Review of Media Ownership Laws Signals Dawn Of A New Era

Review of Media Ownership Laws Signals Dawn Of A New Era
SHARE
THIS



With the media ownership laws undergoing a review by Communications Minister Malcolm Turnbull, OMD’s Adam O’Neill looks at how this will affect brands playing in the Aussie media landscape.

Newsrooms across the country are running hot, private equity is circling and commentators are banging out notes speculating how the cards will fall as the media sector in Australia prepares for a wave of merger and acquisition (M&A) activity. It is somewhat surprising then that brands and those responsible for allocating advertising dollars have been relatively quiet on how this may play out.

Medieval Madness

To give context, the current media ownership laws were put in place by the Keating Government 27 years ago and are currently undergoing a review by the Communications Minister Malcolm Turnbull with the objective to unshackle the media industry and take us into the 21st Century.

Back in 1997, a number of regulations were put in place to restrict the ownership of commercial television, newspaper and radio licenses so that no more than two licences could be held by the same party, in any given city, around the country. Badged the “Two out of Three” rule, this legislation aimed to establish a balance of opinion of at least two voices in each city across the major media channels. To date, these laws have ensured Australians a balanced point of view, however, today with prevalent access to content in many shapes and sizes, this type of regulation is no longer necessary.

The other piece of legislation, the 75% reach rule, stipulated that an individual media owner could not reach more than three quarters of the national population. Today, this unfairly imposes restrictions on television, newspaper and radio operations whilst allowing digital media companies, such as Google, Twitter, Facebook and other media behemoths such as The Huff Post, The Daily Mail Online and The Guardian, to enter, access and profit in Australia without hindrance.

Certainly, the introduction of digital media businesses has had a profound influence on how Australians consume their entertainment, news and sporting content. The list of benefits is a long one. Australians should have a right of access to information from national or international sources, regardless of which Australian town or city they reside in. In its own evolution, the internet has granted Australians this access. So why then, should established television, newspaper and radio companies be restricted by such an antiquated and unequitable piece of legislation?

As a media agency, and on behalf of our clients, our organisation has been focusing efforts on rebalancing advertising investment to follow the growing audience trends of digital media and to consider new digital media business models such as Buzzfeed, The Guardian and The Huff Post. It follows that we, and on behalf of our clients brands, should also be able to rebalance investment on a larger scale, by partnering with multi-channel media companies who have a national presence across the country.

The first step in creating an equitable regulatory landscape would be to abolish the 75% reach rule so that Metropolitan Media owners could acquire or merge with their Regional affiliates allowing national brands and their agencies to access audiences without the need to operate via several different operating companies. A true national media partner with a single point of contact could not only unlock value of resource efficiency, but give Australians access to a national standard in quality of entertainment, news and sporting content regardless of where they live.

Whilst this goal appears to be simple enough in vision, it is significantly more difficult to execute with a number of M&A transactions needing to take place.

Possible M&A Transactions without deregulation

The good news is that a handful of M&A transactions can actually take place without the need for changes to the ownership laws. The Communications Minister raised the prospect of media deregulation for the second time a few months ago, however the government has been unable to draw a consensus on the topic and has subsequently delayed further action. Meanwhile, the trading environment for media companies hasn’t changed. Most still face a growing list of commercial pressures; fragmentation of audiences, added competition of digital media and the harsh reality of operating in a relatively small, mature advertising market with single digit growth year on year. So, something has to give.

These factors are forcing media owners into M&A transactions not only to defend their territory but also to secure their balance sheets as the Australian economy doesn’t look to be serving up anything spectacular in the next 12 months.

Device convergence is adding additional pressure on some subscription based media companies, telecoms and online media companies who are now all effectively operating in the same space, competing for the same lucrative advertising dollars and thus competing for viewer’s attention.

Whilst difficult to speculate who will move first, when the M&A does start, the changes will be made rapidly and it will all end swiftly as the first to move will potentially lock out other transactions. Just looking at the sheer number of headlines in recent months this indicates the ground swell is increasing. Television broadcasters will be buying radio stations, newspaper groups will merge with television broadcasters, outdoor networks will start selling assets to reduce debt and so on. Media companies with strong balance sheets, such as News Corp, Seven West Group and Fairfax are likely to be the first movers.

Earlier this month Lachlan Murdoch, ex-chairman of the financially challenged Network Ten, had openly stated that he is open for conversations to offload his interests in DMG Nova. There is more to this move than what appears to be the initial motivation, given such a sale could allow News Corp or Foxtel to partner up with Network Ten, a deal offering financial and structural synergies in both securing sports rights on the front end and shared resources such as sales, management and operations in the back end. Given the current debt levels some media companies such as Network Ten are operating at the prospect of M&A could offer them a much needed lifeline.

