Networks welcome media reform package

Free to Air networks and Pay TV have welcomed a media reform package announced this morning by Mitch Fifield, Minister for Communications.

The wide-ranging changes cover Licence Fees, Gambling Ads, Reach Rule, ‘2 out of 3’ Rule, Anti-Siphoning List, Content & Children’s TV Review, and Women’s & Niche Sport.

Mitch Fifield release:

The Turnbull Government has announced a comprehensive package of reforms that will improve the sustainability of Australia’s free-to-air broadcasting sector, support the creation of high quality Australian content and modernise broadcasting and content regulation. The package also includes a community dividend in the form of further restrictions on gambling advertising. The measures include:

Abolishing broadcasting licence fees and datacasting charges.

Applying a fee for the spectrum that broadcasters use at a level more reflective of the current media landscape.

Further restrictions on gambling advertising in live sporting events across all platforms.

Amending the anti-siphoning scheme and list.

Repealing the two out of three and 75% audience reach media ownership rules.

A broad ranging and comprehensive review of Australian and children’s content.

Funding to support the broadcasting of women’s and niche sports

The package provides significant ongoing financial relief, acknowledging that Australia’s broadcasters are facing an increasingly competitive commercial environment, with intense competition for audiences and advertising revenue from other media companies, including global online and on-demand operators.

The package will abolish free-to-air broadcasting annual licence fees currently estimated to raise around $130 million on television and radio to improve the ability of broadcasters to operate on a level playing field with other platforms. Licence fees, which are revenue based, were introduced when broadcasters could generate significant profits due to their exclusive access to mass audiences. In today’s media environment, licence fees are a relic of a bygone age of regulation.

Under the reforms, broadcasters will pay new annual spectrum fees estimated to raise around $40 million, a level that is more reflective of the current media landscape. The financial relief provided by the package gives commercial broadcasters the flexibility to grow and adapt in the changing media landscape, invest in their businesses and in Australian content, and better compete with online providers.

The package also includes a community dividend in the form of further restrictions on gambling advertising during live sports programs. The Government will work with industry to introduce new restrictions on gambling advertisements during live sports broadcasts shown on commercial television, commercial radio, subscription television, the Special Broadcasting Service (SBS) and online platforms. The new restriction will ban gambling advertisements from five minutes before the commencement of play until five minutes after the conclusion of play or 8:30pm, whichever comes sooner. This will provide a clear and practical zone for families and children to watch live sports. Existing exemptions for advertising that covers the racing industry and lotteries will remain.

The reform package will also amend Australia’s anti-siphoning regime to reduce the size of the list and update other parts of the scheme, whilst ensuring that iconic sporting events of national significance are retained.

This year, the Department of Communications and the Arts, Screen Australia and the ACMA will undertake a review of Australian and children’s screen content. The review will identify sustainable policies to ensure the ongoing availability of Australian and children’s content to domestic and international audiences, regardless of platform.

The Government will provide funding of $30 million over four years to subscription television to maintain and increase coverage of women’s sports, niche sports and high participation sports that are less sustainable to broadcast. Increased coverage of these sports will assist them to build their profile, boost participation and improve sponsorship opportunities.

The Government will progress its Broadcast and Content Reform Package via an integrated legislative package which will include the Government’s media ownership reforms. Together this package represents a comprehensive package of media reforms. It represents a major opportunity for government, industry and the Parliament to strengthen and benefit this important industry, ensure ongoing investment in Australian content and support for the highly skilled jobs this sector provides.

The reforms are vital to the long term viability of the sector, which provides access to high quality Australian content that contributes to, and reflects, Australian cultural life.

Free TV statement:

Free TV Australia today welcomed the Government’s comprehensive Broadcast and Content Reform Package.

“This package is crucial for Australian jobs and our ability to continue creating great local programming that is watched by millions of Australians every day. I congratulate the Government and Minister Fifield,” Free TV Chairman, Mr Harold Mitchell AC said today.

