CHAIR—Mr Beecher, welcome. You are welcome to make a short opening statement.

Mr Beecher—I am one of the owners of Crikey, which is just about the only independent commercial online news service in Australia. So, if you are looking at diversity in Australia, you are looking at me, because there is almost no other. Before that, I had a long career in daily newspapers. I was the editor of the Sydney Morning Herald; I was the editor-in-chief of the Herald Weekly Times. So I have worked as the most senior editor for both the Fairfax and News Ltd organisations. I have seen firsthand how media power is exercised, and I am happy to talk about that at some stage, if anyone wants to ask me about it. I think there is a lot to support in these bills, such as the expansion of digital broadcasting and the removal of foreign ownership. Really, the horse has bolted on that last issue, so I do not see that there is a particular problem with that.

The issue I would like to talk about is the cross-media rules. I think this is a real issue. A lot of people talk about the importance of media diversity, but I do not actually see it as an issue of media diversity. I think that the diversity that people should talk about is the diversity of journalism. It seems to me that the diversity of the rest of the media—of music on FM stations and of entertainment on television and that kind of thing—is quite irrelevant to a debate about the cross-media rules. I do not think it matters how few people own music stations or run soapies on television. But I do think it is critical to the democracy that there is diversity in journalism in news and opinions in political coverage, business coverage and that kind of thing.

I think this whole debate about diversity gets bogged down in a kind of umbrella that is far too broad. Really, the kind of diversity of journalism that I am talking about, the power that is exercised in journalism, lies in newspapers, some TV and radio news and talk programs, and that is about it. I think the focus should be on those aspects of the media. From experience, the cross-media rules are the only mechanism to guarantee diversity of journalism. We are talking about a diversity in this country that is already very fragile.

Currently in Australia most journalism of significance is in the hands of five families plus the Fairfax organisation. Let us be specific about that: in the regional areas, it is the O’Reilly family and the John B Fairfax family, and in the metropolitan areas it is the Murdoch, Packer and Stokes families and the Fairfax organisation, which used to be family owned and is now institutionally owned. So you have six unelected groups—five of them families—and they are the gatekeepers of news and opinion in this country.

The question I would ask is: what is the justification for removing or weakening the cross-media rules in a climate like that? Is there a public demand for it? I certainly have not noticed any; I have not heard any. Are the media companies ailing? Do we have an industry that has economic malfunction? Here are some facts. In the past year, profits in the media industry were higher than ever before. This is a booming industry. It is an industry that makes profit margins—that is, the percentage of profits to revenue—that are higher than almost all other industries in Australia. There is only one other industry in Australia with higher profit margins.

The average profit margin of public companies in this country is around 15 to 17 per cent—that is, $15 to $17 in every $100 of revenue is profit. The media industry average is 24 per cent. It is the second highest only after resources, and the reason resources is higher is that the capital requirement is stratospheric and therefore the risk-reward ratio is higher. Then you would ask: have any technological changes introduced so many new players and so much diversity into news, current affairs and journalism that renders these cross-media restrictions obsolete? It is actually quite the opposite.

The consolidation of the media industry in this country has been going on for years. In the 1980s there were 13 daily newspapers in the five capital cities and they had nine different owners. Today there are seven daily newspapers—almost half—and they have four owners. All the major regional city newspapers—Cairns, Townsville and all of those big places—are owned by four companies: News, Fairfax, APN and Rural Press. The last of the majors, in Albury, fell a few months ago. Most of the internet news and commentary sites—apart from Crikey, really—are owned by the same people. So they own the lot. It is the most concentrated media ownership in the Western world. We all know that, we talk about it, and yet we are sitting here talking about concentrating it even further. I am not suggesting that media owners are evil or malign or anything like that. What they are are media owners: they are nearly all public companies, and they want to make more and more money. They have a lot of pressure from shareholders and the markets to increase the earnings, but they are already making a hell of a lot.

The final point I want to very briefly make is that I think this is going to have an enormous impact on journalism. Journalism is already downsizing. Over the last year both Fairfax and the Nine Network have retrenched hundreds of journalists and, in my opinion, another round of consolidation is going to continue that process. Journalism in this country, which to me is at the heart of the role of the fourth estate, is going to be severely weakened. I believe that these bills, whilst they have some things going for them, are going to be a disaster for democracy.

Senator CONROY—Thank you very much for that presentation, Mr Beecher. I want to congratulate you as well for being only the second witness we have seen today out of 17 that was selected by the government and has actually been consistently opposed to the cross-media laws. It sounds like you are totally outweighed from the presentations we have had today, but I am sure you will not be discouraged by that. I am tempted to ask you about the comments you made at the beginning of your presentation about how power is exercised. As someone who has been in a position to exercise that power, could you tell us about it?
Mr Beecher—There is a lot of talk about this by owners and senior managers saying, ‘You don’t direct journalists what to write or say.’ That is absolutely right—you do not. You do a couple of things. One is that you appoint editors and news directors who will follow the kind of line that you want taken. That is obvious: in any business, you appoint senior managers to follow the party line and then those editors and news directors appoint senior journalists along the same lines as well. I think it goes a lot further than that, though.

I have talked about the fact that there are very few owners of the media in this country and this has a big effect on the employment prospects of journalists. If you work in metropolitan newspapers, you have two employer prospects. So if as a journalist, editor, subeditor—and in television a similar situation applies, with perhaps one more owner—you get on the wrong side of your owner and lose your job, you have one other place to go. The truth of the matter is that the other place probably does not want you because they do not want vigorous independent-minded editors and journalists. I spent two years running the Herald and Weekly Times for Rupert Murdoch and I left. I walked out because I found it intolerable for those reasons. Not many people do that, though I am glad I did. You can ask a simple question and say, ‘Do you tell