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Select Committee on the Future of Public Interest Journalism
11/07/2017
Impact of search engines, social media and disinformation on journalism in Australia

McCARTHY, Ms Justine, Legal Counsel, Regulatory and Business Affairs, Seven West Media

MITCHELL, Mr Ross, Director, Broadcasting Policy, Free TV Australia

WALADAN, Ms Sarah, Head of Legal and Regulatory Affairs, Free TV Australia

ACTING CHAIR ( Senator Paterson ): Welcome. I understand information on parliamentary privilege and the protection of witnesses has been made available to you, as has information on the giving of evidence to Senate committees. I now invite you to make a short opening statement and, at the conclusion of your remarks, I will invite committee members to ask questions.

Mr Mitchell : On behalf of broadcasters represented by Free TV Australia, I would like to thank the committee for the opportunity to be present here today.

Commercial free-to-air television is the trusted face of Australian news and current affairs, and our members are proud of their commitment to public interest journalism. Free TV members employ hundreds of journalists throughout Australia, producing over 430 hours of news and current affairs related programming each week. Over 11 million Australians tune into at least one of the commercial free-to-air broadcasters' news programs each week. Our members employ high-calibre, award-winning investigative journalists who play a key role in providing the checks, balances and transparency that are vital to a healthy democracy.

So central is our commitment to accuracy and fairness in news and current affairs programming that we have enshrined the obligations in our code of practice. This sets us apart from the purveyors of fake news. Our commitment to fairness and impartiality is set out in black and white and is enforceable by the ACMA.

But sustaining the volume of public interest journalism is becoming increasingly hard, owing to the changes we are seeing in consumption and advertising, largely driven by huge foreign media tech companies like Google and Facebook. Over the last 10 years, online advertising revenue has grown by 460 per cent in real terms, while TV advertising revenue has fallen by 22 per cent. This has a direct impact on our capacity to keep supporting Australian jobs and producing high-quality news services.

We haven't sat still in the face of this tsunami. Our members have developed new, feature-rich offerings to meet the changing expectations of our audience. But, in order for this transformation to continue, our members need capital and scale to invest in their businesses. That's why we as an industry strongly support the government's media reform package. The existing media ownership rules are outdated, belonging to a pre-internet era. The ownership restrictions only apply to television, radio and printed local newspapers, completely missing the fact that the world has changed. In the current media landscape, these outdated rules only serve to deny Australian media companies access to scale and capital, both of which are essential to continue developing products and services and remaining competitive against the tech media giants.

Just as important is removing the world's highest broadcast licence fee. This fee was essentially a superprofits tax in an era when content could only be delivered over broadcast spectrum. Abolishing the licence fee is critical to the industry continuing to invest in high-quality local content and regional and local news. Both these measures are important tools in ensuring that commercial television broadcasters are able to continue to produce the news services so many Australians rely on.

Free TV believes this committee should be looking at three distinct approaches to support Australian journalism. The first is ensuring that the current media providers are placed in the best possible position to continue to invest in quality journalism and to compete with the unregulated online providers. That is why we highlight the importance of passing the media reform package currently before the parliament.

The second is reviewing other aspects of our regulatory scheme to ensure it does not amplify the imbalance between the creators of content and the money made by platforms off the back of it. One area that warrants particular attention here is copyright laws. It is important to remember that, before you can search for a news report on Google or share it on Facebook, a local media company has had to invest in creating that content. This involves having journalists on the ground, camera operators and sound techs to put the stories together. The advertising revenue generated by both Google and Facebook is made possible by the content they are able to access. In many cases, this is journalistic content. But these companies do not pay for the content from which they earn their revenue, nor do they invest in creating or employing journalists.

This is why we must seriously engage with the debate around copyright laws in this country. Google and Facebook are making a strong case for weaker copyright protections for content creators. This is nothing more than a naked strategy to gain access to more free content against which to generate revenue. This committee should instead be looking at whether we need to strengthen our copyright protections in order to encourage online platforms to make fair payment for the content they profit from.

