The changes, approved by cabinet last week, will scrap Australia's 'reach' rule and 'two-out-of-three' rule, both of which have been hotly debated ever since the Coalition government took power in 2013. The reach rule currently prevents television networks from broadcasting to any more than 75 per cent of the Australian population. The 'two-out-of-three' rule blocks media companies from owning a newspaper, a radio station and a television network in any single major market. A Bill containing the reforms was lodged with the House of Representatives on Wednesday and will now be referred to a Senate committee for review.
Domino effect
The landmark changes to Australia's media ownership laws are expected to trigger a wave of tie-ups between major city television networks and smaller regional counterparts. In particular, the reach rule has long sat as an obstacle in the path of metropolitan networks looking to acquire smaller regional players. Scrapping the 'two-out-of-three' rule would also allow major newspaper publishers, such as News Corp, to tie-up with major television and radio networks. Communications minister Mitch Fifield insists that creating space for mergers is essential for ensuring the long-term viability of regional media operators. 'In the digital era, these regulations unfairly restrict Australia-based broadcast or publishing companies from optimising the scale and scope of their operations and from accessing resources, capital and management expertise available to other media operators,' said Mr Fifield.
Regional boost
Regional broadcaster Southern Cross Austereo chief executive Graham Blackley has welcomed the decision to junk the reach rule, arguing that clearing the path for mergers will help enhance and protect television on offer in regional communities. 'It allows regional networks to actually be more efficient and get some economies of scale as we move forth, which should secure us both financially and physically, allowing us to invest more in content for regional viewers,' he said. According to Mr Blackley, the emergence of digital streaming facilities for metro content in regional areas has shaved 6 per cent of regional television advertising revenues over the last 12 months.
Diversity concerns
The Bill will need backing from both sides of the Senate is the reforms are to be signed into law. While the Australian Labour Party has backed overhauling the reach rule, it has held off endorsing changes to the 'two-out-of -three' rule amid fears that scrapping the ownership cap might further fuel the dominance of Rupert Murdoch's News Corp in the Australian media market, to the detriment of media diversity. Seven West Media, a major broadcaster, has also warned that the new rules may threaten the viability of Australian-produced television and media content. 'Media ownership changes might be great for the deal junkies out there but they are not going to ensure a strong future for Australian film and television production,' said Seven chief executive Tim Worner. 'You won't see one more minute of local content as a result of these changes, in fact you will probably see a lot less, especially in regional areas.'
Sources: Sydney Morning Herald; Australasian Lawyer; Bloomber Business
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