Cirrus@Austlit

COMMERCIAL RADIO NETWORKS

Australian radio networks can be traced back to the 1920s, with the introduction of radio to Australia. Here we look at the development and current state of networking in Australia, and the regulatory system that propagated its growth.

In the mid-1920s, the Postmaster-General’s Department settled on a system of A- and B-class stations. The regulator reasoned that this dual system would give listeners a choice of stations. The A-class stations were funded mostly through listener subscriptions, and in 1932 they became the government-funded ABC. The B-class stations were funded through advertising, and became the commercial stations we have today. This period from the 1930s, described as the golden age of radio, also saw the introduction of radio networks.

The Australian Broadcasting Act 1942 controlled the allocation of frequency, content and ownership, but it did not make any provisions for the networking of radio. Networking has never been legally regulated. The commercial stations began to form networks because they were viewed as the best way to deliver large audiences to advertisers. To many stations, especially those in regional areas, this was also a way to lower expenses. Australian broadcasters were closely watching the establishment of two American networks, NBC and CBS, and were keen to follow this trend to prepare for the perceived dominance of the ABC as a national broadcaster.

In 1930, Oswald Anderson, manager of 2UW Sydney, spearheaded the formation of the Federal Radio Network, later renamed the Commonwealth Broadcasting Network. Consisting of 2UW, 3DB, 4BC, 5AD, 6ML and some country stations, it was designed to split copyright and landline charges, and increase the stations’ appeal to advertisers hitherto deterred by the limited transmitter power of commercial stations. That year, 2UW and 3DB joined forces to provide a ‘ball-by-ball’ coverage of the Ashes Test matches in England. Two years later, Anderson presided over the coverage of the opening of the Sydney Harbour Bridge on 20 stations.

In 1935, the powerful Amalgamated Wireless (Australasia) Ltd (AWA) entered into negotiations to lease 2CH Sydney from the NSW Council of Churches as a hub for relays to its country stations. In October that year, the Lyons Coalition government introduced regulations designed to limit control by any one person or company to five radio stations throughout Australia. One minister estimated that two corporations—AWA and the Herald and Weekly Times—controlled 24 stations between them. The commercial industry, backed by newspapers with interests in broadcasting, erupted in protest; in a sign of the industry’s growing political clout, the government substituted a more lenient set of regulations providing for a maximum of eight stations to be owned by one company.

Most of the networks in existence by 1938, including the Argus network in Victoria, the Advertiser network in South Australia, the Whitford Network in Western Australia and the Findlay Tasmanian Network/Tasmanian Broadcasting Network, were organised at the state level. This was partly because linking up even capital cities through landlines was expensive.

There was one genuinely national network, the Major Network, which was centred on 2UE, 3DB, 4BK, 5AD and 6IX and later 7HT. The network virtually organised its stations on lines parallel with the placement of national features by Australia’s two dominant advertising agencies in broadcasting, J. Walter Thompson and George Patterson Pty Ltd.

In 1938, the Macquarie Network arose from a restructure of Sir Hugh Denison’s newspaper interests. It comprised 20 member stations and five cooperating stations, with a potential audience of 94 per cent of Australia’s population. There was a parliamentary and public controversy in 1951 when London’s Bartholomew newspaper group, which had bought the Argus and its associated radio stations, purchased a controlling interest in Macquarie.

The establishment of these networks was not viewed positively by the regulator, which proceeded to place ownership limits on the industry. Since networks such as Major and Macquarie could own, or have a controlling interest in, any number of stations, the PMG set an ownership limit of one station in a capital city, four in a state or a total of eight stations in the Commonwealth. While this limited the ownership of licences, it did not curtail the establishment of a network.

When West Australian Newspapers, which already controlled four radio stations, made a bid for a substantial holding in another four stations in 1968, the Broadcasting and Television Act 1965 was amended to include radio. No person or company was to hold an interest in excess of 15 per cent in more than four commercial radio stations in any one state or eight in Australia, reinforcing the spirit of the 1935 legislation.

