CHAPTER TWO
In this chapter I consider the role of the media, describe the different elements of the Australian media industries and set out the main features of the existing regulatory structure. I provide the background and conceptual framework for the discussion and evaluation of regulatory instruments in subsequent chapters.
ROLE OF MEDIA
Broadcasting services are probably the most important source of information and entertainment for most Australians. On average, adult Australians spend more than six hours a day watching television or listening to the radio. In some cases, and particularly for radio, consumption of a programme may be complementary to some other primary activity (such as reading a book or driving a car). Residents of the mainland State capital cities spend three hours and 13 minutes a day (slightly more in regional areas) watching television. Older people (55 years or more) spend considerably more time watching television with an average of four hours and 24 minutes a day (ACNielsen, 1998a, 1998b). Adult Australians (18 years or more) in capital cities spend an average of almost 24 hours a week (between 5.30 am and midnight) listening to radio (ABA, 1996). These figures clearly show that broadcasting services take up a large proportion of the available leisure time of a large part of the community.
Television and radio services are widely distributed throughout Australia. At present, all State capital cities except Hobart and regional areas in the eastern mainland States receive the national television service provided by the Australian Broadcasting Corporation (ABC) and three commercial television services. All other areas (other than remote) are served by the ABC and two (or soon to be two) commercial services. Remote areas receive a single commercial service. In addition, the television service provided by the Special Broadcasting Service (SBS) reaches all State capital cities and most other major regional population centres. A variety of radio services provided by the ABC, commercial operators and community operators are available for reception in most centres. The number varies from locality to locality, generally reflecting the size of the population. Sydney and Melbourne, for example, receive more services than other centres. The SBS also operates ethnic radio services in Sydney and Melbourne with relays to some other centres.
The popular print media comprise the two distinct sectors of newspapers and magazines. The newspaper sector is dominated by the national and capital city dailies with an aggregate average daily circulation of 2.4 million on weekdays and 3.2 million and 3.4 million on Saturday and Sunday respectively. There are two dailies published nationally and two additional dailies in each of Sydney and Melbourne. In all the other State and territory capital cities, only one newspaper is published daily. There are also some 37 regional newspapers published daily with a combined circulation of approximately 630,000. The magazine sector comprises many diverse titles published on a regular basis. The circulation of the top 30 titles ranges from 80,000 to over one million per issue. Most of the top 30 titles are published monthly, but some of the highest-circulation magazines are published weekly (Communications Update, 1998).
SNAPSHOT OF MEDIA INDUSTRIES
The structure of media industries in Australia is greatly influenced by regulations in the form of licensing and ownership controls. It also features the widespread provision of services funded from the public purse. In addition to the ABC and SBS television services, up to three commercial television services operate in each licence area. In total, 47 commercial television stations operate in Australia. No-one may own more than one commercial television station in the same market and the aggregate reach of multiple stations under common ownership must not exceed 75 per cent of the Australian population. Table 2.1 provides details of major television stations under common ownership. There are no limits on the networking of programming, most of which originates in Sydney and is distributed through syndication arrangements throughout the country.
Table 2.1: Major Commercial Television Station Groups
| Group | Stations Held | Population Reach (% of Australian population) |
| Seven Network Ltd | 5 metropolitan (Sydney, Melbourne, Brisbane, Perth and Adelaide), 1 regional (Queensland) | 71.4 |
| The Ten Group Ltd | 5 metropolitan (Sydney, Melbourne, Brisbane, Perth and Adelaide) | 64.6 |
| Nine Network | 3 metropolitan (Sydney, Melbourne and Brisbane), 1 regional (Darwin) | 51.2 |
| Prime Network | 8 regional (NSW/ACT, Victoria and Western Australia) | 25.0 |
| TWT Holdings Ltd | 5 regional (NSW/ACT, Victoria, Queensland and Tasmania) | 22.7 |
Source: Communications Update (1998).
