The Federal Budget doesn’t do enough to save free-to-air TV
Last week’s Federal Budget included the Turnbull government’s media reform agenda which it says will “improve the sustainability of Australia’s free-to-air broadcasting sector”. However, University of Technology Sydney’s Peter Wells argues the budget didn’t contain enough measures to save the broadcasters.
In a bid to save free-to-air television, the government has announced plans to repeal media ownership rules, and the 2017 budget included a change to licence fees. 
But the media landscape is undergoing a structural change as advertising dollars move online, into a marketplace dominated by Google and Facebook. The budget didn’t contain enough measures to save the broadcasters, especially as the drop in licence fee pales in comparison to the industry’s recent losses.
The broadcast licence fee will change from one based on revenue to one based on how much of the spectrum the networks use. This adds up to a A$400 million reduction for all the broadcasters over the next four years.
The only thing that will save free to air television is a commitment to producing a product that will be worthy of public support.
When television companies start producing a quality mix of good programming and stop trying to lead the public by the nose or earlobes
to a meal of gruel and sugar coated stale bread, then the corner may be turned towards a profitable future. The future will not be as profitable as the heyday, and the ground rules will never be the same as they were, but high-quality programming in a variety of subjects and disciplines will save the day.
Unfortunately Richard not everyone has your refined tastes (and the Networks know that).
Only Ten made an operating loss, all the other “losses” are based on non-cash impairments that don’t affect operations. Even then, Ten only made a loss because of a big increase in programming costs from Big Bash and News Ltd programs.
The networks recently spent $5.5 billion on football rights, they certainly aren’t poor. Despite their recent near death experiences, Ten and Nine have substantially _increased_ their programming expenditures and Seven wasted hundreds of millions on pointless court cases against cable TV.
I know many discount impairments as non cash, but that is only half right as cash was paid for those assets at inception, and recognition as one hit (as opposed to progressively) will be misleading. Regarding performance, I would let the stock price be the judge of profitability and as you can see the trend over the last 5 years is all one way – down.
As I understand it, the operating licences were given away _free_ to the newspaper proprietors and it is this, rather than the cost to subsequent purchasers, which is included in the impairment.
The cost of acquiring the businesses is included on the balance sheet as a debt and also spread throughout the balance sheets of shareholding companies through various complicated debt and debt-for-equity instruments, which make it difficult to ascertain the true financial position of the networks.
The stock price of Ford has fallen 40% this year with a $2bn profit, meanwhile Teslas shares are soaring and its nowhere near making a profit. Its based a lot on future hopes rather than current reality.
I think we are is stall the death rather than save the industry territory with free to air now. Have you ever met anyone under 30 who watches free to air? Like print, the audience is literally dying out.
Even over 30s. I have noticed that I find it hard to watch TV today now I am no longer used to seeing them.
Plus free to air is much more inflexible to watch.
Even over 30s. I have noticed that I find it hard to watch TV today now I am no longer used to seeing ads.
Plus free to air is much more inflexible to watch.