*contains graphic material

An absolutely extraordinary editorial today in The Australian, which followed an equally extraordinary piece of editorialising by News Ltd carnival barker David Penberthy a few days prior. The response by senior News Ltd editorial staff to Australian Financial Review journalist Neil Chenoweth’s impressive investigation into a Pay TV smartcard hacking scandal raises serious questions about their ability to read/understand words of the English language.

I encourage you to read Chenoweth’s amazing investigation, but the essence of it is this:

A secret unit within Rupert Murdoch’s News Corporation promoted a wave of high-tech piracy in Australia that damaged Austar, Optus and Foxtel at a time when News was moving to take control of the Australian pay TV industry.

The piracy cost the Australian pay TV companies up to $50 million a year and helped cripple the finances of Austar, which Foxtel is now in the process of acquiring.

The Australian editorial suggested the AFR editor, former No.2 at The Australian, “send his reporter, Chenoweth, on a plain English course,” while the famously hard-of-thinking Penberthy said he needed “a couple of cracks at reading it.”

I myself found it relatively easy to understand. I now offer my assistance to The Oz/Penberthy and believe I can help allay many of their concerns about the AFR’s editorial standards:

• According to The Oz and Penberthy’s reading of the AFR piece, the alleged smartcard hacking sponsored by News Corp ”was, apparently, a plot to damage Austar’s business so that News Limited could pick it up for a song more than a decade later.”

No. At no point does the AFR argue that the late ’90s/early ’00s piracy activity was related to Foxtel’s attempted 2012 acquisition of Austar. This is made quite clear when editor of the AFR said “Our report in no way suggested that NDS-related piracy in the late 1990s and early 2000s was done with the purpose of helping Foxtel to buy Austar now.”

• The Oz said “If there was a conspiracy to damage Austar, you would expect Austar’s chief executive, John Porter, to be screaming from the rooftops…”

No, you would not. In fact, you would think the exact opposite. The piracy allegations go back to the early ’00s and smartcard piracy has long since stopped weighing on the share prices of Pay TV companies like Austar. Foxtel is now, however, in the process of negotiating a friendly takeover of Austar. These new piracy allegations will ring alarm bells with the government and the ACCC, and could thus complicate or delay the takeover, which is the last thing the Austar CEO would want.

• The Oz attempted to explain the piracy scandal in a way that exposes their near-total misreading of the issue. “Think of NDS as a lock company (let’s call it Yale) which wants to prove its product is the safest in the business. If it took a hammer to its competitor’s product, to demonstrate its fragility, we doubt even Chenoweth would describe it as ‘dirty tricks.’”

Incorrect. If a lock company such as Yale took a hammer to competitor products in the context of a demonstration to customers of the weakness of the products, then yes, that’d be OK. If, however, Yale established a unit of ex-police and security personnel to go into hardware stores and take a hammer to enough locks that it would degrade the competitor’s share price, then (a) that’d be a more comparable analogy and (b) yes, I would call that a ‘dirty trick,’ actually.

• The Oz goes on to say, “On the other hand, if a newspaper company (let’s call it Fairfax) set out to trash its rival’s reputation by running a series of baseless stories in one of its premium titles (let’s call it The Australian Financial Review), we doubt anyone would call it ‘independent journalism.’”

I am not sure how an investigation into a Pay TV operator, Foxtel, ‘trashes’ the reputation of The Australian newspaper (the AFR’s rival), which is not mentioned once in Chenoweth’s report.

I do hope this is of some help to News Ltd’s senior editorial staff.

[Disclosure: I work for Warner Bros and so share a parent company with HBO. In addition my company distributes HBO content in Australia.]

There are many, many things that infuriate me with these type of pieces. There’s the sense of entitlement (effectively satirised here), which says you should be able to consume something in any fashion you want. There’s the disingenuous language “HBO has left me no choice: I’m going to be pirating season 2 of Game of Thrones” (apart, that is, from the choice to subscribe to HBO). And there’s the sheer sense of outrage directed at entertainment companies for using business strategies (e.g. bundling, segmentation) that pretty much every other company does, as if it was a human rights abuse.

But what really annoys me about this piece in particular is the following:

Much of the arguments in defense of HBO today have been that it’s their content and they can do what they want. True! But they’re doing so blindly as gatekeepers who have total faith in their wall. The problem is that the wall is already full of holes.

Currently, they’re pretending the wall is perfectly intact. In a year, they’ll admit it’s been breached, and they’ll try to rebuild it. But they won’t be able to. 5 years from now, hardly anyone will be using the gate. 

So why not just let everyone in now and charge them all a fee? Because admitting the wall is crumbling will mean accepting less money. Supply/demand. No one ever wants to take less money. But what they’ll have to come to terms with in the future is that less money is better than no money at all.

