The Finkelstein Media Report and Media Regulation

Matthew Ricketson is a journalist and academic who has worked on staff at The Australian and Time Australia magazine, among other publications. He has held the position as Media and Communications Editor of The Age newspaper between 2006 and early 2009, run the Journalism program at RMIT for 11 years and is currently Professor of Journalism at the University of Canberra. At The Sydney Institute, on Monday 28 May, Matthew Ricketson joined, Gail Hambly, Group General Counsel and Company Secretary of Fairfax Media Ltd, to discuss the Finkelstein Media Report and Media Regulation.

THE FINKELSTEIN MEDIA REPORT AND MEDIA REGULATION

MATTHEW RICKETSON

It is relatively common ground, in the academic literature and even among commentators in the press, that the regulation of the news media in Australia is inconsistent, fragmentary and ineffective.

There is one body for regulating news and current affairs on radio and television and another for regulating newspapers and, to an extent magazines and online. Is there any good reason for this? Not really. Or, if there were sound historical reasons for the print media to campaign against the strictures of being licensed by the government, the prospect of a government licensing the press has been a dead issue for many many years.

Regulation was imposed on radio and then television at least partly because the airwaves was a public resource and a scarce one at that. But that was not the only or perhaps even the primary reason broadcast media were regulated. The Broadcasting Services Act of 1992, which remains the act in force, expressly says a reason for regulating broadcast media, especially television, is because of its power to influence society.

The broadcast media has been regulated for decades by a succession of government created and funded bodies – the Australian Broadcasting Control Board, the Australian Broadcasting Tribunal and, most recently, the Australian Communications and Media Authority – and whatever grumbles and complaints those in the industry have had they have not generally extended to denying these bodies the right to exist.

Newspapers are regulated by the Australian Press Council and have been since 1976. Three of its past chairmen as well as the current chair gave written and verbal presentations to the Independent Media Inquiry that was set up by the federal government late last year. All but one said that despite their best efforts the council does not work satisfactorily.

The key problems are:

The news media industry can come and go from the council as it pleases without suffering any penalty. The council relies on the industry for its funding and there is evidence the industry has used that or the threat of reducing funding to control the council. The current chair of the Press Council, Professor Julian Disney, told the inquiry he needed double the level of funding to fulfil the council’s charter properly.

The requirement that Press Council adjudications be published prominently in newspapers is honoured in the breach. Some are not published at all; most are published but buried. Rarely are the adjudications written in the clear, far less the vigorous prose, that characterises good journalism and almost all are topped by a vanilla plain headline along the lines of “Press Council ruling”. It seems safe to observe that no sub-editor has ever entered, let alone won, a Walkley award for their wittiest complaint adjudication headlines.

While most Press Council chairs argued strongly about the problems they faced, two of the three of the major news media companies – Fairfax Media and West Australian Newspapers – flatly said there was little if anything to worry about. Funding was adequate and it wasn’t a problem that companies could withdraw if they wanted to. News Limited said it there was a case for increasing funding and it was talking to the council about that, but its then chief executive, John Hartigan, was also critical of the council and dismissive of its State of the Print News Media reports. The companies’ attitude towards the reforms Professor Disney has been advocating ranged from bland indifference to outright hostility.

At the same time the inquiry analysed public views about the news media – its trustworthiness, its influence, ethics, intrusiveness, responsiveness to complaints and so on. The inquiry did a good deal more than pluck out the annual Roy Morgan survey of attitudes towards various professions. It examined 21 separate surveys taken over 45 years, between 1966 and 2011.

These polls revealed deep-seated and strongly held concerns about the performance of the news media in this country.

Even more alarming was the way this material was blithely dismissed by various commentators in the media, either as, first, based on ignorance (even though on behalf of the inquiry Dr Denis Muller had sifted out polls whose method was questionable or which asked for opinions about which the ordinary person could not be expected to know much), second, as what everyone knows people think about the media (as if that somehow erased its validity) and, three, clearly the product of a media studies wank. I am not making this up. Mark Day, The Australian’s media writer, described the inquiry’s report as an “academic wank” in the opening paragraph of a feature piece he wrote on 1 May about the Convergence Review Committee’s report.

Instead, the newspaper media companies told the inquiry the most reliable barometer of their performance was their readers. If a newspaper was printing rubbish, people would stop reading it. As simple as that.

If it was really this simple we would conclude newspapers are printing a lot more rubbish now as overall circulation per head of population has been steadily declining for decades now. There is actually a myriad of reasons why sales of newspapers rise and fall, of why individual readers start the newspaper reading habit and why they stop it, of why they read particular sections of newspapers to the exclusion of others and so on. And notice I have been talking here about newspapers. The rise of online media throws up a whole range of other variables.