“Broadcasters must be able to effectively compete with the giant multinational media companies taking advertising dollars out of Australia. Our industry supports more than 15,000 jobs and invests $1.5 billion each year in Australian content,” Mr Mitchell said.

The Government’s Broadcast and Content Reform Package abolishes the outdated licence fee and adopts a spectrum charge.

“Until today, Australia’s free-to-air broadcasters had been paying the highest licence fees in the world,” Mr Mitchell said.

“Repealing the 75% audience reach and cross media ownership rules is vital for Australian media companies to be able to compete in our modern media environment and we urge the Senate to support the legislation already in Parliament,” Mr Mitchell said.

As part of this package, broadcasters are committed to addressing community concerns regarding frequency of gambling advertising in live sport during children’s viewing hours. The industry will move to amend the Commercial Television Code of Practice to ban gambling ads in live sport before 8.30pm, and during a five minute buffer before and after the event.

“We welcome the Government’s recognition that any new restrictions must apply across all media platforms, including online, in order to be effective,” Mr Mitchell said.

The Government package also comprehensively addresses calls from the subscription television sector to revise the anti-siphoning list with the removal of several major events and the extension of the automatic delisting period to 26 weeks.

“The anti-siphoning list remains crucial for ensuring Australians can enjoy major sporting events for free,” Mr Mitchell said.

“A review of the Australian content rules is long overdue and we welcome the Government’s decision to conduct a root and branch review of the content ecosystem,” Mr Mitchell said.

Nine Network:

Nine today welcomed the package of media reform announced by the Federal Government.

Hugh Marks, Nine CEO, said: “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. 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.

“This decisive package is welcomed by Nine and we thank the Government for the foresight it shows in providing a more level playing field while removing outdated ownership rules to encourage innovation and investment in local content by us.”

Nine recognises the need for an overall reform to benefit all players in the market, and as such accepts the need for changes to the anti-siphoning list as part of the broader process, but welcomes the guarantees that Australians will continue to get their favourite sports including NRL, AFL and cricket live and free.

“Community calls for reform to gambling advertising is something we are very aware of and while it will cause our business a loss of revenue we will work with our partners to ensure compliance.

“Nine has always maintained that licence fees are the most important reform for our industry. Now that this is being addressed it is sensible to also address the outdated media ownership rules. The two-out-of-three ownership rule and 75 per cent reach rule are redundant and have been superseded by agreements such as Nine delivering regional news through our partner Southern Cross Austereo, and technology advances including streaming services such as 9Now.”

Seven West Media:

Seven West Media has welcomed the Government’s package of media law changes announced earlier today by Communications Minister, Senator Mitch Fifield.

Seven West Media Chairman Kerry Stokes AC said: “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. It will give us a real opportunity to compete in the new media environment.
I am pleased that the Turnbull Government is backing the Australian media industry through these reforms.”

Seven West Media CEO Tim Worner said: “Seven has maintained a consistent position since 2013 on the issue of media ownership changes. We have called for a broad reform package that will truly empower free-to-air broadcasters to meet the increasing pace of change that we are facing. We believe that the package announced by the Government today will go a long way to achieving that objective.

“In particular, we welcome the Government’s move to reduce television licence fees, which have 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 and we thank the Turnbull Government for taking this initiative.

“We support the proposed changes to the media ownership rules as part of the Government’s comprehensive package. We recognise that the changes we are witnessing in media consumption and delivery are challenging the traditional sector-based regulations that are currently in place and we call on the Senate to pass the bills currently before the Parliament,” Mr Worner said.

Seven also indicated its commitment to implement the package of gambling advertising restrictions announced by the Government, which will see gambling ads prohibited in live sport shown before 8.30pm including a 5 minute buffer before and after the event.

“The anti-siphoning list is still the best way to ensure that Australia’s iconic sporting events remain available live and free to all Australians. I am very pleased that significant events such as the AFL, Australian Open Tennis, Olympics and Commonwealth Games will remain on the list,” said Mr Worner.

