Monday, April 13, 2009

Mark Scott, the ABC and the future of Australian media

On Good Friday, Melbourne documentary maker John Safran went to the Philippines and emulated the feat of a more famous Jew when he had himself nailed to a cross. As well as making headlines, the stunt will also make good television for the ABC in a new series, John Safran's Race Relations to be aired later this year. It brought predictable howls of protest from vested interests in the crucifixion business. Catholic priest Gary Rawson hopes Safran did the stunt for the “right reasons” though did not specify what those reasons might be (dying for our sins? rebellion against the Romans?).

It is unlikely ABC Managing Director Mark Scott cared about those reasons (unless they were TV ratings) or indeed had Safran in mind when he gave a remarkable Annual Media Studies Lecture at La Trobe University in Melbourne on Wednesday. But perhaps Safran was reacting to one of his boss’s opening remarks: “Each month brings a new twist on this revolutionary road”. Scott’s lecture may not have been aimed at the extreme tendencies of his employees, but it was a wide-ranging and insightful look at how the “digital revolution” in the Australian media industry is playing out.

The Melbourne Age saw its own crucifixion in the speech. They said Scott’s speech painted “a bleak picture” as it predicted the death of newspapers in Melbourne and Sydney (with the Fairfax mastheads likely to lose out). And Scott should know, he worked for The Age for ten years before taking over the ABC in 2006.

But Scott’s speech was no more about The Age than it was about Safran. Scott saw three factors affecting commercial media in Australia. These were the parlous state of the global economy, the shattering structure underpinning the business model, and business blunders. The faltering economy has badly affected the media’s lifeblood: classified advertising. Normally in a recession media companies cut costs and ride out the tough times. When the good times returned, said Scott, “the staff came back, the travel plans were dusted off and the long lunch returned.” But he does not think this will happen after the current crisis ends. And that is because of the second problem: business structure.

In the past the commercial broadcasters were “remarkably lucrative oligopolies” with exclusive access to large audiences. Scott says the old style owners such as Murdoch and Packer could afford to sacrifice some profit in return for influence. Packer subsidised the Sunday program while Murdoch ran the loss-making London Times and The Australian. The trade-off was the political and cultural influence they brought to the owners. But now the moguls have lost exclusive access to the audience and fragmentation is rapidly eroding profits. “And that profit,” said Scott, “kept cover prices low, funded international and investigative journalists, cranky columnists, eccentric cartoonists…all the things that made papers great.”

The changing paradigm has led to the third of Scott’s market failures: business blunders. Private equity companies began buying up media entities when prices were still high. Fairfax has been loaded up with debt after its purchase of Rural Press. Poor media acquisition decisions have occurred overseas too. Billionaire Sam Zell purchase of The Tribune group saddled it with massive debt leading to savage cost‐cutting at iconic papers such as The LA Times.

But despite the “triple whammy” of the cyclical crunch, shattering structure and business blunders, Scott saw several grounds for optimism. He said there never has been more active debate around the future of media, the path ahead for journalism, and the search for sustainable business models. He noted initiatives such as Jay Rosen’s “Flying Seminar in the Future of News” and the ABC’s own recent Future of Quality Journalism seminar as examples as “active concern and engagement” in media issues.

Scott also says there is plenty of “bold and creative thinking” but it is happening beyond the mainstream where they are too busy “putting out fires”. But Scott was reluctant to predict too much. Newspapers face further rationalisation, he said. The fate of News Ltd may depend on the plans of Lachlan Murdoch. The proposed National Broadband Network will impact media delivery (media writer Mark Day agrees, calling it a “television killer” today) but says that Telstra will remain a major player. “It pays to watch the organisation that is set to dominate IPTV, owns half of subscription TV, and has the cash to buy a free to air channel at the drop of a hat,” he said.

Scott then spoke about his own organisation, the ABC. He described an organisation in rude health with iView, high ratings, digital channels, user-generated content and leading the way in podcasting. He pitched for further government money ahead of the ABC review and Triennial funding round later this year. “Everyone I meet in government speaks with optimism and enthusiasm about the ongoing importance of the ABC and stresses this in light of all that is happening to others in the media landscape,” he said. “I hope the dollars follow the noble sentiments.”

Scott concluded by praising the way Web 2.0 has transformed the media experience. Audience expertise is now being “injected” into the news process via Youtube and Twitter. The technological revolution means that users can exercise media choices anytime they like or on any device they want. Scott says that things may be lost as media organisations adapt to the revolution, but the effect will be “profound and transforming and empowering”. Scott ended his speech by calling the journey “a remarkable ride to an extraordinary place”.

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