer Commission (ACCC), Mr Rod Sims suggested:
I think things going digital does allow a bit more competition. One point that I often make is that, when I was growing up, the ABC was just TV and radio, and [today] I probably read as much of the ABC as I listen to or watch it, just because I get the feeds all the time when I go on the website. So they're very much digital, and so…they're now more directly competing with what was once just newspapers. So I think you've got more competition than you had before… The more competition you've got, I think it follows that the more diversity you've got, but sometimes people think of diversity in a different way that doesn't actually impact competition.
Concentrated ownership and declining number of outlets
2.30
Australia's news media sector is one of the most concentrated markets globally, with ownership of traditional print media, TV and radio networks, and new online media being in the hands of a very few wealthy and influential individuals and corporations.
Increased concentration of traditional news media
2.31
The Finkelstein Inquiry final report observed that throughout the 20th Century the Australian newspaper industry became increasingly concentrated, until:
Sydney and Melbourne are the only cities with competing locally‑produced daily newspapers [in 2012]. The other state capitals and major urban and regional centres have only a single daily newspaper. The metropolitan and national segments of daily press consist of 11 titles, eight of which already existed in the 1930s, plus two new nationally circulating papers and one based in the national capital, Canberra. These 11 titles have just three owners… It is worth noting that although the number of titles increased by four between 1960 and 1985, the number of owners continued to fall.
2.32
Overall, the Finkelstein Inquiry found that the newsprint media sector in Australia was 'highly concentrated' in the hands of 'four major publishers':
Measured by circulation, News Limited is by far the largest with 65 per cent of total circulation of metropolitan and national daily newspapers, or 58 per cent of circulation when counting all daily newspapers. Fairfax Media, the second largest group, controls 25 per cent of metropolitan and national daily circulation, or 28 per cent of all daily newspaper circulation. WA Newspapers which owns two titles in Western Australia, most importantly Perth's morning paper The West Australian is the third largest in aggregate circulation (eight per cent). APN, owned by an Irish company owns many provincial daily newspapers in New South Wales and Queensland but controls only five per cent of aggregate daily circulation.
2.33
Dr Benedetta Brevini, Associate Professor in Communications and Media at the University of Sydney, submitted that a more recent study of global media ownership and concentration considered this trajectory had continued, finding:
…Australia has the most concentrated newspaper industry out of any country studied, with the exception of China and Egypt, which are not liberal democracies… According to a 2020 Guardian analysis…the top four companies in the newspaper market at present account for 92 per cent of the total market, with a single organisation, News Corp, owning more than half the market at 52 per cent.
2.34
A recent report provided to the committee by GetUp noted that the current situation was more like a 'media monopoly'. Regarding traditional print media, it submitted:
…two media corporations [control] Australia's two national mastheads and two daily newspapers in Sydney and Melbourne, the only cities where they compete directly. Each of Australia's remaining capital cities have only one single, unchallenged daily paper, with ownership varied across each city.
News Corp…controlled by Rupert Murdoch—is the unchallenged dominant player, owning a 59 per cent share of the metropolitan and national print media markets by readership—up from 25 per cent in 1984. Nine Entertainment (Nine) is the second-largest media owner, with a combined 23 per cent readership share.
2.35
Mr Rudd, who supported the establishment of a royal commission tasked with examining current and emerging media monopolies, described these monopolies as inherently bad and already present in Australia:
Monopoly in any form, as a matter of principle, is just wrong. It doesn't have to be a monopoly in business. It can be a monopoly in politics—look at one-party states. It can be a monopoly in news media operations, where you have a concentration of power. When you look at Australia, where 70 per cent of the print readership of this country is effectively owned by the Murdoch empire—and in my state of Queensland nearly 100 per cent of the print readership is owned by the Murdoch media empire—if the plans by Murdoch and others to see the end of Australian Associated Press comes to pass, that level of concentration of effective power in the Australian media market goes through the roof. The abuse of the monopoly power is along these lines—no-one disputes this.
2.36
Like Mr Rudd, the Hon Malcolm Turnbull, former Prime Minister of Australia, described the impacts that media monopolies can and have had on Australian politics and democracy. For example, Mr Turnbull stated:
One media organisation in Australia, News Corp, belonging to Rupert Murdoch and his family, has profoundly changed in the way [the media] works on our democracy… News Corp has evolved from being a traditional news organisation, or journalistic organisation, to one that is essentially like a political party but it's a party with only one member. You see the way in which it is used in an aggressive, partisan way to drive particular agendas… You see this kind of pressure that is brought to bear again and again and again. I'm telling a roomful of politicians what you live with. You know how intimidated politicians and governments are by the way in which that political power is wielded… I think we face a real threat to our democracy.
