Figures prove $250m Free TV rebate to be a total crock
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The decision earlier this year by the Federal Government to give the major commercial TV networks a $250 million rebate on their licence fees to help fund their Australian content, has been exposed as a complete crock by the latest six month ad revenue figures, and a statement last Friday by ACMA, the broadcast media regulator. Free TV Australia said today that January to June ad revenues jumped by 17.7% nationally, nearly 19% in the metro markets and by a more sedate 14.2% in regional areas. The increases are some of the largest in memory, especially the surge in the five metro markets. Sydney revenue was up 20.4%, Melbourne by 20.59%. Revenue for the half was $1.821 million nationally, compared with $1.546 billion in the first half of 2009. In metro areas, revenues were $1.392 billion, against $1.171 billion in the six months to June 2009. Regional revenues for the first half of 2010 came in at $428.9 million, compared with $375.4 million a year ago. The rises mean that the industry’s revenues will be significantly higher, thus increasing the size of the rebate announced earlier this year. That was estimated to cost the Federal Government around $250 million, but if the near 20% rise in revenues are maintained into 2011, then the final figure will be closer to $300 million. By any measure the fortunes of the heavily indebted Seven and Nine Networks have taken a turn for the better (and for their management, who are shareholders or equity participants in the owning companies). And yet it was only in early February of this year when Communications Minister Stephen Conroy revealed he’d taken the bait from the FTA networks and given them a belated Christmas present, or was it an early Budget gift? “Licence fee rebates will be 33% in 2010 and 50% in 2011 to ensure that commercial broadcasters can continue to invest in new Australian content. According to the Australian Communications and Media Authority, Television Licence fees were $286.8 million in 2008-09,” the minister’s statement read. “The Government will protect Australian content on commercial television by offering licence fee rebates to broadcasters in 2010 and 2011,” Conroy announced:
That’s a load of codswallop because last Friday as this statement from ACMA revealed that the commercial networks had no trouble in meeting those Australian content requirements in the year to June, 2009:
The 12 months to June 2009 saw all three major commercial networks and some of the regionals operate at or below break even. After their interest bills and other payments are accounted for, the sector lost money, and yet they found money to make sure they met their content quotas. Tony Abbott has not said whether he will take away the $250 million plus gift from the networks bestowed on them by the government. |
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15 Comments
Another cash splash giveaway by labor - fiscal conservatives my bum.
Lorna, still full of venom I see, how about doing us farmer’s a favour and sprew some of it at the cane toad’s that would be a tremendous help.
This is the boy wonder who first Rudd, now Gillard, have put in charge of the communications portfolio - a complex job requiring a fair level of technical understanding and the ability to play chess with the devil.
The TV companies must have found getting their licence fee ‘rebates’ was like taking sweets from children - easy money.
The NBN SHOULD be an enormous vote-winner for Labor at this election - yet most of the people I know who follow these issues doubt Conroy’s ability to deliver good outcomes in the public interest. He appears grossly incompetent and unsuited to the position.
They is also widespead concern about Conroy’s real intentions.
Enthusiasm for the NBN will be muted as long as it appears to be a carrot with which to bribe and cajole the IT industry into accepting the government’s mandatory censorship proposals.
I would like some of the digital spectrum taken off 7, 9 + 10 and sold to independent startups. The way the spectrum was divided up was a farce.
Just another case of handing out taxpayers’ money to buy votes and/or favors. Always was a rort by the Rudd -Gillard lot - now exposed as even bigger than anyone thought.
Maccas - So your a farmer, that explains your love of and for government handouts. I maintain my previous comment - IDIOT.
This is disappointing journalism by Glenn. It totally fails to take into account the huge drop in ad revenue between 2008 and 2009. Here are the last 5 years for advertising revenue in the 6 months between Jan and June in each year
2006 - 1,632,709,268 (0.08% decrease from 2005)
2007 - 1,740,023,830 (6.5% increase)
2008 - 1,752,745,068(0.7% increase)
2009 - 1,546,675,246 (11% decrease) *
2010 - 1,821,629,005 (17% increase)
Free to air TV ad revenue has been flat for years and the environment is not going to get any better, due to competition with Pay TV and the internet. Also Glenn has ignored a portion of the press release detailing that the rebate is also about the transition to digital TV
“Rolling out multiple digital television channels to regions which have previously had limited services is a particular challenge,” Senator Conroy said.
