Mark Scott: will Telstra buy an entire FTA channel?
by: Mark Poole
Published on Screen Hub
Wednesday 15 April, 2009
Just another speech, on just another campus, but ABC Managing Director Mark Scott smiled sweetly and invited a Melbourne audience to consider the possibility of Telstra loose in the television industry. Cue awed silence from industry audience...
With the proposed broadband rollout and Telstra two buzzwords of the moment it was fascinating to hear the ABC’s Mark Scott pondering the future of network TV in this fair nation, and in particular the possible rise of Telstra as a major media player.
Mark Scott, Managing Director of ABC TV, began the La Trobe University Annual Media Studies Lecture, delivered last week at the State Library Theatrette, by pointing that he was in no position to lecture anyone about what is happening in the media today. Clearly the sector is in a state of transformation and turmoil, especially after last week’s announcement by the Government on broadband.
“The Prime Minister’s announcement is set to reshape the future for media organizations, telecommunication firms and most importantly audiences across the nation,” he said.
Citing the infamous Donald Rumsfeld line about ‘known unknowns,’ Scott said he would try to distinguish what we can say is true about this rapidly changing sector and identify the ‘known unknowns,’ or key unresolved questions about Australian media.
One of his key points was about Telstra, particularly relevant in the wake of the Goverrnment’s broadband announcement which clearly has major implications for the telco.
Scott pointed out that despite last week’s setback Telstra is in a prime position to consider purchasing a free to air channel ‘at the drop of a hat.’ And given that he explained during the lecture why the free to air commercial networks had engineered themselves into a parlous position through bad decisions and the global financial crisis, this seems a real possibility.
“Telstra has the capacity to become Australia’s largest commercial media organization,” he said. “They own half of Foxtel, they own cable to the door and they have the right to put their own set?]top box in people’s homes.”
As well, Telstra is the dominant ISP and have picked up the online rights to major sporting events that in time will be able to be seen as a full?]screen television experience delivered by broadband. For Scott, it is clear that Telstra want to be a provider of content, and see their role as steering audiences towards that content, rather than seeing themselves as simply a conduit through which audiences can access that content.
“In a world where terrestrial television, subscription television and IPTV can all be delivered to a set?]top box for a seamless, integrated audience experience,” he added, “it pays to watch the organisation that is set to dominate IPTV, owns half of subscription TV, and has the cash to buy a free?]to?]air channel.”
Scott pointed out that clearly the Government is well aware of the potential for Telstra to become a media giant that could dominate the new media landscape. He cited the discussion paper released by Senator Conroy, which made clear the need for a new regulatory framework to ensure that there is proper competition within the sector.
Clearly Telstra is in the Government’s sights with a view to separating its retail and wholesale divisions, and possibly considering whether it should divest itself of its cable network. Speaking of which, the future of Foxtel, which is 50 per cent owned by Telstra, is intriguing, added Scott.
Foxtel is reportedly making money even through the downturn, and holding audiences through attractive technology and a valued family entertainment proposition. But does this mean that the company has the potential for strong and sustained growth, or will it remain a niche player that will remain unable to woo a clear majority of households from free to air?
Of course Mark Scott’s ABC is a key competitor to Foxtel and the other free to air networks, and his speech reinforced the perception that the commercial networks, particularly Nine and Ten are in danger of sustaining a shrinking market share, particularly since they don’t have a viable online strategy like that of the ABC and SBS.
Scott alluded to the push by subscription TV for access to Government funding for programming for drama and children’s television. “Our strong counter?]argument is that if the Government is to directly fund the development of programs that people should have access to see, then programming should be available free?]of-charge in every home, not just those willing to write a monthly cheque.”
He mentioned that Federal anti-siphoning laws have inhibited Foxtel’s growth by restricting its access to live major sporting events, but they are due to be reviewed next year. “The free?]to?]air networks will argue for changes to allow them to show major events on their new multi?]channel services. Free?]to- air television, acting under the banner of Freeview, will attempt to convince households that digital free?]to?]air TV will offer 15 channels without the monthly bill and provide a strong range of programming.”
The fascinating looming scenario is a future where superfast broadband will deliver so much more content directly into homes in television?]like experiences, without the intermediary of a subscription television provider. And clearly this content will compete directly with both free to air TV and cable.
So who will win? That remains a known unknown. But for Mark Scott, “It is going to be fascinating to watch.”
You can read the whole speech here.
Mark Poole
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