Another area is the pricing of broadcast spectrum. The media package currently before the parliament locks in pricing for a five-year period. This will be reviewed, and we need to ensure that in this process future pricing takes into account the public interest benefit of ongoing free-to-air television services.

Thirdly, we support calls to investigate further the options for tax measures to incentivise local journalism. The two measures that are most commonly raised are taxes on Google, Facebook and others which would generate revenue to support local journalism coupled with some form of tax incentives for those companies who produce it. It is clear that we must make the changes necessary for a strong and viable local media industry. The future of a diverse range of uniquely Australian journalistic voices depends on it. I thank the committee.

ACTING CHAIR: Thank you very much.

Senator XENOPHON: Thanks very much for your submission and your opening statement. I just want to go to the issue of your submission saying that supporting the media reform package will ensure companies can invest and transform their businesses, so presumably that would mean, more likely, mergers in the business in the media landscape.

Mr Mitchell : There are two elements of the package that I would highlight to the committee, which are equally as important as each other. That is the reduction in licence fee and the imposition of a spectrum tax closer to international best practice. That release of capital is important in itself for the ability of our broadcaster members to invest in their businesses.

Senator XENOPHON: Could we just pause there: that is in part to offset the changes to gambling advertising as well, is it not?

Mr Mitchell : The two are not directly linked but they are part of the same package.

Senator XENOPHON: But how much do you think Free TV will be losing from the changes in gambling advertising?

Mr Mitchell : Free TV hasn't actually got a number on that to share with you today.

Senator XENOPHON: But it would be less than—that either means you don't have the number or you don't want to share the number. Does that mean that—

Mr Mitchell : Luckily enough, Senator, the two are actually the same thing today.

Senator XENOPHON: Can you say this though: is it fair to say that the amount of revenue that may be lost as a result of the changes to the gambling supports betting rules will be less than the amount of the licence fee reductions?

Mr Mitchell : The answer to your question is yes, but the points I would make are that we see the changes in the licence fee in their own right, because for many years we paid the highest broadcast licence fee in the world. It existed in a time when spectrum was the only game in town for delivery of video content. We're now living in a world where over 40 per cent of that spectrum has been sold off and is being used to provide competing services. In its own right that licence fee stands, because it was a complete outlier in terms of world public policy in broadcast space to bring us from 115 times the USA and closer in line with international best practice. So, quite aside from other elements of the package, we see the justification for that licence fee as standing on its own right. We thank you for your support on that as well.

Ms McCarthy : Obviously, it is fair to say that yes, the gambling restrictions will cost us significant amounts of revenue, and that will partially offset some of the benefit of the licence fee.

Senator XENOPHON: Sure, I understand that. The third point on page 7 of your submission is:

Competition laws and other media ownership restrictions remain to protect against any substantial lessening of competition.

But you have said that this will enhance public interest journalism, I think, broadly. The fear that journalists have expressed to me from both the print and electronic media from Free TV is that this will inevitably lead to a consolidation, and that consolidation will lead to more retrenchments in media, more redundancies and fewer journalists actually reporting the news with journalists doing more with less and having to cut corners, particularly in relation to investigative journalism. That's if nothing else is done, if there aren't any other protective mechanisms to deal with it. You have made reference to tax measures. You have made reference to tackling the Google-Facebook tsunami. What do you say in specific terms could lead to more journalists working in free TV doing those important investigative stories, delivering the news? What sorts of specific tax measures do you think ought to be implemented and how would you envisage that? The devil is in the detail here, particularly given the negotiations that are occurring between the crossbench and the government in terms of media ownership laws.

Mr Mitchell : Can I start by just addressing some of the preamble to your question there. Concerns around consolidation, I understand, are genuinely held by lots of people in this debate, but I would make the point that that consolidation can happen in two ways. It can happen in an untidy way, where people are forced to the wall, as it were, and you end up with news outlets cutting jobs and services. That is one way that you can lose a diversity of voices, and that is the track that we are on at the moment.