“We look forward to working with the Government to deliver all the elements of the package announced today.”


Screen Producers Australia:

Our CEO, Matthew Deaner, today welcomed the Government’s announcement of a review of Australian and children’s content as well as the announcement of reforms to support Australian broadcasters.

“I welcome the announcement of a review of Australian and children’s content by the Department of Communications and the Arts, Screen Australia and the ACMA. In February, Minister Fifield said he wants to see more Australian content on Australian screens and this is an obvious starting point for the review.”

“However, in a separate inquiry into the industry undertaken by the House Standing Committee on Communications and the Arts, the commercial television broadcasters have submitted that they want their obligations to Australian children’s content abolished. This is a major concern. As an industry, we will resist this proposal while working constructively to develop options to strengthen this important part of the industry.”

“In extending restrictions on gambling advertising across all platforms, including online, the Government demonstrates a commendable willingness to regulate new platforms. In undertaking the review into Australian and children’s content, the Government must demonstrate a similar willingness and identify platform-agnostic options for content regulation. All platforms, including commercial, public and subscription broadcasters as well as international SVOD services, must come within a regulatory environment that includes strong commitments to contribute to Australia’s screen culture.”

“Investment by commercial television broadcasters has been, and will continue to be, critical to the development and success of the independent production sector. In transitioning from broadcast licence fees to a spectrum charge, the Government has provided relief at one end of the value chain. This is appropriate. However, the entire value chain for Australian content creation and delivery is under pressure. I note that the Government has again missed an opportunity to tie relief for the commercial television broadcasters to commitments to independent production in terms of hours, expenditure, promotion and access. I expect the content review will examine these issues.”

“I look forward to the content review and the detail of the legislative package.”

ASTRA:

ASTRA has welcomed a holistic media reform package announced by the Government over the weekend. The changes are a modest but welcome first step in the reform process, and will be supported by subscription television if adopted as a comprehensive package.

The media overhaul will include minor modernisation of the sports anti-siphoning scheme, which protects the opportunity for free-to-air television to bid unchallenged for rights to broadcast more than 1300 events.

Though these changes are a modest first step, they are welcome and timely given how profoundly the environment has changed since anti-siphoning was introduced in the early 1990s, when the only way to watch sport was on television and relatively few Australians paid for media services.

29 Comments:

  1. Again we’re talking about media ownership in Australia. While other industries have had to accept deregulation the three main players, 7, 9 and 10 are somehow a protected species. Unshackle all regulations regarding media ownership. I don’t care if someone or organisation wishes to own a television station, radio or print media (newspapers). Let’s be honest why would anyone wish to enter that dying industry. “Hello Fairfax journalists, Are you listening?”
    I’m sorry to say it’s survival of the fittest in this tough world. Media in particular is going through one its biggest challenges with streaming services becoming so popular, especially as more people roll over to the NBN. Deregulate the whole media rules and the government simply requests a licensing fee to be paid yearly. Potentially this opens up the television landscape for overseas companies to set up house in Australia…

  2. > Will this mean we might finally get 7,9,10 via Foxtel Satellite in Adelaide <
    Well I am in Sydney and get all of the FTA channels on my satellite IQ3 excluding Viceland HD via a FTA tuner which doesn't rely on the satellite!

    • Difficult with DVB-T in a 7MHz wide channel without stretching the guard interval & code rate to breaking point. The 7 network IIRC was doing that at one stage pre-restack & it caused problems – smaller coverage area, more marginal reception, more freezes/dropouts, etc.

      The only real hope for increasing bitrate is to transition from the existing DVB-T to DVB-T2 – and, between them, the networks & governments have made that difficult (see my other comment on lack of channels)…

      • Interesting, I keep my ear to the ground regarding transmission and can’t say I’ve heard of this before. Quite some time ago the 7 network did use the original recommended configuration that yielded approx 19Mbit/sec and I am aware of some fringe viewers that had difficulties when 7 moved up to modulation parameters that permitted 23Mbit/sec, but 26Mbit/sec, that’s news to me. Do you know in what part of the country this was implemented?