All centres in Australia receive at least one commercial radio service. Most receive two or more. The number of commercial radio services varies from market to market largely depending on population. Larger regional city markets have up to four commercial services and the number of services in mainland State capital cities ranges from five to nine. In total, 217 commercial stations are licensed to operate in different parts of Australia. Regulation limits ownership to no more than two stations in the same area (details of major ownership groups are provided in Table 2.2). Up to four ABC national network services are available in most population centres. Additional, but more targeted, non-networked ABC services are available in capital cities and large regional centres. SBS has two stations, one each in Sydney and Melbourne, and a network service to larger population centres. Community radio stations operate in State capital cities and many regional centres.
Table 2.2: Major Commercial Radio Station Groups
| Group | Stations Held | Population Reach (% of Australian population) |
| Austereo Ltd | 11 metropolitan, 3 regional | 62.7 |
| Australian Radio Network | 8 metropolitan, 3 regional | 61.3 |
| Lamb Family | 2 metropolitan | 27.0 |
| RG Capital Australia | 1 metropolitan, 9 regional | 25.5 |
| Southern Cross Communications Ltd | 4 metropolitan, 4 regional | 24.9 |
| 2KY Broadcasters | 1 metropolitan, 2 regional | 21.7 |
Source: Communications Update (1998).
Although the print media are not subject to direct regulatory controls, they are indirectly influenced by cross-media ownership rules that prevent individuals from owning a major daily newspaper and a television station or a radio station serving the same market. The major daily press is highly concentrated in two dominant groups (News Ltd and Fairfax group) which together control ten of the 12 capital city and national daily newspapers. Because of its high level of concentration, major changes in the ownership of the daily press are typically subjected to scrutiny by the Australian Competition and Consumer Commission (ACCC) and on occasion by parliamentary committees.
All sectors of the print media are highly concentrated. The national and capital city dailies and Sunday newspapers sector is dominated by News Limited. It publishes one of two national daily newspapers (Monday to Saturday), six of ten capital city daily newspapers and six of the ten Sunday newspapers. The second largest group, Fairfax, publishes one national daily, two capital city dailies and two Sunday newspapers. West Australian Newspapers Holdings Limited and Stokes publish one daily and one Sunday newspaper each.
Currently, 37 regional newspapers are published daily. Of the regional dailies, 14 are published in New South Wales, 14 in Queensland, six in Victoria, two in Tasmania and one in Western Australia. The ownership distribution is summarised in Table 2.3.
Table 2.3: Summary of Regional Daily Newspapers Ownership
| Group | Number of Newspapers | Aggregate Circulation | State Distribution |
| O'Reilly | 13 | 192,617 | NSW (4), Queensland (9) |
| J.B. Fairfax | 8 | 93,209 | NSW (5), Queensland (1), Victoria (1), Tasmania (1) |
| News Ltd | 5 | 143,211 | Queensland (3), Victoria (2) |
| Fairfax Group | 3 | 92,901 | NSW (2), Victoria (1) |
| Others | 8 | 104,856 | NSW (3), Victoria (2), Queensland (1), Tasmania (1), Western Australia (1) |
Source: Communications Update (1998).
There are over 150 suburban newspapers in circulation in major cities including 41 in Sydney, 61 in Melbourne, 22 in Brisbane, 18 in Perth and 11 in Adelaide. Of these, 77 are published by News Limited and 20 by the Fairfax group.
A great variety of magazines is published regularly. Many have a small circulation and appeal to a specialised (minority) readership. The more popular magazines have a relatively large readership. Women's Weekly and Woman's Day, for example, have a circulation of around one million copies each. The largest magazine publisher is Publishing and Broadcasting Ltd (owned by Kerry Packer) which controls 11.5 of the top 30 titles and approximately 47 per cent of the aggregate circulation of the top 30 titles. (2) The second largest owner is PMP Communications, which publishes 7.5 of the top 30 titles and accounts for 24.9 per cent of the aggregate circulation.
