Stephen managed to rattle some feathers over his piece the other week that the case for the ABC may no longer exist in the Internet age. He argued (i) that the ABC, being subsidised, provides unfair competition for others; (ii) that good reporting is a public good but is now amply and independently supplied by the Internet; and (iii) that diversity is important and the ABC’s role in providing that is no longer essential.
While the actual answer would require evidence to adjudicate, there are theoretical counter-arguments to each of these points. I’ll put them here. First, news content is rarely paid for and, instead, is funded by advertising. But advertising lends itself to a lack of independence and also to demographic tailoring. The ABC can provide content precisely that would not be advertising supported. Take The Gruen Transfer as a case in point. Moreover, if the ABC in its subsidised form was crowding out private sources, where are the exits? Instead the mainstream online offerings look remarkably similar and still have persisted. If anything, the ABC is providing unfair competition against independent and new media sources — e.g., Crikey and of course Core Economics. So it is the small that might be the issue rather than the ‘old large media.’ Of course, for this reason, Stephen’s third point might be entirely valid.
Second, do we need the ABC for quality news reporting? Specifically, should it be tax payer funded? Now, here the US is an interesting case. Public broadcasting arguably provides quality reporting and has done so for decades. If anything, it has received a boost from the Internet in terms of reach. So the existence of a public broadcaster is probably crowding out a privately funded, non-profit option. The problem, however, is not whether that is possible but if it is decided that is the way to go, how do you transition to it? Do it slowly and it is hard to encourage donations. Do it quickly to show people what they are missing and so they pony up leaves us without these services for possibly a long time. And in the end, does it really change any set of resource allocations in the economy?
That said, the argument that because of the existence of the ABC, the Government should step in to protect old media seems to me to stand — although here I suggest it is for other reasons. Put simply, the alternative hypothesis is that the ABC is not competing with old media and its continued existence means we do not have to step in to support that media. The ABC’s existence means that the Government should be more vigilant in promoting competition and not protecting established businesses in this industry.