All these are good reasons why it’s not possible for individual readers to hold a newspaper to account in any meaningful way for what it publishes. But there is another, compelling reason, and it was contributed by Dr Franco Papandrea, who brought to the inquiry expertise in the economics of the media which he has published in, among other places, the journal of the free market think tank the Institute of Public Affairs.

Chapter three of the inquiry’s report shows the sources of revenue for newspaper companies. Circulation, that is, revenue earned from the sale of newspapers to readers, accounts in most cases for significantly less than half of total revenue. The great bulk comes from advertising, whether classified or display as is shown in a table on page 72 of the inquiry’s report. [Note to editor: you can reproduce this table if you like].

The point is this: keeping advertisers happy is more important to newspaper executives than keeping readers happy. It has to be or they go out of business. This doesn’t mean good editors and good journalists are indifferent to their readers but when you hear newspaper executives mouthing the mantra that you don’t need to worry too much about media regulation because it is their readers who provide true accountability, you are being the fed a line that is first cousin to the tobacco industry’s decades-long denial of the damaging effects of second hand smoking.

To sum up the picture confronting the inquiry, the Press Council is deeply concerned it cannot do its job properly, and everyday customers of the media have a host of concerns about it but the news media industry thinks things are ticking over nicely and we should all be focussing our gaze not on them but on every other organisation in society. But where the news media may be content with pointing to others’ failings, Mr Finkelstein, the chair of the inquiry, and I were charged with not only analysing the problem but offering some solutions.

The problem is summed up thus: “how to accommodate the increasing and legitimate demand for press accountability, but to do so in a way that does not increase state power or inhibit the vigorous democratic role the press should play or undermine the key rationales for free speech and a free press” (Inquiry report, p. 53).

The report recommends that where complaints about media practice are upheld the news media outlet will need to publish an apology, a correction or a retraction. A successful complainant will have a legally enforceable right of reply. I am not quite sure how this suppresses freedom of speech. Isn’t its main effect to add to the amount of speech in society?

The news media outlet may chafe against being made to publish a reply but remember that they had the first word in the matter and that if there is no adequate means for ordinary people to have their complaints taken seriously then the news media can behave pretty much as a law unto themselves. On the question of defamation laws, I’ll return to that.

The response of the mainstream news media to this recommendation was near universal hostility; the question is why? Electronic news media are already regulated by a government funded agency. The standards of journalistic practice that are being discussed would be drawn from the standards and the codes of ethics that all major news organisations have in place and that they say they believe in and commit to uphold. The inquiry needed to ensure the regulatory body had adequate and secure funding and the news media industry had shown clearly that it wouldn’t guarantee that.

The inquiry could have recommended that a mechanism be set up to impose a levy on the industry but the advice we had was that the costs of administering the levy could well be higher than the levy itself. That is certainly another method of securing funding that the government could consider, however.

The inquiry’s report explicitly acknowledged that concerns about potential government interference in regulating the news media are legitimate. It showed the relationship between executive government and the news media is difficult, fraught with tension and conflicts of interest. The proposed News Media Council was recommended with a number of steps and safeguards in mind to meet these concerns that are outlined on pages 290-92 of the report that at the least demonstrate a bona fide commitment to ensuring the proposed News Media Council would operate at arms’ length from the government.

The inquiry offers one solution and implicit in its discussion is clear recognition that there are others that could be offered and debated. Unfortunately, the report of the Convergence Review Committee (CRC), released by government at the start of this month, is not really an alternative solution even though it is presented as such. I emphasise that this is my view, not the view of the media inquiry whose report predated the CRC report. The committee’s report says that a government-funded News Media Council should be set up only in the last resort, and places its faith in a continuation of an industry-based self-regulatory body. On this recommendation it received mild support from the news media industry.

The committee then says this body will need appropriate funding and that members of the news media industry will be compelled to join and to provide it with adequate funding, but the committee is silent on how you can compel people to join a self-regulatory body. In other words, they seem to arrive at pretty much the same conclusion as Mr Finkelstein but choose not to take the step that the logic of his position requires. The recent decision by West Australian Newspapers to withdraw from the Press Council at precisely the moment Julian Disney had succeeded in persuading News Limited and Fairfax Media to increase both the amount and certainty of funding for the council underscores the core weakness of voluntary self-regulation for the news media.

The CRC report’s silence on this thorny issue points to one of the possible reasons for the hostility of the news media industry’s response to the inquiry’s report. It is well documented that the industry reacted strongly to what it perceived as politicians taking advantage of the public disquiet over the News of the World to put pressure on News Corporation’s Australian arm. It also seems clear that journalists and editors react tribally to any suggestion of government interference in press freedom.

