Revised media reforms abolishes licence fees, amends sports anti-siphoning list

Arvind Hickman
By Arvind Hickman | 6 May 2017
Communications minister Mitch Fifield at the National Radio Conference

The Australian government has tabled a revised and expanded media reforms package that abolishes the contentious broadcasting licence fees, imposes tighter restrictions on gambling advertising during live sport and removes several overseas sports competitions from the anti-siphoning list.

There’s also provision to support women’s sport and new spectrum licence fees that could cost broadcasters up to $45 million, but better reflect current usage.

This is in addition to the original package that repeals the two out of three and 75% audience reach media ownership laws. It’s a compromised package designed to please all of the major stakeholders – free-to-air broadcasters, Foxtel and senate powerbrokers who will be critical to ensure a safe passage through the upper house.

At a glance the package includes:

  • The scrapping of the “outdated” licence fee in favour of a spectrum charge.
  • Revision of the anti-siphoning list with several major events removed, and the delisting period extended to 26 weeks.
  • Gambling advertising restrictions - gambling ads prohibited in live sport shown before 8.30pm including a five minute buffer before and after the event.
  • Support for Australian produced content, and underrepresented sports such a women’s codes.
  • Repeal the 75% reach rule and two out of three rule which current prevents a network ‘reaching’ 75% of the population or owning more than two media channels.

The new package has quite a few concessions from South Australian senator Nick Xenophon, who has long championed restrictions to gambling advertising and getting rid of broadcasting licence fees that cost TV and radio broadcasters up to $130 million each year.

The relief removes one burden that punishes local content providers in competition for advertising dollars with global digital tech companies like Facebook and Google.

In announcing the package, communications minister Mitch Fifield said: “The Turnbull Government has announced a comprehensive package of reforms that will improve the sustainability of Australia’s free-to-air broadcasting sector, support the creation of high quality Australian content and modernise broadcasting and content regulation.

“The package provides significant ongoing financial relief, acknowledging that Australia’s broadcasters are facing an increasingly competitive commercial environment, with intense competition for audiences and advertising revenue from other media companies, including global online and on-demand operators.

“The reforms are vital to the long term viability of the sector, which provides access to high quality Australian content that contributes to, and reflects, Australian cultural life.”

Abolishing the broadcasting licence fees was welcomed by free to air broadcasters, particularly Ten, which had been banking on financial relief at its recent half yearly results presentation.

See here for: 'Operating at the mercy of its bank'; Mediawatch questions if Ten can survive

“The government’s package provides very welcome, immediate financial relief for all commercial free-to-air television broadcasters. It provides a boost for local content and the local production sector," Ten's CEO Paul Anderson said. 

“Every dollar from today’s changes will be reinvested into our great Australian content and into continuing to enhance our services for viewers across all platforms.

“Recent financial results and announcements from across the Australian media industry clearly demonstrate that this is a sector under extreme competitive pressure from the foreign-owned tech media giants."

Nine CEO Hugh Marks said the "total package" should help the industry compete with global players in a rapidly changing media landscape.

“The move from licence fees to a spectrum use-based fee addresses the onerous and prohibitive charges we have been facing, at a time when our business is competing with global giants who have no such restrictions in our market," Marks said.

Seven West Media chairman Kerry Stokes, believed to be one of the major roadblocks to the initial package, has also called on the senate to pass the package in its entirety.

“I endorse the complete legislation package proposed by the government, including licence fee reductions, media ownership changes, gambling advertising restrictions, anti-siphoning and the spectrum charge. It will give us a real opportunity to compete in the new media environment. I am pleased that the Turnbull government is backing the Australian media industry through these reforms.”

Free TV chariman Harold Mitchell also welcomed the reforms. “This package is crucial for Australian jobs and our ability to continue creating great local programming that is watched by millions of Australians every day. I congratulate the government and minister Fifield,” Mitchell said.

“Broadcasters must be able to effectively compete with the giant multinational media companies taking advertising dollars out of Australia. Our industry supports more than 15,000 jobs and invests $1.5 billion each year in Australian content.

“Until today, Australia’s free-to-air broadcasters had been paying the highest licence fees in the world.

“Repealing the 75% audience reach and cross media ownership rules is vital for Australian media companies to be able to compete in our modern media environment and we urge the Senate to support the legislation already in Parliament."

CEO of Prime Media Group, Ian Audsley, said the regional broadcasters have worked “tirelessly for many years”, detailing the significant structural challenges faced by the television industry and advocating for change. “We are very pleased to see that everyone has gravitated to share our view and now encourage the Parliament to pass the legislation as soon as possible,” he said.

WIN CEO Andrew Lancaster aded: “The government should be commended for bringing the industry together to support a raft of changes that includes repeal of the archaic 75% reach rule and two-out-of-three cross media rule.”

A view from radio 

Commercial radio broadcasters have also welcomed the elimination of radio broadcast fees by the Turnbull government which it says will result in around $20 million in annual cost savings and help counter increasing pressure from unregulated international and online competitors.

CEO of industry body Commercial Radio Australia (CRA), Joan Warner, said the cut, together with a small increase in fees for the use of spectrum, is expected to result in a drop of 94% in the total fees commercial radio stations pay to government.  

“We welcome the removal of broadcast licence fees which will provide a fairer competitive environment and allow radio to invest even more in Australian jobs and content,” Warner said.

“We call on the parliament to support this package which provides much needed relief for local Australian radio. However, we are also keen to ensure that all CRA member stations receive substantial reductions in fees paid and so we will be working closely with the government on the methodology used to calculate spectrum fees for CRA members.”

The Broadcasting Reform package, to be announced as part of the Budget, also proposes restrictions on gambling advertising in live sports broadcasts, starting five minutes before the game begins until five minutes after it ends, up until 8.30pm at night.

Warner adds that gambling advertising is already covered by the Commercial Radio Code of Practice and federal and state regulations, so the industry would like to see any new restrictions “accompanied by a national harmonisation and simplification” of existing, disparate rules relating to gambling advertising.

CEO of Southern Cross Austereo (SCA), Grant Blackley, said SCA is delighted that the government recognises the need for meaningful media reform and importantly has acted to secure a consensus view from key stakeholders.

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