My post was merely meant as a wake-up call for HBO and other content providers. Winter is indeed coming.

What on earth does this patronising buffoon think goes on inside Hollywood studios? We’re talking about multi-billion dollar entertainment companies, which are part of much larger media conglomerates comprising TV, radio, print, music, book publishing, online, and which have more accumulated expertise in commercialising content than anyone else in the world. Does he think no-one in these organisations are aware of piracy? Does he think no-one looks at business models and consider how profits might be maximised? Does he really believe that decision-makers in these businesses are making their decisions ‘blindly’ and that he is capable of delivering a ‘wake-up call’?

One day I’ll write a longer post about why Hollywood windows content the way it does, but for now, suffice to say that they haven’t transitioned to a “just let everyone in now and charge them all a fee” model yet because they would lose substantial amounts of money.

As you will likely be aware, the Finkelstein inquiry into the media has concluded with a proposal to significantly strengthen the regulation of Australia’s media. The undeniable fact that Australians increasingly distrust the (commercial) media is presented as a key justification for Finkelstein’s proposal:

“[The report] begins by answering the question put directly to it in the course of its hearings: Is there a problem?The answer given is yes, and the problem is described as taking many forms: market failure, general public distrust of the media and the consequences of this for the Australian polity, numerous instances of the media doing unjustified harm to people, and the failure of the existing regulatory systems to hold the media to account for these harms”

The word ‘trust’ appears in the report a further 147 times.Section 4.9 of the report deals exclusively with the question of public trust and confidence in the media as a key problem, and reviews all the major longitudinal studies on the matter (Roy Morgan, Essential Research, Saulwick, AC Nielsen, and some academic studies), all with similar results showing a decline of trust, growth in perception of bias etc etc.

My point is not to question this, which is beyond doubt. My point is to question the overarching narrative, accepted almost at face value within the Finkelstein report, that the perception of a biased, untrustworthy  media is most likely increasing because of something the media is doing – i.e. it’s simply not doing a very good job.

There are two key strands within Finkelstein’s analysis of the media – the first is of growing distrust of the media, and the second is of massive structural change within the industry. For the most part Finkelstein keeps these two strands separate, almost suggesting one has very little to do with the other. But I don’t think it’s a pure coincidence that media diversity is exploding, and consumption fragmenting, at the exact same historical point that public trust in the media is eroding.

Matt Yglesias penned this 2-paragraph note Partisan Media: An Economic Analysis, explaining why he thinks the media in the USA is increasingly partisan (something which would reduce it’s trustworthiness in the eyes of the public):

The Grand Old Days of American journalism were characterized first and foremost by severely curtailed competition. There were three television networks, and outside of New York each city had basically one newspaper … What’s happened to the United States over the past 30 years is that cable, talk radio, and the Internet have created a more competitive media market that’s much less dominated by geographically segmented quasi-monopolies.

So in the old days newspapers (to take one example) enjoyed a virtual distribution monopoly over news-delivery in a particular geographic area. The competition in TV and radio was not much higher. This was equally as true in Australia.

So (and I’m paraphrasing Yglesias closely here) in a one-newspaper town there are two choices for a consumer – either buy the Adelaide Advertiser, or don’t buy the Adelaide Advertiser. The strategy for the Advertiser’s editor therefore is to be as broad, inoffensive and neutral as possible, in order to scoop up as many readers as possible. have a broad mix of content: news, editorial, sport, gossip, weather, crosswords etc etc etc. Don’t be too controversial; don’t take too strident a view that might alienate readers; just the facts. An entire ideology of the newspaper as the neutral, balanced, paper-of-record sprang directly from this business model.

However in the last few years structural changes to distribution (i.e. the internet) has forced change on this business model. No traditional media (newspaper, TV or radio) has a distribution monopoly anymore, which for consumers means a lot more choice. Why would I want to read a broad bundle of neutral articles when I can consume something which speaks directly to me as a (older right-wing or younger progressive) individual? The traditional newspaper product, by targeting everyone, through this de-individualised, one-size-fits-all approach, now effectively targets no-one.

It’s little wonder that the most successful traditional media organisation of the past decade has been Fox News, which all but created an immersive virtual-reality experience for conservatives. In the UK the newspapers that look best-equipped to deal with this world are those with a clear editorial stance: the Daily Telegraph, the Guardian, the Daily Mail and the Sun. The harder-to-pin-down Independent, Times, Daily Mirror and Daily Express without exception have seen higher circulation drops and lower online audience growth.

But back to Finkelstein: why do Australians distrust the media? First thing to note is that there’s been an explosion of media in the last 20 years. Since the 1990s the amount of time spent with media has increased from 50 to 70 hours per week – and not just the internet: Pay TV, new digital TV channels, digital radio etc.There is much wider media diversity, catering to a much wider types of audiences, and that means choice for consumers. But it also means consumers are choosing to consume a (relatively) smaller slice of a much larger pie, and rejecting the rest. In short, Australians distrust media in part because there’s so much more nowadays to distrust.

