Newspapers, aggregators and the ABC

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I wrote an Op Ed for the AFR a few weeks back that has sparked some debate. Rather than attempting to debate by e-mail, I reproduce the Op Ed below and hope that the debate can continue through this blog.Our newspapers are in a fight to the death. One enemy is well known – the news aggregators like Google News. But the other enemy has slipped under the radar – the public broadcasters like the ABC.

News aggregators upset the newspapers because they lower consumer search costs and reduce barriers to entry.

Want to know the days top stories? Go to your aggregator’s page on the internet and you get the headlines from a vast array of alternative sources. Don’t want to pay? Of the hundreds of stories on any topic, a few will be behind pay-walls. But these are easy to avoid as there are a myriad of substitutes that you can click on instead.

News aggregators make the news accessible but make it hard for the news providers to charge consumers directly for stories. The aggregators underpin vigorous competition and this competition prevents the newspapers from raising both prices and profits.

The newspapers are fighting back. In the US, the Federal Trade Commission – supposedly the consumers’ watchdog – is considering proposals to stymie competition. It proposes changing the rules of copyright so that aggregators cannot republish newspaper headlines. Even more worryingly, it is looking at a competition law exemption so the newspapers can collude and collectively agree to set up internet paywalls.

It will be interesting to see if a similar push occurs in Australia. If nothing else it will give Graeme Samuel and the rest of the ACCC a good laugh.

The publicly funded broadcasters are the other enemy. And here the newspaper owners have a legitimate gripe.

The BBC and the ABC have been leaders in using internet technology to distribute the news. They were pioneers in downloadable content and in mixing text, audio and video news. They vigorously cross-promote their traditional radio and television outlets with their new internet outlets. The ABC’s dedicated television news station is simply the latest example of the powerful competition this public broadcaster is bringing against the private news media.

This competition is clearly unfair.

Unlike the private media, public broadcasters do not have to make a profit. Taxpayers underwrite their losses. So the ABC and BBC can experiment with the internet and news delivery without having to worry about making a buck. This makes it difficult for the private news providers to compete.

However, the argument goes further than unfair competition. In the age of the internet, the real question is whether there is any justification for having taxpayer funded media companies like the ABC?

Two public policy arguments traditionally underpin the rationale for public broadcasting. First, news is an economic public good. It is difficult to own a story. Investigative journalism is costly but the resulting stories can quickly be repackaged and redistributed by competitors. So, the argument goes, we need a public broadcaster to ensure that enough high quality news is produced.

The internet undermines this argument. We now live in a world with a surfeit of news coverage. Through our computers, we each have access to news content from thousands of sources around the world, taking every possible perspective. Many of these sources are as good or better than the ABC. We do not need public broadcasters to get quality news.

Second, supporters of public broadcasting argue that the main stream media is too narrow. It aims at the multitude, not at specialised interests. The ABC has traditionally helped fill this gap.

Again the internet has killed this argument. No matter what your interest or how oblique and unique your tastes, the internet means that you can find news and information to satisfy your demand. With the internet, there are no ‘gaps’.

If public broadcasters are no longer needed to fill their traditional role, surely it is time to ask if we need them at all. Should taxpayers be funding the ABC to compete against private providers who both want to and can do everything that the ABC can do?

There are two key issues for the next federal government. That government must stand fast against an anticompetitive push by the newspapers. The government will come under intense pressure to change the law and ‘protect journalism’. This anticompetitive push will have no economic merit and will be anti-consumer and anti-news.

The next government must also revisit the role of the ABC. Is it needed or has the internet made public broadcasters irrelevant? Again, the pressure from vested interests will be intense. But with the internet undermining the traditional role of public broadcasters, it may be time to pull the plug on the ABC.