What’s in it for brands?

This is a positive development for clients and their agencies who will soon be able to secure national entertainment, news and sporting content across platforms and devices with a reduced need to combine multiple media owner contracts. This should also allow advertiser with simplified terms such as IP rights, production and distribution costs.

Working through this thought with a specific example, consider if Foxtel and their majority owners, Telstra and News Corp, started opening up consumer based media packages so you could combine your broadband subscription, with selected Foxtel content, with a mobile contract, with a digital subscription to the daily newspaper. Allowing you to watch your favourite entertainment, news or sporting events across any device, at any time, with one-single monthly subscription.

The current regulations mean that for a consumer trying to watch this content or for arguments sake a brand trying to secure this inventory, you would need to plan, negotiate and execute at least three separate contractual agreements.

When these mergers settle, the benefits for brands and ultimately consumers will quickly add up. Firstly, it will be easier than ever to access personalised and interesting content from a single source regardless of platform or device. Digital companies have been doing this since their inception, and hence with rumours of over the top services such as Netflix rumoured to be planning a market entry in Australia one can start to see their unfair advantage.  Secondly, with the ability to negotiate and execute national campaigns through a single source perhaps brands and agencies can see the advantages in freeing up time to focus on the content creation and distribution itself.

Whether the ownership laws change today or several months into the future is debatable. However, with this in mind, the imminent wave of M&A activity not only looks more interesting for brands and consumers, but for media companies has become a business necessity.

Adam O’Neill is the business director at OMD

Latest News

Women In Media Profile: Tanya Orman
  • Media

Women In Media Profile: Tanya Orman

We know our Women in Media Awards were last week, but that doesn’t mean there aren’t still more women to recognise and celebrate. And so our Women in Media Profile Series continues. We’ve still got a few inspiring women to feature – one of which is none other than Tanya Orman, channel manager for Australia’a Indigenous channel […]

by B&T Magazine

B&T Magazine
Reports: Mark Read Now The Frontrunner To Replace Sorrell As WPP Supremo
  • Media

Reports: Mark Read Now The Frontrunner To Replace Sorrell As WPP Supremo

WPP’s former strategy and digital chief Mark Read is now the favourite to become WPP’s new CEO, according to media reports out of the UK. Read became WPP’s joint chief operating officer in April after company founder, Martin Sorrell’s, spectacular departure from the world’s biggest advertising group in April. As reported on B&T last week, David Kenny, the senior […]

by B&T Magazine

B&T Magazine
Grant Denyer Forced To Explain Groin-Touch Cock Up
  • Media

Grant Denyer Forced To Explain Groin-Touch Cock Up

Gold Logie winner and media personality Grant Denyer has been forced to apologise after the former Family Fued host was caught touching his groin in a recent 2DayFM commercial. In the original ad featuring Denyer and his Sydney breakfast co-hosts Em Rusciano and Ed Kavalee, Denyer clutches his groin momentarily while laughing. The ad, which spruiks […]

Tuesday TV Wrap: Leadership Spill Sees News Programs Soar
  • Media

Tuesday TV Wrap: Leadership Spill Sees News Programs Soar

Australia came tantalising close to a new prime minister early yesterday morning and the leadership challenge certainly proved good news for news programming last night. Of the top seven shows on Tuesday, six were news related, with the ABC’s 7pm bulletin (772,000) beating the likes of Hamish And Andy (699,000) and Survivor (661,000). Seven’s 6pm bulletin was […]

by B&T Magazine

B&T Magazine
Ogilvy Brisbane ECD Phil Nobay Departs
  • Advertising

Ogilvy Brisbane ECD Phil Nobay Departs

WPP’s Ogilvy has confirmed its executive creative director for Brisbane, Phil Nobay, has left the agency after two years. B&T understands Nobay has left Ogilvy to focus on the creative consultancy he owns called Philler. David Fox, CEO of Ogilvy Australia, said in a statement to B&T that Nobay had made a valuable contribution to […]

by B&T Magazine

B&T Magazine
Women’s Health Fit Night Out Returns With Sponsors Garnier, The Chia Co & Vital
  • Media

Women’s Health Fit Night Out Returns With Sponsors Garnier, The Chia Co & Vital

Women’s Health, Australia’s fastest-growing healthy lifestyle brand, has announced the ultimate workout party, Women’s Health Fit Night Out, is returning for its third year on 31 August with a stellar line-up of sponsors. Haircare brand Garnier has signed on as naming rights partner for the event, while health food brands The Chia Co and Vital […]

Why Adaptation Is The Key To Thriving In Today’s Ever-Changing Business Environment
  • Opinion

