It should be no surprise that Lachlan Murdoch is taking an axe to Channel Ten. He told everyone that there was a “difficult cost cutting program” ahead only a couple of months ago.
And only a couple of weeks ago, head of news Jim Carroll resigned. He, of course, was the man who had presided over revamping the network’s bulletins and creation of the George Negus current events program.
The plan had been to make Channel Ten a serious player in news and current events, but now it is reported that a fair swag of 100 redundancies to be handed out on Monday will be to jobs created as part of the brave new push into news.
I understand, though, that Negus himself is feeling secure. The ratings for his show are on the rise and management regards it as value for money.
The bigger picture, and the reason for Murdoch’s interest in Channel Ten in the first place, is the current view that free-to-air television might have a better long-term future than pay. This is a reverse of the thinking of most of the past two decades.
In the United States, cable television subscriptions began to drop last year for the first time in recorded history. The reason is the increasing availability of substitute services, such as Apple TV and Netflix, that provide access to similar content cheaper and without the requirement to pay for inflexible packages.
The flight from cable, or “cutting the cord” as it is tagged in the US, is yet to really gather steam, but the threat to established players from streaming video companies is clear.
In Australia, pay television has never gained the same grip as it has in the US, and for the past six months or so local media investment analysts have questioned the long-term health of pay television once the National Broadband Network makes downloading video content faster for all.
Telstra has introduced the T-Box, which delivers free-to-air and pay-TV content, as well as owning part of Foxtel. It is hedging its bets
Meanwhile, Murdoch and Packer bought into Channel Ten, giving them a foothold in free-to-air television after a decade when their main game seemed to be pay.
But the theory that there is a brightish future for free to air TV can only work if the costs are low. These will be lean and mean operations. Hence, cut, cut and cut again, while trying to target profitable audiences with the new digital multichannels. Hence the recent relaunch of Ten’s all sport digital channel One as a more general male-oriented channel.
In this context, the current federal government convergence review of broadcasting regulation is crucial.
Free-to-air television stations are arguing for cuts in licence fees and “more flexibility” in quotas for local content, to put free-to-air broadcasters on a more equal footing with cheap-as-chips oversees-based internet content providers.
At present, different regulatory regimes apply to free-to-air TV and pay TV, and content delivered over the internet is not regulated as broadcasting at all, due to then communication minister Richard Alston’s 2000 decision that “streaming is not broadcasting”, now looking distinctly short sighted.
So, can it all work? Nobody really knows. A great deal depends on the convergence review, and most players are hedging their best.
But regardless of the outcome, low cost and tightly targeted are clearly the way of the future.