And why should Australians trust all media – that is, the media as a single, monolithic entity? Why should I care, as Finkelstein does, if someone distrusts the specific media that I choose to consume, anymore than they dislike the music I listen to or the food I eat? As long as there is a genuinely diverse market from which they can find something they DO trust. No-one is forced to consume the Herald Sun, and less so than ever before, when it was one of only two suppliers of text-based news in Melbourne. The question ‘Do you trust THE media?’ is the wrong one for pollsters to ask; ‘Do you trust ANY media?’ makes more sense today.

The Australian newspaper makes a case-in-point. There shouldn’t be any doubt it’s a conservative-leaning newspaper, which has shifted further to the right in recent years. In fact, I’ve argued elsewhere I think this is a conscious strategy, and based on their relative circulation in that period, a successful one. If I was running the paper, I’d do the same, given the dead-end of trying to appeal to everyone. The paper appears in Finkelstein’s report as a bogeyman, with its biased coverage of climate change and the NBN. But there’s surely no doubt its intended target – senior professionals in traditional employment (law, finance, medicine, public service) and self-funded retirees – don’t share this perception of bias.

The Australian is read by 402k people, Monday to Friday – less than 2% of the population of the country. It is, by any measure, a niche publication – one tiny voice in a much, much bigger sea of news sources that continues to grow. It’s a glorified pamphlet. Yet it’s being held to expectations more appropriate for a time when newspapers were the only news source available – when almost a third of the UK adult population read The Sun each day.

Distrust of the media is intrinsically tied to the underlying changes in the media economy. It’s the effect of fragmentation in the market – 100s more news sources than ever before, competing for audience attention, and trying for the first time in their history to differentiate their voice. Consumers trust only the small percentage of sources they choose to consume, and distrust (and ignore) everything else. The days of every person in Australia reading from the same ‘trusted’ paper are, if not quite over, moving in that direction. And increasing regulation around enforcing corrections will make no difference to that, and I’m not convinced that it’s even desirable.

I had mixed feelings when reading this passage from the just-released Report of the Independent Inquiry into the Media and Media Regulation, page 295, para 11.67:

“If a publisher distributes more than 3000 copies of print per issue or a news internet site has a minimum of 15 000 hits per annum it should be subject to the jurisdiction of the News Media Council, but not otherwise. These numbers are arbitrary, but a line must be drawn somewhere.”

On the one hand, surprised and annoyed that this blog will itself fall under the proposed News Media Council’s purview; on the other hand, proud to be part of a major new ‘news media’ venture!

Firstly, on the 15k hits, the assumption is that this refers to page impressions – technically if a web page contains 15 jpegs, then the page and the jpegs will register as 16 ‘hits’, but one page impression.

Secondly, 15k ‘hits’ is not very many. A little over 1,000 a month. I achieve this despite rarely even bothering to link to this blog through my Twitter feed, although I do link to it in my bio. I have an enormous fifteen (15) subscribers. I’m not sure how many have added it to their RSS feed; I think it’s possible to find this out but haven’t looked into it. I get a large number of “hits” because an image I’ve used ranks highly in Google image searches for the term ‘elephant in the room’. I have no doubt that plenty writing in the ‘news media’ genre could achieve much more than 15k with minimal additional effort.

My question is this: why does a line have to be drawn anywhere? What is the difference between a blog that sees 15k hits (in practice, a tiny number) and a blog that gets much less? How does the News Media Council intend to verify these numbers? I suspect they think it’s pretty straightforward – it isn’t. The effective cost of doing so might more than outweigh the additional cost of bringing smaller blogs under the purview.

I think by far the trickier issue might be determining what makes something part of the ‘Australian’ news media. This blog – like anything else on a WordPress, Blogger, Twitter, Facebook or Tumblr domain – is hosted overseas. It doesn’t have an .au domain. At least the first half of it was actually written overseas, and small bits of it subsequently. How do you determine that it’s ‘Australian’? By where the author is when it’s written (what about foreign correspondents)? By where the majority of the audience is.

*sigh*

“In a speech/article/paper, the number of times the words ‘Big Data’ are used has an inverse correlation with the number of times actual data is introduced to support any arguments”

I’ve seen a lot of links to this piece from the Minimal Mac blog, ‘TV is Broken’:

She’s still confused. She thinks this is like home where one can choose from a selection of things to watch. A well organized list of suggestions and options with clear box cover shots of all of her favorites. I have to explain again that it does not work that way on television. That we have to watch whatever is on and, if there is nothing you want to watch that is on then you just have to turn it off. Which we do.

