Rebate is about digital switchover: Ten

TenIn part two of our special report on the future of free-to-air broadcasting, we talked to Ten’s  head of programming and head of corporate communications, Beverly McGarvey and Jeanette McLoughlin respectively.

According to McLoughlin, the controversial license fee rebate is not just about funding local content, but mainly about the digital switchover work that the FTA operators are doing in conjunction with the government.

This is how our conversation with McLoughlin went:

Encore: One of the main objectives behind the rebate was to protect local content. How does Network Ten see the license fee rebate?

The license fee release that the government provided to the commercial free-to-air networks, which is yet to be implemented, is about recognising the role of the commercial FTA sector in the  digital switchover.

What Grant Blackley (CEO of Network Ten) said (at the Australian Broadcasting Summit) is that the license fee rebate release recognises a large body of work that the commercial FTA operators have been engaged in over a number of years with the government, to work towards digital switchover and relinquishing the spectrum we currently occupy – or half the spectrum we currently occupy – to achieve what is called the digital dividend.

If you have a look at the comments that Grant made, the spectrum will be sold to other commercial entities. Senator Conroy has said at the broadcasting summit that the digital switchover can’t be done unless the government and the FTA commercial operators work hand-in-glove on that.

We are basically involved in a whole range of projects to help the transition to digital, which includes handing back spectrum, helping viewers in blackspot areas, and also a major project to re-stack the spectrum. What the FTA operators will do is re-stack the spectrum so that we occupy different parts and locations in the spectrum, and the government can sell what’s being relinquished as a contiguous block – which makes it more commercially valuable.

The commercial FTA sector has local content obligations that no other part of the industry has, and we will be maintaining our local content obligations. Grant noted in his speech that we did not lobby for reduction in that, which has happened in other parts of the world. We did not lobby for reduction in the local content obligations. Also, specifically for One, we commission and develop local content, roughly at 40 percent.

What we can do with One is that there’s a lot of Australian sport and so we have all the coverage and commentary around that and even with international sport we have some Australian local programs that relate to international sports.  We also have our own sports night, our own shows, and it’s quite a vast amount of local content. It is a point of differentiation for us.

The main concern is that there is no local content regulation for the digital multi-channels. While it’s assuring that One has levels of local content, what about the future of Ten’s upcoming multi-channels?

All the commercial FTA networks have all signaled that they will launch a third digital channel. In terms of the channel itself we haven’t actually announced what that’s going to be as of yet. The Australian content obligations the government places on the networks are important. We have said that they are higher than other markets, but they do provide a level of commitment, investment and volume by the networks, which is important for the production side.

Ten has invested quite considerably and prudently over the years in making sure that we have a fully digital architecture so that when we were able to launch a new channel – when the legislation allowed us to do that from the beginning of last year – we were ‘match fit’ and ready with our infrastructure so it was just a matter of deploying the channel.

At the moment there are no local content obligations for the multi-channels. Do you think there should be?

We do have significant content obligations for the main channel, which we fulfill, and we commission and produce a vast amount of unique Australian content for our sports channel One. We did not lobby for a reduction in the quota; as I’ve said, we have a level of commitment, investment and volume by the networks that are really important for the production sector, by investing in developing content ideas and undertaking local productions, so we are a significant player in that.

And the rebate is going to be used to meet such objectives?

You really need to understand that the license fee release is really in relation to that broader program of work to help the government to switch over to digital, which will be costly and disruptive for the FTA networks, but we are committed to making sure that the transition to digital is as smooth as possible and at the same time, we do maintain a level of investment in Australian programs for Australian viewers.

And then we sat with McGarvey to discuss the importance of local content on Ten’s programming.

Encore: What value does Network Ten place on local content?

Beverly McGarvey: The most critical thing is balance. We really value domestic content; it’s really important to our audience. When you get the right domestic show, it can rate incredibly well and we also have more control of it, so if we need to modify it, that’s something we can do.

We have quota obligations which we always meet, but more than that we really want to commission shows that people want to watch. That’s an indicator that you’re doing the right thing, that you’re producing shows that people want to watch.

However, in a market this size, for us to do the big shows- the Idols, the Dance, and those big shows, they’re incredibly expensive. MasterChef is incredibly expensive. We want to be able to do those shows, so we need some balance in our schedule and we need international shows to counteract the effect of the costs of those local shows.

Our audience also really enjoys some of the international shows at the moment- our biggest show on air is NCIS, and that has people making a choice with their remote.

What are the main challenges in producing local content for your multi-channel?

The risk in terms of multi-channels is the same as it is on the main free-to-air channels: you spend a lot of money and they may not work. That’s the risk that we take with every show, every time we produce something, so the risk doesn’t change particularly.

The revenue opportunities on a smaller channel are smaller, so people will be considerate about what sort of shows they commission. We will all make domestic shows and put them on the multi-channels, but we’ll be careful with the genre and style so it does make sense to do it for a smaller audience.

Does Ten have any plans to secure new local content for the future of your multi-channels?

Absolutely- it’s a rolling process. We’re always looking for new shows; we’re always commissioning new shows. Every year we add something significant and new to the schedule.

This year we’re doing Junior MasterChef and a couple of interesting local shows that we haven’t announced yet. We’re adding Offspring– a new domestic drama to the schedule. Last year we introduced Bondi Vet, Recruits, MasterChef; the year before we did some new local shows.

We will put new domestic shows in our schedule every single year. Although this year we don’t have a lot of new titles, we have a lot of domestic content and the reason for that is virtually everything we commissioned last year was returned this year. Therefore we were doing year two, year three and year four shows.

What is the plan for Ten’s third channel?

It’s in very early planning stages; we haven’t announced a third channel yet, and I think we will all do something. Seven, Nine and Ten will all put together a third channel within some time, but we have not signed off of what even the genre will be on that channel yet.

Do you think there should be a quota for local content on the multi-channels?

It’s really not my area of expertise. My job and my objective is to put on a schedule that people want to watch, but if people want to watch local shows we will put them on there. Our experience on the main channel is that people like a mix, and that’s how we will move forward.

-by Micah Chua.

Tomorrow, part three will present our conversation with SBS’s director of strategy and communications, Bruce Meagher.


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