Networks disappointed with small cut to licence fees

Free to Air commercial networks have expressed disappointment that Federal Treasurer Scott Morrison’s cut to licence fees was kept at 25%.

Networks were hoping for a much deeper cut -or even the abolition of fees altogether.

Free TV Chairman, Harold Mitchell described the reduction as a modest first step.

“We appreciate that the Budget delivers a small permanent reduction in licence fees however, we are concerned that the Government hasn’t acknowledged that these changes are urgent,” he said.

“In the new media environment, the government can’t afford to be complacent. We need to act now to make sure broadcasters can continue to invest in great Australian programming and in transforming our businesses.

“The pace of change is unrelenting and licence fees must be reduced to international best practice levels without delay.”

“We will continue to work with the Government and the Parliament to ensure the public interest in a strong and healthy free-to air broadcasting sector.”

TEN Network Chief Executive Officer, Paul Anderson, said: “Despite a lengthy review and extensive consultation with the television industry, the Government’s disappointing decision only reduces this outdated and unfair super profits tax from 4.5 per cent of gross revenue to 3.375 per cent.

“While any reduction is positive, at this level our fee remains wildly out of step with fees paid in any comparable jurisdiction. This single reduction does not recognise the urgency of the challenges that this industry faces and the Government has not indicated a clear path forward to a truly sustainable fee.

“The commercial free-to-air television networks are by far the largest contributor to domestic content production in Australia and underpin the entire production sector. Together, we spend more than $1.5 billion a year on Australian content,” he said.

“As we clearly outlined to the Government, a meaningful reduction in licence fees would have resulted in more work for local content producers and more Australian content on air. Without an urgent path to a sustainable fee, local content remains under threat.”

Tim Worner, CEO of Seven West Media said, “Television licence fees are outdated and not sustainable.  The small cut in this budget is not nearly what the industry needs to compete and innovate in a fundamentally changing media environment.

“We are disappointed that the Government has not recognised this. It seems that commercial television broadcasters will continue to struggle under the burden of the highest licence fees in the world for the next few years and that the spectrum we use to provide our services is also under threat.  This will have a negative impact on our ability to generate jobs and growth in the Australian production sector.  The time for us to invest in the changes we need to make to transform our businesses for the future is now.”

Meanwhile ASTRA chief executive Andrew Maiden said licence fees reflect the protections that the free TV sector enjoys, such as the anti-siphoning list.

“In exchange for paying licence fees, Australian free-to-air broadcasters enjoy a legislated ban on competition, guaranteed access to broadcasting spectrum and the world’s most protected market for sports broadcast rights,” he said.

“There should be no reduction in licence fees without a corresponding reduction in the privileges and protections from competition that free-to-air television networks have amassed over decades.

“Thirty years after serious efforts began to eliminate protectionism, few industries enjoy greater structural advantages than free-to-air television, and even fewer expect corporate welfare as changing technology and consumer choices challenge their privileged position.”