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.