Fourth TV player doomed ANTHONYSTAVRINOS&ZILLA EFRAT
The balloon of excitement over the prospect of a new TV network competing in Australia appears to have popped, with experts citing political reality as the main reason it’s unlikely—for now.
The idea of a fourth free-to-air TV network in Australia had some formidable backers when it was first floated but the political reality that the government has little to gain and everything to lose has put the issue on the backburner.<[etk]>
But some continue to stew over the meddling of “disingenuous” big business interests.
The Australian Consumer Association’s Charles Britton staunchly believes a fourth channel would give consumers the variety of viewing they deserve.
“We’d be more than happy if there was to be a fourth analogue television network allowed…we think it’s feasible. Our view is consumers deserve to have choice—it’s been an awful long time since we’ve had a new free-to-air network in Australia,” he says. “I think the argument that we can’t afford it is disingenuous and self-interested.”
But like most experts, Britton is acutely aware of the political reality and says he proposed in his submission to the government’s issues paper that an appropriate compromise for the government could be to allow a fourth network restricted to digital only.
“[That would] increase the attractiveness of digital TV without radically destabilising the industry—one of the reasons used to argue against media diversity,” he says.
Similarly, independent media analyst, Peter Cox, who was commissioned to research and present the Australian Association of National Advertisers’ position which included backing for a new free-to-air player, is supportive of increased choice for Australian viewers.
“You could have created another Channel Ten just on [advertising] price growth exceeding inflation in the past 10 years,” he explains.
But Cox says vested interest dictates policy and the government’s position protects politicians, the three incumbent commercial networks—Seven, Nine and Ten— and the massive slice of the lucrative advertising pie their owners receive.
“But what about the public in all this? There’s nobody left in this country that argues the public cause,” he says.
Cox says multi-channeling—where networks use bandwidth capacity to provide additional channels—is a feasible alternative and trade-off in the public interest.
“We should pursue multi-channelling in this country. The experience of it in the US and in the UK is that it’s been enormously successful, it’s gone absolutely through the roof,” he says.
But while the possibility is being examined as part of a Government review, AANA executive director, Collin Segelov, says the chances of a fourth TV player emerging are slim.
“Based on a reading of the political climate—whatever the justification—there is little early prospect of a fourth commercial TV network,” he says.
“The Federal Government has been persuaded against it, and that is not one of the political facts of life subject to change with its control of the Senate.”
Similarly, Fusion MD, Steve Allen, believes it’s “very unlikely”.
“The issue is a waste of Beta… It would be politically untenable,” he says, noting that Government “would be loathe to upset some of Australia’s powerful media barons”.
Indeed, Minister for Communications, Helen Coonan, has questioned the benefits of granting a fourth licence, because of issues like media convergence and audience fragmentation.
Earlier this year, she said she had yet to hear a compelling case for it.
With the moratorium on issuing new commercial TV licences running out at the end of next year, the government has been reviewing the issue, together with other areas such as digital TV, multi-channeling and data casting.
Executive director of the Australian Subscription Television and Radio Association, Debra Richards, says there are also other issues to consider.
“At this stage we are reluctant to comment on the possibility of a fourth licence because other factors could impact on this,” she says.
“The government is taking a ‘whole approach’ and there will not be just one decision. It will depend on other decisions such as changes to multi-channel restrictions and data casting.”
Nonetheless, a number of industry pundits believe there are few benefits to granting a fourth licence.
“Who pays for the licence?” Allen asks.
“The advertisers do, and then they have a more fragmented audience. It’s not in their interests. Is there room for a fourth channel? No. Is there a need? No. Will it do anything new? No. My view is it will do nothing for anyone.”
Likewise, Mitchell & Partners chairman, Harold Mitchell, says a fourth licence would create a disparate audience and lower current ratings without the benefits of lowering costs.
“TV networks still have to bring in product, but there’s very little available. Most networks have tied up US output deals, so a fourth channel would have to look at local content,”he says.
“The trouble with getting new local material is that while it does attract high ratings, it’s very expensive to produce.”
Not surprisingly, Free TV Australia—the industry body for free-to-air TV—remains “completely opposed” to a fourth TV licence, arguing that Australia is a small market by international standards and already has a high number of free-to-air networks relative to other countries and population size.
It believes a new entrant is unlikely to deliver increased diversity or choice, targeting the broad audience sectors already serviced by existing channels, driving up content prices and creating pressure on other players to reduce costs.
Independent media commentator, Paul Budde, believes the growth in broadband TV certainly poses challenges to the commercial viability of a fourth channel.
“We’ve already started seeing that broadband TV is becoming quite big in some countries, even though it’s still early days,” he says.
“Quite often, when people buy a broadband connection, they are offered broadband TV for, say, $6 or $7 a month more and often they get 100 TV channels... even Telstra is talking about introducing 1000 channels.”
Budde believes in five to 10 years, broadband TV is likely to have taken an enormous bite out of FTA TV’s market.
Segelov says advertisers aren’t concerned with the desirability of more of the same television programming—which is what the Government sees a fourth network offering—but a perceived need for greater access to what remains, for the moment, the most effective means of creating consumer awareness for their products and services available to them.
“What the Government could do, perhaps, is revisit the issue of multi-channeling, providing greater access to television to advertisers at the same time as increasing competition in the television sector without necessarily increasing the number of competitors,”he says.
