The CEO of Foxtel, Kim Williams, has made a major speech today calling for a rapid and fundamental alteration to the way in which the television industry is regulated.
Speaking at the Network Insights Conference in Sydney, Williams took the fight up to commercial free to air television and to the ABC, suggesting that regulations and government practices that favour them are the last bastions of the pre-1980s protected Australian economy. Read the speech here.
He called for government funding for Australian content to be made contestable, rather than being given only to the public broadcasters, and argued that the new era of multiple channels means there is less justification for taxpayer funded broadcasting. The ABC should be limited only to things the market cannot provide, he said.
Over the last year, the ABC Managing Director Mark Scott has emerged as one of the thought leaders of the Australian media industry. Kim Williams is the only other media executive who can truly claim that title. (News Limited CEO John Hartigan is a distant third.) Williams is smart, dynamic and forward thinking and, as he said in his speech today, can genuinely claim to have been a leader of innovation.
Today’s speech is another blow in what I have previously described as one of the most important battles of the new media century – between those who want to make us pay for content (think News Limited and Foxtel) and public broadcasters.
But Williams also has government and commercial free to air broadcasters in his sites. Television, he says, is the last industry not to be deregulated in the interests of a dynamic economy.
Television sits today like a protected island in an ocean of economic freedom – much like one of those side-stepped Pacific Islands 25 years after the end of World War Two, where the ragged, grey-bearded Japanese soldier still stands guard with his rusty bayonet, waiting for the Americans to land, because no one’s told him his side has already lost the war.
He drew an analogy with the industrial revolution and the invention of the steam locomotive.
Now imagine an alternative scenario for the birth of railways. Having constructed a new network, the protectionists came along and said: “Look,what about the companies that run the horse-drawn train industry? They’v been around for centuries. They may not be as profitable as they used to be,but they have employee jobs and shareholders to protect; they know how the old system works; and they are slower, quieter and less dangerous. We should give them preferential use of the network and keep the steam locomotives on a few branch lines only, preferably somewhere like northern Wales. It’s the best outcome for the majority. The result would have been predictable: there would have been no industrial revolution.
Williams argued against prohibitions on a fourth television network, and attacked limitiations such as the anti-siphoning regime, that tied up key sporting events for free to air television. He said:
You can’t change the delivery system and not change the regulatory framework; you can’t adopt a medium that is all about consumer power but keep the consumer powerless; you’re ether in the analogue world or the digital world, the past or the present – you can’t be in both.
There are interesting echoes, here, of Mark Scott’s recent speech in which he described the shift of power from media emperors to the audience. But Williams paints Foxtel, unfettered market competition and the coming of the National Broadband Network as the liberators of the audience, with little role for public broadcasting.
Without Foxtel Australians would only have five stations to watch, because te old channels participants rather than leaders in the digital economy – would never have expanded their offering.
Williams argued today that the ABC content is no longer unique. Foxtel provides high quality public interest content, including the A-PAC public affairs channel.
The content mightn’t have huge ratings but its very existence guarantees freedom of speech.
Just like the ABC, he said, Foxtel will introduce an advertising free children’s channel, and its Ovation channel already offers “more operas, plays, ballets and orchestras than you can poke a conductor’s baton at.”
If there is public money available for new worthwhile Australian content, then Foxtel is happy to commission it on a contestable basis with the ABC and others:
And let us remember that while the ABC is a much loved institution and at its best a good broadcaster, Aunty is not Athena, the Greek Goddess of Wisdom. The ABC does not have a monopoly on wisdom or commitment to Australian content.
Williams suggested that more creative ways are needed to protect Australian content, including using some of the digital dividend money made available through the sale of spectrum once the analogue signal is switched off. Once again, there are echoes here of the ABC approach. Auntie’s Director of Television, Kim Dalton, made a similar case just a few weeks ago, focusing on the content production industry. There is no doubt about it. Both Foxtel and the ABC grasp the challenges of the age. But they have different solutions. Dalton wanted increased regulation over mobile devices and other new services. Williams wants the money, but without the regulation.
Williams believes the ABC has a very limited place in the deregulated industry he would like to see. He says he is not against public funding of broadcasting, but that in the digital age the ABC should not merely replicate what the private sector is doing, or “crowd out market driven creativity and innovation.”
The ABC’s programming was once both unique and special – today it remains
special but it is no longer unique.
Williams concluded by calling for a government review of broadcasting regulation to be brought forward, and for the new regime to be technology and provider neutral. Spectrum, he said, should be auctioned off before analogue switch off, and the prohibition on a fourth television network removed.
Two weeks ago, when I wrote about Mark Scott’s plans to make the ABC a dominant regional and international presence, I predicted that we would soon see return fire from the pay television sector. This is it.
But it is more than that. In this speech and other recent public pronouncements, Williams is claiming for Foxtel the mantle that Scott would like to drape over the ABC – as chief innovator, provider of quality niche content, and industry leader.
Both sides of this debate naturally fail to acknowledge their weaknesses. Foxtel has yet to penetrate the majority of Australian homes, and the National Broadband Network is about to bring much more choice to Australian consumers. Commercial free to air is not the only television sector facing fundamental challenges to its business model.
And, despite being willing to provide channels such as A-PAC for free as part of its public relations campaign, the majority of Foxtel’s quality niche content has to be paid for, which raises obvious issues of equity.
As well, the particular nature of public broadcasting means that there are innovations that come naturally to the ABC – such as the recently announced ABC Open, in which professional content makers help the audience to tell their own stories – that are more difficult for a commercial organisation.
On the other hand, there is no denying that taxpayer funded broadcasting, which was once justified by the scarcity of quality content, must today find new justifications. Scott has pitched Auntie’s continued claim on the public purse as being about innovation and audience power without the need to worry about commercial returns, safeguards for the existence of quality journalism and Australian content in an era of market failure, and a trustworthy safe guarder of Australia’s enlightened self interest.