Ten lashes out at licence fees

Australian commercial broadcaster Network Ten has issued a profit warning to shareholders, claiming licence fees are threatening the local production sector.

Paul AndersonIn a trading market issued to the Australian Securities Exchange today, Ten revealed it was expecting an earnings before interest, tax, depreciation and amortisation (EBDITA) loss of up to A$5 million (US$3.85 million) for the half-year.

The full year loss would be between A$20 million and A$30 million if there was no change to the current commercial broadcaster licence fee system, which has been long been a bone of contention at Ten and rivals Network Seven and Network Nine.

Yesterday, Seven West Media, parent of Network Seven, revealed half-year net profits would be down 91% due in part to write-downs and the sale of its stake in SVOD service Presto.

“This industry is obviously under severe duress and yet commercial free-to-air television broadcasters continue to be penalised by the world’s most expensive broadcast licence fees,” said Ten CEO Paul Anderson (pictured).

“Without the investment of the commercial free-to-air broadcasters, local production will dry up, jobs will be lost and local news will be a thing of the past.

“As we have been saying for years now, the current regulatory framework is unsustainable. Without an urgent reduction in licence fees to the levels paid overseas, and without reform of Australia’s archaic media laws, this sector faces a very uncertain future.

Anderson noted international SVOD services operating in Australia, including market leader Netflix and new entrant Amazon Prime Video, were exempt from much local media regulation and content obligations, and did not pay licence fees.

“We are calling for urgent action from the Government and the Parliament to ensure a future for the high-quality, free television service that Australians highly value and rely on.”

On a brighter note for Ten, the broadcaster expects its full-year revenue to increase approximately 1.2% year-on-year for the first half of 2017.

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