McKenzie Wark on Tue, 13 May 1997 04:05:26 +0200 (MET DST)

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<nettime> nettletter from Sydney

I've not quite kept up with the fantastic smorgasbord of stuff
pouring through the nettime list lately. I've just returned to
Sydney Australia from New York, so i've been busy trying to 
pay my bills and readjust. Certain my allergies kicked back in.
I was living in Brooklyn, New York, where nothing lives that
isn't either human or rodent, so i could breathe quite freely.
Sydney has too many damned trees.

There are more signficant differences this time, too. In
American media culture, the key note was a certain strained
optimism. Pictures of the President whitewashing walls, or
talking about early childhood education. Quite feeble gestures,
but at least the mood was: built that community! educate those
kids! A modest optimism within limits.

I come home to Sydney and the two things dominating the headlines
concern the fate of the last liberal newspapers left in the 
country, and the rise of a far right populist political movement.
The mood is grim, as if there were some pervasive emergency that
required a curtailment of liberty. Always a dangerous moment.

Most folks know that the media behemoth News Corporation started
out in Australia -- Rupert Murdoch's key family companies are
still registered in the provincial capital of Adelaide -- but 
few people realise quite how he accumulated so much media power.

Australia is a continent as big as the United States with a 
population more like the size of Holland's. Hence transport and
communication issues are very important for the industrial
development of the country. Even more than in the United States
and Canada, the national polity is a side effect of railways
and telegraphy. 

But back to Murdoch: restrictions on foreign ownership meant that
as large media concerns developed economies of scale, they
gobbled up local and regional media. It got to the point where
there were only three media giants left standing -- Murdoch's
News Limited, which controls 70% of newspaper circulation in
the country; Kerry Packer's Consolidated Press Limited, which
has a stranglehold on magazine publishing and extensive television
interests, and the Fairfax group, which owns the quality broadsheets
published in the two main cities, Sydney and Melbourne, and also
publishes the national business daily, Australian Financial Review.

Because of restrictions on foreign ownership, monopoly pressure
forced consolidation among local players. Various kinds of 'cross
ownership rules' prevent any one mogul from accumulating too much
media power, but these rules have been altered again and again in
sweetheart deals between media companies and governments. The foreign
ownership ceiling was lifted briefly to allow Canadian media
mogul Conrad Black (who owns the English Telegraph) to buy 35% of
Fairfax. But the others had the clout to prevent government from
lifting that percentage and giving Black full control, so he sold
off his interests and left.

Now Packer is pressuring the new conservative government to lift
cross media ownership restrictions, so he can buy control of Fairfax. 
He would then have control of the major dailies in the two main
cities, and he would also have interests in one of the three 
commercial television stations in those cities. A frightening 
prospect. Packer has substantial interests in the new casino in
Melbourne, for example, along with many establishment figures behind
the ruling Liberal party. The Age, the liberal Fairfax paper in
that city, has been highly critical of the casino. Rumour has it
that when Packer gets control of Fairfax, heads will roll in the
office of the Age. And there will be nowhere for those journalists
to go -- except to Murdoch papers. The old three corner contest
is about to become a duopoly.

I mention all this, partly because i see the conditions being set
up now in many small formerly communist countries for just such
a scenario, and i see the same debates. I'm inclined to think that
diversity of wonership, including foreign ownership by multinational
media conglomerates, is preferable to a cabal of local oligarchs.

One of Packer's arguments for why he needs to control Fairfax is 
so he can immitate Murdoch and become a global media players. Of
course, Packer could have done this years ago. His was a more solidly
based media empire to begin with. Packer's main overseas interests
to date are in Asian horse racing. His main business talent, 
arguably, is in getting concessions out of the Australian government.
He's been partiuclarly successful in getting state governments to
give him gambling concessions, for example. But you never know --
there might soon be another Australian player in global media.

>From the profits from the quasi-monopoly operations of Australian
media, Murdoch built the war chest with which he built a global
empire. He has always been pretty honest about the editorial policies
of his media assets. If he decides to run on a certain issue, that's
an order. He supported the Labor party in Australia from 1971-1974,
then viciously against it in 1975 -- and ever since he's backed
whoever was winning. He did the same in England, switching alliegance
at the last election from Tory to Labour. 

Its curious that in attempting to justify its desire to give Packer
what he wants the current Liberal government used the argument that
media concentration doesn't matter any more, because of the internet.
This is where we see what a crock the libertarian position on the
internet actually is. Even if the internet becomes the major means
of distribution for news, economies of scsle will still operate.
Whoever has the most subscribers will have the most revenue, either
from subscriptions or advertising, and can then afford to spend the
most money of news gathering. All things being equal, whoever spends
most on newsgathering will attract the most subscribers -- and as the
screw tightens, media becomes a monopoly industry. Its happening on
a national scale, and witl existing media forms. I see no reason
why the internet will be exempt.

Netletter #12
McKenzie Wark
Sydney, 13th May 1997

"We no longer have roots, we have aerials."
 -- McKenzie Wark 

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