The federal government’s media reforms have finally passed the Senate, thanks in large part to crossbencher Nick Xenophon, who made some amendments before giving the new laws the tick of approval.
If you have no idea what all of this means for the industry (and for you), B&T thought it would be grand idea to break it down for you once again.
Here’s what’s set to change in the media industry:
- Broadcast licence fees and datacasting charges for TV and radio will be abolished, and a new annual spectrum fee of $40 million will be introduced.
- The ‘two out of three’ and ‘75 per cent audience reach’ media ownership rules will be scrapped.
- There will be further restrictions on gambling advertising in live sporting events across all platforms.
- The anti-siphoning scheme and list will be amended.
- Local and children’s content will undergo a broad-ranging and comprehensive review.
- Funding to support the broadcasting of women’s and niche sports will be introduced.
What does it mean for broadcasters?
Most of the above points are pretty self-explanatory, but there are two changes in particular that need a little more explaining.
The abolition of licence fees for the free-to-air networks means Seven, Nine and Ten will no longer have to pay around $130 million a year in fees to the federal government, to basically run their networks. Instead, they’ll have to fork out $40 million annually as part of the new fee structure.
It now means that Seven, Nine and Ten can re-invest that extra $90 million back into homegrown TV and drama, which is good news for actors, screenwriters, producers and the like.
It also means that they’re now on a more level playing field with their disruptive overseas competitors – Netflix, HBO and Google – who don’t have to pay licence fees in Australia.
As for the ‘two out of three’ rule being scrapped, you can expect to see more mergers, acquisitions and content partnerships involving Aussie media companies from now on.
In the past, a media company could only own a TV station, a newspaper business BUT NOT a radio station in the same territory. For example, Fairfax could own The Sydney Morning Herald and Macquarie Radio stations in Sydney, but the laws meant it was illegal for it to also have ownership in, say, Channel Nine or a third media outlet.
The ‘two out of three rule’ was the one law that billionaire media moguls Lachlan Murdoch and Bruce Gordon really wanted gone so they could make a real play for Ten.
However, it seems it might me too little, too late for the duo, who are currently locked in a fierce court battle with Ten administrator Korda Mentha over its decision to let US studio CBS take over the embattled broadcaster.
Meanwhile, rumours have been swirling for some time around Nine and Fairfax coming a little closer together – perhaps through a merger – and the scrapping of the ‘two out of three’ rule is only going to add fuel to the fire.
It makes perfect sense that Nine and Fairfax would be keen for each other. One has a strong TV and digital presence, while the other has some decent print, digital and radio assets. The two companies also already have a partnership through streaming service Stan. Watch this space.
As for Kerry Stokes’ beloved Seven West Media (SWM), it’s most likely acquisition target would be its affiliate regional broadcaster, Prime Media, which is part-owned by Seven Group Holdings (the biggest shareholder of SWM).
The Xenophon amendments
In return for Xenephon’s support for the media reforms, the government will implement a regional and small publisher’s jobs and innovation package worth $60.4 million over three years.
To assist smaller publishers and to foster diversity, the government will establish a one-off Regional and Small Publishers Innovation Fund involving $16.7 million worth of grants a year over three years, from the 2018-19 financial year, totalling $50 million.
The government will set up the architecture for the fund such that the first round of grants can be announced no later than 1 June 2018, with the first grant monies to flow from 1 July 2018.
Publishers with an annual turnover of not less than $300,000 in revenue and not more than $30 million in revenue would be eligible. Large publishers such as News and Fairfax are ineligible, along with public broadcasters.
Funding grants would be capped at a maximum of $1 million per year for any media group.
To assist in creating employment opportunities in regional media, the government will establish a regional and small publishers cadetship program.
The government will support these cadetships with a wage subsidy, modelled on the Department of Employment’s existing wage subsidy program.
Eligible organisations would be able to apply for a wage subsidy or grant of up to $40,000 (GST inclusive) per journalism cadet.
Two hundred cadetships will be available for funding over two years, with 100 cadetships available each year. Of the 100 cadetships in a single year, at least 80, but not more than 90 cadetships, will be for regional publications.
Furthermore, Treasurer Scott Morrison will direct the Australian Competition & Consumer Commission to conduct an inquiry into the impact of digital players such as Google and Facebook on media. The inquiry will commence as soon as possible, and not later than 1 December 2017, according to a statement by Xenophon.
The government will also support an amendment by the Nick Xenophon Team to increase the post-trigger event points requirements in smaller (that is, non-aggregated) regional TV markets from 360 points over six weeks to 600 points over six weeks.
The government will grant a further six-month extension for community TV licensees, taking these licences through until 30 June 2018. In the interim, the government will hold a roundtable discussion with the sector to discuss its future.
Finally, The Department of Communications and the Arts and the Department of Foreign Affairs and Trade will conduct a review into the reach of Aussie broadcasting services in the Asia-Pacific region, including examining whether shortwave radio technology should be used.
The review will include public consultation and the report of the review will be made public.
Xenophon wasn’t the only Senate crossbencher to get their way, with the government also striking a deal with Pauline Hanson, whose One Nation Party wants an investigation into the ABC.
Communications Minister Mitch Fifield said the ABC will be subject to a “competitive neutrality inquiry” to find out whether it’s using its status to compete in a way that “isn’t reasonable with commercial organisations”, according to ABC News.
Fifield slammed claims that the ABC was being attacked by One Nation.
“What we have agreed and what we will seek to pursue in relation to the ABC are measures to enhance the ABC,” he said.