Project Timeline 2005–2010

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Proof of Concept Phase – Interview B

Categories: Interviews, Proof of Concept Interviews, Support Material
Date: 12 April 2005
Contributors:

CD B – 18th March 2005

Andy Lloyd James: I just love it because it’s just done straight on the computer and then you can burn discs and everything so I can shoot you back a disc of what you said anyway.

Interviewee: Yeah, sounds good.

All righty.

You lead, you’ll kind of control it and ask what you want and tick it along and do whatever you like.

Yep, okay. It’s… well essentially what is it is, is it’s looking at what is going to influence between now and 10 years time, what is going to influence television between now and 10 years time? I’m thinking as much content as technology, the outcome of this ought to be a set of scenarios, which give us a real sense of what the potential – positives and negatives – are for television in 2015, and what in the television is like that.

So television, you’re defining very broadly.

Very broadly.

As entertainment and information on a largish screen.

Yes that’s it exactly. So it’s as long as it is wide, and this does not have to be… this doesn’t have to be finite this particular interview, if there are things that you’re not happy with at the end of it, even more when you’ve listened to it back, happy to do other bits and pieces whatever. So it’s…

Then it can be discursive.

Absolutely, it has to be.

Yeah.

So the first question is, the first question, what do you see as the key issues for that development?

Well I suppose the key issues seem to me to be television’s response to the rise of allied platforms. And how it handles the time CRUNCH that comes through people increasingly using other screens for related but sometimes other purposes. Whether they be mobile phones or currently internet screens or whatever may emerge. And it seems to me that a really key issue for developed television broadly defined in the traditional mode of information and entertainment on a large screen in the video form, video rich form, is how television copes with the proliferation of screens and indeed the proliferation of video itself. So that’s one, and we can come back to that if you like. I think another issue is the ability of television to remain relevant to audiences, and that has a number of aspects, one aspect is how does television which has pre-eminently been defined as a mass medium, how does it, how should it operate and how can it operate in an increasingly fragmented market place. I mean we thought this sort of HUNDRED channel environment on Pay Television was an amazing response to that, but when you think about the potential of video storage technologies and VOD technologies where the customisation of the stream of information and entertainment can be almost as specific as every viewer.

As me.

Yeah. How does television as an enterprise cope with that process?

Yeah.

And another aspect of that I think is because people expect a level of relevance which only they can deliver. The other aspect of that is television that’s actually relevant in people’s lives in terms of content.

Yeah.

And can television within particular countries, within particular markets, remain at the centre of people’s lives especially in context of local content, and a range of content, and a level of treatment contract, all those questions about television in terms of content, being able to maintain the sort of getting under the skin relevance in television we’ve always expected to have. Or whether it gets blended out, internationalised and looses its ability to be so integrated into people’s lives, that they couldn’t imagine not having it. Because we’ve got to remember, the average Australian watches 3 hours or more of television a day, which I’m often fond of saying is the most we do for any activity during the day apart from sleeping and working, any activity, so on that basis the three important things in our lives are sleeping, working and watching television.

Yes.

And I think that’s probably true!

It is, but even if you’re involved in a sport, it’s not going to last 3 hours.

No, and all the evidence shows that when people go to remote places, the thing that they want to… they pine for, and need to have is a television set. Even before they [xxxxx].

[xxxxx] It’s just that…

So we’re not talking here just about a, you know, an… we’re talking about something that has over its history become – and more so than radio I have to SAY, because radio is not as addictive and the substitutes for radio, literature and other things, reading is a bit like that, but television has this special ability, is a drug. And people are addicted to it.

It does extract you from your environment.

Absolutely. And that’s one of its positive powers, as well as one its negative powers, and how that… whether that status can be maintained for television broadly defined is I think an important issue and if it’s not, what’s going to take its place? And will it be as benign, or not or worst or better?

Yeah.

And those issues are I think the issues of regulation, content, production values and those kind of content oriented issues. So, I thinks it’s you know coping with the proliferation of information entertainment platforms, dealing with the question of fragmentation of market places and people’s expectations about being served personally, and being able to maintain its special day-to-day relevance to individuals are going to be key issues.

When you look at that first one, the first thing that’s spring to my mind as I’m sure it comes into yours are the ADVERTISERS … what that proliferation of platforms means to revenue.

Yeah. Well…

And how particularly for the commercials, how they’re then maintained like in content. And then the whole tumbling changes: does that mean a change of regulations, all of those kinds of things.

