By Drew Cratchley
(Australian Associated Press)
Major free-to-air TV and radio networks have slammed the government for failing to provide sufficient support for their battle with online giants such as Apple and Netflix.
Commercial broadcasters stand to save nearly $50 million a year after the federal government slashed their licence fees by 25 per cent in response to the financial pressures they are facing from dwindling advertising revenue.
The Seven, Nine and Ten networks pay 4.5 per cent of their revenue on licence fees, which currently equates to a combined $173 million a year, while commercial radio networks pay 3.25 per cent.
The government said lower fees will make the TV networks more competitive with their emerging competitors, including Netflix and Apple, who pay no licence fees.
But the broadcasters want even bigger cuts to their fees.
“Television licence fees are outdated and not sustainable,” Seven West Media chief executive Tim Worner said.
“It seems that commercial television broadcasters will continue to struggle under the burden of the highest licence fees in the world for the next few years.”
Ten boss Paul Anderson said the cut fails to recognise the urgency of the challenges faced by broadcasters.
“The commercial free-to-air television networks are by far the largest contributor to domestic content production in Australia and underpin the entire production sector. Together, we spend more than $1.5 billion a year on Australian content,” he said.
A Nine source said the company is frustrated with the government’s inaction so far on media industry reform, and wants more support for the “vibrant” local TV industry.
Commercial radio broadcasters welcomed the cut, but also urged the government to cut even further.
“This has been a key issue for the industry for some time. We need to be able to better compete against global players who are largely unregulated and do not carry the many costs, obligations and restrictions that local radio broadcasters do,” Commercial Radio Australia chief executive Joan Warner she added.
“We are disappointed that the relief is not greater but will enter into discussions with the minister.”
The government said it will consider further licence fee cuts later in 2016 as part of its broader media reform measures, which are expected to include the scrapping of restrictions on media ownership and the proportion of the population a broadcaster can reach.
A cut to licence fees is also likely to anger pay TV operator Foxtel, which is facing increasing competition from streaming services.