19 Responses to "Newspapers, aggregators and the ABC"
  1. There remains a public good gap, even when the internet is factored in. It is the ‘quality’ gap.
    Simply, I can trust the ABC more than I can trust bloggers and niche online providers. I do not have the time to invest in cross-checking facts, especially when “facts” (factual or not) transmit across the news-sphere at a rapid pace.
    It would also be the provider of last resort to those who do not have access to the internet – and keep the commercial networks “honest” to this audience segment.
    Now as to other services, such as children programming, I can see less of a public good argument. As for drama, just give the BBC an Australian license to sell to our commercial networks 😛

  2. I don’t really think either of your points stand up when you actually look at the actual environment:
     
    1) There are not really that many news sources out there on the Internet, there are thousands of commenters, but even the news papers do relatively little original news development, one study found that for a major news article,
     
    Out of the 121 distinct versions of last week’s story about tracing Google’s recent attackers to two schools in China, 13 (11 percent) included at least some original reporting. And just seven organizations (six percent) really got the full story independently
    http://www.niemanlab.org/2010/02/the-googlechina-hacking-case-how-many-news-outlets-do-the-original-reporting-on-a-big-story/
    Another interesting take on the massive amount of repetition of data from the thousands of news sources is:
    http://daggle.com/mainstream-media-stole-news-story-credit-1906
     
    And it’s quite clear that ABC News and BBC News are doing a significantly higher quality job in terms of analysis and generating news than the vast majority of the other major news outlets on the web. Is there anything on the Web that comes close to matching the electoral analysis offered by the ABC through Anthony Green? The Poll Bludger and Possum Pollytics are good, but both are private individuals and as Possum has just admitted, it’s very difficult for him to keep up the level of quality.
     
    2) In terms of diversity, the ABC clearly offers far greater diversity than anything else out there on the Web in a professional and high-quality manner, if you listened to indie music that would be obvious.
     
    So overall, while the number of news sources has multiplied tremendously, the number of high-quality news sources that actually generate news stories has not, if anything it has decreased as the ability of news organisations has been undermined by the slackening of the rivers of gold generated by classified ads as these have moved on to the Internet. A thousand repackagings of the same story does not undermine the relevance of public broadcasters
     
    cheers
     
    Martin

  3. You say that the ABC is clearly unfair competition for private media companies. By the same assertion, are public schools unfair competition to private schools? Am I allowed to cry unfair competition whenever I decide to set up a business in an field that a publiclly funded body is doing a perfectly good job?

  4. I agree that the argument against a public funded broadcaster is just a repeat of the arguments against, say, public subsidised buses (which compete is some areas with private providers), public roads (which often compete with private tolls roads), public schools, public prisons, etc.  As we should all be well aware, the media has peoples attention, and when you have peoples attention, you have power to influence.  The public broadcaster has the ability to maintain quality without risk, and does not need to appeal to popular trends to compete.
    Second, by definition the existence of news aggregation does now change the content of the news – it simply changes our access path to a more streamline searchable method.  As previously mentioned, the wide variety of news sources are mostly duplication of a few original articles.  This is not new, but we now have extremes of duplication.

  5. “If public broadcasters are no longer needed to fill their traditional role, surely it is time to ask if we need them at all. Should taxpayers be funding the ABC to compete against private providers who both want to and can do everything that the ABC can do?”
    I agree with the first sentence, but the second is a non-sequitur. For all the armwaving about the great diversity of opinion available on the Internet, your could not produce any organisations that actually want to do everything the ABC does (as opposed to merely wanting the eyeballs the ABC now holds), and certainly none that can do everything the ABC does. Could you imagine, for even a second, Media Watch on an Australian commercial station? No – neither can I.
     

  6. We could always replace the ABC with a publicly subsidised production company that would provide shows such as Media Watch free to the existing free to air broadcasters if people are worried that this content wouldn’t be produced without the ABC.
    Given we now have channels 7, 7Two, 9, Go, Ten and One with 7mate and onther ten channel being launched next month, there is no shortage or broadcasting.
     