Yeah. Well let’s go through a sort of scenario on that. Most estimates suggest that the… we should take free-to-air television as a key component of television in the broad, that in over the next decade free-to-air television in Australia is going to have it’\s audience eroded by around about 15%. Now that means its revenue will considerably drop. However of course television industry, free-to-air television industry argues that, as there is this broadening of other opportunities and the place of television as the conduit for mass advertising gets more and more of a premium, if you’ve got cornflakes the only way you can tell everyone in the country that you’re making cornflakes is to put it on television, because everyone else is looking at specialised medium, so the premium goes up, which has allowed the television networks in Australia to increase by 5 or 6, 7% a year their advertising rates, even though their reach is reduced, year by year. And the real dynamic which no one knows the answer to, is as the audiences, if you take the free-to-air television revenue model, which depends upon this, as the audience is eroded by other things, Pay Television, internet, mobile phones, life events, whatever else, which is going to continue even deeper, and accepting that there are some premium then on a mass media that can charge extra for getting everyone at least some of the time, what’s the damage left as it were? And I think the damage left is pretty damaging, because on the other side of that you’ve got this extraordinary and rapid increase in the cost of programming driven by the pressure of programming from competition of other media as much as anything. So you have got free-to-air television operators who are relying on the standard advertising revenue model, their audience is dropping, they can ameliorate that to some degree by a premium because they are mass operators, but at the same time the cost of programming driven by all the other platforms they’re competing with, including Pay Television and broadband and whatever, DVDs, the whole lot, is pushing the cost of programming up to a degree that makes the margins get to be very compressed. But that really leads to my other point, coming back to the point though, of course if you operate across platforms and you‘ve responded to the proliferation of platforms by taking a position on a number of them, you get two benefits that help further to ameliorate that difficulty. You get the ability to layoff some of the risk that if you‘re not making money in your pre[xxxxx] television station, you may be making it on your cable channel, or on your internet site or your DVD manufacturing plant. And equally if you have those kinds of activities, it is more likely that you‘ve produced projects that you actually own the IT of, because you can then use that IT on a range of platforms, and so you control the price because you make a product. Of course that’s exactly what’s happening in the States, where not only is there a process of the networks now being all of them allied with big operators who are more broadly based. But in 3 of the 4 cases of the networks in America the big operators are content producers, Universal, Cloggs, Viacom, Disney. So, you control the price of content by actually owning the factory.

Yeah.

And that’s of course we’re seeing here a bit, with the move back inside after the great migration of production out of house, back inside to a degree with The Block and some of those other eminently crossed platform activities because Nine can make The Block in house and leverage its Foxtel, its Nine MSN and all its connections. And it increases the revenues intake and reduces the risk. So when I say the biggest thing is about managing this new multi-platform environment, that’s what I mean, it’s about positioning really the brand because all the television station has at the end of the day is its brand. And because there’s only been a few of them, because they’ve been regulated, and because they’ve under everyone’s skin, in the manner we talked about…

Yeah…

…television is a drug, got to keep remembering that, people go through withdrawals if they don’t have television. Then it’s a very powerful brand like Coca-Cola, and those that can extend that brand across the range of potentially competing platforms in the audio visual department, and lay off risk by doing that, will do better than those who think that they are really only in the television business and they can stay there, because I think the ones who believe they are just in television business will die.

Yeah, they’d have to.

Because of this erosion.

There is an interesting irony in what you‘re saying too, which is that operating like that, operating across a whole multiplicity of platforms they also of course, run the risk and it’s an inevitable risk I imagine, they run the risk that the audience’s loyalty then will be to the content, and not to the mothership so to speak, which actually, just thinking about what you were saying, actually then stands to accelerate the diminution.

Well indeed…

…of the big ships.

Indeed but then… look that’s true, the ship’s in a new shape, if we do this well, we’ll survive. But Ten is probably the big message of what we’re saying, the television in the traditional sense of a big screen in the corner of a lounge room will become a much smaller component of their activity, so you’re right in a sense, for a television company to survive it has to kill itself. Well!

Yeah that down there… I’m just following the logic, which I agree with, so following the logic of what you’re saying.

And that’s inevitable, I mean television will in 2015 occupy a smaller part of our daily audio visual consumption but then, but if you’re a big television operator I think your choice is to be like that, or to be dead. The BBC’s choice is to be – and that’s classic what’s happening – the BBC’s choice is to be a multi-platform operator, which it’s doing with great insight and panache, or to be an invisible and dying public broadcaster. The commercial choice is broadly the same.

There is a very… that’s a very interesting thing you see that’s going on in England at the moment, with OFFCOMM proposing a boosting to public service broadcasting and a con[xxxxx] removal of the ratings from the public service remised of the commercial broadcasters. Presumably partly in response to actually this question, how do the commercial broadcasters continue to deliver themselves revenues if they’ve also got to do public service and [xxxxx]?

Because it’s margins.

Yeah.

Coming to this country, commercial television and the ABC and laterally SBS and certainly commercial television and the ABC have done a formidable job of, so they should, build roles, do you see any likelihood here of governments understanding the issue the same way that they appear to be understanding it in England at the moment, where admittedly there’s always been a more sophisticated view of how you can power that content backwards and forwards. But do you see that as a possibility in this country?

