Government to scrap licence fees, conduct review into local content

Over the weekend the Federal Government unveiled a wide-ranging media reform package, with plans to abolish broadcasting licence fees and conduct a review into Australian and children’s content. 

In a statement, Minister for Communications and the Arts Mitch Fifield said the reforms were vital to the ongoing viability of the sector and that the package would support the creation of local content and modernise broadcasting and content regulation. 

The package’s 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 per cent 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,” said Senator Fifield. 

Currently, free-to-air TV and radio broadcasters pay approximately $130 million in licence fees each year. When replaced by spectrum fees, broadcasters would instead pay around $40 million a year. 

“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,” said Senator Fifield.

“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 review into Australian and children’s content will be jointly conducted by Department of Communication and the Arts, Screen Australia and ACMA, with a report to be prepared for the government’s consideration. The review will look into identifying sustainable policies to ensure the ongoing availability of local content, including children’s content. 

In particular, it will look at the current support measures in place – like screen production funding and quota obligations – and determine if these remain “fit for purpose” in the changed media environment that has emerged since a majority of these measures were established. 

Fifield is set to further outline the government’s approach to the review in an address at the Australian content conversation conference next week, hosted by the department, Screen Australia and ACMA. 

The government has said there will be opportunities for organisations and members of the public to submit to the review.

Industry welcomes reforms

Screen Producers Australia (SPA) welcomed the announcement of the Australian content review, as well as the other reforms that would support broadcasters. 

“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,” said SPA CEO Matt Deaner.  

“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.”

Deaner said the government must demonstrate a willingness to identify a platform-agnostic option for content regulation – one that includes all commercial, public and subscription broadcasters, as well as SVOD services.  

“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.”

All of the major free-to-air networks have welcomed the package, particularly the move to abolish licence fees and to repeal media ownership rules.

Paul Anderson, CEO of Ten Network – which reported a half year net loss of $232 million earlier this month – said the package provided welcome, immediate financial relief for all free-to-air broadcasters. 

“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,” he said. 

“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.” 

Anderson also welcomed the content review, stating current rules needed to be looked at in the context of a changing media landscape.

Seven West Media CEO Tim Worner said the package would go a long way to empower free-to-air broadcasters to meet the increasing pace of change in the screen industry.

“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,” he said. 

“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.” 

Nine CEO Hugh Marks agreed the total package tackled the various elements of media reform required for the industry to compete with global players. 

“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.” 

Free TV Australia congratulated the government and Senator Fifield on 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,” said Free TV chairman Harold Mitchell.

“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.” 

Mitchell also said a review of Australian content rules was “long overdue”.

More information about the government’s broadcast and content reform package is available here