Australia | Sep 15 2006
By Greg Peel
The government’s rescue plan for free-to-air television networks was released yesterday by ministerial irrelevance Helen Coonan under the guise of media reform laws. This ensures that information dissemination and entertainment in this country, laughingly referred to as a democracy, will be controlled by the privileged few until at least 2014.
It was timely that yesterday also saw the release of the latest CEASA advertising figures, showing that advertising spend grew 4.5% in FY06, split between 1.5% for old media and 3.1% for new.
To split the numbers up further, online advertising grew by 59%, pay TV by 29%, newspapers by 0.4% and FTA TV fell by 1.2%.
The numbers did not surprise brokers so much in the split but most were not expecting such weak numbers for old media. While forecasts continue to suggest a slight improvement for the dinosaurs in the second half, the trend is expected to continue down in the longer term. Meanwhile brokers continue to be cognisant of the sustained growth in online advertising.
Under the proposed laws, anyone can bid for new digital channels which the market is specifically targeting for mobile phone networks. Fairfax Digital has thus thrown up its hands in despair, as it would be pointless trying to outbid the FTA networks without any content in place, and pointless to attempt to secure content without any chance of outbidding the FTA networks anyway.
The pay TV industry is ropeable, as this is yet again a barrier to being able to compete in the market place, attract more content and advertising, and bring the cost of pay TV down. The sport anti-siphoning laws have not been dealt with sufficiently, such that we will continue to have The Sound of Music broadcast in some states in place of the corralled Bledisloe Cup.
Rupert Murdoch, who’s News Corp (NWS) has been busy transforming into the world’s pre-eminent multimedia network, has all but washed his hands of Australia.
Non-FTA hopefuls did receive one fillip, in that FTA TV will not be allowed to bid for the “niche” channels – those with content limitations and specific purpose goals such as a religious channel. Whoopee. They’re thrilled. FTA TV wasn’t the least bit interested anyway.
This is a big shot in the arm for Seven (SEV) and Ten (TEN), while Jamie Packer must be laughing heartily at his prostrate subjects (the government) whose lingering subjugation by the ghost of Kerry means he will get a much better price when he moves to sell the Nine Network (PBL) soon.
The biggest losers in the deal, apart from a struggling pay TV, are the newspaper publishers, who have effectively had a means of media diversity snapped off. An interesting move by Howard to alienate two powerful media voices, but then I’m sure he is happy to ensure perennial deification from the television networks that will steer public opinion with little challenge.
And the real losers are the Australian public, left with no variety of commentary or entertainment choices.
The good news for democracy is that the law change proposals have been met with criticisms on all fronts, including National Party parliamentarians (specifically worried about regional monopolies) and concerned Liberal party backbenchers. Opposition from non-government members is guaranteed.
Wait now for the government to spin the line that providing opportunities to FTA is to provide “free” media to all Australians. In the meantime advertisers are moving with the new millennium.
In other news, Seven has just bought into VoIP (voice over internet protocol) provider Engin, which all brokers see as a positive move. Apart from leading FTA ratings growth at present, Seven is presently pushing hardest on expansion into new media formats which will benefit the network into the future. Now that it may have mobile networks sewn up, Seven needs simply to deal with the ridiculous amount it and Ten has paid for AFL rights.
It is little surprise that pay TV’s sub-rights offer for AFL has fallen well short of Seven’s and Ten’s hopes. The bid is hardly likely to improve now.
While Seven has many other positives Ten is still stuck in the last century, hoping that you will be watching Big Brother (soon coming to you on your mobile phone).
It’s all of little consequence to Publishing & Broadcasting (PBL) whose Macau casino deal gets better by the minute.
News Corp’s next move will be interesting. While Rupert is sounding like he may just walk away altogether there is still a possibility he may attempt to buy back struggling Ten to offset falling revenues for his national newspapers.
Fairfax (FXJ) has received a big kick in the guts, but brokers are still balancing expected lower newspaper revenues with the growth of the digital division.
