Journalists race to be first with the news. A new report calls for a stronger umpire to stop this becoming a race to the bottom for journalistic standards. Competitive markets are in theory a great thing. In reality though, that's not always true.

by Mike Seccombe

In theory, when there are multiple suppliers of a good or service competing, prices come down close to the cost of production, innovation is encouraged, and consumers benefit.

Now for an example, the reality. The Leveson Inquiry into the culture, practice and ethics of the press in Britain, is often originally referred to as the "phone hacking inquiry".

Leveson is far more than that now, though. Hardly a week goes by without some new insight into the criminal conspiracy that is the Murdoch tabloid press in Britain. Phones and emails hacked, public officials of all kinds corrupted by secret payments, police and politicians compromised.

This is what unfettered, unregulated competition can bring; the Murdoch tabloid papers in Britain are so particularly awful, in large part, because the other, competing tabloids are also awful, and the war between them eventually saw all semblance of journalistic ethics sacrificed.

In Australia, too, we see the downside of competition in the media, although it is most obvious in areas other than newspapers.

As the host of the ABC's Media Watch program, Jonathan Holmes, pointed out in a piece on The Drum at the end of last year: "If you were looking for media excess in Australia, for behaviour that paralleled the phone-hacking and blagging and bugging and bribing we've seen revealed so graphically this year in the UK, you would look first at the Australian media markets that are ferociously competitive: the weekly celebrity magazines, and the tabloid television "current affairs" shows that battle it out daily in our homes," he wrote.

"For all the years that Media Watch has been going, the worst invasions of privacy, the worst examples of bullying the non-media-savvy, the worst cases of misrepresentation and character assassination, have come from those programs, rather than the tabloid papers."

But back in September 2011, when the federal government set up its own inquiry into the media, the focus was on print, both because of what was beginning to emerge as critical through Leveson, and particularly since members of the Labor Government were convinced the Murdoch papers were out to get them.

Thus the Independent Inquiry into the Media and Media Regulation, the so-called Finkelstein Inquiry, was mostly directed at newspapers. And there the problem in Australia is not excessive competition, but excessive concentration.

The inquiry has now reported, and while the focus is still on print, its findings go to all forms of media. And that is all to the good.

First to the papers.

The report provides a fascinating insight into the development of a print media industry unique in the developed world.

In 1923, it notes, there were 26 capital city dailies and 21 independent owners. By 1960, there were 14 and seven respectively. Today, there are 11 titles and just three owners.

Measured by circulation, News Limited was by far the largest, with 65 per cent of total metropolitan and national daily papers. Fairfax had 25 percent of all metro/daily circulation, and WA Newspapers had 10.

In a study of 26 nations, Australia's newspaper market was found to be by far the most concentrated. It was the only country where one owner controlled more than half of total circulation.

"With a share of 86 per cent, Australia also ranks highest by a considerable margin when considering the share of the top two companies," says the report.

And those print owners are doing it tough, although not as tough as some would have us believe.

Compared with the United States, where the newspaper market contracted by 30 per cent between 2007 and 2009 in the face of recession and growing competition from the Internet, in Australia, it had shrunk only about two per cent.

Things were more dire in terms of advertising revenue: the papers' share of the ad market declined from more than 43 per cent in 2001 to just over 31 per cent in 2010.

Nonetheless it concluded the Australian press "is in no immediate danger of collapsing".

The Finkelstein Report begins to get really interesting, though, 103 pages in, at chapter four, headed Media Standards, which begins with outtakes from the evidence of representatives of the big three newspaper groups, all arguing that newspapers are sufficiently accountable through the current system of self-regulation, and there are no problems with integrity, accuracy or bias in their reporting of events.

The chapter then goes on to show that most people don't agree with them.

Drawing on a "substantial body of evidence", derived from numerous public opinion polls over 45 years, the report shows "significant concerns" among the public over media performance.

One was their confidence in journalists. The most recent survey (in 2001) had them held in lower esteem than all but three of 30 occupations, ahead of only real estate agents, advertising people and used car salesmen.

The credibility of news organisations overall was similarly low. Multiple surveys over 25 years found a majority of people did not trust newspapers. Television (ironically, in consideration of Jonathan Holmes's words) was more trusted, and the ABC far more trusted than commercial TV.

Then there was the matter of political bias. The report noted there was a public perception of persistent bias against the Labor Party.

The chapter quotes the former chief executive of News Limited, John Hartigan, rejecting suggestions of bias against the Labor Government, saying such claims were an insult to readers, who were capable of making up their own minds.

Later, though, the report goes on to instance examples of bias. One in particular was compelling: a December 2011 Australian Centre for Independent Journalism study of the way climate change stories were reported in 3,971 articles. It found negative coverage of government policy outweighed positive. In Fairfax papers, the balance was reasonably close 57-43 per cent; in News Limited papers, though, it was 82-18 negative.

There were other case studies cited.

Apart from outright bias, there was also evidence of plain old slack reporting. A 2010 study by Crikey and the Centre for Independent Journalism found that in a one-week period in 2009, 55 per cent of news reports in major metro papers had been "driven by some form of public relations".

Of 2,203 articles examined 24 per cent were largely republished press releases "with little or no additional journalistic work."

