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Government’s 'gift' to commercial TV

By Vincent O'Donnell - posted Friday, 19 February 2010

As a way of supporting Australian content on commercial TV, the government's planned rebate of TV licence fees is a great way to line the pockets of foreign equity investors and Australian media moguls.

If the government wants to support quality TV content, then the license fee rebate should be invested in a production investment fund. The model is there: the Commercial TV Production Fund that enjoyed some commercial and critical success more than a decade ago.

The idea is not new. Nigel Dick, a former general manager of Channel 9 made the case for using license fees as a production fund to support quality public service broadcasting on commercial and government networks in his submission to the ABC SBS Review in 2008.


According to the Minister, Senator Stephen Conroy, television licence fees were $286.8 million in 2008-09. This figure cannot be confirmed, as the Australian Communications and Media Authority has failed to publish TV revenue and expenditure for the last two financial years, previously a routine part of ensuring transparency in the administration of the broadcast spectrum. Recent revenue figures are published by Free TV Australia, the former Confederation of Australian Commercial Television Stations, but have not been independently verified. As the economy recovers, revenues will undoubtedly grow, perhaps reaching $320 million by June 2011.

In the case of all broadcasting, the electro-magnetic frequency spectrum that television uses is a publicly-owned asset. The licence fee is the rental paid for its exclusive use by private profit-making enterprises, like the lease on a shop or factory to conduct a business there.

The commercial licensees point to overseas license fees which are frequently lower. At 9 per cent of total revenues, and even with the growing competitions from Pay-TV, the three major commercial networks enjoy unfettered access to an audience of 20 million viewers, with viewers in some areas reached via low power relay transmitters installed under the old “Black Spots” program, or the remote areas or homestead satellite service - all paid for by the government, at least in part.

The Federal Government is generous in other ways. It has already subsidised the transition to digital broadcasting and the replacement of ageing analogue equipment. It has also provided the digital spectrum to commercial television networks for free during the transition phase ending in 2013.

Television thrives on novelty - who could have anticipated the MasterChef final would become the third most watched program of the past decade, just behind two sporting events - but as Sir Humphrey might say, it takes brave or foolhardy TV management to take any risks with programming.

A 33 per cent rebate in fees this year would contribute almost $96 million to a television production fund, more than double the amount invested by Screen Australia in TV development and production in 2007-08. The planned 50 per cent rebate for next year could add between $143 million and $160 million to the investment pool, depending on the size of recovery in the economy, at no additional cost to government. And commercial networks would share the benefit of the investment. Audiences love quality Australian programs, especially drama, which out-performs imported drama hands down.


This investment in television production would certainly create jobs, but more importantly, it would convert many part-time media workers into full-time tax-paying employees who would no longer look to the dole to feed the family between gigs.

But the fund could have a more important result for a maturing television market. It has the potential to encourage innovation in form and content by partly removing the commercial risk from producing programs with niche audience appeal. Indeed, Australian television could start to offer quality programming in community languages.

Traditional programming especially on commercial television and to only a slightly lesser degree on the ABC is pitched to mass markets. Even SBS would prefer its niche audience to be big niches.

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About the Author

Dr Vincent O’Donnell is an honorary fellow in RMIT University’s School of Media and Communication, a past president of the Producers and Directors Guild of Victoria and former executive producer at Film Victoria.

Creative Commons LicenseThis work is licensed under a Creative Commons License.

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