Category Archives: Print media

Finkelstein media report’s four fatal flaws

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“Make the media more accountable for their sins, and worry less about new technologies and freedom of speech”.

That’s a one-line summary of Ray Finkelstein’s Independent Media Inquiry.  It argues for a new system of media regulation to apply to journalists, commentators and most of the Australians who contribute to online news and opinion. It wants a government-created News Media Council to set standards for all media – broadcast, print, online. When necessary, that Council should “require a news media outlet to publish an apology, correction or retraction, or afford a person a right to reply”. And when the media outlet won’t comply? Normal contempt of court rules would apply. So eventually, an editor would spend some time in a jail cell.

The report is already copping it from the management of Australia’s major print media groups, who see themselves as its targets. I’m writing more out of interest. I’m involved in the media, as chief operating officer of the online publishing firm WorkDay Media. But WorkDay Media has always been happy to make corrections and grant prominent rights of reply; it has even tried to join the Australian Press Council. As a business manager, there’s nothing in the report that worries me.

There’s a lot to admire, too. I have done enough report-authoring to be impressed by the speed with which Finkelstein and his team (mostly lawyers) marshalled their arguments into something at once informed and understandable. It’s a good introduction to Australian media regulation issues, it appropriately handballs the issue of print media industry assistance to a Productivity Commission inquiry, and it seeks to align the jarringly different treatments of broadcast, print and online media.

But for all that, the Finkelstein report remains a flawed 468-page attempt to justify new government regulation of media. Four flaws, in particular, make it unconvincing.

1. Deploying the accountability dodge

The first question about this inquiry has always been: why now? Why should Australia introduce new media accountability regulations just when the Internet has delivered a huge new source of media competition?

Of course, one answer might be “because Bob Brown wants to restrict News Limited and the federal government at least wants to frighten it”. But you can’t make that the philosophical basis for a government inquiry. And besides, the fact that an inquiry has a political motive does not prevent it coming up with useful conclusions; all inquiries are founded with politics in mind.

So: why now? Finkelstein’s answer is first that there is an “increasing and legitimate demand for press accountability”, and second that the federal government must accommodate that demand. He has plenty of evidence for the first point, much of it drawn from public opinion research.  Trust in the media is relatively low and may be declining, many voters think the media use their power irresponsibly, most people think various media outlets report inaccurately, journalists often recycle press releases, and sometimes media seem to be pursuing the agendas of vested interests (ranging from poker machines owners to the Victoria Police) or overstating things such as the likely effect of the carbon price on household budgets. The call for accountability is the report’s keystone, the piece of rock which keeps everything else from falling down.

But calling for accountability only suggests we need some rules. It does not tell you what those rules should be.

Setting down those rules is hard. Nevertheless, if you’re serious about accountability, that’s what you have to do.

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The Independent Media Inquiry: Six impossible things by February 28th

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Right now Ray Finkelstein and Matthew Ricketson, the two members of the federal government’s Independent Media Inquiry, are trying to finish off their report to the government. It’s due by 28 February.

Writing these reports is frequently difficult, but Finkelstein and Ricketson have a particularly intriguing task. It’s more difficult because they clearly want to rein in a few of traditional media’s worst excesses – and they want to do it just at a time when that traditional media is shrinking in importance in the face of an Internet-driven explosion of information availability:

