Commercial TV networks to make $240m saving from licence fee rebate

Australia’s big three TV networks are likely to be around $240m better off after the government agreed to halve what they pay to access the nation’s airwaves.  

In a deal announced by communications minister Stephen Conroy over the weekend, the networks will this year get a third off what they normally pay, giving them a saving of over $94m if calculated based on last year’s licence fee payment of around $286.8m.

In 2011, the rebate will be lifted to 50 per cent, which will see the networks make a saving of over $143m.

Changes in subsequent years are yet to be determined, with the government expected to call a review of the current structure.

The concession – which the networks claim will “protect Australian content on commercial television” although no new standards accompanied the announcement – may well tie in with the government’s attempts to speed up the transition from analogue to digital transmission.

The so-called digital dividend will allow the government to auction the vacated spectrum to telcos. However, to hit the deadline of the end of 2013 relies on a smooth transition and wholehearted support of the networks as it would be electorally damaging for the government to switch off  if voters have not made the switch.

Conroy said:

[Broadcasters] are faced with a converging media environment and switch to digital television, as well as the impact on revenue created by a decline in advertising spend as a result of the Global Financial Crisis.

The Government recognises that the commercial television broadcasters will require some assistance to maintain Australian content production, while investing in a new delivery platform nationally.”

Julie Flynn, Free TV CEO, said the converged media environment means the old system of licence fees needs to be reviewed, as it remains much higher than in other parts of the world. The current system, which has been in place since 1964 has not been reviewed since 1987.

Under the current standards broadcasters are required to produce and air a minimum of 55 per cent Australian content between 6am and midnight. Broadcasters will not be required to increase their amount of local content in order to receive the rebate.

The amount the broadcasters pay is calculated as a percentage of advertising revenues.

Pay TV industry body ASTRA has labelled the rebate as both anti-competitive and against the interests of consumers.

ASTRA CEO Petra Buchanan, said:

Taxpayers are yet again being asked to subsidise the businesses of foreign owned broadcasters to help them meet existing content obligations – it’s an outrageous affront to Australians. Giving the old TV networks yet more protection just to maintain existing standards is the antithesis of modern media reform.

“It is couch potato policy that reduces their incentive to invest, compete and innovate, and ignores innovators such as the subscription television sector, which has no trouble meeting its own Australian content obligations year after year without a cent of Government assistance. By using taxpayers’ money to prop up the old players, innovation and competition in the television space will continue to be curbed.”


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