2.37
Evidence submitted to the committee also shows a very high degree of public dissatisfaction with the concentration of media ownership in Australia, particularly the dominance of News Corp mastheads in print media, in broadcasting through Sky News, and in the subsequent re-sharing of content through the Google-owned YouTube and the Meta-owned Facebook. These submissions were overwhelmingly critical of News Corp's influence on political and social issues, which were alleged to be partisan, biased, and skewed.
2.38
This public concern over levels of ownership, and a growing dominance or emerging monopoly in certain areas is also evident in Mr Rudd’s petition for a royal commission into media ownership. The petition, which received more than 500 000 signatures, is the largest electronic petition in Australian history. Additionally, a large number of submissions were received through Mr Rudd’s website, which included comments such as:
As a citizen of this country, I am concerned about the diversity of media in Australia. I am worried about the news that the majority of Australians receive, it's sensationalism and its validity. Australians deserve real, unbiased, factual news. (Georgia Brown)
I think fundamentally the level of control that one family have over the governing of our country is truly wrong. (James Howarth)
Historically, monopoly over anything has never been considered a fair practice within business. What’s happened here in Australia is a gross oversight of what is right and wrong being perpetrated by the media and the man in sole control of the vast majority of them here in Australia. (Hank Steele)
I would like to see a royal commission because I am concerned that Australia’s print media is overwhelmingly controlled by News Corporation, it is biased, it incites racial divide and hatred and spreads dumbed down misinformation. The role of media is to provide unbiased information and News Corp does not do that. A fair and equal democracy requires diverse sources of reliable, accurate and independent news. (Samantha Winter)
I am concerned about the misuse of media power by Rupert Murdoch and Newscorp, and their affiliated properties within Australia. It is a major concern of mine that Sky news' ‘after dark’ programming is becoming increasingly like Fox News, which played a pivotal role in Donald Trump's ascension to the presidency, and continues to air his baseless claims surrounding electoral fraud. This is a danger to our democracy. (Finnegan Laird)
We can't have our media by owned by just one company. The media has so much power in directing people's opinions of important matters such as politics, the environment and climate change. We need to ensure our media isn't just telling one side of the story. By ensuring there is a large media diversity this should help, us the public be able to see all the information rather than being fed half a story. (Bethany Smith)
2.39
A large number of members of the general public supported a further inquiry into the media in Australia, including submissions made through Mr Rudd’s website, and through GetUp.
Changes to the Broadcasting Services Act in 2017
2.40
In September 2017, the government introduced changes to the BSA, including reform of two media control and ownership rules. The changes abolished a number of provisions aimed at preventing concentration of media ownership, including:
the '2 out of 3' cross-media control rule, which prevented a person controlling more than two out of three regulated media platforms in any one commercial radio licence area; and
the 75 per cent audience reach rule, which prevented a person from being in a position to exercise control of commercial television broadcasting licences whose combined licence area populations exceed 75 per cent of the population.
2.41
In introducing these changes, the government argued that reform was required to ensure the viability of Australian broadcasters, given the growth of online services, the challenge this growth has created for existing revenue models that rely on advertising, and to respond to how Australians are consuming media products across global platforms and traditional media formats.
2.42
The rationale behind abolition of the reach rule was that it was redundant, given affiliation agreements between metropolitan and regional television licensees to share content and online streaming—whereby Australians generally receive the same broadcast content. The abolition of the '2 out of 3' rule had a similar rationale, based on many Australians accessing content from online sources.
2.43
The committee notes that the media control and ownership changes have enhanced media concentration. For example, the reforms enabled the $4 billion merger between Fairfax Media and Nine in 2018. As reported by Guardian Australia:
The new entity will comprise the Nine network and its digital publishing assets, the Herald, the Age, the Australian Financial Review, a majority stake in property giant Domain, streaming service Stan and a
54.5% shareholding in radio network Macquarie Media, home of Sydney's 2GB and Melbourne's 3AW.
2.44
It has also consolidated News Corp's dominance across media formats, owning radio, newspapers in each capital city, regional newspapers and a majority share of the Foxtel news network. Some commentators noted that the amendment of the BSA had immediate effects of further concentrating media ownership, reducing standards of journalism of newspapers acquired by larger media companies, and the creation of further job losses for journalists.
Concentration and convergence of online media
2.45
The last decade has seen a profound shift in the news media landscape. While it has seen a decline in the reach and influence of traditional print media, many traditional mastheads now also have online outlets. Furthermore, there has been a recent rapid rise in the number of people accessing news through social media and aggregator platforms (notably Facebook and Google).