But perhaps the most telling of all the survey evidence referred to in the inquiry's report was one commissioned by journalists themselves through their union, the Media, Entertainment and Arts Alliance which found 53 per cent of respondents felt constrained not to criticise the organisation for which they worked, and 38 per cent said they had been instructed to "comply with the commercial position of the company".

About one-third of respondents felt obliged to take account of the political position of their proprietor when writing stories.

The inquiry's delving into the history of the self-regulatory regime under which papers operate was also illuminating. It illustrated clearly that the moves towards establishing some kind of ethical framework - through a journalists' code of ethics to govern practices, and an Australian Press Council (APC), to adjudicate breaches - had been driven by journalists and resisted by proprietors. News Limited in particular had been problematic, dropping in and out of the Press Council depending on its satisfaction with rulings. The report found that, for the most part, and particularly under its current chair, Julian Disney, the Press Council had done the best with what it had.

But its effectiveness was limited, and "perhaps the most compelling evidence" of that came from the Press Council's own evidence, and that of Disney.

That evidence highlighted the Press Council's toothlessness. It not only lacked binding investigative powers, but its budget of $1 million a year - provided by newspaper owners - was woefully inadequate. Furthermore, the council had insufficient powers of enforcement "including an inability to direct where and how APC adjudications should be published and to direct the publication of apologies, retractions or corrections as the case may require".

The report also criticised "the appearance of a lack of independence" among publisher representatives on the council.

"While self-regulation via the APC has played an important role in maintaining standards of journalism, few people outside the media contend that self-regulation, or at a minimum, the current form of self-regulation, is adequate," the report says.

"At the same time, the clear impression is left that the media will not tolerate, let alone finance, an effective industry regulator."

But it was not just the print media and its regulator that the Finkelstein inquiry condemned.

In "marked contrast" to the self-regulation of print media, the report noted, "television and radio are subject to extensive statute-based regulation."

The trouble was that regulation, through the Australian Communications and Media Authority, was not working.

The inquiry found all the complaints one usually hears of government bureaucracies, specifically that "ACMA's complaints handling procedures and enforcement provisions have structural limitations that prevent speedy disposition of complaints."

Best to remove ACMA's ability to police news and current affairs standards.

The report recommended the establishment of a News Media Council to oversee the enforcement of standards of the news media, taking over the roles of both the Press Council and ACMA.

The suggested structure is that members be appointed by an independent body, possibly comprising three senior academics appointed by the universities, the Commonwealth Ombudsman and Solicitor-General.

They would then appoint an independent full-time chair - a retired judge or eminent lawyer has been suggested - and 20 part-time members, half from the public at large, and half media representatives, excluding managers, directors and shareholders of media organisations.

And that body would oversee all media - any print product with a per-issue run of more than 3,000, all electronic media news and current affairs and any news internet site which received more than "15,000 hits per annum".

It would have teeth. It could demand corrections, withdrawals of articles, a right of reply for a complainant, and the power to force media outlets to publish its determinations "when and where" it ordered.

And the new body would have recourse to the courts to have its orders enforced.

Well, it hardly needs to be said the publishers were appalled. Appalled enough to be quoted in one another's publications. The retired News Limited boss John Hartigan, for example, was quoted, along with Fairfax's chief executive Greg Hywood, in Fairfax's Australian Financial Review.

Typically, the News Limited man's quotes were more colourful.

He spoke of a government "jihad" against News Limited. He said it was an "outrage".

The publishers are now talking about increasing funds to the existing press council. A little late, perhaps. Fairfax, News Limited, APN News and Media and West Australian Newspapers are reportedly to meet in Sydney soon, with the Press Council to thrash out a response.

More interesting, though, is the response of Disney, who has several criticisms of the report's proposals.

Even before Finkelstein's report was commissioned, he says, the Press Council had proposed an independent council to cover all media.

But, he said, that would need three to five years "to gear up".

It would be better, in the short-term, to strengthen the Press Council so it could oversee print and online media.

He doesn't favor full government funding of the new body. And he is concerned any new regulator not be "too legalistic" for fear of making it inaccessible to complainants.

That said, he is all in favor of a body to oversee all the media.

And part of the reason for that is the concern that media competition could drive journalistic standards down.

Not competition between papers, as in Britain, but competition arising from the pressures put on newspapers by new media.

"Where I think that kind of competitive pressure is emerging is in - and from - the internet," he said.

"The pressure to be first with news, and the pressure to be particularly flamboyant, is definitely having an impact on the print media. I see it myself and I hear it from people I know in newspapers."

Disney further suggested that the "comment streams" encouraged by traditional media - not only newspapers, but on radio talkback and even the ABC online - mostly did not represent democracy or freedom of speech in any positive way.

Too often they were simply "long exchanges of vitriol" which deterred serious people from contributing.

That's why, Disney says, he "always warns against the complacency" of people looking at what has gone down in Britain and saying, "Oh it's just the red tops, that can't happen here."

Competition, in the absence of strong regulation, can too easily become a race to the bottom.

The views expressed in this article are the author's own and do not necessarily reflect Fair Observer’s editorial policy.

 *[This article was originally published by The Global Mail on March 6, 2012].