Fairfax Media joins criticism of ABC-SBS’s market ‘distortion’

Fairfax Media has united with the commercial television and radio industry in calling on the government to rein in ABC and SBS.

Fairfax Media has united with the commercial television and radio industry in calling on the federal government to rein in the public broadcasters, accusing the ABC and SBS of “distorting” the market.

The publisher of The Sydney Morning Herald and The Age, which is battling declining revenues as print circulations continue to fall, said the “aggressive expansion and promotion” by the $1.1 billion-a-year, taxpayer-funded ABC of its online digital news service had “undermined the level playing field” in a sector undergoing intense disruption.

By chasing clicks with online news articles that had only “entertainment value” — and paying to promote them on ­Google or Facebook to generate traffic back to the ABC site — the public broadcaster was stealing audience from the commercial operators, Fairfax said in its submission to the competitive neutrality inquiry.

“Any time that a story is being promoted on Google, the purpose is to outbid a competitor — the story would reach the audience regardless,” it continued.

“The only winner in this scenario is the overseas-owned platform (in this example, Google).”

Fairfax also pointed to the ­national broadcaster’s “market distorting activities” in competing with commercial operators for third-party contracts, such as when the ABC outbid wire ­service AAP to supply outdoor ­advertising company oOh! Media, as revealed by Media in April.

“The ABC’s current activities in this industry threaten the sustainability of commercial news journalism in Australia,” the submission said.

Communications Minister Mitch Fifield announced the competitive neutrality inquiry last year to examine whether the ABC and SBS were using their taxpayer-funded status to gain an unfair advantage over commercial media companies. The inquiry is expected to publish all submissions on the department’s website this week.

News Corp, which is yet to ­release its submission, has also accused the public broadcasters of exceeding their charters.

The ABC spends $2 million a year promoting its content ­online, its chief financial officer, Louise Higgins, revealed under intense grilling before Senate ­estimates in May.

The tech giants eat up almost half of the public broadcaster’s annual marketing budget, Ms Higgins said, with $1.4m spent on Facebook advertising and $500,000 on Google AdWords.

“In order to maintain the ­diversity of media required for a functioning democracy, we ­believe that the government funded ABC Online needs to ­refocus its content on distinctive, high quality content, that is not ratings driven, but that contributes to the national identity and addresses market failure, for ­example in regional areas that lack scale,” the Fairfax submission said.

Once Australia’s most-read news site, smh.com.au has fallen behind the ABC, Nine and the market-leading news.com.au, according to Nielsen data.

Seven Network chief executive Tim Worner called for “greater ­accountability” from both broadcasters, “especially for SBS and its aggressive pursuit of commercial content to drive ­advertising revenues”.

“It just basically resembles a small commercial network now,” Worner said.

FreeTV, which represents all of the commercial free-to-air networks, said in its submission the public broadcasters had an advantage over their commercial rivals by not being bound by the local content quotas.

Commercial Radio Australia said in its submission the ABC was using taxpayer funds to “market aggressively against the commercial sector”, inhibiting innovation in areas such as ­podcasting by using cross-­platform promotion and paid ­advertising on Google and Facebook to prioritise its products and ­services.