Digital era ends golden age for free-to-air TV
KERRY Packer didn't make all his money playing blackjack; though I'm reliably informed he spent a not inconsiderable amount of time at the tables trying to - generally in faraway places.
Urban myth has it that he was quite good at the game, together with the odd wager on the "neddies" that caused grief to a few rich bookmakers.
The truth is that fortunes have been made over the years by several successful, even very successful, media owners.
In Packer's case, we shouldn't ignore a lifetime of successful ventures into other businesses, in Australia and abroad, but the licensed TV stations are a protected species, a bit like the dugong or, for non-fishing people, the quoll.
The government awarded these licences to many over the years, including some quite colourful characters, some of whom thought they were a protected species, like Christopher Skase, just to name one.
Even an airline owner had a licence. Anyone remember Reg Ansett and Ansett Airlines? He made a fair go at running Channel 0 - the old Channel Ten
To value its protection of the industry, the government imposed a licence fee, or an extra tax, of 9 per cent on turnover.
It wasn't too much of an impost on the owners. Who wouldn't pay a bit of extra tax to operate in a protected industry with no competitors?
Everyone was on to a good thing for the first half of the life of television in Australia. By 1980, the government was raking in what it thought was big money of about $150 million a year.
In return, the networks had their competitors capped, in their case at the knees.
But by last year problems were occurring. The networks were now paying more than $1 billion a year and instead of being protected, the market had exploded in this changing digital world, with the introduction of Foxtel and another 100-plus channels, as well as the internet taking nearly 20 per cent of all advertising dollars.
The early years were great for everyone.
Who else in the world thought of putting a wheel in the last 20 minutes of a live tonight show that often rated more than the first half of the show?
Who else allowed television to be live?
The Americans still can't believe a program like The Don Lane Show went to air live after only five hours' rehearsal and live commercials were allowed to dominate the show so they became part of it. They were exciting days.
And our drama, still so popular, was an important statement of who and what we are. As we know, Charlie and Louise don't agree on much except that they both still miss The Mavis Bramston Show.
So the government has given the networks back a big lump of the licence fee with the expectation that they can be more competitive. The latest figures show that there has been a 23 per cent decline in investment in Australian drama, from $125 million in 2005-06, to $96 million in 2006-07.
But the real drama is now behind the scenes as Foxtel, with its fiery boss Kim Williams and its owners, including News, Packer and Telstra, crying poor.
But it's an election year and it's the right thing to do, so what do they expect? Harold Mitchell is the executive chairman of Mitchell Communication Group.