  7. I read the original OpEd in the AFR and the thought that went through my mind was “Stephen King has never had a proper look at the ABC”.
    We are fortunate in that both the ABC and Fairfax have substantial coverage of state and federal capitals and a fair spread of international correspondents – doing far better than many US publications that were once considered newspapers of record.
    But nobody else does the sort of job that Radio National does in programs like AM, PM, The World Today, National Interest…

  8. Stephen,
    Rather than speculate on what you might think is the rationale for the ABC, why not go to the source?
     
     
    AUSTRALIAN BROADCASTING CORPORATION ACT 1983
    – SECT 6
    Charter of the Corporation

    (1)The functions of the Corporation are:

     
    (a) to provide within Australia innovative and comprehensive broadcasting services of a high standard as part of the Australian broadcasting system consisting of national, commercial and community sectors and, without limiting the generality of the foregoing, to provide: (i) broadcasting programs that contribute to a sense of national identity and inform and entertain, and reflect the cultural diversity of, the Australian community; and (ii) broadcasting programs of an educational nature; (b) to transmit to countries outside Australia broadcasting programs of news, current affairs, entertainment and cultural enrichment that will: (i) encourage awareness of Australia and an international understanding of Australian attitudes on world affairs; and (ii) enable Australian citizens living or travelling outside Australia to obtain information about Australian affairs and Australian attitudes on world affairs; and (c) to encourage and promote the musical, dramatic and other performing arts in Australia.
     
    Why not discuss the merits of the ABC charter, rather than just setting up a straw man and giving it a good beating?

  9. I’m indifferent to ABC TV and radio programming – sourcing most of my news and current affairs from free multiple aggregators (of different hues) and paid news subscriptions. When I can be bothered watching TV news it is likely to be SBS news. Having said that, it appears that the ABC is a “quality” broadcaster, but it is beside the point. For the loyal, but relatively few viewers, does it justify a taxpayer subsidy when other substitutes appear to be available?

    @Dave’s charter on the role of the ABC puts a new perspective on the original blog and subsequent comments. To be bluntly honest, other than the educational programming that my infant daughter enjoys, there is nothing in that charter that can’t be fulfiled either via current commercial programming, alternate news sources (domestic and foreign of all hues) or direct government subsidy (music, drama, performing arts). It’s dated 1983 – pre-internet. Time for for a misssion statement update?

    Since somebody else brought up “indie music” as an example (?!) – I enjoyed Rage in my day, but I can live without the ABC providing all-night video programming (which is very Oz-lite in content anyhow).

    For the truly committed ABC supporters, perhaps a direct digital channel/cable subscription may be the answer.

  10. I don’t see commercial tv or the internet providing programs like lateline, four corners, media watch and qanda or coverage of local sports and state elections.
     
    When talking to friends in the US where they have FOX “news”, I’m proud to say we have the ABC… keeping the bastards honest.

  11. Although it may be arguable about the ABC’s online and perhaps TV presence, the ABC Radio offerings definitely do not fall into the category of services that can be replaced by private providers.  Until you can get a car stereo that plays internet radio stations, radio will have a place.

  12. Was going to respond challenging the assumption about the diversity of media on the internet but Martin has beaten me to it. There really isn’t as much original reporting out there as the aggregators and their “1000 other articles…” links make it appear.
    Traditional commercial newspaper operations under massive financial challenge, and that landscape to be vastly different and potentially even more highly consolidated in 5 years time  – whether pressure to compete comes from public broadcasters or just from each other. Now is not the time to knock out another pillar of the creation of journalism and reporting.
     

  13. We absolutely need the ABC, as it is the only network out there that can’t be influenced by money, and is focused on quality programming and not just ratings. Look at the abominations of ‘a current affair’ and ‘today tonight’ which are both caused by the private network’s desire for ratings and money. I for one don’t want shows like that to be the only shows on TV.

  14. Just because some people like programs like Media Watch – boring, trivial and pointless to my mind – does not justify the taxpayer spending an enormous amount of money on what is by and large provided in the private sector.  What is the public good case for The Drum/Unleashed – none. 