  1. Finkelstein and Ricketson have to examine what the terms of reference call “the effectiveness of the current media codes of practice in Australia”. That’s tough enough on its own, because it’s hard to think of a more effective system which isn’t also more restrictive of freedom of speech. The head of Curtin University’s journalism department, Dr Joseph Fernandez, has made this point well – see the transcript of his evidence here. Fernandez perhaps understands these issues clearly because he spent 14 years editing newspapers in Malaysia, a country where editors face real experience of freedom-of-expression issues.
  2. They must examine the codes of practice “in light of technological change that is leading to the migration of print media to digital and online platforms”. Their problem here is that technological change is leading to an explosion of content that undermines the case for even existing restrictions on publishers. This is a point that Ian Rogers and I have tried to make at length in WorkDay Media’s submission to the inquiry. Traditional media had a level of oligopoly power over information distribution. These days anyone can publish. There is no longer any such thing as “the media” – rather, there is a huge and messy range of information forms, sources and channels with different levels of reach, frequency, engagement, audience trust and motivation. This is great for citizens: the “marketplace of ideas” has never been closer to being fully realised. But it’s bad for traditional publishers – and for aspiring regulators.
  3. They must assess “the impact of this technological change on the business model that has supported the investment by traditional media organisations in quality journalism and the production of news”.  For anyone who pulls the economics of media apart, the answer is pretty obvious: printed newspapers mostly won’t survive. They are losing advertisers and readers to a fundamentally more attractive and efficient Internet. The media analyst Roger Colman calculates that “all metropolitan newspapers in print editions will be unprofitable, definitely, by 2020″. But a surprising number of people don’t want to say this. And if Finkelstein and Ricketson do say it, they will instantly raise the question: “so why are we bothering about extra regulation of print media now?”.
  4. They must figure out how investment in quality journalism ”can be supported, and diversity enhanced, in the changed media environment”. This is an interesting question. But as Ian Rogers and I have argued, the answer is less obvious than many people think. The media and those who analyse it are constantly in danger of over-estimating traditional print media journalism’s contribution to the world, and underestimating the benefits of the information availability explosion which the Internet is bringing us.
  5. They must look at “ways of substantially strengthening the independence and effectiveness of the Australian Press Council, including in relation to online publications”. The ABC’s Jonathan Holmes has predicted that the inquiry will push from a stronger Press Council with more powers and a much broader remit. And that will bring us back to the inquiry’s fundamental problem: it seems to want a more activist government media body just at the time when technology is making traditional media of all sorts less dominant and undermining the case for media regulation.
  6. They will feel pressure to come up with a solution that fits in with the interim report of the Convergence Review, which has decided the inconsistency of Australia media regulations should be addressed by a system of regulating equally all members of a vaguely-defined group called “content services enterprises”. These firms’ content would be subjected to a public-interest test. The firms covered would include television, radio, newspapers and online outlets – which means print and online journalism would face new restrictions. Finkelstein and Ricketson are at least awake to the freedom-of-expression minefield that such a law would sow. As Jonathan Holmes again points out,  the convergence review’s authors seem largely, weirdly, oblivious to the whole issue.

The Independent Media Inquiry could sensibly suggest that a voluntary body provide reputation indicators for online and offline media. That’s the solution recommended by Monash University’s Dr Johan Lidberg. (The Council could also make it easier for small online media organisations to join.)

But if the inquiry recommends the Press Council or a new media super-regulator starts regulating a much wider group of reporters and commenters, and government follows that recommendation, three things will happen. The council  will be quickly overwhelmed, it will be forced to make impossible judgments, and it will eventually become a joke.

[Update: An hour after first posting, I gave in to the impulse to properly honour Lewis Carroll by adding a sixth point, on the Convergence Review.]

The Amazon future works

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The ABC’s Australia Talks program ran a show this week about the troubles of the Australian book industry. Its starting point was that the local bookselling and book publishing industry is in a heap of trouble. Not for the first time, the program did a deal of hand-wringing about the current state of affairs. On its bad days, at least, it really ought to be called Australia Frets.

Few could argue with this particular show’s basic premise.  Online book sales and e-publishing threaten book printing and book publishing. Like many people, I started buying books online in the 1990s – old books, niche books, cheap books. And like many people, I’ve now begun using Amazon’s Kindle e-book system. Amazon has 80 per cent of the e-book market. The Kindle format is annoyingly proprietary and rights-managed but incredibly convenient.

You can see where this is going, for me and others. I have a huge wall of books at home here which I rather like. It saddens me a little, but I will simply not be adding to my collection at such a rate in the future.

But then: so what? Saddle-makers aren’t doing as well as they used to, either. The Australia Talks discussion seemed to hint that the move to digital sales would rob authors of money, but never produced much evidence. Meanwhile, it gave very short shrift to the possibility that electronic publishing might help Australian authors get their ideas and creativity out to the rest of the world. It gave less attention still to the idea that cheaper books might help Australians compete in a global knowledge economy. It gave pretty much no time at all to the notion that an open society and digital technology allow ideas and creativity to flow more freely today than ever before.

This is the same lack of imagination and sheer spinelessness that bedevils the newspaper debate, and that Ian Rogers and I have opposed in our submission to the Independent Media Inquiry. It’s the foolish fear that the moment some familiar artefact disappears – printed book, printed newspaper – people will lose all desire to read, to think, to ask questions about their world. In my experience, people are better and more reliable than that.

The good news is that this as more people use the new technologies and channels, the success stories are piling up. The Australia Talks program’s comments section featured a telling story from an Australian author:

I am the author of 10 books. My books have sold to major foreign publishers and I was able to write full-time. But my disappointment was with the marketing of my work.  The covers too were terrible.

