Beyond the budget headlines like the Medicare levy , the bank levy and that pesky university fee rise; there was a major proposition for free-to-air tv companies to have the licensing fees changed completely. These fees normally bring in $130 million dollars per year and will reduce to a more modest $40 million dollar because the government has realised how out of date free-to-air tv has become.
We could possibly save free-to-air tv,
Thats only possible if you’re willing to give up your netflix, hulu, stan, hayu, cable tv like Foxtel and Austar. Even sites like Facebook and Google. This is where most people get their news and show time entertainment. Due to the changing demographics Seven west media, Nine entertainment and Channel ten network holdings all posted massive losses in the 2016 year period. This is purely due to less people watching this type of television.
For those who don’t know the way these networks make their money is through advertisement between shows. The more popular a show normally the more money you can get for an advert in that time slot. Due to the lack of engagement only 20% of the total money spent on advertising goes to these networks, this is a substantial cut compared to up to 30+% in free-to-air tv’s prime.
Why the licensing fee cut won’t help and why free-to-air is dead
Sites like Facebook and Google have no limits when it comes to content type or type of audience because these websites are accessible 24/7 and can also be updated 24/7 without the need for someone to film it and then put it in a time segment on a specific show.
Sites like Netflix and Hulu have the ability to play and pause whatever show you’re into unlike networks who need to bargain rights and then stick it in a time slot. Also networks normally do not get the shows straight away. The delays between the US and the UK for certain shows is way too long and no one is going to sit through a screening of a tv show that they saw on Netflix three months ago.
Australia is too small of a country to support 5 free-to-air channels seven, nine, ten, abc and sbs. From the recent cuts of programs from channel ten, I personally believe that will be the first to fall if there isn’t some government intervention.
Basic demand and supply in this market, Limited demand for free-to-air and too much supply for the networks to stay profitable.
Do you think the government should help fund these networks like they did with Alcoa power plant or the car manufacturing sector, or should they let the networks fizzle themselves out?