    And it is simply not true that the ABC is not driven by ratings – management analyse the figures every day and attempt to provide something for everyone (very little interest in general from the 15 to 40 year olds in ABC content) to curry favour with the politicians that control its funding.

    The only one area of sort of market failure is regional and rural radio – highly valued by the listeners and private provision would be less.  Having said that, this gap could be filled at little cost and save the taxpayer many hundreds of millions of dollars.

  15. Can I suggest that before you throw out the ABC; you take a bit of a media journey around the nation?
    Speaking for the media available in South Australia, there is one main newspaper (The Advertiser), and the corresponding online presence of it – adelaidenow.com.au.
    The quality of the reporting is left wanting when most articles are published, and due to the commercial nature of the site, articles are whisked away after a certain period.

    Having the ABC covering the local news provides a competitive push, higher quality reporting, and content which is not owned by a faceless corporation. The archiving practices are excellent.
    What this means is I can trawl for articles in ABC’s archives; and my links are still intact. There is original reporting and imagery which is captured in the interests of the public, and I’ll bet that in 50 / 100 years, it’ll still be around and available.
    Try that with how other newspapers engage the internet: you’ll find it lacking in many ways.

    I guess the most surprising thing about what you are saying is that most commercial organizations are having public broadcasters run rings around them; and that this is somehow unfair.
    In what other markets does a government-backed entity beat the snot out of the commercial providers? I’d wager very few.

    I really fail to see why non-public broadcasters can’t change their business models to generate revenue: if you suck at making news for a profit, switch to making hats. Stop whinging, start innovating.

  16. As a reasonably frequent visitor to this site I am very surprised to read this article on the ABC. This is something I’d expect to hear from the Murdochs or from others whose businesses are being threatened because they are unable to adapt.
    Give the ABC some credit please. Years ago they provided me with a means to listen to the best radio had to offer via podcasting, something the commercial networks took years to do. They’ve only now caught up!
    The ABC is independent and unique and one of the world’s great media institutions. It has a charter and must abide by its charter.
    When I return to Australia a few times a year I am appalled at the crap the commercial TV stations put up as news and current affairs and this is at a time when the ABC is firing on all cylinders.
    Let’s be clear here Stephen, Murdoch, Faifax and co are bleeding badly. They have failed to adapt and now try at every opportunity to stifle choice.
    Murdoch junior’s attack on the BBC last year should offer a warning to public broadcasters everywhere, that faced with an enormous loss of revenue and their very existence, the old media moguls will attack with all guns blazing.
    Unfortunately, not many people will listen to their bleating. And Stephen, I’m surprised you fell for it.

  17. Both points miss the point.
    re Point 1:
    The web is not a replacement. ABC does resourced origination; the web does unresourced aggregation and opinionation (when it is not doing resourced plutocratic propaganda).
    re Point 2:
    The web fosters niche amateurism and dissemination. ABC does niche professionalism and production.
    Beyond those considerations, a mixed economy can only survive with a mixed mass media. Without public broadcasters our media, and hence our polity, would undergo a US-style right wing death spiral. That would not only be bad for our souls and psyches – it would, as recent events demonstrate, be bad for our economy.

  18. The problem with the thinking that “I don’t see commercial tv or the internet providing programs like lateline, four corners, media watch and qanda or coverage of local sports and state elections” is that there may be no need, or it is uneconomic, to replicate this programming (state election and local sports most definiately). If the ABC did not exist or was not publically funded, whose to say these would not be produced by the ABC anyway, or by another station?

    You could turn this argument upside down – why doesnt the ABC provide similar programming to other stations? It may be in their charter – or it may just be there is no point in replicating it.
     
    The other problem is with saying that the ABC provides quality programming and that “it is not driven by money and ratings”. Who then determines the quality and content of the programming? Just because you like what is on the ABC – does not automically imply that every other viewer does as well.

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