SUBSCRIPTION BROADCASTING
Section 16 of the Broadcasting Services Act 1992 (BSA) defines subscription television broadcasting as a service providing programmes that appeal to the general public and are made available only on the payment of subscription fees. Services can be provided by any means chosen by the provider. Licences for either satellite or non-satellite services are issued by the Australian Broadcasting Authority (ABA) on the basis of one licence per service. Until 1 July 1997, the ABA was permitted to issue only three satellite licences, two of which (licences A and B) were allocated for commercial use (each of four channels) and the third (with two channels) was allocated to the ABC. A licence does not carry the right of access to any particular means of delivery, which must be organised separately by the licence holder.
Following the demise of the subscription operator Australis Media in early 1998, there are now three major service providers supplying different parts of the country. The two metropolitan-based operators, Foxtel (linked with Telstra) and Optus Vision, distribute their programming mainly via broadband communications cables established and operated by the related communications carriers. Both Foxtel and Optus Vision are currently planning the introduction of satellite delivery for their services in areas not covered by their broadband cables. The estimated subscriber bases of Foxtel and Optus Vision are 300,000 and 195,000 respectively. Austar, the third major operator in the industry, has an estimated 225,000 subscribers and operates satellite and multipoint distribution services (MDS) in regional centres of all mainland states (except Western Australia), the Northern Territory and Hobart. Smaller independent operators include Northgate Communications with a cable network in Ballarat, and a second network under construction in Geelong (both in Victoria), and Neighbourhood Cable currently setting up a cable service in Mildura, also in Victoria.
Table 2.4: Major Subscription Television Operators
| Operator | Number of Subscribers | Service Areas | Major Owners |
| Foxtel | 300,000 | Mainland State Capital Cities: Regional NSW, Qld & Vic | Telstra & News Ltd. Joint Venture |
| Optus Vision | 195,000 | Adelaide, Brisbane, Melbourne & Sydney | Optus Communications |
| Austar | 225,000 | Regional NSW, Vic, Qld, SA, & NT; Newcastle, Wollongong, Hobart & Darwin | United International Holdings |
| Northgate | Several hundred | Ballarat (Vic) Under Construction in Geelong (Vic) | Northgate Communications |
| Neighbourhood Cable | Under Construction | Mildura (Vic) |
Source: Pay TV News (1998).
REGULATION OF BROADCASTING MEDIA
The media industries have been subject to wide-ranging government regulation of private providers and some direct government provision in most countries, and Australia is no exception. While these regulations have changed considerably over the years (see historical outline in the Appendix), there are still some common threads in the present regulatory structure. These relate particularly to restrictions on entry, controls on ownership and regulation of content.
The principal legislative instruments governing the broadcasting industry are the Broadcasting Services Act 1992 (BSA), the Radiocommunications Act 1992, the Australian Broadcasting Corporation Act 1983, and the Special Broadcasting Service Act 1991. The last two specifically deal with the operations of the national broadcasters, while the BSA deals with all other aspects of broadcasting services and provides the legislative basis for the functions and operations of the ABA, the broadcasting industry regulator. The Radiocommunications Act deals with the allocation of spectrum for use by broadcasters.
The principal areas of regulation of broadcasting services are:
- planning and licensing of services;
- ownership and control of services; and
- operating conditions including programme standards.
Planning and Licensing
As part of its planning function, the ABA is required to determine an overall strategic plan for the use of the broadcasting bands of the radiofrequency spectrum and the deployment of the available channels throughout Australia. This is in the form of a frequency allotment plan setting out the priorities for each part of the frequency spectrum assigned to it by the Australian Communications Authority. Before preparing the plan the ABA is required to undertake extensive public consultations.
Having prepared the frequency allotment plan, the ABA is then required to prepare licence area plans in accordance with the planning criteria established by the BSA. The plan for each licence area determines the number and characteristics, including technical specifications, of the services to be established. The minister retains the power to give specific directions to the ABA about how the priorities of the frequency allotment plan are to be met. The Minister is also required by the Act to notify the ABA of the capacity (number of channels) to be reserved for national and community broadcasting services; and that capacity cannot be used for other purposes. Commercial broadcasting licences are allocated on the basis of a price-based system determined by the ABA.
