'Licence fees threaten local content production' - metro TV chiefs

Arvind Hickman
By Arvind Hickman | 1 March 2016

Australian metropolitan TV networks have warned hefty broadcast licence fees threaten the production of regional content, particularly with global media companies such as Netflix, Facebook and Google circling a crowded media market. 

While welcoming parts of communications minister Mitch Fifeld's media reform package today - such as the abolition of the 75% reach rule and two out of three ownership laws - network chiefs say the reform package misses a golden opportunity to create a level playing field between local broadcasters and global media players. 

They argue that licence fees of 4.5% gross revenue provide the biggest barrier for Australian networks to compete with global companies that don't pay fees, Australian tax or have the same local overheads.

Fifield said licence fees would be reviewed in the course of the next budget, but this failed to impress Seven West Media boss Tim Worner.

“Media ownership changes might be great for the deal junkies out there but they are not going to ensure a strong future for Australian film and television production,” Worner says. “You won't see one more minute of local content as a result of these changes, in fact you will probably see a lot less, especially in regional Australia.

“It's disappointing that the government has not walked the talk when it says it wants to focus on innovation and the future.”

Nine's CEO Hugh Marks echoed this view, adding: “The central issue is how do we create a level playing field that enables us to compete effectively into the future with the global brands that have entered the market, and continue to provide Australian audiences with the very best free to air television service.”

Ten Network's chief executive Paul Anderson says free-to-air networks have to pay “the highest broadcasting tax in the world”.

“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,” he adds.

Anderson says amending licence fees is urgent to retain local voices in our media and a local content production industry.

Regional boost

It is expected Fifield's reforms will pave the way for mergers between metropolitan and regional network partners.

To ensure regional content is preserved, the package requires broadcasters to produce 900 minutes of content in six weeks, with more points for news content locally produced in a region. Under current rules, broadcasters need to produce 720 units.

WIN CEO Andrew Lancaster says the reform package bring Australian media laws into the 21st century.

“The new local content obligations strike a sensible balance between ensuring reasonable levels of local content are maintained upon the merger of a regional and metro broadcaster, while ensuring local news services remain financially viable in the meantime,” Lancaster adds.

The sports anti-siphoning list, which allows free-to-air boradcasters first refusal on major sports events, has been left out of the reform package due to fears it would garner enough political support.

AdNews has approached Fox Sports for comment.

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