Bonus for TV networks as government waters-down content quota recommendations

The Government has cut the free TV networks’ licence fees and chosen not to apply tough new quotas for Australian local content on digital channels which were recommended by the Convergence Review.

The early Christmas present for the TV networks was slipped out on the last sitting day of parliament by media minister Stephen Conroy. The ruling was condemned by industry body Screen Producers Association of Australia.

The Convergence Review had recommended that as part of their licence requirements, broadcasters should be able to count Australian content on the multichannels. However, the Review also suggested networks must increase local drama, children’s and documentary investment by 50% across their three channels.

But instead, the Government has handed down a total Australian content quota, which can include news, sport and reality, across entire commercial networks, and ignored the more expensive drama and documentary aspect of the Review’s recommendation.

The Screen Producers Association of Australia, who look after the interests of content makers, and had been campaigning for an increase in the minimum local drama and documentary output, expressed outrage at the decision. SPAA executive director Matthew Deaner said: “There is little incentive to encourage new Australian content on the multi-channels under the new rules announced. Australians should be very disappointed at this outcome which ignores the recommendations provided by the Convergence Review and fails to address the increasing amounts of foreign content on our screens.”

The new mulitchannel quota will see more than 730 hours of Australian produced content across the commercial networks’ three channels in 2013. The quota will jump to 1095 hours in 2014 and 1460 hours in 2015.

The Government also maintained the existing 55% of all content on primary channels must be Australia.

Commercial main channels must currently broadcast a quota of Australian local drama, which under a point system tallies to 250 drama points.

More local drama may find its way to multi-channels, as in the recommendations, with the ruling that any hour of first-release drama to appear on a digital multi-channel will count for two hours of transmission toward the new 730 hour quota. This decision will be particularly helpful for Ten, which moved nightly local drama Neighbours to digital channel Eleven in 2011, scoring 120 points of commissioned local drama towards its quota.

Coinciding with the multi-channel quota announcement, is the extension of the current rebate for TV licensing fees for a further 12 months ahead of a proposed permanent drop of the fees which would equal a maximum of 4.5% of revenue, half the current fee.

In February 2010, the networks saw a similar decrease in licence fees, which saw a saving of approximately $240m.

Screen Australia, the Government’s screen agency estimates the increase in drama, children’s and documentary quota would cost $40m per year across the three networks.

Deaner called on the Government to increase the suggested producer tax offset for television to equal that of the Australian films. The move would give back 40% of production costs via the tax system.

The Government also said there would be no licence made available for a fourth major  major commercial free to air player to enter the market. Instead, the so-called ‘sixth channel’ of the television spectrum, will be used for community television.

The Government will also abolish the ‘75% reach rule’, which deemed no one person could control a network of TV stations which had more than 75% audience reach of the Australian population.

However, there is no word yet over the contorversial question of the future regulation of the press. Senator Conroy said in a statementn: “The Government’s consideration of the review is continuing, and further announcements will be made next year.

“The Government will develop legislation to implement the reforms announced today by March 2013, with appropriate transitional arrangements for the new Australian content measures. These content requirements will apply from 1 January 2013.”


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