I do, I’m not saying it’s going to happen tomorrow but I do, I don’t detect and haven’t detected in its broadest form any loss of enthusiasm or understanding by governments about the need to have to put in place mechanisms to foster media outcomes, and not too much squirminess about doing that when it has to be done I mean it‘s only a year ago that the ABA put in place a largely unheralded but actually quite innovative scheme to significantly boost reach all news and current affairs content in Australia after Prime and Southern Cross closed down their newsroom, do you remember that period?

Yeah I do.

Well there is now operating in regional Australia a regime, created by the ABA, not with a direct involvement but certainly without resistance from government, that requires regional broadcasters to produce a good deal more, news and current affairs programs than they’ve had before.

As part of their licences.

As part of their licence condition and they’re doing a good job, so – cop that, and they’re doing it well. So I think the notion of ways to keep the television system fresh and effective is not fading out of policy fashion.

Right.

What is more difficult of course is to find the mechanisms that will recognise this crunch of the margin that we talked about, so you don’t just put more obligations on the broadcasters who are actually having marginal crunches.

Yeah, [xxxxx] this year.

They’re working now in terms of our obligations for Free Trade Agreement with the United States, which has essentially entrenched the existing style of regulation for each of the segments and that’s an interesting area for discussion, I mean I’m just rolling all over the place here but, you know, if you think about it there might come a time when it would make sense to put expenditure quotas on the free-to-air broadcasters, and hours to air quotas on the cable operators. In other words swap around, exactly the mechanisms that we now have, I mean the ones that are there now are working quite well but I could foresee sometime in the future where for all sorts of reasons it would make sense to…

Yes.

Now that’s not going to be possible. Because the FTA has accepted the existing mechanisms as the regulatory style for that platform in the case of free-to-air its hours broadcast.

When they do that with the Free Trade Agreement, is it carved in stone or are there complex systems which you can go through to renegotiating those [xxxxx] because clearly, and I mean there’s clearly been some serious issues for… well for content production.

Well my understanding is that it’s pretty firm.

Yeah that’s right.

But not so much with digital material and new digital, new media, that’s still very unformed and negotiable, but my impression is that the Agreement in there is that free-to-air broadcasters, the mechanism will be hours broadcast and, you know, it won’t beyond 65 hours a week or whatever, I can’t remember. Now if for other reasons Australia wanted to do something different, whether there is a mechanism more generally in the whole Agreement which says, if both sides agreed on a change of regime, I’m not sure, but its an important issue.

Yeah. And certainly the new media ones are important issues as to whether… well is anybody going to be able to regulate it at all.

Right, quite so. But I think, coming back to your point, I don’t think that in public policy terms there is a resistance in Australia to the notion of creating mechanisms to support good outcomes in media, but I think what is lacking in Australia is nimble ideas that are acceptable to commercial operators, politicians and all the other players.

Yeah.

That achieves those things, but we can certainly do it, the Commercial Production Fund a few years ago had a big impact if you remember. You know, the current government has maintained the syphoning rules, for example, quite strongly. The ABO has put in place this regional newslink. That there’s the notion of media being regulated in the interests of the consumer, I think is firm. And we can go on to great levels of detail. There are significant issues I believe coming, about getting clear in government and in regulators, whether the well spring for that those mechanisms is for the public interest because of the special power and nature of media, or whether it is just a subset of competition policy. And that’s not at all clear. In fact it’s hopelessly confused at the moment. We have got the ACCC acting like a media regulator and Graham Samuels more and more getting up and talking about the regulation of media and the players in the media. You’ve got the ACA about to merge, presumably to have role which is more consistent. How are they going to…. how’s the ACCC and that body going to relate to each other? Can you regulate media because of its cultural and social significance like you would regulate you know retail industries or mines or factories, electricity, or is it different because it’s about people’s identity, all of which is recognised in legislation.

Yeah.

But they are the issues we’re not good at. But I don’t have any feeling that the government and public policy makers have given up the notion of regulating, and in fact, I think it’s come almost back the other way. I think if you look at the internet, the days when people thought the internet would be this wild uncontrollable thing are fast ending, because of a range of other important things. Spam clogging the pipes. Child pornography, very big issue in regulation of the internet. National sensitivities which governments feel they need to respond to like iron crosses on the [xxxxx] in France. The digital divine in questions of equity. A lot of really important public policy issues I think are beginning to put a framework around it.

That’s interesting.

And I think that the heady days of [xxxxx] internet was a sort of uncontrollable and unregulatable thing, for good or bad, are cutting back to the field.

The equity issue is when you hear, you hear as a headline and then nothing more to it at all. But the [xxxxx] then to provide both domestically and internationally, and yet that must be… I mean, in both cases both domestically and internationally there must be an absolutely fundamental issue for it, at least for beneficial incomes or [xxxxx] special outcomes.

Well I think it’s a fundamental issue driving the survival of television, because… and the survival of free-to-air television. Because if you accept that television is a drug and everyone needs it everyday, pretty much, and all that goes with that in terms of politicians knowing therefore that they need to be very careful about changing, I mean you can’t… a politician couldn’t be responsible for switching someone’s television off, or even one of the chat [xxxxx] off. It’s unspeakable.

