Media laws: Who will buy what and will it make any difference anyway?

Via abc.net.au/news/2017-09-15/australian-media/8949574 By business reporter Stephen Letts Updated 16 September 2017

Photo: The media owners have got their wish, but will the law changes bring back profitability to the industry? (ABC News)

Related Story: Government's bill to relax media ownership laws passes Senate

Related Story: Ten Network no longer the biggest loser as CBS shakes up free-to-air TV

Related Story: Media law shake-up getting support from Australian media bosses

Map: Australia

As the new media laws finally clambered over their last obstacle, you could almost hear the high-fives slapping in the boardrooms of the big — although somewhat diminished — media companies.

Key points:

• Fairfax and Nine appears to be the most plausible and powerful merger opportunity
• News Corp's main hurdle to any acquisition is likely to be the ACCC
• Even after merging most businesses would still struggle to grow sales in the face of massive competition from overseas digital giants

The denouement of the drawn-out and fraught process, televised on the Senate channel, had more the torn and frayed look of the Survivor franchise than the smoochy fairytale feel of The Bachelor, which aired around the same time.

So now the rule book has been rewritten, how is the game going to change? And is the promise of mergers and takeovers of struggling media businesses going to create new champions able to protect and expand their turf?

Certainly, the prospect of mergers is real — if for no other reason than: why did the media owners champion the changes in media ownership rules? Will they be successful? That is an entirely different question.

What are the new rules?

It was not so much a rewriting of the Broadcasting Legislation Amendment Bill as just hitting delete on a couple of key provisions that changed things. Out went the "75 per cent audience reach" rule prohibiting a TV network broadcasting to more than 75 per cent of the population. It opens up possibilities for the likes of Seven, Nine, Ten and the regional players Prime, Southern Cross and WIN.

The removal of "two-from-three" rule — owning any two of TV, print and radio was OK, owning all three was not — is the one that puts everybody into play. There are also bits like replacing TV and radio licence fees with a "spectrum fee", although they are unlikely to make much difference to the flow of deals in the wings. However, that doesn't mean it is total open slather — some checks remain.

The "five/four rule" enshrined by the Howard government in 2007 to prevent the number of media owners falling below five in capital cities and four in regional areas, is still on the books, while the Australian Competition and Consumer Commission — with its own rule book — is still on the prowl looking to bust market domination. To lesser extent, the Foreign Investment Review Board and shareholders themselves are in the mix, but they have never really been known to stop media takeovers.

A couple of times, shareholders have tried to stand in the way of a merger — to wit, a body of West Australian Newspaper investors against Kerry Stokes in 2011 and Ten investors at the moment — but they have generally been run over in the process.

Here are the most likely deals

The big investment bank, Morgan Stanley, has tallied up the permutations and combinations flowing from the law changes and has come up the most likely deals. There are a fair few options, but for the sake of brevity, this is the short list of the bigger deals being discussed:

• Nine Entertainment and Southern Cross;
• Fairfax Media and Nine;
• Seven West Media and Prime Media;
• News Corporation and just about anyone.

Nine and Southern Cross have previously said they've had discussions, but Nine's sale of its 10 per cent stake in the regional broadcaster was not seen as a positive step to a future takeover. Would it create a bigger, stronger company? Morgan Stanley's Andrew McLeod thinks not. "Bigger combined audience reach, yes, but higher growth and higher return on capital are questionable," Mr McLeod said.

So Fairfax and Nine? Far more plausible and powerful, according to Mr McLeod. "This could be a rare opportunity to combine media assets and actually lift revenue growth rates via the two online businesses," he said. "Nine's video content could strengthen Fairfax's online video capability and lift traffic and audiences for the Fairfax sites."

Importantly, Mr McLeod notes both companies have little or no debt, which is a big advantage in delivering a highly positive earning per share outcome to both sets of investors.

Seven has always been regarded as a natural predator for its regional partner Prime and now the reach rule has been removed, it is off the leash. Given Prime is a reseller of Seven content, no-one else is likely to bid for it. Does it make sense for Seven? Sort of, but Prime is a lean operation and the cost savings in merging the two may not be large enough to make it worthwhile, and the potential for ongoing earnings growth is minimal.

News Corp is the $10b gorilla

Talking about off the leash, News Corp has never been shy about buying businesses — good, bad or indifferent, profitable or unprofitable — it just buys them and considers the consequences and write-downs later.

Last month, it wrote down the value of sundry newspapers, its stake in Foxtel and the REA real estate portal by $1.3 billion. Although that is dwarfed by the impairments News Corp has racked up by buying the likes of Dow Jones and Gemstar over the years. With its US rival CBS likely to snaffle Ten, News Corp could well turn its attention to Nine or Seven.

