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Turnbull Government to abolish licence fees in media reform package

The Turnbull Government is set to abolish broadcasting licence fees, further restrict gambling advertising in live sporting events across all platforms and repeal the two out of three and 75% audience reach media ownership rules as part of a comprehensive package of reforms that the government says will “improve the sustainability of Australia’s free-to-air broadcasting sector”.

Announced this morning, the measures, which are part of the government’s budget, 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

Many of the reforms will still be subject to Parliamentary approval. Previous attempts by both the Labor and Liberal governments have stalled at that stage.

Abolishing free-to-air broadcasting annual licence fees is estimated to raise around $130m on TV and radio and aims to improve the ability of broadcasters to operate on a level playing field with other platforms.

Under the reforms, broadcasters will pay new annual spectrum fees estimated to raise around $40m.

Hugh Marks: Nine has always maintained that licence fees are the most important reform for our industry

Nine has welcome the changes with Hugh, Marks, Nine CEO, saying the 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,” he said.

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by Nine and we thank the Government for the foresight it shows in providing a more level playing field while removing outdated ownership rules to encourage innovation and investment in local content by us.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

Kerry Stokes, Seven West Media chairman, said in a statement: “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 added: “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.”

Paul Anderson: The Government’s package provides very welcome, immediate financial relief for all commercial free-to-air television broadcasters

Ten Network CEO Paul Anderson has said money saved from the changes “will be reinvested” into Australian content.

“The Government’s package provides very welcome, immediate financial relief for all commercial free-to-air television broadcasters. It provides a boost for local content and the local production sector,” he said.

“Every dollar from today’s changes will be reinvested into our great Australian content and into continuing to enhance our services for viewers across all platforms.

“Recent financial results and announcements from across the Australian media industry clearly demonstrate that this is a sector under extreme competitive pressure from the foreign-owned tech media giants.”

 At the end of last month, Ten had warned its future was in doubt unless it got licence fee relief from the federal government.

“A critical element of this holistic package is the removal of two of the current cross-media ownership rules: the two out of three rule and the 75% reach rule.

“These cross-media rules arbitrarily prevent Australian television, radio, and newspaper companies from operating across media platforms. They are stifling growth and costing jobs.

“Now that we have a holistic package, it is time for Parliament to get rid of these pre-internet rules to give Ten and other Australian companies a fair go against the foreign tech media giants whose dominance and influence is growing rapidly in Australia.

“This package is not just about Ten or free-to-air television. It is about ensuring that there is a future for Australian media companies – for local journalism, for Australian stories on screen and for a local production sector that provides jobs and training for thousands of Australians, many of whom go on to success on the global stage,” Anderson said. 

“Anyone who supports a future for Australian media companies must support this package and we call on the Parliament to pass these reforms urgently or risk losing local voices altogether.

“We welcome the review of the content rules also announced today. The rules need to be looked at in the context of the changing media landscape.”

Industry body Commercial Radio Australia has also welcomed the elimination of the broadcast licence fees, which it says is expected to result in a drop of 94% in the total fees commercial radio stations pay to government.

Joan Warner, the chief executive officer of Radio Australia, said in a statement: “We welcome the removal of broadcast licence fees, which will provide a fairer competitive environment and allow radio to invest even more in Australian jobs and content. We call on the Parliament to support this package which provides much needed relief for local Australian radio.

“However, we are also keen to ensure that all CRA member stations receive substantial reductions in fees paid and so we will be working closely with the Government on the methodology used to calculate spectrum fees for CRA members.”

As expected, the Government will place further restrictions on gambling advertising during live sports programs.

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.

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.

Nine’s Marks said:“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.”

Commercial Radio’s Warner said:  “Gambling advertising is already covered by the Commercial Radio Code of Practice and existing federal and state regulations, so the industry would like to see any new restrictions accompanied by a national harmonisation and simplification of existing, disparate rules relating to gambling advertising.”

The package will also amend the anti-siphoning regime to reduce the size of the list and update other parts of the scheme.

Tim Worner: We look forward to working with the Government to deliver all the elements of the package announced today

Seven’s Worner said: “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.

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

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

Subscription TV will receive an extra $30m in funding over four years to increase coverage of women’s sport, niche sports and high participation sport that are less sustainable to broadcast.

The Government will progress its Broadcast and Content Reform Package via an integrated legislative package which will include the Government’s media ownership reforms.

The statement from Fifield’s office said: “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”.

Industry body Free TV has welcomed the 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 Harold Mitchell said.

“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.”

Grant Blackley, CEO of Southern Cross Austereo has said SCA is “delighted that the Government recognises the need for meaningful media reform and importantly has acted to secure a consensus view from key stakeholders”.

“The enormity and complexity of the task should not be underestimated.”

CEO of WIN, Andrew Lancaster, said: “The Government should be commended for bringing the industry together to support a raft of changes that includes repeal of the archaic 75% reach rule and 2-out-of-3 cross media rule.”

Ian Audsley, CEO of PRIME Media Group, said: “The regional broadcasters have worked tirelessly for many years, detailing the significant structural challenges faced by the television industry and advocating for change. We are very pleased to see that everyone has gravitated to share our view and now encourage the Parliament to pass the legislation as soon as possible.”

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