In the last year I have converted all my books into e-books and created my own covers that are a huge improvement on those supplied by the major publishers I was originally published by. I am also responsible for my own marketing and feel so much more in control of my own career. I don’t receive opaque royalty statements that even my agent admitted she couldn’t follow. So instead of relying on publishers who are always looking for the ‘next big thing’ instead of developing writers they already have, I can see with one click how my sales are going. – and I’m delighted to say that my career is flying again and I can access huge markets.

I can only say- thank you Amazon.

Update: Charlie Stross nicely describes Amazon’s strategy in book publishing. Summary: Jeff Bezos wants to crush competitors, and he has a strategy for doing it.

(Regardless of what Charlie says, we probably do need some sort of DRM system if authors are to publish ebooks and be paid for their work. As Charlie notes, there is ultimately no foolproof DRM system for books, or anything else. This is why thrillers are usually offered as e-books, while programming and IT titles frequently are not.)

In (sort of) defence of The Australian

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With the Media Inquiry in full swing and the Greens’ Bob Brown complaining loudly about News’s lack of fairness and accuracy, now might be a good time to travel back in time 20 years. Let’s visit another era when a powerful paper was unashamedly boosting one side of politics – the left.

In 1992, Joan Kirner’s government was in its dying days: state government debt had ballooned, and many ministers seemed frequently to be denying reality. One newspaper, however, resisted the consensus that change was needed. The Age stuck by Kirner, took its initiatives seriously, derided the government’s critics and Opposition Leader Jeff Kennett in particular. Some of its best journalists, on beats like national politics and business, looked on in despair. But the state reporters and commentators would not be swayed. Balance consisted of criticising the Kirner government from the left as much as from the right.

The Age had many fine journalists in that era, but working on state issues there sometimes had an air of unreality. When Kennett won the 1992 election in a landslide, some of the paper’s reporters seemed not quite to believe it had happened. Only one of the paper’s Melbourne-based political journalists – the cheerfully professional Sue Neales – appeared to have cultivated contacts within the Coalition. ALP reformers like John Brumby thought the Cain/Kirner government had stuffed up; quite a few at The Age did not. On my third day working for the paper in Melbourne in 1993, I turned down a request from a news editor to write an opinion piece explaining that the new government’s budgetary tightening was unnecessary and dangerous. When Kennett’s initiatives succeeded – he ran one of the most successful privatisation processes ever – many at The Age seemed determined to ignore them. Steve Bracks and John Brumby knew better; on assuming government, they kept the best of the Kennett government reforms firmly in place.

Alan Kohler, appointed editor in 1992 to bring the paper back to a more centrist line, struggled against the power of the paper’s welded-on sympathy for the left. Kohler’s successor, Bruce Guthrie, an aggressive newsman, made Kennett the target of much of his aggression.

The point is not that The Australian’s frenzied campaigning against the current federal government is warranted. (I don’t think it is, and neither do many journalists at The Australian.) It’s not even that The Age’s approach in the early 1990s damaged democracy (the News-owned Herald-Sun was pro-Kennett, and frequently manically so, throughout this period). The point is simply that newspapers have campaigned against governments at regular intervals in Australian history, and campaigned at least as hard as The Australian is campaigning against the federal government now. If a newspaper or an owner has a duty to be even-handed, no-one noticed in the early 1990s. Certainly not Bob Brown.

Media Inquiry: Look forward, not back

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[Cross-posted to Online Opinion]

I spend my working life running an online media firm – WorkDay Media, publisher of Banking Day – with its owner and editor-in-chief, Ian Rogers. Last month, Ian and I wrote a submission to the federal government’s Independent Media Inquiry. You can see the whole thing at the WorkDay Media site.

We’re trying to focus the inquiry a little more on what we might gain from the Internet’s transformation of communication, and a little less on what we might lose as newspapers inevitably dwindle.

It’s fairly obvious that Australians are relying less and less on information from “the mainstream media” – that is, existing newspapers, TV and radio stations. Instead they are getting and exchanging information from a far richer variety of Internet-based sources, from email newsletters to expert blogs to government and company records – plus, of course, Club Troppo.

This seems like good news. So why are we holding a media inquiry focused on mainstream media, and particularly on the newspaper industry?

The obvious answer is that the future for Australian newspapers looks pretty ugly. Once newspapers were the gatekeepers; now they are not. They are losing advertisers and readers to a fundamentally more attractive and efficient Internet. The media analyst Roger Colman calculates that “all metropolitan newspapers in print editions will be unprofitable, definitely, by 2020″.

Many of those who fear for the future of “the mainstream media” in Australia – like academic David McKnight, or publisher Eric Beecher – are concerned about how we will reproduce the activities of big newspaper newsrooms as newspapers gradually go out of business. They believe this is a very important question.