Senator XENOPHON: Or a television network goes into administration.

Mr Mitchell : Or, indeed, a television network goes into administration—correct. You can either keep going down that path or you can take the steps you need to take to have a strong and vibrant local media sector. I understand where you are trying to take me with the question, so I will not continue to bang on about the media reform package, although that is crucial in that process.

Senator XENOPHON: But the media reform package could include amendments that deal with how you give appropriate tax breaks to media organisations large and small to encourage public interest journalism so that, instead of looking at retrenching journalists, you are actually looking at taking them on.

Mr Mitchell : Yes. Certainly there are other areas of our businesses that benefit from things like tax offsets and producer offsets, but we have not got for you today a fully worked-through model about which we could say, 'Here is our preferred way of doing it.' We are more than open to the conversation between now and when the report is finalised around what those tax arrangements should be. From our perspective, the principle should be a model that is applicable to all sides of the media industry, regardless of their business model, as it were. Some of the media commentary has been around: do you have a subscription tax deductibility and apply it at that consumer level? That one would be of a slight concern to those businesses that don't run a subscription model—ourselves and people like community papers. So we would be looking, as part of the conversation we may well have with you over the next few months, to make sure that it is at that level where it is agnostic to the media industry that you're looking to support.

Senator XENOPHON: Sure, but can I put this to you? From my point of view, there is some urgency. Fortunately the chair is Senator Paterson, not Senator Dastyari, because he would probably take issue with this, but this committee has important work to do. It will report at the end of the year. Is that right?

Mr Mitchell : December.

Senator XENOPHON: In December. But I expect that there will be some considerable negotiations between the crossbench and the government which will raise issues of appropriate tax breaks, appropriate mechanisms as to how you encourage public interest journalism, including definitional issues of what is public interest journalism. Doing a two-hour special on the Kardashians may not qualify as public interest journalism, unless they are running for public office. I'm not sure. They would probably win! But, perhaps you could consider mechanisms and formulas for what will encourage public interest journalism so we can have that diversity of opinion and whether indeed there ought to be, in competition law, a diversity-of-opinion test in terms of merger-and-acquisition laws and issues of market power so that there is that diversity of opinion. You have got News Corp, which runs a Phillip Adams column as well as Andrew Bolt columns—one more than the other, but you can have, within a media organisation, quite diverse opinions.

Mr Mitchell : For sure.

Senator XENOPHON: I genuinely ask that you provide that to the committee perhaps in the next couple of weeks, because that might be quite relevant to not only this committee but also a broader public policy debate as to what would work. I do not know whether other members of the panel want to add to that. In other words, newsrooms are shedding staff. It is getting tougher. You talk to journos in the electronic print media and they are doing it really tough and it is pretty disheartening for a lot of professional journos. How do we turn that around? It seems to me that Google and Facebook have actually ripped all the revenue away from free TV. Has there been an estimate done of what impact that has had on free TV generally?

Mr Mitchell : Certainly we have advertising data that is publicly available. If you at the last 10 years, in terms of a share, free TV advertising revenue went from a share of about 27 per cent of advertising to, in 2016, 22 per cent. The telling stat is the online, which was at 8½ per cent in 2006 and is now at 50 per cent. So 50c in every dollar that is spent in advertising in this country goes online.

Senator XENOPHON: But how much of that does free TV do?

Mr Mitchell : In absolute dollar terms, in 10 years we have gone from about $4.2 billion annually to a touch over $3 billion. Online has gone from $1.3 billion to over $7 billion in 10 years.

Senator XENOPHON: And that $4.2 billion to $3 billion is not inflation adjusted, presumably?

Mr Mitchell : No; it is.

Senator XENOPHON: It is inflation adjusted?

Mr Mitchell : Yes.

Senator XENOPHON: But it is still a significant drop of about—

Mr Mitchell : That is in 2016 dollars.

Senator XENOPHON: So it still about a 27 per cent drop in revenue. That does not make for a stable business model for free TV, does it?

