Reports in the Australian and the Australian Financial Review last week confirmed the government is failing to act on important regulatory issues affecting Australian television broadcasters. The first is the delay to pass the Anti-siphoning reforms that were first announced in December last year and second the delay to award the new Australia Network contract.
Since this website’s inception in 2007 we have extensively written about the Anti-siphoning law and why change is necessary. The Australian public were recently exposed to how the new Anti-siphoning regime will enhance access to premium sport on free-to-air television. Senator Stephen Conroy, Minister for Communications, Broadband and the Digital Economy allowed Seven to broadcast Wimbledon live on 7TWO by delisting the Event from the Anti-siphoning list, otherwise the Event would only have been allowed to be premiered on Seven. A report in the Financial Review confirmed that despite the Government looking to table legislation in the recent sitting of parliament to pass the reforms, the legislation will now not be introduced into Parliament until at least the next sitting.
According to an Official from the Department of Communications, the draft legislation is in the “final stages of consulting with stakeholders” and this is reported to include a second draft of the bill being circulated amongst key stakeholders.
The continued delay by the Government is causing issues between broadcasters and sporting bodies. Whilst the Minister has allowed sports that are currently on the Anti-siphoning list to premiere on a digital-only channel such as Wimbledon and some AFL matches, the Minister refused Channel Nine the opportunity to broadcast the State of Origin on GEM live in Western Australia, despite the fact that under the proposed regime the State of Origin sits on the B list meaning it can be premiered on a digital multichannel.
The failure to pass or at least introduce the reforms into parliament is stalling broadcast rights negotiations,for example the broadcast rights to the Summer and Winter Olympics . Over the last few months the International Olympic Committee has renewed broadcast rights with US Broadcaster NBC and also with Korean broadcaster SBS, who purchased rights for all Olympics up to 2024, despite host cities for the 2020, 2022 and 2024 Olympics yet to be announced. The IOC has said that it will not begin rights negotiations with Australian broadcasters until there is a outcome to the Anti-siphoning reforms. Nine and Foxtel together paid $100 million for the broadcast rights to last year’s Vancouver Winter Games and the 2012 London Summer Olympics, the rights in Australia for the 2014 Olympics and beyond are yet to decided. Whilst it may seem early days, forward planning for an Olympic broadcast is essential. For example Nine started selling 2012 London Olympic advertising and sponsorship packages in the middle of last year, two years out from the London games.
The changes to the Anti-siphoning list will have a major impact on the Olympic rights, as the games reside on the proposed Tier B list meaning they may be premiered exclusively on a digital multichannel. This could possibly see a devaluing of subscription tv’s offering as Nine could broadcast coverage on its 3 channels, where each channel televises different events. This would avoid the criticism that Seven faced during its Beijing Olympics broadcast where it failed to broadcast different events on its multichannels. Of course this criticism was unfounded because Seven were legally obliged to only use its main channel to premiere events and simulcast such on 7HD, due to the Olympics sitting on the current Anti-siphoning list. The reforms to the law would change this and hence the IOC is right to wait for the Government to pass the reforms.
The Government’s failure to act is having a major impact on the sports broadcast market and may even affect the takeup of digital TV, because compelling sports content continues to remain on primary channels. The Government’s indecisiveness is also affecting Australian sporting broadcast rights internationally. The new 10-year deal worth $223 million to manage the Department of Foreign Affairs’ international network, the Australia Network, has yet to be awarded. The Australian Broadcasting Corporation (ABC) which currently manages the network were recently given a six month contract extension as the Government continues to bicker over the tender process and who will be awarded the new contract. Read more here.
Australian News Channel (better known as Sky News Australia and owned 33% each by BSkyB, Nine and Seven) and the ABC have tendered for contract. Politics appears to be the reason for the current delay and this has led to uncertainty over whether the ABC can purchase sports rights for the next three years for broadcast on the Australia Network. The international network currently broadcasts Australian sporting competitions such as the National Rugby League and AFL and such content drives about 60% of the network’s ad revenue.