But this focus on the media past signals a failure of imagination. Big newspaper newsrooms will not be recreated in online form. Facts, news, analysis are all going to have to come out in different ways than they have in the past.

And they will. They already are. You have to be enormously enthusiastic about the old media environment not to believe this: the new media environment, for all its faults, is far better than what it is replacing.

Media thinkers worry that online sources would never have uncovered a Watergate scandal. They’re probably wrong, in every way. Now more than ever, the truth will out. Richard Nixon’s corruption was mostly uncovered by official investigators; Woodward and Bernstein, great journalists that they were, were merely conduits. In the age of the Internet, Watergate might have evolved over weeks, not years. Just in the past year we have seen yet another new information innovation – Wikileaks – whose model suggests secrets will be harder than ever to keep in the decades ahead.

There will probably be times in the future when Australia will look back at some event, some scandal, some development in the society, and say that newspapers might have done a better job than the new information sources. But we suspect those cases will be few and far between.

New online players would already be even more numerous in traditional media areas such as politics, public policy and business if not for the presence of mainstream media, particularly newspapers, whose large online presences are hugely subsidised by their traditional businesses. This is certainly the biggest bar to the expansion of many online information ventures, including WorkDay Media.

Australia has entered an age when media can be created, transformed and transmitted far more easily than ever before. Australians who believe in the importance of an informed society should treat the 2010s as an era of huge optimism and opportunity. For there is every reason to believe that the Australian society of the next 20 years will be better informed than ever before.

Facing such a future, it makes little sense to try to impose a more restrictive regime on the dwindling existing “mainstream media”, or to subsidise its continued existence. We can improve the Press Council. We can have governments make more information available to citizens. But there is no need to choose this moment to impose either a new regulatory regime or a new protection scheme.

This is a moment to embrace the information future, not to embalm the media past.

The quest for the Holy eGrail

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Current developments in e-books and e-readers may end up having dramatic effects on the mainstream newspaper industry, about whose future I’ve been musing in recent days.

A significant part of the problems being experienced by old media companies generally, especially Fairfax in Australia and to a lesser extent Murdoch worldwide, is that we’re in a transitional phase between the old world of print media and the new wholly online world.  During this phase, old media companies are forced to maintain their existing expensive, labour-intensive print infrastructure and physical distribution networks while simultaneously developing new and even more expensive state-of-the-art online platforms to deliver the same content and advertising.

They can’t avoid either element because a large though progressively falling proportion of their audience still relies predominantly on print for news and information, but more and more of their young audience especially is migrating to the web as their major source of news, information, entertainment and social interaction.  If old media fails to develop adequate web platforms their audience and customer base will be stolen by leaner, meaner web-only competitors not laboring under the additional overhead burden of a print and physical distribution infrastructure.  For example, eBay and similar smaller operators have liberated a significant amount of what would previously have been newspapers’ classified advertising “rivers of gold”.

However, the time is fast approaching when the old media corporations like Fairfax and Murdoch will be in a position to jettison their print operations and move to a wholly online model.  The key to timing of any radical business decision of that sort will lie in how rapidly their customers adopt e-reader or tablet technologies as their primary delivery platforms for reading material and entertainment.

Google’s announcement this week of its new eBookstore may mark a decisive stage in that shift:

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The internet and news media

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Troppo’s Paul Frijters, too self-effacing to push his work on Troppo, has a new paper on the effect of the internet on quality news content.  I discovered it on a newsletter of new papers. Looks interesting, so I’ll have to have a closer squiz when I get the time.

Is the Internet Bad News? The Online News Era and the Market for High-Quality News
Date: 2009-05
By: Frijters, Paul
Velamuri, Malathi

We review and model the impact of the internet on the production and uptake of high- quality news. Our review of trends in the market for news suggests 3 stylized facts: i) particular quality news markets are dominated by merely a few providers, ii) demand for quality news appears stable, but provision of news has become specialized; mainstream news is decoupled from quality news, and iii) the dominant business model of internet news mirrors that of radio, television, and newspapers in that costs of news production are recouped via advertising. We build a stylized model that rationalizes these facts. Our model captures three conflicting effects: (1) economies of scale in the production of news lead to monopolies on particular markets, (2) easy access to information on the internet makes it cheaper to provide high-quality news and to disseminate it via the web, which increases the production of such news; and (3) the existence of bloggers and news aggregators who recycle the stories of news-providers reduces the effective property rights of high-quality news producers, thus forcing the business model of the internet to be advertising-based. For the most likely cases, our model would imply that the internet does not constitute bad news for the provision and uptake of quality news.