I then do what I should have simply done in the first place. I hook up the iPad to the free hotel wifi and hand it to her. She fires up the Netflix app, chooses a show, and she is happy.

This, she gets. This makes sense.

The thrust of the article is straightforward: the author’s toddler daughter watches most of her TV on non-linear on-demand platforms. She doesn’t like, and doesn’t understand, traditional scheduled TV where she can’t watch exactly what she wants when she wants.

I read this piece and was nodding along in recognition, if not agreement. My daughter Mabel, who is 2 (half the age of the author’s own daughter), has similar frustrations with linear TV. She watches 90% of all her TV content on my iPad. She can watch what she wants, when she wants, and – crucially – where she wants. If she is watching scheduled TV she gets (super) angry because it’s not always showing exactly what she wants, when she wants it, without interruptions.

The problem with the piece, noted by Twitter user @quietdiscourse, is the implicit line of reasoning: “my toddler is surprised by the functionality of (media form) therefore (media form) is broken.”

It is not surprising toddlers prefer their TV delivered on an on-demand basis rather than a scheduled bases. Toddlers prefer everything to be delivered on-demand – TV, bananas, tickles, stories. They hate having to put up with anyone’s schedule, and what’s more, they are intrinsically unable to appreciate any of the benefits of the concept of ‘schedule’ itself. Of which there are a few – a schedule allows for development of routine, eliminates surprise, provides a basis for going off-schedule where desired and, most importantly with TV,  a set-and-forget schedule ensures an event (i.e. a schedule of programming) will always occur with no human involvement whatsoever.

Put simply, toddlers do not watch TV like normal human beings. Before they were frustrated by the differences between on-demand IPTV and scheduled TV, they were just as frustrated by the differences between DVDs and scheduled TV.

My daughter watches TV like this – sits 3 inches in front of the screen and watches Peppa Pig, a 4-minute program, over and over. And over. And over. AND OVER. The ABC iView on-demand app saves 3 broadcast episodes of Peppa Pig. On Saturday mornings, the main TV opportunity, my daughter will watch these 3 episodes twice, sometimes three times, in immediate succession, giving maybe 40 minutes of TV watching. She is frustrated by scheduled TV, but mostly because it doesn’t show Peppa Pig for 6 hours straight.

The people who create TV schedules do not, by and large, create these schedules for audiences like her. They create schedules for normal people, who like to watch a range of diverse programming, with wide appeal. I think that while there’s clearly evolution going on with on-demand content, I believe scheduled TV will persist.

Anyone who claims, as many do, that, since a small number of people are now doing [new media form] that “[older media form] is DEAD” simply haven’t been paying attention. 

Media forms, by and large, do not go away. The exception is formats where there is a like-for-like replacement, like VHS to DVD and cassettes to CD.

The first thing you notice when you look at the chart on the left (from the media agency Carat, and showing time spent with media forms) is that there are a lot more colours on the right-hand side of the graph than on the left. All these new media forms come along, but the old ones don’t go away. They just take a slightly narrower slice of an exponentially growing pie.

For audiences, these older media forms evolve, as the role they perform in the audience’s lives changes. Most people used to get newsreels from the cinema, every week; when TV came along, people could get their news there; cinema didn’t die, however, it evolved into the pure entertainment form it largely still is; as people can get comparable experiences on 55″ TVs at home, cinema might evolve further into a more social, performative activity (who knows, really? Certainly not any futurists I’ve been paying attention to).

The simple fact is, TV still performs an important role in people’s lives. It’s the entertainment of last resort – the thing you do when you’re not doing anything, when even browsing Facebook is too much effort. I am a big believeer in on-demand content. I own an Apple TV and use it almost every day. But browsing content on the device is still a comparative chore when set against scheduled TV, and I’m yet to see an on-demand TV platform that overcomes this. You need to know what you want to watch, when you want to watch it, and adults have more complicated brains than my 2yo daughter.

Before someone tells you scheduled TV is dead, point them to the following key facts [click links for sources where available,  some are pdfs]:

• 99.7% of Australian HHs own a TV.
• 14.2 million Australians watched TV every day in 2011, the highest daily penetration in 6 years.
• Australians spent 3hrs 10mins every day with TV in 2011, a number which hasn’t moved in 4yrs, and which dwarfs any other media type.
• More than 3m TV panels were sold in Australia in 2011, with three-quarters of that non-IP connected [GFK figures, no source]. My assumption is the majority of these 3m(ish) households making new investments in TV technology is to watch scheduled TV. Furthermore, as price erosion of TV technology increases, roughly two-thirds of HHs now have more than one TV, a number which continues to grow.

You cannot look at the above numbers, which are pretty staggering, and say with a straight face that TV is dead, either now or in the short- to medium-term. Apart from toddlers, who have always felt this way, everyone else likes TV.