2.46
GetUp observed that one company had a disproportionate share of Australian media across all platforms in the converged news environment:
The predominance of News Corp in cross-media settings is unprecedented in liberal democracies. In addition to its dominance in print readership and radio, it owns Foxtel—Australia's only subscription broadcasting service in practical terms—reaching an estimated audience of over 5 million people per week.
As a result, News Corp earns 40 per cent of total Australian television revenues—combining free-to-air television advertising and subscriptions—almost double that of second-place holder Nine.
Beyond direct ownership interests, [there are] extensive content licences and affiliate relationships by which the largest media corporations extend their influence across a range of other media outlets, including across rural and regional Australia [as well as evidence that a] few corporations are extending their dominant positions—from the legacy media services of radio, television, and print, into digital news and on demand services.
Google and Facebook as platforms for the distribution of news media
2.47
The two biggest digital platforms, Facebook and Google, currently do not accept that they are publishers of information, arguing instead that they are platforms on which individuals are able to interact with family and friends, and communities with shared interests. For example, Facebook submitted:
Although Facebook is primarily a service used by Australians to connect with their family and friends, to participate in causes that are important to them, and to interact with their community, we recognise that our services can play a role in the news ecosystem. This is because publishers choose to share stories on our services to connect with audiences, and because Australian users choose to share news content or react to news content that they read other than on Facebook with their family and friends. Publishers control whether and how they share news on our services and they also control whether members of the public are able to share stories on Facebook.
2.48
The committee received evidence from these large digital entities that they take managing misinformation and disinformation on their platforms seriously. For example, Ms Lucinda Longcroft of Google told the committee about the oversight on their platform YouTube:
…we're dedicated to providing access to high-quality information and freedom of expression for all, but we are not an anything-goes platform. Our community guidelines set out clear rules of the road, which our team regularly review and update to ensure that they're current, keep our communities safe and preserve openness. The guidelines provide public guidance on content that is not allowed on our platform: spam, scams, hate, harassment, misinformation, disinformation and more. We apply these guidelines to all content equally on YouTube, regardless of who the creator is—whether an individual, an organisation, a news publisher or anyone else. Ultimately, we have to make difficult decisions about what is permissible and we take that responsibility seriously. With that in mind, we build our guidelines with input from a broad community of stakeholders not just YouTube users, content creators and advertisers but also civil society and public institutions.
2.49
However, a number of stakeholders told the committee that Facebook and Google should be considered publishers, and so be accountable to the same kind of standards and regulation as publishers of other media. For example, noting that Google and Facebook 'publish information', Mr Robert Thomson, the Global Head of News Corp, stated bluntly: 'They are a publisher' and so should be able to be held to account for the material they facilitate.
2.50
Although Facebook and Google both informed the committee of their processes and standards for handling inaccurate and dangerous information, some other stakeholders have noted that the sharing of misinformation and disinformation is endemic on social media. In 2020, for example, the ACMA suggested that where consumers have a range of indicators for the reliability of news from traditional media:
…many of these indicators are not as clear to users in the online information environment. This environment also includes a vast array of sources beyond professional news publishers and journalists.
A focus of platforms should be on increasing transparency in the online information environment—by, for example, increasing visibility of these indicators so that users are more easily able to make informed judgements about the quality of news and information they encounter. Many platforms have taken steps in this direction. Further codification would promote consistency and provide accountability for platforms in the services they provide to users and in their crucial role in the delivery and distribution of news and information.
2.51
Negative effects from the proliferation of misinformation online have been noted, including:
Acute problems such as for public health (particularly in the current pandemic), public panic and social disruption, electoral integrity, and financial harms through scamming or enabling people’s poor decisions;
Chronic harms: lower trust in public institutions; eroding trust in professional sources of information (e.g. healthcare, media, academia and science); and a lower quality of social cohesion.
2.52
A number of stakeholders were extremely concerned that digital platforms had no oversight or enforceable standards. It was argued that this encouraged the spread of misinformation online, contributed to a growing distrust of mainstream media, and was an unfair competitive advantage, which allowed them to pursue profits without accountability.
2.53
A further complexity has been introduced by the debate about who is responsible for content distributed and disseminated online, including the question of whether Facebook can be considered as a 'publisher', and so liable for oversight in the same way as traditional media. Over the course of this inquiry, for example, the High Court of Australia reached a final decision in the 'Voller' case, which will have repercussions for mainstream media content reproduced on social media.
