Ideas@TheCentre
Finkelstein: Murdoch’s new best friend?
The Finkelstein Report into media regulation, released last Friday, has been greeted by free-speech defenders and journalists with uniform condemnation. So it seems rather redundant for the CIS to add to the chorus.
But one aspect of the Finkelstein recommendations caught my eye, and indeed, my mirth. Chapter 12 of the report, which speculates on the future of the media industry, makes for interesting reading.
News proprietors are struggling to adapt their business models to the new online world. Traditional newspapers are going the way of the dodo.
While this doesn’t warrant government intervention now, Finkelstein says, it might in the future. He wants the Productivity Commission to investigate whether there is a case for subsidizing news. Under Finkelstein’s model, media outlets could claim a subsidy for their payroll costs if they hire reporters to produce ‘investigative and public service journalism.’
So let’s get this straight. Barriers to entry for media are lower than ever. Anyone with an internet connection can start a blog. We have access to more news than at any time in the past.
Of course the rational thing to do is compensate the poor-dear media barons who haven’t figured out how to adapt.
Based on this kind of logic, we should compensate makers of six-cylinder gas guzzling sedans who conveniently ignored their customers changing preferences too. Oh, wait...
It’s ironic that in a week dominated by a government versus rent-seeker showdown (Wayne and Twiggy, I’m looking at you) we should be pondering the need to create a whole new line of subsidies for another crop of woebegone billionaires.
Gina Rinehart, Swan’s target numero uno, must be thanking her lucky stars she got in on Fairfax just in time for the largesse to start flowing.
Expect media stocks to skyrocket. If investors get so much as a whiff of potential government subsidy, they will surely be banging down every door in Canberra.
To be fair, Finkelstein acknowledges that the majority of news proprietors rejected the need for a subsidy in their submissions. But if he is determined to give one to them anyway, can you imagine any will be public spirited enough to say no?
Most incredible will be the sight of Communications Minister Stephen Conroy, self-styled tabloid slayer and defender of truth, handing a cheque over to his billionaire nemesis Rupert Murdoch.
Finkelstein is right to say that traditional media must find a way to survive in this new environment. This must happen through innovation, not bail-outs.
Jessica Brown is a Research Fellow at The Centre for Independent Studies.
