Answers on Murdoch’s argument

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Answers From presents an opinion of Anya Tretyakova

Picture of TV

The best way to move forward?

The simple fact is that television is too pervasive a medium to be unregulated.

In August 2009, James Murdoch delivered the MacTaggart Lecture at the Edinburgh International Television Festival and spoke about the UK Media Industry, specifically public service broadcasting, digital media and journalism, and government regulation.  Although a unique media market in and of itself, the UK media structure is not entirely dissimilar to Australia’s own, especially in regards to the presence of government-subsidised public service broadcasters such as the ABC and SBS (Hawkins).  Murdoch compares current government regulation of broadcast media in the UK with creationism, dominated by the licence fee-funded BBC and asserts that this has led to an unnatural state where business and commercial investment are stifled and creativity and innovation is quashed.  He argues most of all for the deregulation of commercial media and for the allowance of profit to assure quality and independence (Murdoch).

Murdoch’s argument however, is one of extremes, oscillating between the assertion that the current UK media market is beginning to resemble an Orwellian dystopia and the declaration that in order to rectify this, capitalist enterprise should all but be given free reign.  He talks about trusting people, trusting the consumer to make informed decisions about the services they wish to enjoy and subsequently pay for, but he shows very little trust in the government and the independent bodies which regulate media content and notably advertising, in the UK (Murdoch).  Even within the Australian context, his views are decidedly alarmist, although the Australian media market is much smaller than the UK, as are Australia’s public service broadcasters (Hawkins).  Murdoch does however make the prudent observation that we should be focusing on the digital present, rather than a digital future, especially as different media markets converge into what he calls an all-media marketplace; this applies very well to the Australian media as well as the UK.

Additionally, Murdoch’s focus on the importance of quality, independent journalism in a digital age has been an issue in Australia now for some years and bears further enquiry (Simons).  Most importantly however, James Murdoch’s claim that profit is the best guarantor of independence and quality, leading to the failure of sub-standard (and therefore commercially unviable) media, is an assertion that can certainly be explored within the context of the Australian and indeed any international media market.

Picture of remote control for digital television

Deregulation or framework for the media market?

Murdoch cites Darwin’s Theory of Evolution as a prudent example of how naturally occurring, unmanaged change is the best way to move forward in terms of innovation and subsequently, superior growth.  He paints the current UK media climate as the alternative to this, namely creationist – managed and regulated by an omniscient body – the UK government (Murdoch).  However, under the current economic conditions, following the Global Financial Crisis (GFC), it seems folly to argue for deregulation in any marketplace, especially in an area as socially pervasive as broadcast media.  The bank bailouts of the late 2000 were implemented in many countries, the UK notwithstanding, and although the banking industry is quite a different beast from the broadcast media, it is a commercial industry nevertheless.

If Murdoch is willing to use banana varieties as a valid argument against deregulation, surely the demise of the banking sector is fair game in the argument for it.  If anything, the GFC proved that letting any commercial sector go unchecked, can lead to mismanagement, corruption and harm to the consumer.  Furthermore, following on from Murdoch’s analogy of Evolution as a viable framework for the media market and claim that profit or the bottom line be the deciding factor in the success of any media institution, ignores the vital, yet not necessarily profitable endeavors of niche media markets which the public service broadcasters were put in place to serve.  Programming which specifically caters to ethnic and minority groups, children and local communities, does not deliver the highest profit margins, but is vital to society regardless (Hawkins).  The ABC and SBS in Australia is a good example of the vital role public service broadcasters can play in society, providing quality television, radio and digital content (Hawkins).

In September 2008, Mark Scott – the Managing Director of the ABC – delivered the National Press Club Address, discussing the ABC’s role in the digital age.  Interestingly, Scott talked about the rampant market failure which exists even in the age of “media plenty”, citing the ABC’s production of local, children’s, news and Australian content as essential in a market where commercial broadcasters fail to provide such coverage.  Harking back to Murdoch’s emphasis on profit leading the market, one can only imagine how these areas of broadcast coverage, specifically children’s, local and Australian content would suffer in such an environment.  Scott also cites the ABC’s “growth of online offerings” including online news, podcasts and ABC’s iView; one of the largest selections of online content in the world, notably surpassed by the BBC.

Almost all of these services are financed by government funding and small commercial revenue, totaling approximately A$850 million for the ABC (Scott) and A$191 million for the SBS (Hawkins), per annum; in stark contrast, the BBC’s income stood at approximately £4.5 billion last year, with a large portion coming from the compulsory licence fee tax, the spending of which is overseen by the BBC Trust (BBC).  James Murdoch speaks against the licence fee in his MacTaggart address, claiming that it acts as a penalty for the poor, and perhaps he has a point.