A nightmare!

But at the other way, they all want to get more… you know we got SBS into Tamworth, you know, and that’s compelling behaviour. The other aspect of that is not only is it compelling, it’s also free, free-to-air television there, so it’s eminently democratic and you go with [xxxxx] in terms of its impact.

Yeah.

And even though paid-for-television is going to I think grow – I’ve traditionally predicted that there will be a 50% in 2009, and I bet it is. In other words 50% of the Australian households, 3½ million of them will probably have some form of Pay Television by 2010 say. The second 50% is probably never going to happen. And that’s 50%.

Yeah.

That’s, you know, half the population.

That’s a bloody big slice!

And there’s no way that any government is going to be consciously involved in a process that allows that 50% television menu to be reduced, it’s just politically, nothing to do with business or anything else, politically it won’t happen.

They can’t let it happen.

Even for the public broadcasters, which may have to limp along, but we might come back to that later. Or for commercial operators, they will find a way to keep a failing commercial operator or some substitute on the air, so that the voters of Mt Gambier can still have however many services they’ve got.

Yeah.

So I think in terms of transmission systems, and the various categories of television, free-to-air television will continue into 2015, although it may well be not nearly as powerful or as rich in content as it is now.

Given the issues that you’ve raised, which I mean are really solid issues, what’s the… I suppose the next few questions, what’s the best outcome by 2015, and what’s the worst?

Well I think the worst is easiest to do, the worst outcome – because I actually see it, underlying this is belief that in the broad, television has been an enormously powerful influence for good in the world. Now there are a lot of people who say exactly the opposite, but despite all the difficulties with television, all the fat kids running around and all the other things you want to talk about, it has been this compelling medium, which has underwritten you know everything from the liberation of Eastern Europe to the growing consciousness of our linkages with our fellow human beings in our region, as we saw recently.

Yeah.

With the Tsunami, the civilising of the planet has been underwritten by television. Mind you, I would be happy to argue that in any.. so it’s a… so good television’s important. But the worst thing in 2015 would be if free-to-air television found it so hard to keep businesses together because they didn’t do what we were talking about, but they’re really just broadcasting schmuck. Low rent, badly made, non-responsive, but programs that people will watch out of boredom I guess, kind of like Channel Ten when that American guy was running it under [xxxxx] the low experience.

Yeah.

Not Channel Ten now, I’d say, which I’m a great admirer of. Pay Television really doesn’t develop beyond where it is at the moment, and a more varied and interesting architecture of material doesn’t happen.

Yep.

That audiences are almost got to a point where they just accept that for really interesting, rich video material they will go onto their broadband device, which may well be the television. They will go onto their broadband one-to-one device and access it there, probably internationally.

In the [xxxxx] library.

Yeah, and the public broadcasters are like community stations with little power, influence or money. That would be a very bad outcome.

Well, again in terms of some of the things you’ve talked about, given the very slim margins that is used for production in this country, particularly in terms of production in this country, it wouldn’t… it is not impossible to think about it that in the next 10 years, even with a little flow-on from some of these events of sort of notion of quality, of there being a quality production industry in this country as opposed to Tony [xxxxx], could be in the subject, [xxxxx] is that something you get a sense of [xxxxx]?

I look… it’s always [xxxxx], it’s always in jeopardy, I think it is one of the great challenges in public policy in this areas is to find the mechanisms to keep the local production industry alive and commercially successful, no use just being a sort of Film Bulgaria, you know it’s got to be… which gets towards being in ways we’ve discussed in the past. But you know, supported by government but also commercially confident and aggressive. You have to remember all those great dramas on Channel Ten of the late 80’s or whenever they were, were commercial products. That Carroll stuff and all those… I’m sure Liz Jackett, who has written a book about it, and really I mean that’s very important that they be commercially alive, so that is certainly one aspect of this which is crucial, to be constantly adjusting the settings to make sure that we can encourage a vibrant and lively commercial production industry. Because we could lose it very quickly.

Yeah. And that has to, it would seem to me that that – I may be wrong – but it would seem to me that that has to include a greater empowerment of the public broadcasters whatever model they may be for public broadcasters in 5 or 10 years time, but it’s almost inclined, for me it’s almost impossible to see in the light of the sort of issues you are talking about, it’s almost impossible to see how the commercials will be able to take enough risks. I mean traditionally they, sometimes they do the first [xxxxx].

Well it comes back to my great fundamental proposition about this response to the multi-platform environment. If a commercial entity, with a strong brand, who has done it’s business well and ameliorated the erosion in its television audience by effective extension of its brand across other platforms, if it can do that, there is absolutely no reason why it shouldn’t continue to support Australian production, and put that across all its brands. Because it should still be commercially effective, it should be taking, and I suppose Channel Nine is kind of the closest we’ve got to this.

Yes.