2.54
Moreover, the ban of Sky News from YouTube for one week for violating the platform’s COVID-19 standards raised questions about how digital companies can enforce their own standards to block news organisations, whilst not being subject to enforceable or transparent regulatory standards themselves. Mr Paul Whittaker of Sky News argued that this decision suggested that YouTube was not a neutral platform, but was 'selectively broadcasting content and censoring certain views' expressed by an established media company. Given this, he told the committee:
We acknowledge YouTube has terms of service that publishers must abide by. However, YouTube's process lacks transparency, and this should be concerning for all media. It is now beyond debate that YouTube is a publisher, selectively editing content for political or commercial reasons, but unlike traditional media it does not accept any of the regulatory or legal burdens that being deemed a publisher carries with it.
2.55
This perspective was shared by witnesses from Nine, who commented on Facebook’s restriction of news publishers sharing content and on users accessing news in Australia in February 2021. Mr Hugh Marks, the Chief Executive Officer of Nine, told the committee:
…in light of the events of this week [in February 2021] isn't it ironic that Facebook is not here, given their increasing role as a destination for consumers to access news and information. Yes, they produce no news but they control a lot of the access to it. And shouldn't we all be concerned when an enormous overseas multinational, having built a dominant habit for consumers, is prepared to take the reckless steps they did this week, without apparent concern as to its consequences, and deny Australians access to news published by professional news organisations—ironic indeed.
2.56
This matter is discussed further in later chapters of this report.
2.57
Current indications are that the government is considering reforms to some relevant legislation and legal frameworks, which would see social media companies and aggregators held responsible for comments made on their platforms.
2.58
Additionally, the government has also introduced the News Media Bargaining Code, which provides a mechanism by which Facebook and Google must reach agreements with some news media organisations to remunerate them for the use of their news content. This Code is discussed further at Chapter 3 of this report. The issue of the current lack of oversight for Facebook and Google is discussed further at Chapter 5.
The effects of the shift online
2.59
Over the past decade, the incredible rise of online search engines and social media has driven a revenue and reach crisis in the media industry. This has simultaneously hollowed out traditional sources of income from advertising for newspapers, TV and radio, whilst also reducing the number of people consuming news from those traditional formats.
2.60
In short, as consumers have migrated to online platforms, the advertising revenues that sustained traditional media forms of print, broadcast and television have plummeted. This not only includes commercial advertising, but also newspaper classifieds, which were once described by Rupert Murdoch as the 'rivers of gold' that subsidised newspapers' production of quality journalism.
2.61
This sharp reduction in revenue has led to an existential crisis in many traditional news media organisations, which have struggled to adapt their revenue structure to the digital age. Some new models have been adopted by media organisations, including:
Membership subscriptions offering exclusive content or experiences, on a free basis, but requiring an email login;
Paywalls, where some or all content can only be accessed by a financial subscription;
Philanthropic models, where organisations are set up as charities or not-for-profits and subsidise operations through donations;
Co-operative models relying on investment in shares, or projects raising capital through crowdfunding;
Micropayments for accessing articles or series of articles, including for personalised news content;
New models of incentivising consumption of content, including through blockchain technologies.
2.62
The Department of Infrastructure, Transport, Regional Development and Communications' submission noted that the ACCC had found that moving online does not always secure sustainability and that new digital-only news publications have not been able to develop financially viable business models to deliver journalism online.
2.63
Some media organisations, such as Guardian Australia, The New Daily and The Conversation were optimistic about the potential for new funding models to work in the sector, and increase the diversity of news media available to Australians. Others however, saw the alternative use of subscriptions and paywall models as impeding the public’s access to diverse opinions, which they saw as essential for an informed public debate.
2.64
Potential government support for new models of journalism is discussed further at Chapter 7 of this report.
Effects on regional media
2.65
In 2012 the Finkelstein Inquiry commented on the increasingly concentrated ownership of print media in regional Australia (mostly by News Limited, now News Corp), Fairfax (now part of Nine) and APN News & Media, since acquired by News Corp in 2016. Mr Finkelstein noted that there were then:
[Thirty-seven] newspapers of varying size and quality, but with little impact or news gathering capacity beyond their own area. Nearly all these began as locally owned enterprises, but by 2008 only two remained so.
2.66
These ownership trends have been exacerbated by contractions in the number of newsrooms and masthead titles, or the suspension of news services across Australia. Mr Rudd argued that media monopolies destroy alternative media voices in both metropolitan and regional areas. He suggested that the News Corp acquisition of APN News & Media a few years ago, which was approved by the ACCC, had reduced regional and rural media voices significantly, and that this had been exacerbated during the COVID-19 pandemic:
We've seen [a decline in voices] most recently and spectacularly with Australian provincial newspapers. The decision by the ACCC to allow Murdoch to buy APN in 2016-17 meant you had in Queensland a 100 per cent near monopoly emerging. But, under the cover of COVID last year and despite the Murdoch empire's promises to enhance their regional and local coverage, something like 112 of these papers across the country were shut down, so local communities no longer have local papers and they are being starved of local news. It doesn't matter whether it's from the Left or the Right; they've just been starved of local news.
