Fairfax Media's new chairman of the board, Nick Falloon, has told shareholders the publisher's leadership is readying the business to take advantage of the market if media reform is passed by the government.
Falloon said on Thursday that the state of media ownership laws is of great importance to all shareholders and is something the publisher is pushing to get on the new government's agenda.
“Fairfax’s view on the need for media law reform is well-known,” he said. “The current legislation, namely the 75% reach rule and two-out-of-three rule, simply do not meet the needs of the industry or the community. It is hindering the development of modern media for Australian consumers and has the potential to greatly restrict the quality of content that flows to them in the future.
“Fairfax is strongly advocating for modernising media ownership laws. The reality is that those old media rules advantage our overseas-based competitors at the expense of Australian-owned media."
Falloon explained that the government, together with the opposition, has the opportunity to drive economic and social reform through new policy initiatives, which meet both the needs of the media industry and the Australian community.
“Know that as we shape the company’s future, my fellow directors and I will strive to ensure our decisions position Fairfax to best operate in a contemporary media environment, ready to take full advantage of new opportunities," he said.
“The strength of our balance sheet, reduced cost structures, and leadership of our mastheads, position Fairfax to take advantage of any market opportunities that might arise to the benefit of our audiences, consumers and to maximise value for our shareholders."
On the same day, Australian Competition and Consumer Commission (ACCC) chairman, Rod Sims, said that better media and intellectual property regulations can boost innovation, saying reviewing the media laws would be a good place to start if as a country we hope to drive innovation.
“The two-out-of-three media ownership rules may be preventing efficient delivery of content over multiple platforms and should be reviewed to see if they are still relevant for the preservation of diversity,” Sims said.
“Surely laws that restrict acquisitions need clear justification. Changing technology may have made the initial justification for the two-out-of-three rule, from 30 years ago, redundant. The 75% reach rule has been undermined by the ability of commercial free-to-air television to stream their content nationally via the internet.
“Both the two-out-of-three rule and the 75% reach rule were introduced before the emergence of the internet."
Sims noted however that some form of anti-siphoning regime continues to be required.
“The concern is that, without the anti-siphoning regime, Foxtel could acquire exclusively all premium sport and reduce competition in the television viewing market,” he said.
“If the trend of streaming live sport is replicated in Australia, particularly via paid subscription models, the anti-siphoning regime may need revisiting, but we are not there yet.”
The push comes as both major publishers reveal their first quarter results for the 2015-2016 financial year. Fairfax Media outlined that metro print advertising conditions remain difficult with the publisher's statutory net profit falling to $83 million from $224 million last year. Its group revenue hit $1.84 billion, which is a lift of 0.3% on last year.
News Corp experienced a fall in its revenues, with figures totalling $2.01 billion compared to $2.11 billion in the previous year. In good news for the publisher, revenue at the company's digital real estate businesses, which includes US website realtor.com and a stake in REA Group, jumped 70.5% to $191 million.
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