        • At one stage in the 00’s 7 Brisbane were running at FEC 5/6 & GI 1/32, which gave ~26Mbps but caused problems. At the time they seemed to be the ones doing most of the on-air experimenting & tweaking to test the boundaries (e.g. they were also pushing their encoders to stupidly long keyframe intervals & large / open GOPs), but I don’t know if it was a national thing or just locally.

  3. “Abolishing broadcasting licence fees and datacasting charges. Applying a fee for the spectrum that broadcasters use”. Polywaffle 2.0 – so it won’t be a “licence fee”, it will be a “spectrum usage fee”. Um.

  4. It’s a bit of a worry when all the TV Network accountants are happy with the changes. Do they see rationalisation and redundancies on the horizon? The Senate will be sharpening their blue pencils.

  5. Hi David , thanks for keeping us up to date, this may not have an easy answer, the spectrum is the digital frequency the channels use ? , so can the networks buy more soon , or they only have what they have, can overseas providers buy spectrum? If they get a ABN, I hope the changes get TEN out of the problems , and they can do a relaunch , can TEN source product from Foxtel? And will it allow ten to stream it channels on the Freeview app ? Again thanks David , hope you are having a nice weekend , xx

    • A few conflicting questions here. No changes to spectrum proposed, which is extremely valuable and also used by telcos for mobiles, not for sale to overseas entities unless like Singapore-owned Optus they have an Australian business. TEN streaming is their choice, I can’t explain the strategy. I expect more Foxtel shows will pop up on TEN at some point, depending on new ownership under these rule changes.

    • To elaborate a bit about spectrum: in the capitals there’s only really one VHF channel available – & that’s nominally set aside for future tech rollout (e.g. DVBT2/UHD-TV or DAB+ expansion). UHF is mostly free in capitals, but unlikely in practice for Reasons (e.g. in use by repeaters or adjacent non-metro b’casters, possible telco/”white space” sale, etc).

      Basically, there’s no spectrum available for new entrants in metro markets.

      A cynical mind would suspect the recent channel restack was at least partly planned to protect 7/9/10 from future competition – and is better at that than the 75% & 2/3 rules. While I agree those caused more problems than they fixed, they’re now a little redundant – & worse, limit the incumbents expansion plans.

      Even more cynically, the whole thing sorta looks like Stage 2 of “stop competitors from getting a foothold in our market”…

      • The cost of providing another transmission network and playout (even if entirely outsourced) and the ever present revenue issues afflicting the existing commercial operators already prevented the entry of another terrestrial operation. If anything the forward allocation of a RF channel for future use actually made it easier for another network to be set up compared to the prior situation where one would have to go begging to get spectrum allocated in the first place.

        (p.s. I’m not stalking you…)

  6. wonder if nien will try and push for nrl games to start after 8.30pm so they can have a sh1t load of gambling ads . gamble responsibly

    • I bet more games will go back on delay, especially into QLD when NSW is in daylight saving. The networks will no doubt find workarounds. Also, what about PAY TV with their national footprint, do the gambling bans apply up to when WA hits 8:30pm, so on the east coast, that should mean no gambling spots upto 10:30pm/11:30pm when the east coast is in daylight saving?

  7. Do Netflix and Stan have to pay fees to the government each year to be allowed to effectively broadcast? That’s where it should be applied to even up the playing field.

    • Secret Squïrrel

      The playing field is already even in that regard. No-one is preventing the networks from offering quality content via the internet like Netflix and Stan (which is half-owned by Nine Entertainment anyway).

    • What a great idea Dede. You’ll only find either the costs passed onto the subscriber or a service such as Netflix deciding to pull out of Australia. Then we will be in a position where there are no alternative legitimate sources of streaming Netflix original content. At least Netflix are producing hours and hours of new drama unlike our local FTA networks.

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