VM

It should be taking a bigger take from a successful Foxtel a bit down the track, when it starts to make money. NineMSN should be increasingly getting returns, it’s starting to make money now as we know it. Its television service will be at a more adjusted and less dominant level, but will be there and as an audio visual entity it should and it’s starting to to some degree, whether it’s crossed… may be come to this, even it’s film fund activities which wasn’t entirely successful, but…

It was interesting.

It was interesting, at the end of the day they won’t lose money over it because they’ll have the benefit of all spin offs of those movies but it will require television operators to be much more broadly based, which as you say derogates from being clear television activities, but makes them you know more survivable entities. I’m talking commercial entities, and it’s the ones that don’t do that who will be the ones putting up their hand to government and saying, we can’t cop this regulation, we can’t make it any more Australian, and it will be not very credible, if they have made no attempt to broaden their businesses to lay off risk.

It’s interesting isn’t it, I mean proliferally, just for a second I mean you look at some of the stabs Seven’s had, I mean they just keep paying for them on that basis.

Well they do and you know I did a little analysis of this. That’s not an analysis that’s just a little… a little present, it’s a visual representation of where the players are at, and I mean Nine is doing well.

Yeah!

The ABC is doing pretty well. SBS is doing all right; Seven – and is some time ago now.

Yes.

Was looking pretty good, but of course that’s gone and that’s pretty much not going to happen, so they’re back up with Ten now. And the point of this at the time, which is, now about 2 years ago was that Ten was vulnerable, in every sense even though it was doing well at that stage with Simple Life and all sorts of things, and that if there were a change in cross media ownership, Ten would be the pea, which is in fact essentially what’s occurring, but of course since then Seven is also vulnerable. With Ten it’s a function of growth and getting the house in order before they, I mean they’re vulnerable but an asset they’ve vulnerable but lost…

Something…

Yeah, and…

Ten at least [xxxxx] also have the capacity to move quickly.

That’s right.

I mean their owners.

That’s right. Now, so I think it’s really back to this thing of being able to put together a portfolio of cross platform activities, which support and buttress this activity while accepting that this activity will reduce.

Yeah.

The activities of these 2 players, I think…

The 2 national broadcasters?

Yeah, have been not too bad in that regard. What this one needs of course badly now is some kind of presence on subscription television. Badly needs it. This one of course has world movies, which is making money and doing quite well. But of course they both also need strong understanding from government about their future role.

But that won’t… they need I think, I mean I don’t feel entirely comfortable saying it but they need a strong understanding within themselves about their future role, I mean there’s no base…

That’s true!

Yeah, I mean there’s no…

And I don’t see that myself at the moment. I don’t know about you.

No, and from either of them.

No, they’re adrift.

Both I mean at board level and at management level, and presumably that, whatever government’s view of public broadcasting may be, as long as the public broadcasters themselves are hurling out big challenging notions for themselves in future, they’ll just…

They’ll be off the puffilator, and the danger there of course I think is, to go back to your question, is that the a government that is recognising the importance of keeping a media mix that supports community development, and I actually genuinely believe that all the governments that I’ve worked with did have that view and do have that view, is that governments will create other mechanisms, and I suppose you could… the funny way, the off com idea of a public publisher, of a public service publisher, is if that were to happen here, it would be a deep threat to the ABC and SBS, because it’s happening in Britain where the BBC is so well supported, its rampant. It’s not, but it could be happening here, I mean someone sooner or later in government unless the public broadcasters really get in the face of people again, and begin to sort of rattle it… the chain, not so much the money but on the policy level.

They need some interesting ideas.

Exactly. Some government is going to want to create some kind of mechanism like that that fills the space, as it were, without the tradition or indeed the kind of brand credibility of the ABC, or the SBS. So I think there is a danger of fragmentation of the public broadcasting sector, and I say a danger but then I’ll also be on record as saying that community television in Australia should be bigger and stronger than what it is.

Yes.

So I’m not saying that shouldn’t be the case, I think it is odd that we don’t have a national indigenous television service, I’ve spent a lot of time working on that project and I really believe that for quite a modest investment we can have an indigenous service which would be quite good. And I hope community television now…well it’s licensed, the indigenous one, I think it will, certainly by… I think by 2015 we will have in the community broadcasting area… Well let’s try and backtrack, so I’ve answered the bad thing, you…

You’ve answered the bad thing.

But the god thing, a good system in 2015 I think would have kept the, to some degree, genius that our system developed through the tri-sector development we’ve had in the last few years. Mostly in radio but to a degree, in television. I think the Australian discovery that having strong, aggressive commercial broadcasters competing against each other, a relatively stable and well-understood national broadcasting sector and a growing and locally oriented community sector, and trying to keep all of them in some kind of balance has been the key to the diversity of our system. And it seems to me that the test, my test for 2015 is to see if each of those sectors are still there and in robust health. And that might or might not include the commercial sector having some more outlets, it was… I would certainly want to see them multi channelling because another aspect of this platform broadening is not just to acquire web operators…

Yeah, sure.

