Australia steps closer to broadcast reform


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Rebecca Hawkes

| 04 April 2016




Australia is closer to allowing mergers between metropolitan and regional commercial free-to-air (FTA) TV networks after a reform package was introduced to parliament on Saturday (2 April).


Communications Minister Mitch Fifield says he hopes the package, which also relaxes cross media ownership, will be passed into law before the end of the year, after it received approval from a coalition backbench committee.

Australia’s regional broadcasters had told a senate committee on 30 March that current media ownership laws “act as a brake” on their economic wellbeing.
In a joint statement read by Prime chief executive Ian Audsley, regional broadcasters WIN, Prime and Southern Cross agreed the current media ownership laws are outdated and “act as a brake on regional media being able to organise itself in an economically efficient manner”.

Audsley added that regional networks are the first to be hit by falling audience figures and advertising revenues. “Three years ago my company was worth A$360 million, today it has a market value of $130 million.”

“If we are working in the same regulatory environment, it's hard to see how we can grow our businesses,” added Audsley.

The broadcast reforms package includes the abolition of the 75% reach rule and two-out-of-three cross-media ownership rule.

Paul Anderson, chief executive of Ten Network Holdings, said these changes would help Australian media companies better compete against global digital giants.

“Ten Network is now competing directly for viewers and advertisers against large, global Internet companies that are exempt from local media regulation, don’t pay television licence fees, pay minimal corporate tax despite taking billions in advertising revenue in this market, and in some cases don’t have a single local employee.

“Meanwhile, we pay the highest broadcasting tax in the world on top of our normal corporate taxes and we are held back by media ownership rules that don’t even recognise the existence of the internet,” he said.

There is, however, some disagreement between regional and metropolitan broadcast executives about how far market consolidation would impact upon regional TV content.

The proposals include stipulations that regional content production must increase if 15% of a company is bought by another network; a proposal broadly supported by the regional broadcasters.

However, Seven West Media CEO Tim Worner warned: “If entities are merged, the controlling entity is going to look very quickly for efficiencies. When they do that they will find the biggest costs are in local content production, and I believe that is where they'll go first”.

Worner also criticised what he called a “piecemeal approach” to media reforms, saying the current government proposals don’t go far enough.

He, along with pay-TV providers, have called for the government to amend the 4.5% licence fee levied on the gross revenue of all commercial TV broadcasters, arguing this would enable them to better compete with global digital media players.

In addition, Worner called for local TV production tax offset to be raised from 20% to 40%, as it already is for filmmaking.

Pay-TV operator Foxtel has also urged the government to amend the anti-siphoning list that applies to major sporting events. Senator Fifield confirmed that changes to sports broadcasting regulations are not part of the current reform package, and could only happen with wider parliamentary support.