ABC eating our lunch: Fairfax

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THE ABC should not be using taxpayer money to compete with commercial news outlets online, Nick Xenophon says.

Media organisations including Fairfax, Buzzfeed and the Huffington Post told a Senate committee yesterday that the ABC’s free online news made it difficult for commercial outlets to compete for readers.

“I think it’s an interesting use of taxpayer money to essentially cut non-taxpayer funded enterprises out of the market,” Senator Xenophon said.

“Given the ABC is cutting short wave radio which services the bush and closing down regional stations … I have to wonder if offering online news is at the core of its charter.

“I will be asking the ABC questions because this is a real concern and … I was not impressed when I heard about it.”


media_cameraThe ABC Head Office in Ultimo, Sydney.

Senator Xenophon, a member of the committee investigating the future of journalism, said it was clear the industry was at a crossroads but must be protected for its vital role in democratic society.

Labor Senator Sam Dastyari said Australia needed a strong public broadcaster but that it should not compete with private organisations.

Fairfax Media boss Greg Hywood said one issue affecting editorial returns was the ABC — whose audience has considerable overlap with that of Fairfax mastheads — using taxpayer funds to advertise on Google, in turn pushing up the public broadcaster’s website on search engine rankings.

“It has gone into the provision of free news online, OK that’s considered to be within its mandate, perhaps we can accept that,” Mr Hywood said.

“But when they use taxpayers’ money to drive their traffic, because they don’t have any commercial imperative to drive their traffic … they take traffic away from us, and traffic is dollars for us.

“If we want the sort of diversity that I think everyone wants, in terms of as many players as possible in this local marketplace, the commercial organisations need to be as healthy as possible.”


media_cameraFairfax Media CEO Greg Hywood at a Senate committee hearing. Picture: AAP Image/ Dean Lewins

However, Mr Hywood refused to say how much he was being paid while he slashed staff from his newspapers and websites.

Fairfax publishes the Sydney Morning Herald, the Age and the Australian Financial Review, while there is speculation that Mr Hywood was paid up to $7 million in the last year, a significant part of the company’s $100 million editorial budget.

The ABC maintains that it pays for keyword search engine terms as a way of stopping the “proliferation of fake news”.

Earlier this month Fairfax said it would cut 125 editorial jobs to save $30 million. The Media Entertainment and Arts Alliance, the journalism union, estimates Fairfax has spent $455.5 million on redundancy costs since 2007. The inquiry heard Australian media has lost 2500 jobs since 2011.

Mr Hywood said he was hopeful it would be “the last big structural redundancy round because we have been working for years to get our metro publishing businesses to the point where they can be sustainable”.

He declined to provide any details about a bid by American private equity giant TPG to purchase and privatise Fairfax.

Labor Senator Sam Dastyari urged Treasurer Scott Morrison to consider placing a national interest test on any sale of Fairfax through the Foreign Investment Review Board.

Originally published as ABC eating our lunch: Fairfax



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