Ms McCarthy : That is right. What is really important to bear in mind is that audiences for news have not declined by anything like that level. While there have been small declines as people are consuming some content online, the demand for television news remains very high. It is the advertising revenue to support that model that is moving online.

ACTING CHAIR: Do you have figures on news audiences over that same time frame, for example?

Ms McCarthy : We do not have them to hand.

Mr Mitchell : We are very happy to take that on notice.

ACTING CHAIR: That would be helpful; thank you.

Mr Mitchell : They are easy to come by; it is just that we do not have them right in front of us. Apologies for that.

Senator XENOPHON: We heard evidence earlier today about issues to do with click farms and robotic activity—click farms sounds like something to do with battery hens—and computers rather than real people looking for ads. We heard about ad fraud, where no-one is actually looking at it but they are pumping up the figures—pumping up the tyres; well, they are actually pumping up imaginary tyres. At least with ratings figures you get a pretty good idea and you know how many eyeballs are looking at something. What do you say ought to be done with that sort of ad fraud with some of the online advertising that we are seeing?

Mr Mitchell : TV is a medium where your ads are 100 per cent viewable 100 per cent of the time. That is the primary benefit of bringing your advertising spend to TV. You are never sure of the viewability of your online ads or what they have been placed next to. I think that has been an issue that has been around in the news over the last month or so. Beyond that, it is difficult for me to give advice to the committee on what can technically be done on matters of which I am not a technical expert.

Senator XENOPHON: Just in broad policy terms, you may want to take that on notice. You may also want to take on notice whether Free TV would generally support measures to tackle head on—and it might be that Australia is a leader on this internationally—the issue of ad fraud and click farms. So could you look at that?

Mr Mitchell : Yes.

Senator XENOPHON: You may want to take on notice the question, in broad policy terms, of whether free TV would generally support measures to tackle head on the issue of ad fraud and click farms. Going to the issue of fake news, if a TV network broadcast something that is fake news, you have got the ACMA, and there are sanctions. If it is bad enough, you can actually have licence conditions being placed on you or, I suppose, in a worse case scenario, lose your licence. I could not imagine that, but you do have that Damocles sword over your head if you do something wrong.

Mr Mitchell : That is precisely right.

Senator XENOPHON: But online, you are competing with fake news. What do you say ought to be done to deal with fake news?

Mr Mitchell : First and foremost, you need to have a strong traditional media sector that is capable of calling it out for what it is. I had a good look through the submissions from both Google and Facebook to try and get a better understanding of the actions that they are taking to address this issue. In the case of Facebook, they are talking about users reporting or upskilling people to be able to parse information and question what they are reading in a better way. Facebook further suggested that they can tweak their related articles, so once you have read a story, fake or otherwise, you then have offerings of alternative points of view. The fundamental problem with all of that is that there really is not an alternative point of view to a 'Hillary Clinton has got tongue cancer' story or 'There is a bunker full of Hillary Clinton votes in a bunker in Ohio'.

Senator XENOPHON: Did she have a stroke as well?

Mr Mitchell : I could keep going on them. The first point I would make is that you need a strong and vibrant traditional media sector to call that out for what it is, if Google and Facebook are unwilling to tackle the issue themselves. Simply relying on Australians to parse the information themselves, to question it and to do their own research as to whether what they have just read is fake news or otherwise is ignorant of the world in which we live, where we are all time poor. We had some evidence today that when one of your people saw the Grenfell Tower fire in London, the first thing they did was Google it. To expect that that time-poor person would then have to go and question everything that she had read and do further research of everything she read online flies in the face of just how busy our lives are at the moment.

Ms McCarthy : Certainly the ACMA's recent research suggests that Australian consumers are perhaps a bit more savvy in this regard in that while a lot of people reported high consumption of news on social media, they also quoted a high degree of mistrust, and were very much relying on mainstream media when they wanted a voice of truth.