“The Government recognises that the commercial television broadcasters will require some assistance to maintain Australian content production, while investing in a new delivery platform nationally.
“Licence fee rebates will be 33 per cent in 2010 and 50 per cent in 2011 to ensure that commercial broadcasters can continue to invest in new Australian content.”
Regardless of the veracity of this piece I’ve always felt Conroy should of been the target of the Coalitions vitriol earlier this year, not Peter Garrett. Conroy was also caught out not declaring skiing trips with a certain media head.
Is it just me or did the mainstream media keep this one a little quiet so they didn’t rock the boat on their fee reductions while everyone got upset about fires from dodgey insulation installations?
Oh don’t you love coporate dole! The australian content rules are fairly shonky anyway as revoiced documentarys from OS count as local content and really cheap comedy sketch shows, which are usually painfully bad, count as drama - that all makes a lot of sense doesn’t it?
I can’t help but feel cynical about the $250 million gift soon to be $300 million as nothing either political party nor anything the TV industry does makes me think otherwise.
In this I have to go with my initial gut - a nice bribe to keep the networks sweet for the election that was coming, in whatever form, this year.
For me the commercial stations should live or die depending on the product they offer.If they fail fine,someone else gets a shot.I have never understood the need for Australian content(outside of news,current affairs ,sport, etc),when I watch tv I just want to be entertained,it doesn’t matter where it comes from.My identity as an Australian sure as eggs didn’t come from some tv station.Sexual lobster is on the money about the digital spectrum,it’s sheer idiocy the commercials having all that,it’s always about them not us.Classic example 7’s coverage of the Australian Open,there is more 7 than there is tennis,delayed aussie rules on friday nights and on it goes.
Australian TV content is mandated simply because, generally, it costs orders of magnitude more to make local stuff (especially drama) than it does to buy-in foreign programs. Without such production mandates nobody would make the stuff and still earn a living.
Even so, many Oz productions don’t pull big audiences (and hence big spending advertisers) compared to American shows, so the TV operators cynically fiddle around with the wording of the regulations to get their quotas up, and you get trivial el cheapo shows like Bert Newton’s 20 to 1 trotted out as “Australian content”.
I grew tired of Australian TV schedules years ago. These days I look at the night’s schedule, pick one or two programs of interest, and turn it off at all other times.
@ DAVIROB
It’s a shame there isn’t more demand for Australian content from Australians, it would be nice if it didn’t have to be mandated. Despite this, I share your disinterest in Australian content as it is now (save news etc and rare exceptions like The Gruen Transfer), however I think it’s important to have a strong cultural identity (even if it is in the form of the Rafters) for the sake of those more impressionable than us. We’ve already been significantly Americanised culturally. I mean, why do so many people watch Two and a Half Men? WHY???!!!
@SCOTT, you conveniently leave out the fact that the networks ASKED for the transition to digital. This wasn’t a government initiative. You also leave out the fact that they got all that additional spectrum for some hardware investment, wich is simply a cost of doing business. And despite the drop in 08/09, their is a net increase in ad revenues of 11.5%. The landcape is changing, but why should we prop up an outmoded business model? We’re not paying to keep Blockbuster alive, they have to innovate or die, at their own cost.
This graft is scandalous.
This handout to the free to air networks was never about content. It was all about a trade off for the Government to take back analogue spectrum which it wants to auction for next generation wireless services to maximise its digital dividend. Should we be surprised if Labor goes soft on this if it wins the election. And by the way does the Opposition have a view on this?
Malcolm Colless
I’d like to see your info as to the networks asking for a transistion to digital. As far as I was aware, the digital tv issue was raised by the old ABA (a government agency) in 1995. The government legislated the migration in 1998.
As to the 11.5%, that is over 5 years which works out to a measly 2.3% average increase a year. With inflation running at an average of 3% (year on year, March quarter) over the last 5 years, the TV stations are losing ad revenue.
As for the additoinal spectrum being provided free of charge, that’s probably the only element of your argument that makes any sense. But the networks aren’t exactly getting off free of charge. According to budget figures, they are still paying the government plenty in licence fees..$491,324,000 in 2009 alone up from 431,090,000 in 2008.