Fairfax Media accuses ABC of threatening the sustainability of commercial news journalism
The ABC is a threat to the survival of commercial news journalism, limits advertising revenue and affects commercial news subscriptions, Fairfax Media has argued.
The publisher’s submission to the inquiry into the competitive neutrality of government-funded broadcasters said despite the importance and vitality of the national broadcaster in the Australian media landscape, online news platform ABC Online must ‘refocus’ its content towards that which adds to the national identity and addresses areas where the wider market has failed.
Audiences that might pay for subscriptions are less inclined to do so with the free content available on the ABC website, the submissions says
The publisher, which prints The Age, The Sydney Morning Herald and The Australian Financial Review, added national broadcasters, namely ABC and SBS, were distorting the market.
It said the ABC’s decision to compete in online news journalism heightened challenges the commercial sector was already facing.
According to Fairfax Media, the ABC not only limits the industry’s ability to generate revenue, but has attracted prospective paying subscribers to its free platform.
As a result, it said, advertising revenues to fund professional journalism “are reduced”.
For the Australian publisher, which claims to have shed more than $500m in advertising revenue since 1999, said the ABC’s decision to go head to head with the commercial news journalism sector is “not in keeping with the spirit” of its original charter, which was to provide ‘broadcasting services’ and develop content which reflects the national identity.
“It celebrates its contents’ high quality and distinctiveness and emphasises that its content decisions are not ratings driven. ‘The ABC provides audiences with choice, is independent, and is not driven by ratings or profit.’ Yet much of their content is either commoditised or reproduced from the commercial sector and does not reflect these values,” Fairfax Media wrote.
It added ABC’s participation in the online news environment from 1995 has distorted the market, and given ABC and SBS are not under an obligation for commercial returns, they are “not on a level playing field”.
The publisher explained the specific effect the ABC was having on its own customers, subscription base and advertising revenue. Fairfax Media said that in providing free online news content, the ABC is “substantially hampering” efforts to encourage new subscriptions to its news content, as well as limiting its advertising revenue potential by taking a portion of total news audience page views away from the commercial sector.
Other issues tackled in the submission include using government funds to develop “clickbait”, paying to promote articles via Google and Facebook, and in SBS’ case, generating advertising revenue.
While Fairfax Media has its own strategy in place to ensure commercial opportunities continue to exist alongside quality journalism, the publisher remains concerned of the impact of the ABC on the commercial news sector.
“We recognise the importance of the publicly funded ABC as an integral part of the Australian community. We value the ABC’s commitment to reflecting Australia’s diverse viewpoints.
“We think the ABC has a strong role to play to ensure that marginal voices are heard, where it is not commercially viable to do so. We respect the high quality, journalistic principles that the ABC adheres to.
“But in order to maintain the diversity of media required for a functioning democracy, we believe that the government funded ABC Online needs to refocus its content on distinctive, high quality content, that is not ratings driven, but that contributes to the national identity and addresses market failure, for example in regional areas that lack scale. This would bring its activities back in line with the spirit of the original charter.”
The competitive neutrality inquiry was announced by Communications Minister Mitch Fifield last year, and will look at whether the ABC and SBS have an unfair advantage over commercial media companies.
I don’t get it … on the one hand Fairfax journalists are regularly joining with the ABC news department to do joint gotcha “exclusives” – presumably to get one up on the common foe – while on the other hand, Fairfax management are arguing that the ABC is “distorting the market” and “limits the industry’s ability to generate revenue”. Don’t the journos and management at Fairfax talk to each other?
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Did the Fairfax submission really say, “online news platform ABC Online must to ‘refocus’ its content”? I wouldn’t be surprised, but still…
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The Turnbull Government have now hired ex-Foxtel (Murdoch camp) CEO Peter Tonagh to head the review into the ABC/SBS, how biased and stacked will this be?… lets face it, this review is nothing more than a political Witch hunt, and their end game is to constrain both Broadcasters into extinction.
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The very weak paywall that is so easy to circumvent does not help in the case of Fairfax. Look in your own backyard first Fairfax.
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Mr Hywood seems to have done a grand job of undermining the sustainability of news reporting all by himself.
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Get your act together Fairfax. You’re quite happy to collaborate with ABC on investigative pieces (and thus share the not-insignificant cost of those investigations), but then you turn around and slam the same ABC for undermining commercial journalism. Which is it?
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Wow. So Fairfax are saying the ABC should just close down all its news websites and apps and have no internet news presence?
That is absurd.
The vast majority of Australian’s trust the news and analysis content of ABC and SBS and to say they should both disappear from online news just so that Fairfax can have less competition, is disgraceful.
If Fairfax are so worried about its financial situation then find another investor or merge with Channel 7, or perhaps produce better content?
We don’t live in the 1980s we live in the 21st century where the majority of people, especially young people get their news online. To say there should be no government-funded online news to protect the profits of Fairfax and News Corp is utterly stupid.
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Agreed. How can Fairfax claim that paying customers are being poached when it doesn’t even try to limit access to what it’s selling? It’s like a rancher leaving all his gates open and then blaming rustlers for the loss of all his cattle.
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How dare the tax funded news broadcaster offer free news to tax payers?
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good analogy @Paridell. Besides, Fairfax have been crowing about their allegedly surging Digital Subscription numbers. If this is true (and it’s a big if) then they can’t also claim that ABC is hurting their digital subscription numbers….
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If that is what Fairfax thinks of the ABC, and that the ABC is a root cause for Fairfax’s woes, then what the hell must they think of Google, Facebook et. al.
On the ‘damage done’ front I’d lay most of the blame at the foot of the revolving door of Fairfax’s management.
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“The vast majority of Australian’s trust the news and analysis content of ABC and SBS”
Err where did that stat come from ?
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https://www.radioinfo.com.au/news/abc-australias-most-trusted-media-organisation-radio-tops-trust-study
ABC is Australia’s most trusted media organisation, followed by SBS.
Facebook and social media generally are deeply distrusted.
https://www.roymorgan.com/findings/7641-media-net-trust-june-2018-201806260239
Also, have a look at this survey from last year:
https://mumbrella.com.au/trust-in-daily-and-local-newspapers-on-a-steady-decline-according-to-essential-research-432670
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And another survey from 2016:
https://tvtonight.com.au/2016/02/abc-sbs-news-current-affairs-most-trusted.html
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Fairfax is just blaming the ABC for its own incompetency and slothfulness in understanding the impact on its businesses in the early days of online. Fairfax once owned the “rivers of gold”—the home and car classifieds—and thought they would go on forever. They were the backbone of the company. But now they are mostly in other hands. Various Fairfax boards and management failed to understand, even in the most basic way, just how the company would be skewered by the internet. Now after the horse has bolted, Fairfax is looking around for someone to blame for their ineptitude. But it is not alone in this: just look what is happening in UK newspaper and magazine publishing where similar myopia exists.
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@ Michael… you forgot to drop the mic
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Fairfax, have a look at the terrible mistake you made by moving 95% of your agency sales staff over to direct sales.
No wonder agencies are not spending with you…
Don’t blame the ABC for getting it right, when you obviously have it all wrong!
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It has been obvious for years that ABC Online has been eating Fairfax’ lunch. Fairfax crows about their online ‘subscription’ rates, when I suspect they’re referring to their gratis registration figures.
That Fairfax haven’t had the self-assurance to inflict a real paywall (emphasis on ‘pay’) says it all. They know their market well enough to understand that their soft-left, small-‘l’ liberal readership won’t part with a penny to access their content while very similar content is being produced and promulgated on the taxpayer’s dime by the ABC.
Simples.
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