Mediaboss Marketing

The proposed changes would prompt an industry reorganisation between television networks, radio stations and newspapers. Photo: Louie Douvis

Communications Minister Malcolm Turnbull has upset Rupert Murdoch's News Corporation and its pay television joint venture Foxtel by proposing a cherry-picked media reform policy that has driven a rift through the industry.

Mr Turnbull's recommendation that the governmentabolish Keating-era ownership restrictions has beenwelcomed by a slew of media executives including WIN Corp owner Bruce Gordon and Greg Hywood, the chief executive of Fairfax Media, owner of The Age and the Sydney Morning Herald.

The proposed changes would prompt an industry reorganisationbetween television networks, radio stations and newspapers, enabling them to better compete with unregulated digital entrants such as Google and Netflix.

But News Corp and Foxtel were blindsided by the recommendations, which Mr Turnbull put in private to Prime Minister Tony Abbott last week seeking approval to put the policy to cabinet.

Advertisement

Mr Turnbull told Mr Abbott that he had found a broad consensus in the industry for the abolition of the "reach rule", which stops the metropolitan free-to-air networks, Nine, Seven and Ten, merging with regional affiliates by limiting audience reach to 75 per cent. He also said there was broad industry support to scrap the "two-out-of three rule", which stops any one group owning more than two of a newspaper, commercial TV licence or radio licence in a major market.

However, he denied Foxtel's request to show more sporting events at the expense of free-to-air television, a move that would be unpopular with the electorate. He also proposed changes that could mean Foxtel is effectively forced to pay commercial free-to-air TV networks a fee to retransmit their signals.

News Corp Australia chief executive Julian Clarke said he agreed with most other media bosses that cross-media ownership restrictions were outdatedin the digital age.

But Mr Clarke added: "We do not support anychange if it involves cherry picking some policies and only changingthese."

Read more here:
Communications Minister Malcolm Turnbull's media reform plan causes industry rift