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Work undertaken by PIJI's Australian Newsroom Mapping Project supports this conclusion. It notes 182 'contractions' of existing news services over the past two years, 68 per cent of which were in regional Australia. Others submitters also noted the emergence of 'news deserts', areas that had no source of local news, not only in regional and rural areas, but also some suburban areas.
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Some of this has been driven by the expansion of larger media corporations, particularly News Corp, acquiring regional titles, or content licences or affiliate relationships covering rural and regional areas. However, PIJI highlighted the impact of COVID-19 as a significant contributory factor:
Prior to COVID-19, the impact of digital transformation in the news industry and the evolution of social media had already fundamentally changed the nature of journalism. Content and audience reach had grown exponentially, but the economics underpinning the costly nature of producing public interest journalism was challenged. Advertising revenue that once funded reporting shifted away from journalism, compromising traditional business models. The ACCC found that 106 unique local and regional newspapers closed over the period 2008-09 and 2017-18, representing a decline of 15 per cent. This crisis has been accelerated by [the] economic shock of COVID-19, which dried up remaining advertising almost overnight. Newsrooms across Australia have shrunk and closed… [O]f the 182 contractions (e.g. masthead or newsroom closures, suspension of services) over the past 2 years, 164 occurred during the first three-month wave of COVID-19 in Australia.
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The submission made by the Media Innovation and the Civic Future of Australia’s Country Press Project at Deakin University agreed that the general trajectory of decline has been compounded by the financial effects of the COVID-19 pandemic:
Within weeks of the nationwide COVID-19 lockdown in March this year, more than 200 local and suburban newspapers across Australia had either permanently or temporarily closed and/or shifted to digital-only platforms. A sharp decline in advertising expenditure had further crippled the media industry as Australian businesses slashed all but essential costs to survive the pandemic. This current media low-point follows more than a decade of cuts, layoffs and closures across rural and regional newsrooms. The ACCC has rightly highlighted concern for the continuing reduction in journalistic numbers, especially at the local level, in performing vital functions such as court reporting and investigative reports. However, it is important to note that many failed mastheads to date are connected to big conglomerates, such as News Corp, where profit margins are small (albeit shrinking), yet arguably more palatable for smaller independent owners.
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Ms Miranda Korzy noted in her submission that this has left many communities without a local newspaper:
News [Corp's] (and the former Fairfax's) buyout of local newspapers, radio and TV stations across the continent has meant that in addition to major political and other news obtained through subscriptions to AAP, local news is syndicated through News or now Nine, reducing local input, relevance, independence and diversity. With the onset of COVID, many small communities have now lost those outlets altogether. For example, more than 100 of News Corp's regional and community titles moved to digital-only formats in May and another 14 titles ceased to exist earlier this year.
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However, Mr Bruce Ellen, Board Member from Country Press Australia, stated that in Queensland the closure of local and regional newspapers has led to new opportunities for independent media:
You would well be aware that News Corp shut down regional Queensland for [its] own good reasons. We believe they abandoned their regional communities. They put back in a couple of journalists that did some online filling of content, but it's our view from what we've observed that largely all they're doing is trying to drive audiences through their regional URLs into the metro papers, which quite clearly is not in the realms of what media diversity should look like. The result of that, though, has been that numerous independents have started up in the areas that News Corp abandoned.
Case study: television news in regional Queensland
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In addition to the closure of print editions in regional Queensland by News Corp, as outlined above, there has also been a contraction of local TV news bulletins in regional areas.
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In March 2021, Nine News announced it would close its bureaus in regional Queensland under a deal signed with WIN TV. Following on from that decision, in May 2021, WIN News announced regional TV in Queensland, Victoria and New South Wales would move to state-wide Bulletins, and the loss of news gathering staff in those regions.
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The effect of these changes is that a regional town may have started 2021 with three separate news bulletins (7News, Nine and WIN), which shared local news and stories with the local community, and ended the year with just two news bulletins sharing mostly state-wide stories.
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At the same time, Newscorp’s regional free-to-air news channel Sky News Regional has increased its average audience numbers, with audiences growing by 4 per cent year on year, when compared to its previous arrangement with the WIN channel.