The war for the future of television is on, and without knowing it, you have already chosen a side. Whether you prefer to stick to terrestrial broadcasts on free-to-air and Foxtel, or if you like to get your shows from the likes of iTunes, Google and even Netflix and Hulu you're either on one side or the other. Australian TV networks are arguably losing the war for the future of content, and they're going cap-in-hand to Malcolm Turnbull and the Government for help.
FreeTV Australia, a self-regulating body for the free-to-air broadcasting industry in Australia, wrote a submission to Communications Minister, Malcolm Turnbull, back in December. It was made public yesterday on its website.
The submission serves to discuss legislation in the Communications sector in Australia, and it outlines a swathe laws and taxes which can be reformed or simply repealed altogether.
One of the primary concerns of the free-to-air broadcasters is fees and taxes they are subjected to in bringing content to digital viewers. These are taxes that other local and international players like Netflix and Telstra aren't subjected to, and they want it stopped (emphasis added):
The Communications sector is going through a period of tumultuous change. The Broadcasting industry in particular is evolving at the fastest pace in living memory. From the perspective of the commercial free-to-air broadcasters:
• Competition for both ‘eyeballs’ and advertising dollars continues to increase rapidly as new entrants, such as Google/YouTube, Netflix, Telstra, Fetch, JB HiFi, etc. enter or consider entering the market. As a result, revenues are under pressure, with the advertising market remaining as ‘short’ as ever;
• At the same time, commercial free-to-air broadcasters are investing heavily to make their services available across a wide range of devices in both linear and non-linear (catch-up) formats and content costs continue to increase as the FTAs continue to invest in local content
Our response to the Coalition’s deregulation initiative has been prepared in the light of this profound competitive, structural and economic ‘squeeze’ that the industry is experiencing. As an industry, we acknowledge and accept that from the perspective of many citizens, commercial FTA broadcasting is ‘special’: it is the home of high quality free content, especially news and sport; it is also the home of high quality Australian content; and finally, it holds a special place in the affections of many Australians, participating alongside the public broadcasting sector in the national conversation.
Therefore, we understand that many components of the regulatory regime are important, including obligations and commitments around local content and sports. However, during this period of change, commercial free-to-air broadcasters must be free to innovate and to compete hard for both audiences and advertisers. Our members need a level playing field if they are to continue to meet the high expectations of the Australian viewing public.
That "level playing field" for free-to-air broadcasters would involve the government deregulating much of the industry to remove financial and taxation burdens on said TV networks:
Deregulation should create a level financial playing field, especially in terms of licence fee and retransmission reform. This will enable the commercial free-to-air industry to compete on fair terms whilst still funding its important regulatory obligations around content, captioning, etc.
Free-to-air broadcasters also want out-dated regulation removed like the rule that requires main channels to be broadcast in standard definition rather than HD, and the removal of restrictions related to advertising during children's broadcasting brackets.
Basically, the industry wants to pay less and earn more so that it can compete against new digital players that have never had to pay regulatory taxes or spectrum broadcast fees. That's all well and good, but some of the blame for the uncompetitive situation many broadcasters find themselves in needs to sit with the broadcasters themselves.
Australians have been crying out for legal and easy ways to get access to great local content from local vendors, but instead of innovating, local executives simply slammed pirates downloading the content they simply couldn't get access to in Australia as cheapskates and criminals.
If the free-to-air broadcasting industry can innovate a solution to the use of services like Netflix, Telstra and Quickflix, I'm all for them shirking a few tax responsibilities. If it's just a bid to pay less and continue the status-quo, however, they can continue paying through the nose for their mistakes.
Recently, television execs have been talking to different media outlets, slamming both Netflix for accepting Australian credit card payments, and those tunnelling through to the US via a VPN service to use the cheap streaming service.
A new narrative is emerging within the industry, calling those who pay for services like Netflix and Hulu "pirates", despite the fact that these customers are parting with cash for their content. The "logic" behind such a slur comes from a simplistic analysis of the Netflix user agreement that suggests content can't be broadcast outside of the US market. That may be true, but reading it as a black and white issue — pirate or non-pirate — is a mistake: the reality is that the use of VPN services is made up of shades of grey. It hasn't been legally tested in a court, and from the looks of things, it isn't about to be either.
Instead, it's likely an attempt by certain TV executives to pre-empt future industry decisions about the use of said VPN services to get access to higher quality platforms before local competitors are ready. Don't be surprised: it's just the latest tactic in the war for your content dollars.
Read the full submission here.