But also to use your own frequencies for more activity, to overcome this problem of fragmentation. To see the national broadcasters doing the same and being on Pay Television and the internet and other things that they do extremely well, and the community sector to be broader than what it is and to include an indigenous component and that the… and community broadcasters in each state are as good as the one in Perth, which is the best one I think.

So I gather. Is it conceivable that the public broadcasters actually have a role in that… in the community notion, is that one of the… the only reason I ask is because its something I’ve thought about from time to time, how do you redefine public broadcasting in a multi channel world, when it was really designed to work in a limited spectrum world?

Well that’s one way… the other way of putting it would be to say it was always a big ask to expect the public broadcaster to do everything that it was expected to do on one channel, so by giving it multi channels, you’re liberating it to be a true public broadcaster, so that is the optimistic view of the same issue. Because I actually don’t believe it’s the outlets that determine what’s a public broadcaster, it’s the provenance of the programs, and the values with which they’re made, pretty much, and if you’re doing channel for young people, and it’s a public broadcasting channel, it should look a whole lot different to Nickelodeon. And if it doesn’t, then you’re not doing the right one. And it should have audiences as well. Look I actually think that… I really do believe this sectoral separation is crucial and that it would be in a state for public broadcasters to look into… They may transmit, I mean the ABC may have an [xxxxx] service on one of its multi channels.

Yeah.

But structurally and in governance terms, I think it’s very important that the 3 sectors remain separate, as we always believed in the ABC when indigenous radio came up, and we made that decision, really it should be run at the community level separately, and we‘ll just support rather than set up a department.

Yeah, so that editorially the 3 remain absolutely separate.

And that’s a great structural way of building diversity into the sectors.

So what does it take for that to happen. What does it take for the good outcome?

Well the fourth element of that if you’re talking traditional television of course, is then the subscription centre. So you’ve actually got 4 sectors, you’ve got free-to-air commercial, free-to-air national, free-to-air community and subscription.

And you’re optimistic about subscription, even in the absence of changes to anti-syphoning and things like that?

Well if they get to 50%, that’s better than Kim Williams’ planned so they’d be optimistic too. Yeah, no I think most people are prepared to pay money for special kind of services. And the thing that subscription television offers is the opportunity to put together, it’ll have access to a series of channels which you have a particular interest in, and you’re prepared to pay $50 a month to do that. I think that’s a fair proposition and I think, as the programming gets better and as the market continues to fragment, people prepared to pay that money, well the number of people will grow. And I don’t actually think it’s a… it would only become really unfortunate if the free-to-air players dropped the ball so badly, because the government didn’t support [xxxxx] broadcasters and the commercial broadcasters didn’t do what we’ve been talking about, that it became all that was available. The leavening process of free-to-air television is really important and its special relationship with viewers because it is free, and people know it’s free, is really important. There is no evidence other than that, I mean people in America keep talking about the fact that when you’re watching CBS on your cable connection, what’s the difference between that and watching Home Box Office or anything else, but people actually do know CBS and ABC and FOX, The free-to-air networks do have a broader role which is recognised, and which is important.

So how do we get there, how do we get to that good? What does it require to get to that good outcome, I’m actually leaving aside for a moment this question 4, the significant events because I think we’ve talked about them, in a lot of ways, we’ve talked about the structures, how the structures for television grew over the years.

More than anything, at this stage, it‘s a question of regulatory settings, because of our history and because of the nature of the medium, which we’ve discussed like any drug, television is regulated. All the players in all those sectors that I’ve said will be an important component of the successful outcome in 2015. A huge part of their operational environment is the policy settings of government.

Yeah.

You know for the commercial free-to-air broadcasters clearly the level of regulation, the number of players is very crucial business framework. For the national broadcasters the level of government support is obviously crucial. For the community broadcasters again the way they are supported in trying to get into the mix and what regulation there might be to require other players to transmit their services, like you know, subscription television being required to take a community channel on its menu is important. And for subscription television itself, issues like syphoning and competition issues, whichever way you jump on that, are crucial components of this environment, so in some it seems to me that any government in this tumultuous era for television must be working hard on a strategic framework to put in place the settings that will achieve the vision for 2015 that we’re talking about or something like it. So I think what I’ve said is pretty much most Australians would agree would be a good outcome. So I think that is the most important thing, a regulatory and public policy strategy for how to get good television services across the board up and operating successfully between here and 2015. And not a lot of that would be about spending public money. It’s a design issues.

Do the elements exist for that? I’ll just check this thing is still ticking over , yes it is! Do the elements… are the right elements in place now, I mean the broadcasting authority is about to change shape but presumably will still have the same roles sitting there, the public broadcasters in place, the commercial broadcasters have FUVA, are those the key elements that are needed or are we actually going to have to wait and see what the shakeout of media ownership does?

