revenge is sweetest when it is inevidable

there’s been a lot of talk in the press over recent weeks about the changes in australian cross-media ownership rules. considering that most places in the world don’t have laws like this to start with, much less reform, a bit of background is probably helpful.
as i’ve travelled, people from europe and the usa are routinely surprised to find that australia only has a population of around 20 million people. considering the economy of new south wales is roughly the same size as the whole of indonesia, the 4th most populous nation in the world, it is easy to see how we tend to punch about our weight as a country.
given the power of the 4th estate in any democratic nation the government decided a while ago to limit the amount of inflence any one media mogul could have in a given market, defined at the time to be a capital city. this level of government interaction was fairly justified, as the small australian market still managed to breed a number of media powerhouses, most notably rupert murdoch’s news corporation.
while ownership in the print media is quite concentrated, the behaviour of the television networks over the last 10 years or so has robbed australians of the services many other western nations take for granted.

around the year 2000, australia was deciding between competing standards for digital television. the government had announced the release of spectrum suitable for digital television, and it was up to the government, industry and consumer groups to decide which standard would be adopted. with only three commercial tv networks – and thus very oligopolistic control over the television advertising market – the incumbents had a significant incentive to stop others from joining the tv broadcasting club. through a mixture of successful lobbying, weak politics and the timing of a pending election (as well as the incumbents convincing the govt that they’d need to spend an absolute fortune on their broadcasting equipment to move to digital, so they needed to be protected to make it worth their while), the government announced australia would get the hdtv standard, or high definition television.

the promise of hdtv was that you’d be able to get crystal clear picture with 5.1 surround sound. unfortunately, however, very very few programmes were recorded in a quality that could suppoort hdtv, so the best a viewer would get from this new standard was a widescreen format of picture. honestly, i don’t think a lot of people would have cared too much anyway – who really wants to see who wants to be a millionare in 5.1 surround sound?

the reality – and certainly the intention – of hdtv is that it is very, very hungry for bandwidth. one channel of hdtv uses around 10 times more spectrum than a regular digital widescreen channel. this meant that the networks ensured that there wouldn’t be room for new digital services – including interactive tv and the delivery of a news channel or other content more closely resembling the internet, also known as datacasting – to compete with the incumbents. just in case there was a bit of room – and there still is – the government passed laws forbidding datacasting from looking at all like a tv service; ie, no full motion video for more than a certain length of time.

so, basically, australian consumers got screwed, particularly when you compare it to what the british got from their digital tv service (40+ channels free to air, interactive for things like polling and voting; essentially the innovation you’re never going to get from 3 fairly comfortable players in a market).
fast forward to 2006. a federal government enquiry in late 2005 found that digital tv takeup had been woeful – blind freddy could have told you this, since there isn’t much improvement at all between analogue and digital, with no new services from commercial networks. even the promise of perfect picture quality is false in most experiences, since the picture isn’t crystal clear without improving the infrastructure (read aerial) in their homes. the planned 2007 shut off of the analogue network will now be pushed back to 2012 – no surprise there; it would be a brave politician that took away tv from the masses in a country with compulsory voting – and the incumbents have had their monopoly extended too. thankfully, though, this is all becoming a little academic – the incumbents are in for a big change that the government can’t legislate out of the equation, because this time the media competition is international, it isn’t using broadcast spectrum the government regulates, and its fully interactive with almost millions of channels to choose from.

the answer is the internet.

at the turn of the centry, almost everyone was still connecting to the internet via a 56k modem, at least at home. now most houses in australia can get online 25 times faster. in some parts of the country where adsl 2+ has been rolled out, the speeds are more than 150 times faster than an old fashioned modem. these speeds are enabling full screen video to be sent straight to the home via the internet. and products like google video, and their deal with cbs to allow cheap paid downloads of programmes further drives this trend. in australia, where we get the top shows from the usa 3-6 months after their first air in the states, this model of paid subscription further errodes the australian media outlets, in this case channel nine, with their strong relationship with cbs for content. determined fans of csi will simply set aside $2/week to watch the show 3-6 months ahead of when channel nine gives it – and commercials – to them.
so after being loosing the battle for the best by the incumbents in collusion with the government, the australian consumer is standing to win the war, thanks to the internet. the convergence of tv, internet and telecommunications is going to change a lot of things, but it is hard to see the traditional commercial media business doing well in any scenario that doesn’t involve a time machine. as a consumer who’s missed out for so long, the desire for revenge is palpable – the sweetest thing about this revenge is that it is coming from the world at large, and it completely inevidable.
of course, this isn’t the only battle facing the commercial television sector – personal video recorders, or pvr units, are creating a similarly herculean challenge to the models the sector has been using for the last 50 years. but more on that another time…

1 thought on “revenge is sweetest when it is inevidable

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s