Is Rome burning? Murdoch picks a fight with the ABC

“You want sensitivity training? Don’t hang out in a newsroom, that’s your sensitivity training."
(From Overheard in the newsroom #1979)

Everyone know the media is a harsh business full of oversized egos and a well defined sense of self-importance. So when there is substantial disagreement on a major matter of media principle, it likely the bruises will be public. No noses have been bloodied yet in the big private v public access battle is playing out at the moment but it is only a matter of time. This fight is serious. Corporate media led by Murdoch want to charge for content but are aware they will leak substantial audience to publicly-owned media companies who have no intention of charging directly for content. Public enemy number one in Australia is ABC boss Mark Scott who is fast becoming a talisman for the power of new media.

The charge of Murdoch and his formidable empire is public corporations are inherent anti-competitive institutions whose funding power gives them an unfair advantage. The ABC undercuts private companies’ ability to provide content on the Internet, says Murdoch. Last week, ABC boss Mark Scott took up the cudgels and compared the empire of The Sun King to the Fall of Rome. He ridiculed News Corporation’s plan to charge for Internet content and provided a spirited defence of the national broadcaster’s right to provide "free" news to the masses.

It didn't take long for the Empire to strike back. Today a couple of News big guns took to the columns of its Australian flagship newspaper to defend their turf and attack Scott's assumptions. It was no surprise ABC’s own Media Watch would cover the “conflict” in its program tonight. As an ABC product, Media Watch is not entirely bi-partisan but it is considered an Internal Affairs watchdog and therefore usually not afraid to put the boot into its own employers.

Scott’s speech took on the challenge provided by paid content head on. His theme was end of empire. Taking his cue from Gibbons, Scott charted the progress of the media giants who are now struggling in these “desperate days” to cope with the new realities of Internet. According to media writer Margaret Simons, the Internet’s revolutionary intent is comparable to the printing press which changed religion, democracy and the organisation of societies.

Big Media still has a role to play in the revolutionary new world of the Internet but is hamstrung having has been subsumed into Big Business. There are very few people in the banks and private equity companies that understand how the media business works. In a time of crisis, they are all waiting for Murdoch because he is the only “newspaper man” left. And he is on the defensive. In Beijing he hammered the philistine bloggers and plagiarist aggregators that feast on News’s content. He also condemned the search engines that make their money from pushing around other people’s content without giving anything back to the creators. Murdoch’s son James went further and warned the public their ways must also change. It was essential for the future of independent digital journalism, he said, for a fair price to be charged for news “to people who value it”. The message was the Internet free ride was over.

But Mark Scott said that News “empire” no longer had the power to dictate terms over the cost of the ride. The audience has the power now he says, and media providers must engage with those audiences on their terms. For 15 years people have gotten used to the idea of not paying for online content and are unlikely to start wanting to pay now, he says. News Digital CEO Richard Freudenstein retorted today in Media Australia that Scott was “shielded from the commercial reality”. Freudenstein says people are willing to pay for journalism online but advertising alone won’t work on the Internet. People will pay for online content if it is relevant and delivered in ways they want, he says.

His article was accompanied by a Kudelka cartoon which shows an appreciative Prime Minister Rudd hugging Scott for thinking he had come up with a way not to require government funding. “Wayne's(Treasurer Swan) beside himself" gushed the wonkish and delighted PM, always thinking about red lines that might disappear from the $53b budget black hole. The cartoon Scott is increasingly distraught as the PM "misunderstands" what he means about free content.

But misunderstandings or not, the ABC is an important part of the culture and not likely to disappear anytime soon. News Corp can try to undermine its authority but will also have to be creative in their pay offerings. In the same edition of today's paper as Freudenstein and Kudelka's barbs, The Australian's media analyst Mark Day inted how News might implement their paywall. It would not be an old newspaper-model, he said. “They'll be more akin to social networks, a hybrid of news, services, commerce, information and entertainment designed for like-minded people or communities,” Day said. They will not be providing old content for “like-minded people” but new content. Basic news will still be free.

Simons said paying will work for some things but people will not pay for general news in countries that have strong traditions of public broadcasters (eg Australia and the UK). James Murdoch calls this issue the “dumping” of free state-sponsored content which makes it difficult for journalism to flourish on the Internet. Murdoch notes that the distinction between broadcasters and newspapers is irrelevant on the Internet and what we have now is an “all media market” (Keating’s “Princes of Print and Queens of the Screen” looks very dated 15 years later).

And if commercial organisations need to charge people for content in this new converged environment, they should not face competitors who provide the same content free courtesy of the taxpayer. James Murdoch says it is fundamental for journalism and the creative industries that public media “exist on a far, far smaller scale”. Or as the Times put it to the BBC in Chinese-fashion, they should get its tanks off our lawn.

Mark Scott says the public pays the ABC to provide distinctive content to them which they are entitled to view “free of charge”. Free to the user but not to the taxpayer. The ABC has a guaranteed $844.6m budget (2007 figures) that insulates Scott's decisions from his audience’s actual wants. The private companies must however live or die by their paid content. Media Watch says the signs are we won’t be asked to pay for what we are currently getting for free, but for new content.

Scott says one of the reasons the ABC is required is because of the abdication of news in commercial companies citing Channels Seven and Nine’s attenuated coverage of current affairs. ABC should not be crippled just to make private concerns wealthier, he says and crucially, he adds “there is no political sentiment to make this happen". Media Watch cited the $14m ABC got over four years to provide websites for regional Australia.

It interviewed APN Media boss Brendan Hopkins which questioned this strategy. APN is in direct opposition to ABC Regional as it owns 14 regional newspapers in northern NSW and Queensland (disclosure: this journalist has worked for APN and is hoping to do so again) and Hopkins says he cannot see the government supporting a model of the ABC where the cost “keeps going up”.

He says if APN think ABC is getting unfair treatment they will talk to Graeme Samuels at the ACCC and “hold them to account”. When asked whether after 75 years the ABC should even exist, Hopkins said “now is a good time to have that debate". With Margaret Simons agreeing that the ABC is now in a serious position to hurt the commercials’ business model, this argument has a long way to go. Maybe it is, as Hopkins says, time to honestly re-evaluate what is meant by “your ABC”. The Anglosphere has tended to scoff at Sarkozy’s 600m euro press interventionism in France, but how is our public broadcasting funding much different?