Regional TV networks face bleak future without 'piecemeal' reforms

Arvind Hickman
By Arvind Hickman | 1 April 2016
Seven West CEO Tim Worner fronts up to a senate committee hearing into media ownership reform.

Regional TV networks face a bleak future if Mitch Fifield's media reforms do not materialise, while Seven West Media warned consolidation could erode regional content production, a senate committee has heard.

Yesterday, metropolitan and regional broadcasters were questioned by a senate committee over the media ownership reforms package, which includes the abolition of the 75% reach rule and two-out-of-three cross-media ownership rule.

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executive Ian Audsley,regional broadcasters WIN, Prime and Southern Cross agreed the current media ownership laws are outdated and “act as a brake on regional media being able to organise itself in an economically efficient manner”.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 said regional networks are at the "very extremities of a television lake", and in a drought those extremities dry out first. "That structural change or drought has hit us already. Three years ago my company was worth $360 million, today it has a market value of $130 million," he says.

By "drought", Audsley is referring to dwindling advertising revenues and audience figures that have hit regional networks hard.

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

"While we support provisions under which local content requirements will increase upon a trigger event, we do have concerns about how the definition of a trigger event is currently drafted," Audsley said.

This trigger event refers to acquiring a 15% or more stake in a regional TV network, a level which Audsley says is unlikely to lead to consolidation.

Regional and metropolitan executives disagreed on whether market consolidation would impact upon regional TV content. 

“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," Seven West Media CEO Tim Worner said, while holding up Seven Queensland as a model of success in regional broadcasting.

Audsley said that consolidation could lead to a consolidation of hard assets, such as pooling the use of studios in major regional centres rather than having them in every town. But content producers such as reporters and camera operators would continue to live local to where news is gathered.

A 'piecemeal' approach

Earlier in the day, Worner repeated Seven's view that the Fifield's reforms do not go far enough and criticised what he labelled a "piecemeal approach" to media reforms.

Worner and representatives from subscription TV want a more comprehensive reforms package that consider other areas of regulation in addition to ownership.

Worner says the most important law to amend is the 4.5% licence fee levied on the gross revenue of all commercial TV broadcasters to enable them to compete with global media players like Facebook and Google. 

He has also urged local TV production tax offset to be raised from 20% to 40%, as it is for filmmaking.  

ASTRA CEO Andrew Maiden wants lawmakers to amend the anti-siphoning list, arguing "modest trimming" of the list should focus on events that are played overseas in unfriendly timezones.

Foxtel group director of corporate affairs Bruce Meagher points out that streaming companies can get around the list and pay over the odds for sports rights: "It's discriminatory in that the list only applies to Foxtel in effect."

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