The global platforms’ gilded age is closing

TLDR version: Platform and device maker complaints about the Government’s proposed discoverability framework for FTA TV have some merit, but also miss the point. While the FTA industry could do more to facilitate discoverability, such efforts will have little practical impact if the market power of the global platforms and device makers is not curtailed. This is exactly what is going to happen.

Not just a market

We have been critical of approaches to broadcasting policy that neglect the central role of FTA TV in the delivery of the objectives of the Broadcasting Act 1992. FTA TV remains the main channel to audiences for Australian content and the video service of last resort for millions of Australians. Like it or not, that makes FTA TV special, and this is unlikely to change in any foreseeable scenario.

The Government’s commitment to a discoverability framework is a recognition of this fact. Marginalisation of FTA TV in the growing online video market is a threat to the industry, but also to the achievement of broadcasting policy objectives that are supported across party lines. If the Government wishes to achieve these objectives it must intervene to support the industry. He who wills the objective wills the means.

The process has some knotty issues to consider, including the reach of the discoverability obligation (include tablets and smartphones?) and whether it makes more sense to require platforms and device makers to support each FTA network’s app separately or support a shared FTA TV industry app that the platforms would find easier to integrate. The latter has some merit, and would also be easier for viewers even if it did erode some differentiation between FTA networks.

Why does this matter?

The discoverability framework, and the news bargaining code which preceded it, reflect the growing conviction of governments (and regulators like the ACCC) around the world that the market power of global platforms and device makers cannot go unchallenged if national interests and policy objectives are to be protected.

The qualification ‘market’ does no real work here. What we are talking about is not ‘market power’, but just plain old power. And the only thing that offsets power is more power. The bargaining code and the discoverability framework are designed to supplement the bargaining power of local industries and interests to offset the power of global operators. These operators are not going away, so we have to find a way of living with them, and this kind of balancing will be essential.

Twenty years ago it would have been difficult to find much support for this notion. The consensus was that the solution for media markets was more competition. Strong elements of this view are still around, but they are gradually giving way to a more sophisticated view that recognises the limits of competition in globalised markets dominated by a handful of operators. These ideas are not new – they were articulated by thinkers like John Kenneth Galbraith in the 1960s and 70s, before they were swept aside in the neoliberal revolution led by Reagan.

The long-term trend is now away from the post-Reagan consensus of neoliberal economics towards something more interventionist. As a new consensus emerges, we expect governments around the world to place more obligations on the platforms and device makers. This is good news for national (and Australian) interests, but it will not be so good for the global platform and device makers whose ‘gilded age’ is coming to a close.