Well I think it’s… the good news is there are 2 fundamentals over there. But firstly is that we have a four part system, we have free-to-air television, national television, community television and subscription television, actually in the game and playing.

And working.

And working. And all of them are doing okay although the public broadcasters are in a fair bit of trouble, and the community broadcasters haven’t really emerged. Secondly, they are playing on a platform which is going to be by 2015 entirely digital, so technology wise we actually have a digital platform for television which is crucial, especially if it’s going to be cross-platform related. So there that’s the good news, I think the problem areas will be will be how we handle the process of freeing up business instincts and allowing competition and good ideas to emerge, while maintaining the structure. So it’s the detail of managing the relationship between the various elements. And what you can do in each of those silos, that seems to me to be a spectacularly under thought through in this country. If you take each of them, you know if you take free-to-air television, it’s now less than 2 years before we will even introduce a new competitor or not. The time is ticking, it’s now 2005 and there is still virtually no public debate about whether it should happen, how it should happen and why it shouldn’t happen. It’s still pretty much an insiders game and not very sophisticated. If you went to the ABA conference last year, we had there in front of us the two, we had Mark Carnegie arguing there had to be a new player, and it would be easy and unconscionable not to have one. We had Peter Yates arguing exactly the opposite, and both of their arguments were interesting but quite crude arguments really.

Yeah.

It hasn’t got to any level of sophistication and we had, just to make it more funny, we had Dawn Airy, in the middle

Oh, Dawn Airy, a bit risky.

Sort of kicking the shit out of both of them, she upset them all.

I did read… I was away but I did read that Dawn Airy managed to upset just about everybody who ever lived.

She sure did. And she was pretty into making all the arguments I’m making but, in Britain at the moment free-to-air television is looking better than ever, subscription television is looking better than ever, public television is looking better than ever. What’s the problem?

Yeah.

And that’s true. And we’ve got to find out how to do that, without blowing us apart. And so it requires policy responses in the control of the free-to-air environment, policy responses to fix up public broadcasting, policy responses to get community broadcasting healthy and making a contribution, and policy responses to nudge subscription television to be as relevant and as quality oriented as possible. And they are all huge issues but they’ve got to be addressed and then there is the issue of getting how they all rate to each other, so the… and I don’t have much of a sense about how I… the way I’ve just analysed is really, is really understood by those who were there.

Yeah.

They’re each looking at their own little bit. Now we have in addition to that there is the problem of the ACCC regulating according to competition policy, and the new merged regulator, regulating according to public interest and content, and I personally, I never did believe that could continue. I’ve always argued that the merger should have taken also and I will continue to argue with it, the merger should have taken those parts of the ACCC’s activities that were given to it by the BSA or Telecommunications Act, which is all the stuff about Pay TV and access and all of that should have come out of the ACCC and be given to the new regulator. I think at some point in the future that will happen but there’ll be blood all over the place before it does. In the meantime it’s what’s happening in Britain, it’s what’s happened in America. We’ve got this difficulty of trying to address this huge regulatory matrix.

With two sets of rules.

With two sets of rules.

Yeah.

And that’s really unstable and difficult.

How is the department conscious of that?

I’ve never had a conversation with anyone in the department at this level. And that’s not a criticism of the department, they’re just responding to what’s there, I think some of them are. Some of them are… but, yeah some of them are aware of the trickiness of it, in fact deeply aware because sometimes they tinker with it a bit, and it all begins to wobble, which is the message of course that [xxxxx]….

[xxxxx] fingerless.

That’s right, but I don’t think there is any national will, or will within the existing interest groups, you know the industry groups, TV Australia or ASTRA or the ABC, there is no real will to open up the pot and have a real stir at them. Whereas in Britain as you know, they are constantly, in fact they’re stirring it so often…

Yeah!

That it’s very… it’s almost too much, and in America they’re pretty active in regulating. When people say America is a land of no regulation, the regulation of audio-visual and telecommunications was incredibly sophisticated and complex, and detailed. So I think that’s a real, you know I… the cross media and the foreign ownership coming in, I don’t mind those reforms, depending on how they’re done, still be under the individual because I think in a funny way by having rules against doing all those things, we’re really just reinforcing the lack of diversity that’s in the current system.

I think that’s… I think that’s the [xxxxx] and I think also nobody is going to have to snowball us all apart from possibly the PBL, nobody is going to have a snowball’s chance of getting… getting the answers that you and I are talking about, getting those right by 2015 unless they can… unless they do have a genuine business run.

And they may, having that run, they may have to complete with some very big overseas players.

Yeah, absolutely.

Which is good.

Yeah, no that’s what I mean. I mean and…

I mean if, you know, DMG ended up owning Channel, 10 I’d be quite happy. I’d probably be quite stimulated, or you know the ITV or BRAVA or whoever, but it will be up to the regulator then to make sure whoever’s owning it, that it does its bit on it on behalf of the national interests.

Yes.