While this process represents a considerable advancement on earlier planning and licensing arrangements that gave considerable protection from entry competition to incumbent broadcasters, its impact on the structure of the broadcasting system is unlikely to be substantial, at least in the short term. Much of the structure, of course, has already been determined by earlier planning decisions and technical standards. It also remains to be seen to what extent the ABA and the government will allow the market to determine the timing of introduction of new services to fill the available channels. For example, new commercial television stations are banned until 31 December 2006.
Ownership and Control
The BSA provides for Australian control of all commercial television services as well as limits on the number of commercial broadcasting services that may be controlled by an individual. For television, an individual is precluded from controlling more than one licence in the same licence area or an aggregate number of licences whose combined licence area populations exceed 75 per cent of the population of Australia. A foreign person must not be in control of a television licence or have company interests in a television licence exceeding 15 per cent. Further, two or more foreign persons must not have combined company interests in a licensee exceeding 20 per cent. For radio, an individual must not be in a position to control more than two licences in the same licence area. There are no foreign ownership or control limits for radio licences. Cross-media rules apply to radio, television and daily newspapers and prohibit the control of more than one of the three media in the same geographic market.
Specific Obligations
In addition to the "standard" licence conditions that spell out the specific obligations imposed on licensees by the BSA, licensees are also required to comply with ABA programme standards and industry codes of practice. For television, in particular, programme standards are quite extensive and include Australian content (type and quantity) of television programmes, children's programmes, Australian content in advertising (80 per cent must be produced in Australia) and limits on time devoted to advertising (maximum of 13 minutes an hour in prime time and 15 minutes an hour at other times).
Regulation of Subscription Television
Subscription broadcasting is not constrained to a service area and may be transmitted unchanged anywhere in Australia. However, a separate licence is required whenever the content of the service changes from one area to another. There are no domestic ownership or cross-media limits imposed on subscription television except that major daily newspapers, commercial free-to-air television licensees and telecommunications carriers are prohibited from controlling or holding more than two per cent of the shareholding of the "class A" satellite licence. Foreign ownership is limited to 20 per cent of a licence for an individual and an aggregate of 35 per cent for two or more foreigners. Applicants for a licence must be Australian companies and will be deemed to be suitable to hold a licence provided the ABA is satisfied that there is not a significant risk the company will commit an offence under the Act or the related regulations and licence conditions.
Although advertising is permitted, a subscription licence is subject to the condition that subscription fees will continue to be the predominant source of revenue. Under the programme "siphoning" provisions, a licensee cannot acquire the rights to an event on the siphoning list determined by the Minister until the rights have been acquired by a free-to-air broadcaster. Subscription television services that predominantly provide drama programmes must ensure that at least 10 per cent of programme expenditure for each year of operation is spent on new Australian drama programmes.
SUMMARY
The media industries principally comprise free-to-air and pay television, radio, newspapers and magazines. They use a range of electronic and physical means in providing a variety of products (news, sitcoms, movies, feature articles, etc.). Some media, like free-to-air television and suburban newspapers, are delivered free-of-charge, with suppliers getting revenues by selling advertising. Commercial broadcasting and publishing are essentially profit-making activities. Two national broadcasting services are operated largely on a non-commercial basis and are funded by the Commonwealth. Pay television involves a more direct link between supplier and provider. The means adopted to finance broadcasting services may have the effect of changing the nature of the final product produced by them. This issue is taken up in the next chapter.
Australian broadcasting has been subject to regulations in three main areas: control of entry through licensing, restrictions on foreign and broad ownership and control of content. The print media were not subject to special regulation until the cross-media ownership rules were introduced in 1987. The regulations affecting the media industries have evolved over the years in response to new technologies, changing consumer demands and the decline of the "social responsibility" approach. This evolution is given detailed treatment in the Appendix.
ENDNOTES
2. TV Week is jointly owned by Publishing and Broadcasting and PMP Communications. Its circulation has been attributed equally to the joint owners.
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