Why Adaptation Is The Key To Thriving In Today’s Ever-Changing Business Environment

Jeff Schwisow (pictured below) is a Melbourne-based strategy specialist, speaker and the author of Projectify – How to use projects to engage your people in strategy that evolves your business. In this guest post, Schwisow says businesses need to take control of the massive change around them… To thrive, and perhaps even survive, in today’s […]

Opinion

by B&T Magazine

B&T Magazine
Swrve Establishes APAC Office In Sydney
  • Media

Swrve Establishes APAC Office In Sydney

Swrve, the provider of modern, multichannel engagement for the enterprise, today announced the opening of its Asia Pacific office in Sydney, Australia As well as this, Swrve announced the appointment of Scott Mirabello as regional director of Asia Pacific. The move represents a significant expansion for Swrve, which already boasts offices in San Francisco, London, Dublin, and […]

Leslie Stretch, President and CEO of Medallia (PRNewsfoto/Medallia)
  • Media

Medallia names industry veteran Leslie Stretch as CEO and president

Customer experience management cloud company Medallia announced that Leslie Stretch has been named Medallia’s president and chief executive officer. Previously, Stretch served as president and CEO of CallidusCloud for 10 years. In his time at Callidus he delivered a 25X increase in value in the public markets culminating in the company’s acquisition for $2.5 billion […]

PPR Snares Cameron Thorburn As New Head Of Digital & Creative
  • Marketing

PPR Snares Cameron Thorburn As New Head Of Digital & Creative

PPR has recruited  digital and creative strategist Cameron Thorburn (main photo) to head the agency’s integrated offering across Australia and New Zealand. Thorburn will build on PPR’s existing creative and digital work as well as create new opportunities to offer fully integrated communications campaigns for current and new brands. PPR clients include Woolworths, Emirates, Subway, and […]

Thinkerbell Unveils Latest Domestic Violence Campaign ‘No Excuse For Abuse’
  • Advertising
  • Campaigns

Thinkerbell Unveils Latest Domestic Violence Campaign ‘No Excuse For Abuse’

Independent agency Thinkerbell has unveiled its latest work for domestic violence advocacy group Our Watch called ‘No excuse for abuse’. Non-physical forms of abuse against women are both common and harmful. Yet awareness of the prevalence of these abusive behaviours is low. Violence against women is not restricted to physical violence. There are many different forms of violence against women […]

OPR Unveils ‘Flawed, Hacked, Hard & Slow’ Futures Report
  • Marketing

OPR Unveils ‘Flawed, Hacked, Hard & Slow’ Futures Report

Public relations and communications agency, opr has released its annual Futures report entitled ‘Futures #4 – Flawed, Hacked, Hard and Slow’ which identifies key trends and insights in technology, culture and content, which will impact Australia and New Zealand businesses and government. opr Futures delivers practical business intelligence distilled from the world’s leading creative and […]

by B&T Magazine

B&T Magazine
When Small Data Becomes Integral To A Campaign’s Success
  • Advertising
  • Marketing
  • Opinion

When Small Data Becomes Integral To A Campaign’s Success

In this guest post, Engaging.io’s GM Fraser Gordon (pictured below), agrees data can make or break any campaign, but, he adds, it’s the small stuff and not the big that can make all the difference… We hear a lot about big data these days and how it will change everything. But sometimes big data is not the solution, […]

Opinion

by B&T Magazine

B&T Magazine
One Actor Plays Eight Roles In New Honda Ad From Leos Melbourne
  • Advertising
  • Campaigns

One Actor Plays Eight Roles In New Honda Ad From Leos Melbourne

Leo Burnett Melbourne has unveiled its latest work for Honda’s HR-V SUV. The campaign sees one actor take on eight different roles based on eight different real-life stories. Each is brought to life by young female actor, Krew Boylan, in a tongue in cheek play on the ‘interchangeable 20-something’ women often depicted in the small SUV […]

GDPR “Could Be A Content Killer”, Says Expert
  • Advertising
  • Media

GDPR “Could Be A Content Killer”, Says Expert

The way the European Union’s General Protection Data Regulation (GDPR) is interpreted could have a severe impact on publishers, according to one expert. The GDPR was introduced on 25 May 2018 to help consumers protect their data and reshape the way organisations approach data privacy through a consent model. Speaking recently at a roundtable event […]

by B&T Magazine

B&T Magazine
Ipsos Appoints Ex-Nielsen Exec As CEO Of South East Asia
  • Media

Ipsos Appoints Ex-Nielsen Exec As CEO Of South East Asia

Ipsos chairman and CEO Didier Truchot has appointed former Nielsen executive Suresh Ramalingam as CEO of South East Asia. Ramalingam’s remit includes Singapore, Malaysia, Thailand, Indonesia, Vietnam and the Philippines, with immediate effect. Ramalingam joins Ipsos from Nielsen, where he worked for more than two decades in various leadership roles covering the Middle East and Africa, South East […]

adblock popup web banner concept. isolated vector
  • Opinion

How To Reach The Unreachables

The unreachables may sound like the Indian caste system but, as you'll learn here, it's some newfangled marketing term.

