Explainer: How will the government’s reforms change the Australian media landscape?

The Turnbull government’s media reforms passed the Senate on Thursday night, overturning laws to prevent media consolidation that have been in place since the 1980s.

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It’s a mixed bag of reforms. The government made several changes to convince crucial crossbenchers, including Nick Xenophon’s bloc, to vote in favour of the bill.

0:00 Government announces media reform package Share Government announces media reform package

Here is what’s about to change:

Big media companies can get bigger

The key reforms in the package were all to do with media ownership rules.

They were originally designed to stop any one media company growing too large and restricting the diversity of voices.

But especially in more recent years, big media companies like Fairfax have lobbied the government to relax the laws as they struggle with falling ad revenue.

The reforms would remove the so-called ‘two out of three’ rule, which prevented a media company from operating a TV station, radio station and a newspaper in the same market.

The rule is currently preventing some big potential mergers, like Nine Entertainment (which owns a TV station) with Fairfax media (which owns newspapers like The Age and The Sydney Morning Herald, along with radio stations 2GB and 3AW).

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The rule was also preventing a joint bid from Bruce Gordon and Lachlan Murdoch to purchase the troubled Ten Network. The free-to-air channel has since been sold to American network CBS, but Mr Murdoch and Mr Gordon are challenging the sale in the NSW Supreme Court.

The change also removes the 75 per cent reach rule.

This rule prevented any TV network from broadcasting to a licence area with a combined population of more

than three-quarters of Australians.

It has stopped big metro TV stations like Seven, Nine and Ten from buying up the regional broadcasters like Prime, WIN and Southern Cross. Those deals would now be legal.

The government and big media companies argued the old rules were outdated, with their origins in a pre-digital age. The reforms would, for instance, allow Fairfax and Nine to combine their stakes in the digital streaming service Stan, taking their ownership to 100 per cent.

Labor and the Greens opposed the change. They said it would lead to a less diverse, more consolidated media market with less choice for consumers.

The union representing journalists, the MEAA, also warned further consolidation would mean more cost-cutting in the long run and less jobs for its members.

Related readingNick Xenophon’s deal for a $60 million ‘innovation fund’

After months of negotiation and delay, the government secured the support of Nick Xenophon’s three senators on the crossbench to finally pass the laws. (One Nation also offered its support – see below.) 

Senator Xenophon was able to secure an amendment in return to establish a $60 million fund, designed to improve media diversity.

It’s a one-off cash splash, with $50 million to be spent over the course of three years on grants for small publishers.

Companies that want to apply will need to be Australian-owned, ruling out foreign-owned players like The Guardian. They will also need to be the right size – with an annual turnover of more than $300,000 but less than $30 million, ruling out the big corporations like Fairfax and News Corporation.

They can apply for grants to update equipment and software, develop mobile apps and train their staff. The government said publishers would not be allowed to spend grant money on salaries.

The remaining money will go to journalism cadetships, mostly for publishers in regional areas.

Publishers will be allowed to apply for up to $40,000 per cadet to help pay their wages. There will be 100 cadetship places each year for two years. At least 80 per year will be reserved for rural publishers.

There will also be a limited number of scholarships for regional students who want to study journalism. 

Inquiry into impact of Google and Facebook

The Xenophon deal will also include an inquiry into the rise of Facebook and Google and the impact they are having on advertising revenue.

Senator Xenophon has repeatedly said the two companies were making huge profits by selling ads on the content of local publishers, who were not being fairly rewarded.

The inquiry would likely be conducted by the consumer rights regulator, the ACCC, which would then produce a report.

One Nation’s deal on the ABC and SBS

Pauline Hanson’s One Nation announced last month that it too had done a deal with the government in exchange for its support. 

The One Nation proposal focuses on the two public broadcasters, the ABC and SBS. It would change the ABC’s charter to include the requirement it be “fair” and “balanced”, on top of the existing requirement to be “impartial” and “accurate”.

The ABC and SBS would also be forced to disclose the salaries of its highest-paid staff. There would also be an inquiry to determine whether the public broadcasters were competing too aggressively with commercial media outlets.

The One Nation reforms were not part of the bill that passed on Thursday and will need to be debated separately in the future. Communications minister Mitch Fifield said the agreement with Pauline Hanson “absolutely stands and it will continue to stand.”

Nick Xenophon has warned his team would likely oppose the One Nation plan.