The BBC has become a force unto itself, having harnessed almost one third of the television viewer market share in the UK (BARB) and two-thirds of all radio listeners, it is the biggest broadcasting organisation in the world (BBC) and as previously mentioned its annual income is phenomenal.  The Australian situation is rather different, having abolished the licence fee in the 1970s, Australians are able to enjoy free-to-air-television, which is actually free and expanding in the digital age to more channels and services.  Considering the importance of television and radio in providing news, current affairs, education and entertainment to the public it seems intuitively vital that everyone have access to these services regardless of income and socio-economic status.

Tv set picture

Only 15% of Australians pay for subscription television.

It is true that Australia’s population is approximately one-third of the UK’s, but the disadvantage to the poor in the UK, especially in these times of economic hardship is problematic.  As Mark Scott also pointed out in his National Press Club Address, the provision of television services free of advertising is equally important in an already heavily commercial industry and it is in this instance that the ABC surpasses the BBC, providing truly free content, sans advertising.  The simple fact is that television is too pervasive a medium to be unregulated and left at the mercy of profit; it has become a part of the fabric of our society and we welcome it into our homes on a daily basis (Simons).

One particular point that the BBC, ABC and SBS charters all have in common is the responsibility to inform and educate the public (BBC; ABC; SBS); the provision of quality news and current affairs is a pillar on which society rests, especially in an ever-globalizing world.  James Murdoch particularly emphasises what he perceives as a threat to professional journalism and independent news – the “dumping of free, state-sponsored news on the market…” citing this as the main threat to digital journalism.Murdoch’s own personal and financial interests in News Corporation aside, his arguments against state-sponsored news seem to rely on the assumption that it is better to have news which is dependent on commercial funding, rather than government financing.  Despite Murdoch’s claims that journalism and news must be independent and therefore free of any supervision and interference by definition, this utopian independence is equally threatened by commercial sponsorship.

The simple truth that even Murdoch assents to is that all news media are susceptible to bias and partiality and this has the potential to impinge on the freedom of speech.  However, it seems infinitely preferable to have an independently regulated, government-sponsored, public service broadcaster providing news, rather than an unregulated, commercially sponsored one.  This is of course a matter for debate, but the complete absence of regulation in an institution founded on the principles of maintaining impartiality and objectiveness whilst balancing these ideals with the need for funding, certainly requires some oversight by an independent body, in combination with consumer feedback.  As much as Murdoch speaks about trusting the consumer to make choices, the consumer also needs to trust the service provider and this is far easier when some form of regulatory body enforces accountability and quality.

The growing popularity of pay TV and pay-per-view journalism in both the UK and Australia still requires much work and quality control, especially if it is to compete with free news, online (Simons).  Murdoch makes the case for consumers paying for the services which they value the most, whether news and education or simply entertainment, but again ignores the growing disparity between those members of the public who can afford to pay and those who simply cannot.  He triumphantly declares that half of UK households voluntarily pay for some form of television and that this consumer choice-driven system is the way forward (Murdoch), but not everyone can afford pay television and surely this other half deserves equal access to quality news programming just as much.

This is especially important within an Australian context, where since 1997, pay television service providers have been granted the right to source a portion of their income through advertising (Simons).  Another problem with pay television in Australia is that consumers are not really at liberty to choose the exact services they wish to pay for, but are obliged to purchase channel ‘packages’ and thus pay for channels, which they do not necessarily want (Simons).  It is perhaps then unsurprising that only 15% of Australians pay for subscription television, with the rest relying on free-to-air services (ThinkTV).

Overwhelmingly, James Murdoch’s MacTaggart Lecture appears to carry an underlying goal, which is to ‘encourage’ consumers to pay for more of the services they enjoy, whether this be through advertising viewership, pay television and pay-per-view digital journalism.  It is difficult to consider his negative stance on the presence of the BBC without the paradigm of his family’s News Corporation having to compete for the market share in which the BBC holds a large portion and due to this, his views seem tainted with the very partiality he proclaims to abhor (Murdoch).  Applying his arguments to an Australian context raises concerns over the ethics of asking consumers to pay for services which should be enjoyed by everyone regardless of ability to pay, such as access to quality news and educational programming.

People with questions

Advertising viewership or educational programming?

Fortunately, the Australian public has not been placed in the position of having to pay for such basic services, but considering its close ties with the UK media model, Murdoch’s words can serve as warning that it is not a direction in which we should head.  Deregulation of the media carries with it the dangers of unaccountability and mismanagement, which harms the consumer and considering the importance of the services public broadcasters such as the ABC and SBS provide, it is a path, which should be avoided for the benefit of society.

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Written by Anya Tretyakova

Sometime thespian, wannabe film director. Lover of literature for life.