Australian Free-TV Broadcasters Take Issue with License-Fee Cuts

SYDNEY: While the Australian government has decided to implement a reduction to the broadcast license fees, the country’s free-TV broadcasters are arguing that the amount is not enough.

Australia’s commercial free-to-air networks will get a 25 percent reduction in their license fees, from 4.5 percent of revenues to 3.375 percent.

“The government’s decision to reduce the fees recognizes that the Australian media market has changed significantly since broadcasting license fees were first introduced, with the move to online and on-demand content fragmenting the market for media services and increasing competition for audiences and advertising dollars,” said Communications Minister Mitch Fifield.

“In turn, this is placing increasing financial pressure on Australia’s commercial broadcasters whose main competitors, including online operators such as Netflix and Apple, pay no license fees.”

However, Australia’s leading commercial broadcasters expressed disappointment that the cut does not go far enough.

“The small cut in this budget is not nearly what the industry needs to compete and innovate in a fundamentally changing media environment. We are disappointed that the government has not recognized this,” said Seven West Media’s chief executive, Tim Worner.

“It seems that commercial television broadcasters will continue to struggle under the burden of the highest license fees in the world for the next few years and that the spectrum we use to provide our services is also under threat.”

Ten Network’s CEO, Paul Anderson, said: “Despite a lengthy review and extensive consultation with the television industry, the Government’s decision only reduces this outdated and unfair super profits tax from 4.5 percent of gross revenue to 3.375 percent.

“While any reduction is positive, at this level our fee remains wildly out of step with fees paid in any comparable jurisdiction. This single reduction does not recognize the urgency of the challenges that this industry faces and the Government has not indicated a clear path forward to a truly sustainable fee.

“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.

“As we clearly outlined to the government, a meaningful reduction in license fees would have resulted in more work for local content producers and more Australian content on air. Without an urgent path to a sustainable fee going forward, local content remains under threat.”