CONVERGENCE CRISIS

Lisa Creffield, Sky News Business Reporter

8 April 2011

Technology has wrought huge change in media content, consumption and access. It's changed business models, viewing patterns, and now - in the words of the Australian government - "the NBN will transform the delivery of content in Australia, allowing viewers to access virtually limitless content from all over the world."

And so the government is planning a major review of its media policy, the "Convergence Review". A big challenge with convergence is the increasing irrelevance of national borders and the futility of national governments attempting to regulate and restrict what is now an international - and internationally accessible - media.

The trend now is to cut out the middlemen - which in this context include Australian broadcasters and content re-sellers, such as ISPs desperately trying to evolve beyond dumb-pipes - and instead for content creators to sell directly to consumers, wherever they are.

Currently many consumers already bypass the middlemen via piracy, getting content mainly for free. Popular shows are torrented or hosted on foreign servers. VPNs are used to access geographically IP-blocked content in other countries. Satellite channels are illegally re-streamed over the internet, accessible for a small fee.

But there will soon be many legitimate and easier ways to do this: opening viewership up to the older, less tech-savvy demographic.

One example is the BBC's plan to create an international version of its iPlayer "catch-up TV" app, costing overseas users a figure expected to be "definitely fewer" than ten dollars a month.

BBC director general Mark Thomson says it will allow the BBC to "sell directly to consumers" without shows being rebranded or reformatted. This often happens when UK TV programmes are bought by international broadcasters, who need to make space for ad breaks, or make cuts for censorship reasons.

But where does that leave those international broadcasters who have paid the BBC for the local rights to these shows?

And where does it leave the Australian government, trying to set policies for "maximum consumer choice" and "community standards" (classification ratings) and "spectrum" and encouraging "Australian content"?

For it's not just the BBC. Services such as iTunes already offer premium international shows and films, as do gaming consoles such as the Xbox and Playstation, that are in direct competition to Australian broadcasters. This week's Media Week has a two-page advertisement from Channel Nine, promoting UK comedy Come Fly With Me as a "big new series arriving soon". The entire first series is already on iTunes. (It's also torrented all over the internet, and all over Usenet newsgroups). Even live sport isn't sacrosanct, thanks to the re-streamed satellite channels.

The choice is already out there. People don't need to be given it, they can just take it.

The Economist raises another red flag, the ageing of viewers, listeners and readers. In the US every network except Fox had a median age of 50 or over in 2010. Younger Americans have clearly gone online, it seems unlikely they'll ever return to conventional channels even if they start streaming over the internet. And soon, older people will follow them.

Catch-up services and on-demand TV are nothing but the final coffin nail for conventional advertising models. There are viewers who will actually wait to download a cleaned-up sitcom, rather than watch it immediately riddled with adverts.

As The Economist notes, consumers seem to tolerate fewer ads, and rates are low:

"When digital media were the province of youth, this did not matter much: media firms could argue that they were at least promoting their brands to young people, while deterring them from piracy. But let the middle-aged and the old, too, discover they can have entertainment for nothing? That would not do."

But they will discover this. And they will discover that there is a universe of content out there that they can access on their own terms and at their own convenience, irrespective of government policy and regulations.

Julian Thomas from Institute for Social Research at Swinburne University asks what does the government really want from its review of media policy?

"If audiovisual news and entertainment are readily accessible from all kinds of sources through the internet, what is the point of sticking with our complicated media rules, where policy outcomes depend on a regulatory connection between a particular mode of communication (for example, transmissions using certain parts of the spectrum) and a certain kind of material (for example, children's TV)? A connection that began as an engineering contingency seems to have evolved into a regulatory convenience (or, now, a lack of convenience)."

What is the aim? Is it control, is it encouraging competition, is it protecting an industry with a dying business model? The government itself claims it:

"...aims to identify appropriate regulatory, industry or other tools and responses to ensure an effective governance framework that fosters competition, encourages a diversity of voices and protects Australian stories, community values and citizens' rights."

Grandiose aspirations but ultimately pointless. The internet already does all this by itself. And it does it more effectively, efficiently and interactively than TV networks and traditional media ever can. WikiLeaks, Anonymous, GetUp, YouTube, Reddit, Twitter: these are the channels of the future. This is the true "new media", already digital, already converged, and far beyond the regulatory grasp of Australia or any other government.

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