Opinion

by B&T Magazine

B&T Magazine
Instagram Video: We Are Living In A Vertical World
  • Co-Lab

Instagram Video: We Are Living In A Vertical World

The way people record, share and replay their lives has changed dramatically since the advent of Facebook-owned Instagram. Once a place where only static, filtered photos could be uploaded, Instagram now offers photo and video uploads, shopping features, direct messaging and several other tools serving users and businesses. However, for Instagram head of business Jim Squires […]

by B&T Magazine

B&T Magazine
Yes! It’s Virtual Reality Demystified
  • Co-Lab

Yes! It’s Virtual Reality Demystified

Virtual Reality has been a staple of science fiction for some time, Though, in terms of real-life application, the world is still coming to grips with what the tool can offer us. In recent years, tech experts, doctors, medical students and videographers have used the tool as a way of exploring worlds not normally accessed in […]

by B&T Magazine

B&T Magazine
Facebook Messenger: The New Age Of Communications
  • Co-Lab

Facebook Messenger: The New Age Of Communications

The unparalleled success of Facebook-owned Messenger can be pinned down to its ear to the ground approach with users. Consistently listening to its user base of more than one billion, Messenger’s ability to stay not only on trend but well ahead of it has allowed the app to become a global tool for communication; be that […]

Industry Generates A Record $10.5m For Social Impact
  • Media

Industry Generates A Record $10.5m For Social Impact

UnLtd, the media, marketing and creative industry’s social purpose organisation has announced a total industry contribution of $10.5m to social impact in FY18. The total value of funds, services, inventory and time donated by the media, marketing and creative industry increased by 21per cent compared to the previous financial year due to a growth in […]

Women In Media Profile: Danni Wright
  • Media

Women In Media Profile: Danni Wright

We'd be headlining Danni Wright's Women in Media profile the "Wright stuff" if it wasn't utterly predictable and naff.

by B&T Magazine

B&T Magazine
Posterscope Promotes Two
  • Media

Posterscope Promotes Two

Posterscope, Dentsu Aegis Network’s specialist out-of-home agency, has promoted Ryan Hedditch to the newly created position of national head of strategy and Samantha Summers to Sydney Group Business Director. In his new role, Hedditch is charged with driving the continual improvement and transformation of the Posterscope offering to clients and partners. Summers’ promotion will see her lead […]

Outbrain Accelerates Growth With APAC Promotions
  • Media

Outbrain Accelerates Growth With APAC Promotions

Native discovery platformOutbrain has announced several movements in its regional leadership team, with plans to make more new hires. This comes on the heels of two senior appointments it made in February, after closing a record year in the region with expansion into new markets. Yoav Tourel has been promoted to head of sales for […]

Clems Syd & Extra GUM Unveil YouTube Digital Stage
  • Media

Clems Syd & Extra GUM Unveil YouTube Digital Stage

YouTube EXTRA Gum has launched EXTRA Support Acts, a program created to support Australia’s up and coming musicians by transforming pre-roll ads on YouTube into a digital support stage. It has been created in partnership with Clemenger BBDO Sydney as creative lead, Universal Music Australia and BRING for talent and music strategy and content, MediaCom and YouTube. The […]

OMD Australia Tops 2018 RECMA Rankings
  • Media

OMD Australia Tops 2018 RECMA Rankings

OMD Australia has taken the top spot for Australia’s Number 1 media agency in size, according to RECMA’s 2018 ‘Overall Activity Volume Rankings’ report released last week. Additionally, the company was named first in profile classification with a dominant profile for the 3rd consecutive year, along with vitality ranking and structure ranking. Furthermore, OMD Australia was also named […]

Red Agency Bolsters Sydney Team
  • Media

Red Agency Bolsters Sydney Team

Judging by the image, it seems Red Agency may have had no staff whatsoever prior to this hiring spree.

Nine Appoints Editor For 9Honey
  • Media

Nine Appoints Editor For 9Honey

B&T's editor coincidentally spilled honey on his shirt while typing this. And by typing, we mean copy and pasting.

Y&R Sydney Scores Best&Less   
  • Advertising
  • Media

Y&R Sydney Scores Best&Less  

Y&R wins Best&Less amid rumours the clothing shop its changing name to 'Somewhat OK&Reasonably cheap'.