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Report: Govt open to license fee cuts

The Federal Government may put the idea of a 50% cut to ­licence fees before the Expenditure Review Committee.

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The Federal Government is said to be open to the idea of a 50% cut to ­licence fees for Commercial TV networks in December 2016, followed by 50% decrease twelve months later.

The Australian reports the government is believed to be considering putting the licence fee cut before the Expenditure Review Committee.

Seven, Nine and TEN have received reductions under previous governments and now pay 4.5 per cent of gross revenues in licence fees. But they have called for further reductions whilst objecting to increased primetime ads being introduced to SBS.

A spokesman for Turnbull declined to comment.

Meanwhile SBS Managing Director Michael Ebeid writes in an article for the newspaper that advertising is not a new concept to SBS, with a third of our funding comes from commercial revenue.

“To think that SBS can walk up and take hard-earned revenue from commercial networks and create a seismic shift in the market wildly overstates our influence,” he wrote.

“SBS introduced in-program advertising in 2006. Since then, Google dominates the web, Facebook, Foxtel, FetchTV and Twitter have taken off, and the arrival of on-demand services like Stan, Presto and Netflix has everybody buzzing and engaged like never before.

“New players challenge all networks to look forward strategically and adjust their offering. SBS having this small change in advertising flexibility should be the least of anyone’s worries.”

9 Responses

  1. The fee is only 4.5% of revenues and automatically reduces as their revenue does, for spectrum worth billions. Seven and Nine are making hundreds of millions of dollars in profits. Ten aren’t but nothing that advantages 7 & 9 more is going to change that. The networks are just trying to ensure that they pocket all of any upturn in advertising if retail picks up, because in a flat market how else can they manufacture increases in profit and give themselves large bonuses.

    Turnbull has opposed this before. This, along with Abbott forcing Turnbull to table media reforms that have no hope of passing the senate, looks like him just trying to set Murdoch on Turnbull to distract from his own problems.

  2. I want all the fees cut in half and then half again on everything I have to pay to the govt…..reason…. the quantity of adverts I have to put up with when watching a comm ch

  3. actually, thinking about this more, when governments give subsidies to other industries such as the car industry, they place requirements on them such as building an Australian car. These reductions are in effect a subsidy to the industry and the Minister should place conditions on them such as increase in Australian drama content on all channels – primary and secondary.

    1. Remember too that the licence fee rebates were ostensibly to help the commercials pay for converting to digital.

      Now that that’s done & dusted, what’s their excuse? A minimal change to SBS policy that slightly re-arranges the distribution of allowed advertising?

  4. its those pesky secondary channels that are costing them so much money and hence why they want the fee decrease because they were forced to add those channeld – you know those pesky secondary channels that often help the network’s overall rating for the night so they win; those pesky secondary channels that have next to no staffing and run off a server pre-programmed a month in advance !!!

  5. So … they were given a 16.5% rebate for 2009/10, a 41.5% rebate for 2010/11, a 50% rebate in 2011/12, and were granted an ongoing rebate of 50% for 2012/13 and beyond.

    And now they want a further 50% cut in 2016, and another 50% cut in 2017?

    Hey, Mr. Hockey – I only want to pay 1/8th of my tax. How about it, mate?

  6. if the networks didn’t push for, or get, licence fee rebates then maybe SBS wouldn’t be copping a budget cut and therefore not seek to restructure its advertising quotas. The networks can’t have their cake and eat it too.

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