News already owns plenty of assets here and so any deal could be quite cost-effective or nerve-racking, depending on whether you are a shareholder or work in a newsroom facing further "rationalisation". The merger of online businesses and picking up Nine or Seven video content would be handy for News Corp's digital platforms.

Of course, any move from News while OK under the new media laws would still need to leap any hurdle put in its way by the ACCC. News could always satisfy itself with a tasty morsel like the $700 million Here, There & Everywhere radio network owner of brands such as KIIS and Gold, as well as the Adshel outdoor advertising business.

Player	Earnings (2018 estimates)	Market capitalisation
News Corporation	$1.135b	$10b
Seven West Media	$208m	$1.1b
Nine Entertainment	$206m	$1.2b
Fairfax Media	$268m	$2.2b
Southern Cross	$171m	$1b
Here, There & Everywhere	$120m	$700m
Prime Media	$53m	$100m

Earnings based on Morgan Stanley estimates of earnings before interest, tax, depreciation and amortisation (EBITDA).

What does history teach us?

The last significant media law changes in 2006 — largely centred on abolishing foreign ownership rules — certainly arced up deal making, both large and small. It also sparked activity not held back by foreign ownership issues.

The then-Packer vehicle PBL sold half its media assets to the foreign private equity business CVC, proving you can have more than Alan Bond in your life. Kerry Stokes also hooked up with private equity, this time Kohlberg, Kravis, Roberts selling it a 50 per cent stake in his media assets including Seven and the magazine business for $3.2 billion. They are worth about a third of that today. That deal allowed a cashed-up Mr Stokes to get a large foothold in, and ultimately control of, his hometown West Australian Newspapers. Fairfax headed bush and bought Rural Press.

Morgan Stanley's Andrew McLeod says the experience of 2006 shows transactions could occur very quickly in 2017. "Some of the remaining ownership rules, such as the 'five/four minimum voices' rule, present a first-mover advantage for consolidation occurring in some assets and some markets," he said.

So can the mergers turn back the tide?

The bigger question is whether any of this will create more robust businesses able to compete and grow against the likes of Facebook and Google in the ad market.

Unlike King Canute of yore, who stood in front of a tide to prove his fallibility knowing such things were beyond mere mortals, the Government is backing its plan to help turn back the digital tsunami crashing in from offshore and sweeping away local profits.

Good luck with that, says Mr McLeod. "We think the key debate is whether on the other side of any merger and acquisition, higher growth/better quality media companies emerge — or if after one year's costs savings are banked, the downward trajectory in earnings and shareholder value resumes," he said. "We can envisage a few genuine re-invention opportunities, but in most cases it's more likely the latter."

Crushed: Digital giants vs Australian media

Within a couple of years the likes of Google and Facebook will devour more than half local ad revenues, leaving only crumbs for traditional media players.

Last year Australian TV networks lost around $1 billion between them, newspapers have lost even more over recent years, while profitability in radio is flat-lining at best. The test will be to achieve real top-line growth in sales, not just confected and unsustainable profit growth from cost-cutting.

The problem there is the advertising revenue pool is a bit of a zero sum game — with some GDP-style growth added in. In such a relatively stagnant pool, gaining sales means someone is losing. And on an exponential scale, the digital giants are winning and everyone else is losing.  The one thing the likes of Facebook and Google won't do is bail out Australian shareholders with an ill-considered purchase of an old economy business. They are not that dumb.

Photo: Morgan Stanley estimates of Australia's advertising spend by platform.

Game tests your ability to spot fake news—and it’s not as easy as you’d think

Factitious was designed as way to help people recognise what news is fake.

Spotting fake news can be hard with so much of it polluting your timelines and news feeds. But one game wants to help you brush up your skills so you don’t get fooled in the future.

The game, Factitious, was designed by former American University Fellow Maggie Farley and Bob Hone, a professor at the University. The game was created in the college’s American University Game Lab.

Essentially, the game uses a Tinder-like interface that has people swipe left or right to see if they can spot fake news. Swipe left if you think the article that pops up in front of you is fake and swipe right if you believe the sample article is real.

In Factitious, the game defines fake news as “stories fabricated for fun, influence, or profit, as well as satire, opinion, and spin”—not stories you don’t agree with (which is how President Donald Trump uses the phrase).

“Fake news is impossible to stop, so we wanted to playfully teach people how to recognise it,” Farley said in a blog post about the game. “But the game is fun to play in itself.”