ACTING CHAIR: There is quite a lot of survey data which shows that Australians are very discerning even within the mainstream media about how much trust and faith they put in different types of media, so they are able to separate a broadsheet from a tabloid, and commercial talkback radio from the ABC. They put extraordinary different levels of trust in those institutions, so I think they are not as naive as you are implying, Mr Mitchell—that they kind of just accept everything that is put to them.

Ms Waladan : No, that is right. I reiterate Mr Mitchell's comments that that is why it is so important why we have a really strong local media voice because, if we lose that, then that voice will be drowned out by the proliferation of fake news et cetera so it is really important. We welcome the committee's consideration of what can be done to make sure that that voice remains strong.

Ms McCarthy : The other thing that is important and a rising issue with fake news is it actually puts an additional strain on our own newsrooms, particularly in circumstances of late breaking situations that are unfolding. It can be difficult for our own newsrooms to distinguish things that they are seeing online if names are being reported on Twitter, for instance. They have to put a lot of additional resources into fact-checking before they can broadcast the same material, which of course is what they do and they're happy to do that, but it is additional pressure and there is the need for additional resources in our newsrooms to carry out that important task.

Senator XENOPHON: With the media package as it is now, your members can't really guarantee that there won't be any retrenchments in newsrooms—that's the tsunami you described of the impact of Google and Facebook. You would need some other measures to insulate against that to ensure that journalistic numbers are maintained or increased, would you not?

Mr Mitchell : We'll come back to you on what the other measures might be. They could certainly assist. The media reform package—the two or three elements that we've talked about—would greatly assist in our companies being able to reconfigure themselves to best meet the challenges that we've talked about. If you look at any TV guide today, the commitment to news and current affairs programs has never been larger. Quite what their response would be is a bit of crystal ball gazing, but—

Senator XENOPHON: That's not necessarily the case. Today Tonight has managed to survive in Adelaide. I have to mention Today Tonight for Bridget Fair, who's in the audience, since she knows my interest in Today Tonight. It's managed to survive in the smaller media markets of Adelaide and Perth where it performs a very valuable role in local content and local stories, but it hasn't survived in the rest of the country for the network.

Mr Mitchell : Yes. There will be individual cases. If you look across an entire schedule, you'll see that the amount of news being made today has never been greater.

Senator XENOPHON: You may wish to take my final question on notice. One of the complaints that's been put to me by media organisations large and small is that Google and Facebook have access to the data and they know exactly who's looking at what and who's spending on what, and recently there was the European Union case involving a massive fine against Google. Would it make it easier for your members if they could have statutory access to that data? At the moment you're flying blind to some degree. You just don't have those metrics and the forensic data that Google and Facebook have, which Free TV and, indeed, other media organisations don't have as well. Perhaps you could take that on notice. That's one of the issues that's arisen out of today's hearing.

Mr Mitchell : Yes, I'll certainly take you up on your invitation to take that on notice, Senator.

Senator XENOPHON: Thank you.

ACTING CHAIR: Mr Mitchell, coming back to your opening statement, you mentioned in relation to media reform that one of the reasons it is important is that the current regulations prevent media companies from reaching the scale and accessing the capital that they need to compete. Could you explain what it is about the media regulation framework at the moment that prevents that from happening?

Mr Mitchell : At the moment, you have a situation where you've got regional broadcasters who can't be purchased by anyone else because that would breach the 75 per cent rule—the two-out-of-three rule. You have a situation where they'll have to be essentially stand-alone players with all of the business costs—the corporate costs and the overheads themselves—whereas you have other players who are obviously able to share some of those costs across a number of companies and gain the benefit of the scale and scope.

ACTING CHAIR: Sorry to interrupt. What you are saying is that these are fixed costs that a player has to bear no matter how large they are and it would be better, from a business point of view, if they were able to spread that across a larger business?

Mr Mitchell : That is correct.

ACTING CHAIR: That's to scale. What about capital? What is it about the current arrangements that prevents access to capital?

