Commercial TV licence fees abolished in Oz

Australia’s commercial broadcasters have welcomed a government plan to abolish the television licence fees they currently pay.

As of the 2017/18 Australian fiscal year, channels such as Network Seven, Nine and Ten will no longer pay commercial TV licence and datacasting fees, but instead pay a spectrum-based charge.

This will reduce their payments from around A$130 million (US$96.3 million) per year to about A$40 million.

The government package also reiterates plans to abolish the the so-called ‘two out of three’ rule, which stops media companies from owning TV, newspaper and radio broadcasting licences at the same time; calls for a review on children’s TV programming; and plans to restrict online gambling adverts across all platforms.

“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,” said Network Ten CEO Paul Anderson (pictured right).

“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.”

Ten is in a precarious financial situation, and its commercial television rivals have all complained of the burden of the existing licence fees place on investing in content.

“Nine believes this total package tackles the various elements of media reform required for the industry to compete with global players in a rapidly changing media environment,” said Nine CEO Hugh Marks (pictured left). “We would encourage the parliament to pass all elements in their entirety.

“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.”

He also added it was “sensible to address the outdated media ownership rules” in Australia.

Tim Worner, CEO of Seven Network parent Seven West Media, said licence fees had been “the single biggest regulatory impediment facing this industry for some time”.

“Removing these outdated fees will allow us to invest in more and better local content and to transform our businesses for the future,” he added.

“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,” added SWM chairman Kerry Stokes. “It will give us a real opportunity to compete in the new media environment.”

However, production body Screen Producers Australia called on the government to close a loophole that allows commercial broadcasters to acquit Australian content quotas with New Zealand-produced shows, which are often cheaper to acquire than paying for local production.

“The loophole must be closed. Because of a lack of foresight when negotiating a trade deal with New Zealand in the 1980s, broadcasters can broadcast cheap, second-run New Zealand programs and have them qualify as Australian,” said SPA CEO Matthew Deaner. “Having New Zealand from Above and New Zealand on a Plate qualify as Australian content makes a mockery of the Australian Content Standard. This is one of the reasons why a content review, announced by the Government on the weekend, is long-overdue.”

“The report lays bare the stress the industry is under and unfortunately, the commercial television broadcasters’ commitment to Australian drama and Australian children are the first casualties. Since 2013, the broadcasters’ expenditure on Australian drama has dropped nearly 30 per cent.

“At the same time, New Zealand drama is increasingly used as a cheap substitute. In 2016, Channel Nine acquit just over 40 per cent of its first-run drama quota on New Zealand content and Ten acquit 20 per cent of its first-run children’s drama quota on New Zealand content.”

The SPA welcomed the package’s overall goals, and in particular the children’s TV programming review, noting the commercial broadcasters wanted their current quotas “abolished”.

“This is a major concern,” said Deaner. “As an industry, we will resist this proposal while working constructively to develop options to strengthen this important part of the industry.”

The Turnbull government’s plans have been met with political opposition by the Labour and Green parties, particularly over the plan to relax media ownership regulations.