With fake news proliferating wildly since the 2016 election, being able to spot it is essential for anyone who wishes to read factual news. Factitious helps you spot what stories are fake and even gives you a bit of a hint by looking at the source of the article (which is helpful to know moving forward).

by Andrew Wyrich on The Daily Dot

In a Fake Fact Era, Schools Teach the ABCs of News Literacy

• by Issie Lapowsky, 06.07.17 at WIRED

Fourteen-year-old Isabel Catalan stares intently at her laptop as she walks me through a recent assignment one sunny morning a few weeks before summer vacation. The studious eighth grader and I are sitting in a tiny, colourful classroom at Norwood-Fontbonne Academy, a small private elementary school in the tree-lined Philadelphia suburbs, which also happens to be my Alma mater.

In most ways, Norwood feels a lot like I left it nearly 20 years ago. Catalan wears the same plaid kilt and golf shirt combo that I did, and lugs her books from class to class in the same blue canvas tote we used to call our "daily bags." In the hallway I pass my old social studies teacher, who’s been working here for almost half a century. On a bookshelf in Catalan’s classroom, I spot a roughed up copy of The Face on the Milk Carton that I’m almost certain I checked out from the library sometime around 1999.But in other ways—important ways—the school is radically different. The clunky desktops and overhead projectors have given way to flatscreens and laptops in every classroom. And while back then Microsoft Encarta was our main research tool, today Norwood students have a world of information—and misinformation—ever at their fingertips.

Which brings us to Catalan’s assignment. On the screen in front of her is a viral tweet written by one TrumpsterMarty: "Muslims were already banned from the United States! 1952 US LAW! RETWEET." It comes with a screenshot describing the Immigration and Nationality Act of 1952, which barred immigration by anyone who seeks to overthrow the government "by force, violence, or other unlawful means."

Image by Issie Lapowsky

"This, by its very definition, rules out Islamic immigration to the United States," the screengrab reads.

Catalan, who wears her pin-straight brown hair brushed all the way down her back, pauses for a beat. “This one, I had to think about,” she says. Then she talks it through. "I looked at who posted it: TrumpsterMarty," she says. "The person who posted this wanted you to retweet it. It just doesn’t sound accurate."

She decides the post is fiction, and Checkology, the online platform she’s showing me, tells her she’s right. Checkology is the latest creation of the News Literacy Project, a non-profit founded by former Los Angeles Times reporter Alan Miller. Since 2009, the tiny eight-person non-profit has been working one on one with schools to craft a curriculum that teaches students how to be more savvy news consumers. Last year, in an effort to scale its impact, the team bundled those courses into an online portal called Checkology, and almost instantly, demand for the platform spiked.

“Fake news is nothing new, and its impact on the national conversation is nothing new, but public awareness is very high right now,” says Peter Adams, who leads educational initiatives for News Literacy Project. Now, Checkology is being used by some 6,300 public and private school teachers serving 947,000 students in all 50 states and 52 countries.

Norwood began using the program in March following one of the most frenetic elections in American history. Inspired by the avalanche of "alternative facts" and fake news they were seeing in their own social media feeds, teachers Lindsey Sachs and Shannon Craige decided to launch a four month-long course in teaching students to sift fact from fiction online.

Checkology

"News has shifted so much. Everyone can be a reporter now," says Sachs, the school’s technology teacher. "It’s about them realising you can’t take everything at face value."

The platform offers lessons on the First Amendment, the difference between branded content and news, and how to distinguish between viral rumours—political and otherwise—and reported facts. Teachers help the kids understand sourcing, bias, transparency, and journalistic ethics. The platform also includes interviews with working journalists such as Matea Gold at The Washington Post, who help put a face to the boogeyman that has become known as "the media."

"This is no longer something that if we have time to expose children to, that would be great," says Michelle Ciulla Lipkin, executive director of the National Association for Media Literacy Education. "This is a crisis situation. We do not teach our students enough about what they need to understand about the world they live in." Checkology, she says, is one important tool helping to change that.

Infograzers

On the day I returned to my Alma mater, the students were categorising online posts as news, entertainment, propaganda, publicity, advertising, raw information, or opinion. As Craige stood by, 13-year-old Catherine Aaron, an 8th grader already dressed in her softball uniform for that day's game, puzzled over a headline from the left-leaning outlet Daily Beast. It read, "And Then They Came for Big Bird: Public Broadcasting Reels From Trump’s Plan to Destroy It." The sub-headline continued, "Next on President Trump’s hit list: public broadcasting. His plan to de-fund it will have a decimating effect on access to nuanced journalism and educational TV." Aaron had a hunch this was the author's opinion. "What makes you think that?" Craige prompted the 8th grader.

