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Young moguls in the making

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Has the review of Australia's media landscape missed a crucial point? Julian Lee reports.

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Natalie Tran - Vlogger

Video blogger Natalie Tran talks about her YouTube channel and the life of a vlogger.

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One day soon, Natalie Tran, a video blogger from Sydney, might be considered a media entity in her own right.

Her whimsical musings on life, uploaded to YouTube once a week, have captured a global audience seen by at least a million each time and the advertising sold around them affords her a living to the tune of $100,000 a year.

However, in the eyes of the panel of experts who this week unveiled a road map of the media, Tran doesn't qualify. For one, she doesn't meet the revenue threshold, and her videos are not ''professionally produced''.

Portrait of Video Blogger - Natalie Tran. Friday 2nd March 2012.

Portrait of Video Blogger - Natalie Tran. Friday 2nd March 2012. Photo: James Brickwood

Not that she sees it that way. Like others she started out as an amateur with a handycam and an idea, but today she has an audience - and who knows what tomorrow may bring.

''I bring a level of professionalism to my work, I write the script, I do a story board and I edit. I put a lot of time and effort into them. But is that professionally produced?'' she asks rhetorically.

No. But she is in good company. Google, Telstra, which is broadening its offering from mobile phones to internet television, Facebook, and the ubiquitous Apple are among those that the Convergence Review committee deemed as being outside their regulatory framework.

The panel's remit was to write a rule book that can manage the transition from the old world of free-to-air television, radio and newspapers to the new world of smart phones, tablets and applications that deliver articles and videos in ways that the original legislation could never have dreamed of.

But until such time as the likes of YouTube are big enough to carry the burden of producing and distributing the TV programs that we consume, it will fall to the old media to continue to foot the bill.

Quite when that will be is anyone's guess, as the lead panelist, the former IBM chairman Glen Boreham, admits. ''I think it is impossible to predict when that is going to happen. But until it does we want to let that space flourish without any additional influence from government.''

That space is the one inhabited by the likes of Tran at one end and Apple at the other.

But if the panel's aim was to future-proof the Australian media by building in regulations that would capture the giants of tomorrow, perhaps they are already too late.

The amount of time we spend on the internet exceeds that of television by some six hours a week, according to the researcher Nielsen. Our adoption of reading and watching TV on our mobile phones is rising rapidly, having quadrupled in the past year alone; Australia was faster than the US to reach the point where half the population is using smart phones.

For Matt Bruce, the managing director of Nielsen's media practice, the numbers tell a clear story. Of the top 10 most visited website brands by Australians in March, all are either wholly owned or part-owned by international media companies, starting with Google which was used by 14 million people in March, through to YouTube, Microsoft and Wikipedia.

''You can't ignore the fact that the big players are the international brands,'' Bruce says. ''So how does the government regulate that?''

If someone like Bruce, who is paid to keep abreast and measure media audiences, is finding it hard to keep up with the pace of technological changes what hope is there for the rest of us, let alone legislators whose job it is to preserve the diversity and the revenues of the Australian media.

''It is going to be very difficult for the legislation to keep up with the pace of technological change and if anything it's going to get worse because it is moving so quickly,'' Bruce says, pointing to the impact of the iPhone launched just five years ago and its two-year-old tablet sibling, the iPad, which has already sold 2.6 million. Together they are rendering seismic changes in our media habits. Who would have thought about apps five years ago, says Bruce.

The convergence review panel says that may well be the case but what we are still looking at is content produced by the same old companies, Fairfax, News Ltd, Ten, Nine and Seven. ''Despite these changes, Australians continue to get the vast majority of news and entertainment from a relatively small number of established providers,'' it found.

If the convergence review is talking about tomorrow, the ABC's managing director, Mark Scott, says tomorrow is already here. In a recent interview Scott was unequivocal about who is the competition. ''Now it's going to be Google, it's going to be Apple TV, it's going to be Spotify, it's going to be these global giants sitting on hundreds of billions of dollars cash, moving right into the content play with audiences able to dramatically personalise their viewing experience and a real transformation.''

Already those challengers are earning sizeable revenues from Australian audiences, even if the money made from ''professionally produced'' TV-like content is below the convergence review panel's revenue threshold (see box).

Megan Brownlow, the executive director of PricewaterhouseCoopers' media practice, believes the gap is already closing on traditional players.

''I think it is going to happen sooner rather than later,'' she says. ''There are a range of business models out there from traditional advertising to pay as you go [movies] that are driving it.''

YouTube's stated strategy - to move its video-sharing platform away from the home movie tragics of piano-playing cats to more professional content for a more compelling advertising environment - is one such example. In effect, YouTube, which is owned by Google, wants to be like a TV network.

Only this week its global head of content, Robert Kyncl, unveiled three new channels to advertisers, one called Wigs that will focus on scripted dramas for women, another called TeamUSA focusing on the Olympics and another, Maker Studios to be launched later this year developed in conjunction with the company behind the New York Tribeca Film Festival.

Programs like that will be easier to find once Google relaunches its Google TV service, a software program most likely embedded in TV sets that helps users navigate the internet for programs to watch or movies to rent.

Set-top boxes such as Apple TV and Telstra's T-Box, and the internet TV services offered by telcos such as Optus and iiNet, are set to take off as broadband speeds quicken with the advent of the NBN.

Even Facebook, which last year trialled movie rentals, is looking to offer more videos on its site as a way of boosting advertising revenue.

Boreham insists there is still some way to go before there is parity between old and new in the media. ''We thought it would be larger but there really is quite a gap between, say, Bigpond TV and Apple TV and the TV networks,'' he says.

But that is closing. In the decade to 2010 $400 million in advertising has dropped off from the commercial free-to-air TV sector, according to the Commercial Economic Advisory Service of Australia, which compiles media data figures. In that time advertising on the internet has gone from zero to $2.2 billion or 17 per cent of the $13 billion that is spent on advertising in the Australian media.

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