Mr Mitchell : Capital comes in two ways under this package. There is the immediate changing of the broadcast licence fee to something that looks a lot more like international best practice. It's not there yet, but it's a lot closer to it. There is an immediate release of capital to be able to reinvest in local content, jobs and services to face the new challenges. It also comes, obviously, from partnering with other agencies that are currently precluded under the ownership rules.

ACTING CHAIR: So the removal of, say, the two-out-of-three rule could allow both a media company to have more scale and spread those fixed costs, but it could make that media company a more attractive prospect for investment and, therefore, get that capital that it needs as well?

Mr Mitchell : That is correct.

ACTING CHAIR: So what would you say to people who say we should take the media reform package as it is but delete the two-out-of-three rule and pass it without the two-out-of-three rule? Would that kind of reduced package still meet those objectives?

Mr Mitchell : No. It would be a package that has missed an opportunity to fundamentally update our media rules. The two-out-of-three comes from a pre-internet era. It relates only to printed newspapers, for example. The more recent online papers that have come into Australia—the Daily Mail and The Guardian—do not count. I think if you were to exclude that from the package, you would have missed an opportunity to modernise Australia's media ownership framework.

It is also important to bear in mind that it is ostensibly there to protect diversity. But there have been occasions where the existence of the rule itself has actually had the reverse impact of that. Previous Senate committees have heard from Southern Cross Austereo in relation to the ARN assets of APN when they were up for sale in Queensland. Southern Cross Austereo was invited to have the conversation around whether they would be interested in purchasing those assets. They were. But because of the operation of the two-out-of-three, they were not able to proceed with that transaction. So you have this bizarre situation where a rule that is set up to try and protect diversity has actually led to News Corp buying the remaining papers in Queensland. To us, it is a very important part of this package. It should be supported in its entirety.

ACTING CHAIR: You talk about it as a missed opportunity. Aside from that, what would the consequences be of the failure for the media reform to pass if things just continued as they are?

Mr Mitchell : We have covered a lot of that today in terms of the tsunami that is being faced by traditional media sectors in this country. Whether it is us, whether it is radio, whether it is subscription television or whether it is print, we all need the entirety of this media package. Different companies see different bits of it as being important to them across the media sector. But, as a package, the Australian media sector needs this to take us forward. We simply cannot continue to try and compete with Google and Facebook with, essentially, one hand tied behind our backs.

ACTING CHAIR: You mentioned that kind of consensus in the media industry. In your experience of the media industry—and in the experience of any other members of the panel—how common is it to have all the major media companies and their advocates united on reform package?

Mr Mitchell : I have not spoken to anyone yet who has ever seen it before.

Senator XENOPHON: As we were talking, a journalist from the Northern Territory wanted me to comment on a story that has just broken about how Nine News Darwin is set to lose its local bulletin. A dozen jobs are being cut. Reading from the ABC:

Sweeping cuts at Nine News Darwin mark the end of a standalone commercial news bulletin for the Northern Territory, and about a dozen staff will lose their jobs.

They will be getting their weeknight bulletins and weekend bulletin from Queensland, with the weekend bulletin in the Northern Territory being the Brisbane bulletin aired instead. Brisbane and Darwin are a long way from each other. I guess the question is—and I do not expect you to take ownership of that decision, but it is one of your members: would changes to media laws have made a difference to that?

It is a big deal for a major network to shut down a local bulletin in a capital city. It is approaching the size of Hobart, but it is the smallest territory in population. That's a pretty big deal in the Northern Territory in terms of the local—

Mr Mitchell : I don't have any—

Senator XENOPHON: Are you aware of it? I only just found out about it.

Mr Mitchell : Yes. You are telling me.

Senator XENOPHON: I'm a reliable source!

Mr Mitchell : Thank you very much for that. It would be silly of me to comment on the specifics of that case, but, on the limited information you have just shared with us, it is just another illustration of the pressures that the industry is under.