And that’s why I mean these 2 regulators is a bit of a worry, because that’s…

I must say I’ve never really focussed on that very much, that’s okay, I mean that just sounds like a recipe for complete mish mash.

Because OFFCOMM is kind of there, and OFFCOMM’s message is kind of saying, we want it to be as free as possible, but we are going to have some really tough rules.

Yeah.

And it can say that because it’s now The Regulator.

Yeah, very interesting to read their papers too, I mean they are extraordinary, sensible creatures of work, which you know and I mean it sounds an odd thing to be saying but I mean there has been so much of that stuff in the past, it brings everyone else to really arguing aroundish, they just see it as it’s happening and just cut straight to the chase.

Yeah. Well now they’re an institution, which is looking at the sectors in the way I described, across the sectors and the relationship between the sectors.

Yeah.

And until we start to get used to doing that, then I despair of us getting to that 2015 well, so managing regulatory environment is I think the key first requirement. The second requirement, which is not unrelated to that, I think is… somehow kick starting a more adventurous – I suppose it’s not unrelated at all – a more adventurous commercial attitude to media in Australia. I thinkwe are in a… the industry is in an environment of co-dependency, not unlike the problems that exist within Indigenous Policy in Australia, that because our public policy as been so ad hoc, so media specific, that real entrepreneurs, people with good ideas and money to do something about it, are not involved in the media, they‘re doing other things. They’re in the stockmarket buying property trusts or… you know the amount of real you know, rough house capitalism in our media scene is not great and is an unhealthy [xxxxx] which you accept for better or worse, you know, competitive people will generate new ideas. Apart from Singleton and perhaps APN News and Media, all other big players who are around, who are actually seriously thinking and talking, and people are stumbling over themselves like Fairfax but… So, you know…

Maybe there’s no urgency.

No, so a kind of a business environment, which is more entrepreneurial for television is needed. And that, the lack of that is for a whole lot of reasons, which are very complex, but I think that’s the problem.

And again, I mean opening up the media [xxxxx].

Hopefully.

The last question, if you owned the world…?

If I owned the world?

Beyond the things you’ve talked about, which have been, I mean clearly, soundly, realistic things, are there other things you want to achieve by 2015, unexpressed here?

I suppose the two things that I would really love to see would be a screen production industry that was really going well and getting paid for it and was lively, was aggressive, was working on a global basis, was working across platforms. I have serious worries about the ability of our screen production Industry to survive in this new environment, given that so few of them are across the platform, large and sophisticated.

They shaped it all wrong.

You know, there’s about 4 companies, and I was delighted to see Southern Cross has a radio and television station operated by Southern Star. I am not saying anything about our friends of Southern Star who may or may not be. But as a kind of structural play, to get a broadcaster in making stuff – Australian stuff – and also having radio and being a bit complex and interesting, it’s exactly what’s been lacking.

Yes.

And we need more big production houses that are broadly based, doing well globally, and can really produce quality stuff that works across the platform.

Yes, it’s interesting isn’t it because we’ve… at a time when it’s becoming so possible for so many people, particularly young people, with energy and ideas to produce things, to produce audio-visual material of all kinds, there is… there still is only this perilous industry hovering in the middle.

And we see it here of course because …

Of course we do.

You know, we have there bright young cross platform people who leave here and start to look for where they might live the digital life and there is really no one who’s taking that broad view. Everyone is taking their narrow interest, and so they find it hard to get to that, and they actually have to give up some of their broader interests and go and become a documentary maker, or a drama director or… which is okay except that there is a bigger world there.

Yeah, that’s just a waste isn’t it?

So, a more complex and I guess more robust. The other thing is the National Broadcast, I mean the national broadcaster should be leading creatively and in terms of energy and ideas. Now the ABC has done that to some degree, certainly online it has done it, and it still produces good programs which are ground-breaking, but it should be at the centre of every debate about this issue.

Absolutely.

And you and I, probably both go constantly to conferences and discussions about the media where the ABC’s name doesn’t even come up. And that should not be possible.

I know, that should not, yeah.

So they’re my two things, a much stronger production industry to create the content that this evolving environment might carry and a much stronger ABC, probably driven by, as you say, not just government money but also internal ideas of the kind the organisation used to have. It hasn’t had now for some years.

Yeah.

At the very time it needs it most.

Absolutely. I mean that, if nothing else, that’s what’s shaming about the Board, who may not be able to come up with [xxxxx] soon they shouldn’t be [xxxxx].

I was talking to some student’s the other day and they asked me, because we were talking about SBS and we were talking about the [xxxxx] that I’d done for SBS, and they asked me what the policy principles were on which the ABC advised us, production plans for radio and television.

I think the last time we had one, whether or whether not these were successful or a failure, was the one ABC stuffed.

Yeah right. which was in your face from there I’m sure!

Yeah.

Yeah, I mean…

But I don’t, I‘m not conscious of any extent of criteria of program commissioning criteria from the ABC since then, radio, television… That you guys…

You can have your machine back, is it still going? No?

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