"The language of it is more of an opinion," Aaron says. "Decimating. Destroying." Sophie Giovonnone, 14, isn't so sure. She thinks it might be working as publicity for Democrats, "because it could cause some conflict" for Trump.

I ask Giovonnone whether she knows what the Daily Beast is. She doesn't. In fact, most of the students say that outside of class, they rarely encounter much news online at all. Only one student in the whole class uses Twitter. No one even has a Facebook account. Their social media lives consist mainly of Instagram and Snapchat, one of the few platforms that still meticulously curates what news is and isn't allowed in its Discover feature. (WIRED recently joined Discover.)

For a moment, I think, maybe the fact that these students aren't using Facebook or Twitter is a promising sign. Maybe the very nature of the platforms this generation is growing up with will shield it from the internet's onslaught of misinformation. But Adams stops me short. Kids today, he says, are "infograzers." Without realising it, the memes they share and and viral videos they watch each day are telling them stories about the world they live in—not all of them true.

"What counts as news has broadened for this generation," he says. "Unless they learn to flag content and figure out why something might not be sound evidence, it sticks with them." And even if they're not skimming social media, it's become second nature to them to whip out their smartphones and Google the answers to any questions they don't know. Tools like Checkology encourage them to dig deeper than the first headline that turns up.

As they get older, the spectrum of online sources they use will broaden even further, and that's when these skills will matter most, says Ciulla Lipkin. "When we were growing up some of the work we’re doing in school might not have seemed relevant at the time, but it’s teaching students skills they need for the future," she says. "It gets students to practice asking questions." Or, as Sachs puts it, "We're arming them before they hit the battle."

The question is—as it is for all school subjects—will that practice stick as students grow up and technology evolves? The company is currently crunching the numbers on its first quantitative survey that measures how students' understanding of the topic changes from the beginning of the course to the end.

Catalan, Aaron, Giovannone, and the rest of the 8th grade class walked away from Norwood on Monday for the last time. This fall, they'll head off for high school. If by some chance they return to this place 20 years down the road, as I did, they will no doubt find that the world of communication has changed even more drastically since they sat in these very seats. Now, as the country continues to fight over the fundamental definition of truth, it falls to educators across the country to prepare their students for whatever mayhem those changes may bring."

How To Create a Grungy Star Wars Propaganda Poster in Photoshop

Do you need you class to make a poster in Photoshop? Here's a step-by-step guide.
From the excellent blog Spoon Graphics, by Chris Spooner - visit it here.

I’ve been wanting to have some fun with the low-fi poster style that’s usually associated with punk rock gigs and revolution propaganda, but I couldn’t decide what to base my fictional design on. Then I saw the trailer for the new Rogue One movie and I knew I had to produce a Star Wars themed design for this tutorial! Follow along to see how to create a grungy propaganda poster for the Rebel Alliance in Adobe Photoshop with dirty textures, spray paint effects and a low-cost, hand made feel.

The design we’ll be creating in this tutorial is the ultimate anti-establishment message from the Rebel Alliance. It’s made in the style of the cheap flyers and posters made by underground movements, that rely on low-cost production methods like cutting and pasting photographs, hand-painted typography and low-quality photocopy prints. We’ll be creating this artwork 100% digitally, but with the assistance of handmade resources that will help to achieve the collage aesthetic.



Begin by downloading a paper texture and opening it up in Adobe Photoshop. Press CMD+A to Select All, followed by a right mouse click and choose Transform Selection. Hold the ALT key and scale the selection down to leave a border. Fill this selection with #dcbd88 and change the blending mode to Multiply.



Steal an image of Darth Vader from Google Images and paste it into the working document. We’ll have to rebel against copyright in this tutorial and hope the Disney empire doesn’t strike back! Desaturate the image, then go to Filter > Noise > Add Noise. Enter 5% with the Gaussian and Monochromatic options checked.



To give the image a photocopied appearance, go to Filter > Sharpen > Smart Sharpen. Adjust the settings to 400%, 15px radius and 0% noise reduction.



Use the Polygonal Lasso tool to roughly trace around the outline of Darth Vader, then go to Select > Inverse and hit the Backspace key to remove the background.



Download my old Rough and Grungy Photoshop Brushes (or my more recent Dry Brush Strokes) and adjust the size and angle from within the Brushes panel to deface the image of Darth Vader.



Use a display font to add some hand-drawn typography to the artwork. I’m using the lovely font Againts, which has a messy hand painted brush style.



To produce realistic hand-drawn typography, it used to be necessary to physical draw and scan the text yourself, but many premium display fonts now have alternate characters so any duplicate letters can be given a different appearance.