The indecisiveness of the government, according to reports is due to Mr Kevin Rudd’s Foreign Affairs department losing control over the tender process in favour of the Communications Department headed by Senator Stephen Conroy. There is also the fact that both tenderers have been supposedly asked to redraw tenders with a renewed focus on how the Australia Network will cover and gain viewers in the Middle East and North Africa. The Australia Network currently broadcasts into 44 Asian and Pacific nations.
Apparently Mr Rudd wants the network to become more influential in territories it broadcasts in by focussing on Australian drama, regional and Australian themed programs at the expense of sport. Sky News’ bid is thought to have been recommended as the preferred bid from an expert committee, because of Sky News’ willingness to run a specific Australia Network channel into the Chinese market, which is notoriously hard to crack, even for Rupert Murdoch. Speaking of the Media Mogul who is under serious pressure in the UK following the closure of the News of the World and the withdrawal of News Corporation’s takeover bid for Sky because of the fallout from the phone hacking scandal, there is concern that awarding the Australia Network contract to Sky, whose shareholder BSkyB is in turn 38% controlled by Murdoch’s News Corporation would raise conflict issues between commercial and government interests.
This begs the question why did the Government put the network out to tender in the first place? The Network has around an annual budget of $22.3 million, which isn’t much in any broadcast language. If the government is serious about ensuring the network becomes an international soft diplomacy force like Britain’s BBC World News, more money needs to be invested in the Network. The Network currently provides a solid service and its sports broadcasts are extremely important to expats in Asia and the Pacific who otherwise would have no access to watch Australian sporting competitions. But it is unrealistic to think the Australia Network can be a political powerhouse if run by a commercial organisation instead of by a government department or a government owned corporation, especially with limited funding. Whilst Foxtel, Austar and the Australian News Channel run the reputable Australian Public Affairs Channel (APAC) the stability that a Government organisation brings should be preferred if the long-term goal is for the Network to become a soft diplomacy force and grow its international footprint in less commercially viable markets.
The Government should in its next round of ABC funding condition its funding on the basis that the ABC will run the Australia Network exclusively but only on the basis that the ABC undertake a major expansion program of the network’s footprint. The causaulty in all this may be ABC’s News 24 service which recently celebrated its first birthday. However the ABC may still be able to run a slightly different positioned News 24 by relying more heavily on content generated for the Australia Network (which would be fresh content for Australian based viewers) and become a true Australian-eyed international news service. There is an opportunity for Australia’s government broadcaster to take on the international market, especially considering the announcement earlier in the year by the British Foreign & Commonwealth Office to reduce funding to the BBC World Service. Whilst the World Service is the radio arm of the BBC’s international footprint, there is now an opportunity for the ABC to combine its Radio Australia assets and if successful the Australia Network team and drive synergies across the two teams to truly become a worldwide international broadcaster.
There needs to be further investment to expand the influence of the Australia Network both in terms of programming diversity and broadcast platforms. Whilst a range of programming should be broadcast on the network this should not be at the expense of broadcasting Australian sport because apart from servicing expats needs to watch the AFL Grand Final, sport is a major part of the Australian culture and even the political landscape (think of all the money invested by the Australian Sports Commission into developing Australian athletes) and therefore this aspect of Australia needs to be broadcast to the world. In terms of network reach a start would be making the network available 24/7 online where broadcast rights allow.
The Government has the opportunity to expand its soft diplomacy efforts and service expats around the world through investing in the Australia Network and Radio Australia. In this case it appears that the ABC is the best organisation to be contracted with this task. The Government needs to make a decision fast because otherwise this opportune time will have passed.
The Government cannot sit on the fence for much longer. Whilst the carbon tax is receiving all the political headlines at the moment, the Government must progress its media policy to ensure the broadcast and sports industries are not left in the dark as the Government drags its heels on two important regulatory issues. Action is required now.
The Australian Financial Review, 11 July 2010