These are not bad reasons in themselves but to take these positions and stick with them no matter what means closing your mind to the substantive issues of failure of media performance and lack of genuine accountability, which is what too many people in the industry have been doing for too long. And that is another reason why in my view the recommendations of the inquiry infuriated many: the pattern by and large with inquiries into the news media both here and overseas is that they find self-regulation is failing and exhort the industry to lift its game to which the industry solemnly nods but then does next to nothing. Several years later, usually after a particular media atrocity, another inquiry is established, and the cycle starts again.

The sub-text of the report is to call this for what it is – a charade. It says to the industry:  you have sound standards of journalistic practice that you say you believe in and you have had 35 years to make the self-regulatory system for dealing with complaints about these standards work and you haven’t – and you seem to be content with a Press Council that doesn’t work. So, you’ve had your chance. If you won’t make it work you have left us with little choice but to recommend that that someone will have to be government. And, really guys, it shouldn’t be too big a deal: all we are recommending is that you adhere to your own standards and that when you fall short there is a prompt means of righting that wrong.

The pattern of recommendations from media inquiries being ignored either by industry or by the governments that commissioned such inquiries points to a key shift in the balance of power. When the great struggles for freedom of the press were being fought hundreds of years ago the press, as it was always referred to then, was made up of pamphleteers and small printeries standing up to the might of an autocratic monarch. Today there are media empires that reach well beyond the boundaries of nation states – News Corporation is the best known and most topical example. The British Prime Minister, David Cameron, explicitly acknowledged this on 8 July 2011when the phone hacking scandal engulfing News was breaking wide open.

Because party leaders were so keen to win the support of newspapers, we turned a blind eye to the need to sort this issue, get on top of the bad practices, to change the way our newspapers are regulated.

Alan Rusbridger, the editor in chief of The Guardian newspaper, went further in his 2011George Orwell lecture:

The simplest explanation [for the lack of action] is a combination of fear, dominance and immunity. People were frightened of this very big, very powerful company and the man who ran it. And News International knew it. They had become the untouchables of British public life.

Elected governments, then, of all political colours, may not intervene, according to Paul Chadwick, writing as long ago as 1996, because “media concentration has reached the point where no legislature would have the courage to enact a statutory scheme of journalism ethics and then to enforce it against the largest media outlets” (Report, p. 209-10).

Critics of the Independent Media Inquiry were certainly right in pointing to its origins as a response to the revelations about phone hacking, as was acknowledged early in the inquiry’s report, but to act as if this constitutes the start and finish of discussion about media regulation in Australia is blinkered at best and self-serving at worst.

For a start, inquiries into the news media, especially the print media, are rare in Australia; the main means by which agitation for inquiries into various industries and events occurs is through the news media performing its fourth estate role as a watchdog on other institutions in society. But the news media rarely calls for inquiries into itself. From where, then, does the impetus for an inquiry into the news media spring?

A government is an obvious place but of course it has a vested interest because the news media remains a vital conduit to reaching and influencing voters. So both the news media and governments have a vested interest. As long as you keep that clearly in mind, you can still approach the issue of media regulation dispassionately.

When the phone hacking scandal erupted in mid-2011, some commentators – and I was among them – said there did not appear to be prima facie evidence that phone hacking occurred in Australian newsrooms but nobody knew that definitively at that time. The inquiry did not receive any formal evidence that phone hacking was happening in Australia, but to me that does not void the value of holding an independent inquiry into media regulation.

Those who say otherwise put themselves in the position of accepting practices in the news media that range anywhere from poor to appalling to practices stopping just short of phone hacking. The revelations that led to the closure of a highly commercially successful newspaper, the News of the World, are, to the best of my knowledge, the biggest media scandal in living memory.

Some commentators have said journalistic practices in England, especially among the tabloid newspapers, are confined to that country and that may be right but News International is an important part of News Corporation, as is News Limited in Australia. Rupert Murdoch has been rightly praised for creating a global media company in the 1980s, well ahead of his competitors. Journalists and executives move regularly through the various parts of News Corporation around the world and are encouraged to do so. For years the winner of the News Limited young journalist of the year award was given a trip overseas to other parts of the company to learn how they do their journalism; in recent years this included News of the World. Les Hinton, who stepped down as head of News International during the phone hacking scandal, began working with Murdoch in Australia more than 50 years ago.

Asking questions about the operation in Australia of News Limited in this context is entirely reasonable. Not to ask questions in the face of such disturbing revelations is to be wilfully blind. Regardless of the absence of evidence about phone hacking in Australia presented to Mr Finkelstein and me, the inquiry still found media regulation in urgent need of reform.