Free-to-air fights back on political front

James McGrath
By James McGrath | 18 May 2015

FreeTV is fighting back against both the government and digital players with twin reports highlighting the sector's economic impact and trust level in the community.

The free-to-air TV peak body has released the findings of two studies conducted by Venture Consulting and Crosby/Textor respectively, taking aim at potential government reviews into the sector.

The research from Venture Consulting found the sector contributes $3.2 billion in economic surplus each year on the back of investment in local production and benefits to advertisers.

Venture found that the free-to-air sector spends more than $1.5 billion on Australian programming per year, and is increasing this at a rate of 10% year-on-year. This figure does not include networks' investment in sporting content.

It also found that the average household would be willing to to pay $17 per month to receive the free-to-air service.

Meanwhile, a separate report from Crosby/Textor found that almost 90% of respondents believe free-to-air is a valuable service for the community, while 88% believed major sporting events should be available to all Australians for free.

“This research shows that despite more ways than ever to view content and the unfair restrictions and fees that shackle our industry, free-to-air television is highly valued by Australian voters,” FreeTV chairman Harold Mitchell said.

Networks have also welcomed the report, with a spokesperson for Ten saying that having hard data would be invaluable.

“The Value Of Free TV clearly demonstrates that free-to-air TV remains a powerful, effective and persuasive medium. Importantly, the report proves, once again, that despite the choice of technology and devices now available to consumers, free TV remains the primary and most valued choice for viewers," they said.

"The report’s results are clear: television is still the most powerful medium in Australia, bar none.

“Quantifying free TV’s contribution to the economy for the first time underlines the importance of free-to-air broadcasters’ investment in local content and jobs. It highlights the desperate need for media reform to create a more competitive media landscape for home-grown media companies to effectively compete in and to maintain this $3.2 billion benefit to the economy.”

The reports come as the free-to-air sector fights battles on two fronts:

The first is with potential government regulation looking at things like licensing fees, cross-ownership media laws, reach rules, and changes to the anti-siphoning list.

On the other front, free-to-air TV and TV more broadly is fighting the entrance of subscription video on demand platforms such as Presto, Stan, and Netflix into the Australian marketplace.

“We are at a critical time for broadcasters. We are all investing in new services to respond to audience demands for our content when and where they want,” Mitchell said.

“But nearly 18 months after we switched off analogue we are still saddled with a range of outdated rules and regulations – that don’t apply to anyone else.”

He said the government could not afford to take the ongoing economic impact of free-to-air TV for granted.

“Governments and the community can't afford to be complacent about this. Google, Apple, Netflix and all the other global players who are now entering our market are not going to employ 15,000 Australians, or invest over $1.5 billion in Australian content annually,” Mitchell said.

Mitchell also took aim at Netflix as “the flavour of the month”.

“Online services like Netflix may be flavour of the month but we have been a valued part of the Australian community for decades and we continue to be the most important platform for the vast majority of Australian viewers,” Mitchell said.

“There are a lot of doomsayers out there who will tell you TV is dead. Well, we decided to find out what Australians really think of their TV."

The survey results were collected before the entrance of Netflix into the Australian marketplace.

The report from Venture Consulting also  estimated that the margin on each dollar of TV investment from advertisers was roughly 20c to 40c for each dollar invested.

“We have conservatively estimated an average return of 20-40c of margin for every $1 spent on TV advertising, net of production costs, which is treated as a surplus,” the report read.

“On total industry advertising revenues of $3,506m in FY14, this equals an economic surplus for those advertisers of around $1.0bn per year.”

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