Paste in an image of some Stormtroopers underneath the Darth Vader layer and scale them to size so they’re visible at either side of Darth Vader’s head Since we’re going for the low-quality look, it doesn’t really matter if the image has a low resolution. Desaturate the picture and add 5% of grain, just like the previous steps.



Continue to add a Smart Sharpen filter to produce the photocopied look, but adjust the Amount value to 250% to avoid blowing out the whites too much.



Use the Polygonal Lasso tool to trace around the outline of the Stormtroopers to represent a rough cut out done with scissors, then Inverse the selection and delete the background.



Select one of my Photoshop Brushes and reduce the size to fit over the Stormtrooper’s head. Change the angle so the brush flows diagonally, then place two separate brush impressions to form a cross. Mix up the brush selection each time to avoid repetition.



Open up the original paper texture in a new Photoshop document and draw a rough rectangular selection using the Polygonal Lasso tool. Copy and paste this clipping into the working document.



Use the Type tool to add some more text to the artwork. Posters of this style would often use ransom style letter cuttings from a newspaper, but the Blackout Noon font used here provides a distressed low-quality print effect.



Press CMT+T and scale the background strip to roughly fit around the text. Angle both the text and the paper strip slightly to enhance the unrefined look.



Double click the paper strip layer and set up a Drop Shadow using the settings black, Linear Burn, 35% opacity, 2px Distance, 1px Spread and 3px Size to give the impression that the text has been cut and pasted onto the page like a collage.



Continue typing out the wording ‘Destroy the Empire’, using separate text elements for each word so they can be individually angled and offset. Add a paper strip background for each one and copy the layer style between them.



The same text effect can be applied elsewhere on the poster design, but with the background strips inverted (CMD+I) and the text set in white.



Download a copy of the Rebel Alliance logo and position it on the poster design. CMD+Click the layer thumbnail to load its selection, then go to Select > Modify > Feather. Add a 10px radius, then turn off the visibility of this layer.



Create a new layer, then use my free Spray Paint Photoshop Brushes to fill the selection with red (#cc0705). Use the fine edge of the spray brush so the selection isn’t filled with a solid colour.



Change the brush to a different spray paint splatter and reduce the size to fit within the logo, then add some oversprays around the edges.



Load the selection of the original logo layer, then use a spray paint brush to softly fill in portions of the selection with a crisper edge.



Reduce the fill amount of the layer to 96% to allow the underlying elements to show through slightly, which finishes off a realistic spray painted stencil effect.



Paste in a copy of the Imperial logo, then draw a circle with the Ellipse tool. Set up a large red stroke to form the foundation of a ‘No’ symbol.



Draw a diagonal line to finish the symbol by matching the size to the weight of the circle’s stroke, then select both shape layers and Rasterize them, followed by the shortcut CMD+E to merge them into one layer.



Load the selection of the symbol layer, feather the selection and follow the previous steps to create a spray-painted stencil effect for this element.



Repeat the process with the Imperial logo, except this time use black to contrast against the red symbol. Due to the smaller scale and higher detail of this logo, only feather this selection by 5px.



To finish off the artwork with more grungy textures, make a duplicate of the paper background and drag it to the top of the layer stack. Add 5% of Noise from the filter menu.



Change the blending mode to Multiply, then add a Smart Sharpen filter to bring out the details and boost the contrast. Keep an eye on the preview and balance the Amount to provide the desired result. 100% gave a nice mix of grainy tones while not being too overpowering.



The final design captures the style of those grungy gig flyers and revolution posters by mimicking the low-cost production methods in digital format with a variety of resources and filters. The limited colour palette, photocopy print effects and collage style all enhance this visual aesthetic, which makes the Rebel Alliance seem like the anarchists of the galaxy!

Before And After The PC Makeover- Richard Scarry's Best Word Book Ever

by Zeon Santos • via Neatorama        Saturday, November 14, 2015 at 10:00 AM

Reading Richard Scarry books isn't supposed to be a scary experience for children- they're supposed to expose children to realistic life scenarios so kids better understand the society they live in.

Even though the people and the perils are the same as they were when Richard Scarry's books first started coming out in the 1950s, a shift in social values has changed how we describe our world.

Photographer Alan Taylor spotted some differences between the 1963 version of Richard Scarry's Best Word Book Ever and the 1991 version, as the book received a PC makeover to reflect modern social attitudes.

Some of the changes seem a bit nitpicky, like removing pretty and handsome from character descriptions, but there's one change everyone can get behind- dad's cooking!

See more before and after images from Best Word Book Ever here