The introduction of commercial FM radio in 1980 sowed the seeds of a new network. One of the original stations, 2MMM Sydney, bought EON-FM in 1986; it became 3MMM in 1988. Triple M stations in Brisbane, Adelaide, Perth and Auckland also emerged.

By 1986, the Macquarie Network had spent $3 million on developing MACSAT to transmit program content—news bulletins, music, a midnight-to-dawn program and John Laws—to eight of its own stations, and another 24 subscribing stations. A sophisticated computer system triggered cue signals to input ostensibly ‘local’ news, weather, advertising and time calls. That year gave rise to a new company owned by Kerry Packer, Consolidated Broadcasting Corporation. But the bold, expensive talk format linking 2UE in Sydney with 3AW in Melbourne was a miserable failure, with audiences unable to adapt to the lack of local content.

Under new cross-media ownership laws in 1987, an owner was effectively stopped from acquiring more than 15 per cent of a radio licence if it published a newspaper or owned a television station in the same service area. However, the limits on the scale of holdings in any one medium were loosened: operators could now own up to 16 radio stations. By now, three powerful commercial radio groups—each with interests in at least three metropolitan markets and a range of regional ones—had emerged. The Australian Radio Network, half owned by the American behemoth Clear Channel, had evolved from Alberts radio interests, with 2UW and 4BC as its linchpins. Hoyts Media was backed by the established cinema chain. It, in turn, had a strategic 14.9 per cent shareholding in its main network rival, Wesgo Holdings Ltd.

Under the Broadcasting Services Act 1992 (BSA), the limit of ownership of radio licences in competitive markets was increased from one to two on the basis that the number of radio services had grown. Restrictions on foreign ownership were also lifted.

As more FM licences became available, other FM networks—such as DMG Radio (owned by the London Daily Mail Group)—started to form. Adding to its regional network, DMG Radio was the successful bidder at the auction of two FM licences, one each in Sydney and Melbourne. In 2004, DMG opened Star 104.5 FM (Central Coast) and Nova 91.9 (Adelaide) and won the auction for further licences in the licences in an auction held for additional FM licences in Sydney, Brisbane and Melbourne. DMG’s competitor, Austereo, owned FM stations in the capital cities and shares in regional stations in Newcastle and Canberra.

A new player in regional radio also emerged. Macquarie Regional RadioWorks (now Southern Cross Austereo) purchased 32 stations owned by RG Capital and 57 owned by DMG. The rise of networks was rapid and the old networks gave way to new players. Macquarie Regional RadioWorks and the 2SM Super Network became two of the largest regional radio networks in Australia.

The proliferation of networked program on a daily basis into regional Australia led to an investigation by the Australian Communication and Media Authority (ACMA) to address the concerns of listeners to regional radio. They felt they were losing their local regional broadcasting content. The 2001 Inquiry into Regional Radio found that networks were not servicing their licence areas by providing enough local voices and content. The industry argued otherwise, with the Federation of Australian Broadcasters (now Commercial Radio Australia) stating that networking met ‘community needs, competitive issues, economic necessity and programming variety’.

Concerns about an over-supply of networked programs to regional areas were addressed through proposed amendments to the BSA in 2006. The ACMA’s subsequent Local Content Levels Investigation made several recommendations that were directed only at regional radio and in particular the networks that owned the licences concerned. The amendments to the BSA introduced in 2007–08 effectively re-regulated regional radio to ensure a degree of local content.

REFs: H. Criticos, ‘The Centralisation of Regional Radio: City versus Country in the Super Radio Network’, in M. Mollgaard (ed.), Radio and Society (2012) and ‘From Deregulation to Regulation: A Change for the Better for Regional Radio’, in C. Anyanwu et al. (eds), Refereed Proceedings of the Australian and New Zealand Communication Association Conference (2013); B. Griffen-Foley, Changing Stations (2009).

HARRY CRITICOS