Senator XENOPHON: To be fair to Nine, the ABC report says neither Channel Seven or Ten Network have locally produced bulletins in the NT, with the ABC being the only Northern Territory station with a locally produced nightly news bulletin. So that means that's the end of—

Ms McCarthy : We don't have a licence in Darwin.

Senator XENOPHON: So the Seven Network doesn't have a licence in Darwin?

Ms McCarthy : No.

Senator XENOPHON: I think that's a fairly reasonable excuse as to why they wouldn't be producing a bulletin. I think their shareholders would kick up a fuss if they produced a bulletin in Darwin without a licence there!

ACTING CHAIR: Just on that, Ms McCarthy, is the reason Seven doesn't have a licence because of the reach rule? Is that a potential reason why you wouldn't have a licence in Darwin?

Ms McCarthy : I actually don't know who holds licenses in Darwin or whether there are two licensees or three, but—

ACTING CHAIR: Perhaps take that on notice.

Ms McCarthy : I think it is a two-licence market. Someone would be carrying our service into Darwin. We would have an affiliate.

Senator XENOPHON: Can you foresee circumstances where if more advertising revenue was coming in it would make a difference? If more revenue was coming in overall and you could do something about the haemorrhaging of revenue going to Google and Facebook, surely that would make a difference in terms of the ability to provide more news in local areas.

Mr Mitchell : Without question. It helps us across the board in all of our local content.

Senator XENOPHON: One argument that has been put to me is that these changes to the media rules, whilst there has clearly been across-the-board unanimity that this should go ahead amongst major media organisations, all it will do is delay the inevitable, unless there are some other structural changes to deal with the haemorrhaging of advertising to Google and Facebook. It will help you, but in the longer term the business model is not looking too flash, because of that haemorrhaging of revenue to Google and Facebook. You actually need something else, either tax write-offs, tax incentives or other things to claw back that revenue so you are in a stronger position.

Mr Mitchell : We have taken on notice the question of what that could look like, but, certainly, we recognise the committee's desire to explore other mechanisms to help.

Senator XENOPHON: Actually, that wasn't the question. The question was simply passing the government's bill unamended would help media organisations and networks and Fairfax and News Limited, but it would not provide a long-term solution to the problem of the revenue that is haemorrhaging to Google and Facebook. You actually need to do other things to address that fundamental issue, which has been largely responsible for ad revenue going from $4.2 billion to $3 billion for free TV. You can just say 'yes' and agree with me if you like.

Ms Waladan : It is very hard to speculate, but the passage of the media reform legislation would facilitate the industry being able to transition, and—

Senator XENOPHON: Transition to what though? You are bleeding revenue to Google and Facebook.

Ms Waladan : It would provide a very important step towards modernising the businesses.

Senator XENOPHON: But a step to what though? You are still bleeding revenue.

Ms Waladan : I would be speculating.

Senator XENOPHON: They are still sucking away revenue.

Mr Mitchell : It puts us in a better position to highlight that. Your invitation just to say yes, I suppose, is fair enough in one respect because, obviously, any measures that provide an additional revenue stream are helpful.

Senator XENOPHON: But it's something that regulators around the world haven't tackled. The fact that the Europeans have recently tackled Google with a multibillion dollar fine indicates the scope of the problem and the degree of their market power.

Mr Mitchell : I think part of the challenge of this committee, listening to lots of the evidence that you have heard and read in some of the transcripts, is that we are at very much the bleeding edge at the moment in the issues that you are considering.

Senator XENOPHON: Did you say leading edge or bleeding edge?

Mr Mitchell : One of the two.

Senator XENOPHON: I couldn't hear; I'm still deaf from the Elvis Costello concert.

Mr Mitchell : I said bleeding edge.

Senator XENOPHON: You said bleeding edge—okay.

Mr Mitchell : I think I might have taken your bleeding metaphors a little bit too far perhaps, but anyway.

Senator XENOPHON: I think it's a good one. Thank you very much.

ACTING CHAIR: Thank you very much to the witnesses for your time and your evidence today. It was very helpful.

Mr Mitchell : Thank you very much.