Convergence Review: New rules for the ‘content service enterprises’ big boys

The Convergence Review into Australian media has proposed a new regulatory regime for Australia’s largest media players, with organisations that bring in more than $50m revenue a year on the back of professionally produced local content and reach more than 500,000 Australians a month falling within its remit. These organisations would be known as “content service enterprises”.

The figure is dramatically higher than the 15,000 “hits” per month proposed by the Independent Media Inquiry which in March had proposed the setting up of a News Media Council.

content service enterprises

Content Service Enterprises: Source - Convergence Review/ PWC

The review said that at this stage Google – and sister site YouTube – would not fall within the CSE threshold because it does not carry sufficient Australian created professional content.

One news organisation which the Convergence Review appears to have missed – although it offers the caveat that the list is a preliminary one only – is B2B publisher Reed Business Information Australia with revenues estimated at $86m. RBI is currently for sale which could be subject to a new public interest test if any transaction happens under the proposed new regime.

The review states: “Emerging services should not be burdened by unnecessary regulatory requirements. The thresholds for revenue and users should be set at a sufficiently high level so that only the most substantial and influential media groups are categorised as content service enterprises. The Review expects that this will be around 15 enterprises.”

Although Google is excluded for now, the review said: “Any enterprise with a significant presence in Australia should be accountable in Australia. This is particularly true of those in the media. Just as online banking is regulated in the same way as banking in the branch, significant media enterprises should be expected to meet the expectations of the Australian public irrespective of the platform used.”

The Convergence review instead proposes two regulators – a statutory regulator to replace the Australian Media and Communications Authority, which is widely criticised for being slow moving and having few teeth and a new self regulated media body to oversee press standards which would in effect replace the Australian Press Council but cover broadcast and the full spectrum of online news rather than just the offerings of newspapers.

The content service enterprises would be forced to be members of the “news standards body” while smaller players would be able to do so on a voluntary basis.

Forcing the CSEs to take part may in part have been brought on by the decision of SevenWest media to withdraw from the APC and set up its own body instead. It is unclear whether the news standards body would be a reconstituted APC or an entirely new organisation.

The recommendation: An independent self-regulatory news standards body operating across all media should be  established by industry to enforce a media code aimed at promoting fairness, accuracy and  transparency in professional news and commentary.

i. Content service enterprises should be required to be members of the news standards body, which should be established and adequately funded and resourced by its industry members.
ii. As it is in the public interest that such a body be appropriately resourced, the government  should make a financial contribution.
iii. News and commentary providers that are not content service enterprises should be encouraged  to join the news standards body.
iv. The news standards body should have credible sanctions and the power to order members to  prominently publish its findings.
v. The news standards body should be able to refer to the communications regulator instances  where there have been persistent or serious breaches of the media code. The communications regulator should also be able to request the news standards body to conduct an investigation.

It added:”Given that there is no longer any rationale to treat print and broadcast media differently, the Convergence  Review believes there should be a single cross-platform body responsible for news and commentary standards.

“There are two options. One option is to move print and online media into statutory regulation consistent with the recommendations of the Independent Media Inquiry. The other option is to move broadcast news and  commentary into a self-regulatory structure together with print and online media.  The Convergence Review has adopted a deregulatory approach and therefore proposes the self-regulatory structure for all news and commentary in the first instance.”

There would also be reform over the current rules on media concentration. Rather than limiting any owner to a specific number of platforms in any given locality, the regulator would enforce a minimum number of voices.

There would also be rules governing changes of ownership of the CSEs. The review states: “A public interest test should be developed to ensure that diversity considerations are taken into account in transactions where there are changes in control of content service enterprises of national significance.”

The Convergence Review ruled out including public broadcasters ABC and SBS in the new bodies.

All of the proposals are yet to be accepted by media minister Stephen Conroy and would then be subject to the Labor government staying in power long enough to enact them.




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