Home World Business New rules will help us fight Netflix, say TV bosses

New rules will help us fight Netflix, say TV bosses

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Regional TV broadcasters WIN, Prime and Southern Cross Austereo have welcomed expanded media reforms that would allow them to merge with metropolitan TV networks or radio and newspaper companies to be able to compete with global giants like Netflix.

The reform package announced on Saturday by Communications Minister Mitch Fifield ties licence fee reductions for free-to-air TV, revision of sports on the pay-TV anti-siphoning list and gambling advertising restrictions on live sport telecasts to the Turnbull government’s stalled bid to repeal the “reach rule”, which prevents TV networks from broadcasting to more than 75 per cent of the population, and the “two-out-of-three rule”, which prevents media companies owning a TV station, radio station and newspaper in the same market.

WIN TV has previously warned that the 3000 hours of local content it produces each year in regional areas was "not a ... WIN TV has previously warned that the 3000 hours of local content it produces each year in regional areas was “not a profitable exercise”. 

The three regional broadcasters have repeatedly warned that the growth of unregulated online competitors like Google, Facebook and Netflix is threatening the viability of their businesses, and that their capacity to produce local content for viewers in regional Australia is increasingly at risk without an overhaul of broadcast laws that pre-date the internet and pay-TV.

Mr Fifield’s broadcast and content reform package includes expanded local content obligations for regional TV in the event of a sale or merger involving a metropolitan network.

Communications minister Mitch Fifield. Communications minister Mitch Fifield.  Photo: Jesse Marlow

Prime Media Group CEO Ian Audsley encouraged the Parliament to pass the legislation as soon as possible.

Since 2013, the market capitalisation of long-time Seven Network affiliate Prime has fallen from $388million to about $100million.

In that time, Mr Audsley has appeared before  three different Senate inquiries on media reform to plead for change.

“The regional broadcasters have worked tirelessly for many years, detailing the significant structural challenges faced by the television industry and advocating for change,” he said.

Prime Media Group CEO Ian Audsley. Prime Media Group CEO Ian Audsley. Photo: Louie Douvis

“We are very pleased to see that everyone has gravitated to share our view.”

Southern Cross Austereo CEO  Grant Blackley describes the existing rules as “well past their use-by date”.

Southern Cross Austereo chief executive Grant Blackley. Southern Cross Austereo chief executive Grant Blackley. Photo: Scott Barbour

Programming tie-ups like Southern Cross Austereo’s deal for feeder network Nine to deliver local news across regional NSW, Victoria and Queensland markets have rendered the 75 per cent reach rule largely redundant.

Mr Blackley acknowledged the “enormity and complexity” of Mr Fifield’s negotiations with competing media interests as well as Senate cross-benchers such as anti-gambling Senator Nick Xenophon.

Nine News Canberra, presented from Nine's Sydney studios by Vanessa O'Hanlon, is one of 15 regional bulletins produced ... Nine News Canberra, presented from Nine’s Sydney studios by Vanessa O’Hanlon, is one of 15 regional bulletins produced by Nine for Southern Cross Austereo. 

“We are delighted that the government recognises the need for meaningful media reform and importantly has acted to secure a consensus view from key stakeholders,” he said.

WIN chief executive Andrew Lancaster commended the government for bringing the industry together to support repeal of the reach and cross-media rules, which he described as “archaic”.

Andrew Lancaster, WIN TV CEO, appears before a Senate hearing on media reform at Parliament House in Canberra in 2013. Andrew Lancaster, WIN TV CEO, appears before a Senate hearing on media reform at Parliament House in Canberra in 2013.  Photo: Alex Ellinghausen

In its submission to the most recent Senate inquiry into media laws, WIN said: “In a challenged regional media environment, having the potential to merge with or acquire a regional radio network and a regional newspaper publisher would provide the opportunity to bulk up and be better placed to defend ourselves from much larger, often foreign-owned, media organisations”.

Bruce Gordon, the Bermuda-based billionaire owner of WIN, would be a big winner if the reform package is passed.

WIN owner and Ten and Nine shareholder Bruce Gordon, right, with WIN's veteran news anchorman Geoff Phillips. WIN owner and Ten and Nine shareholder Bruce Gordon, right, with WIN’s veteran news anchorman Geoff Phillips.  Photo: Sylvia Liber

WIN has warned federal MPs in recent years that the 3000 hours of local content it produces each year is “not a profitable exercise” and increasingly at risk without legislative change.

As well as owning Wollongong-based WIN, 88-year-old Mr Gordon is the largest shareholder in both Nine and Ten, but is prevented from taking his holding above 15 per cent in either due to the current ownership controls.

MasterChef judges Gary Mehigan, George Calombaris and Matt Preston watch Tamara Graffen, 28, at work. MasterChef judges Gary Mehigan, George Calombaris and Matt Preston watch Tamara Graffen, 28, at work. Photo: Ten

Despite the popularity of programs like MasterChef, Australian Survivor and The Project, the troubled Ten warned last month that its future was in doubt unless it saw immediate licence fee relief.

WIN was forced to switch to carrying Ten’s programs last year after long-time partner Nine linked with Southern Cross Austereo. 

In its Senate submission, WIN questioned the “practical application” of the reach rule when “the content and, importantly, news services of the Seven, Nine and Ten networks are broadcast across the entire country through their regional affiliates – who are often bound by these agreements not to alter the schedules”.

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