Free-to-air broadcasters will face more pain if this goes ahead

Pay TV wants access to more sporting events

| More on:

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Pay TV has set its sights on the commercial TV networks last remaining gold nugget.

The Australian Subscription Television and Radio Association (ASTRA) is after the estimated 1,300 events on the anti-siphoning list. The list contains sporting events that are broadcast by the free to air (FTA) networks, such as cricket, AFL and NRL matches.

Now ASTRA wants sporting bodies to be able to sell their events to FTA as well as pay TV in parallel, and has taken the proposal to the Federal government, according to the Australian Financial Review (AFR).

Chief executive of ASTRA, Andrew Maiden says the record $1.25 billion broadcast rights deal between the AFL and Seven West Media Ltd (ASX: SWM), Foxtel and Telstra Corporation Ltd (ASX: TLS) was a good model for other sporting codes. Foxtel is jointly owned by Telstra and News Corp (ASX: NWS).

Mr Maiden says the anti-siphoning mechanism prevents sporting bodies from having more control over the rights to their events, and it should be up to those bodies whether they sell the rights to subscription providers or the free-to-air networks.

Outlining the issues the television industry faces, Mr Maiden has told the AFR that pay TV hasn't been able to grow its subscribers meaningfully over the past few years, while the FTA networks, including Ten Network Holdings Limited (ASX: TEN), Seven and Nine Entertainment Co Holdings Ltd (ASX: NEC) face increasing advertising revenue pressures.

Illustrating the issue, Network Ten recorded its worst weekly audience share ever last week, with its share falling to 13.8% of total audience, behind even the ABC, which had 17.9% of the audience. We've long suggested that given the falling FTA advertising revenues, there is no longer room for three profitable commercial networks in Australia, and the demise of one is only a matter of when not if.

Foolish takeaway

While most Australians would like the option of watching sporting programs for free, in the past, the FTA networks have treated viewers as second class citizens, delaying 'live' broadcasts and not showing some matches despite holding the rights to the event. Having the option to pay to get access to full series, and real, live events would be a benefit to most consumers.

Motley Fool writer/analyst Mike King owns shares in Telstra. You can follow Mike on Twitter @TMFKinga

More on ⏸️ Investing

Close up of baby looking puzzled
Retail Shares

What has happened to the Baby Bunting (ASX:BBN) share price this year?

It's been a volatile year so far for the Aussie nursery retailer. We take a closer look

Read more »

woman holds sign saying 'we need change' at climate change protest
ETFs

3 ASX ETFs that invest in companies fighting climate change

If you want to shift some of your investments into more ethical companies, exchange-traded funds can offer a good option

Read more »

a jewellery store attendant stands at a cabinet displaying opulent necklaces and earrings featuring diamonds and precious stones.
⏸️ Investing

The Michael Hill (ASX: MHJ) share price poised for growth

Investors will be keeping an eye on the Michael Hill International Limited (ASX: MHJ) share price today. The keen interest…

Read more »

ASX shares buy unstoppable asx share price represented by man in superman cape pointing skyward
⏸️ Investing

The Atomos (ASX:AMS) share price is up 15% in a week

The Atomos (ASX: AMS) share price has surged 15% this week. Let's look at what's ahead as the company build…

Read more »

Two people in suits arm wrestle on a black and white chess board.
Retail Shares

How does the Temple & Webster (ASX:TPW) share price stack up against Nick Scali (ASX:NCK)?

How does the Temple & Webster (ASX: TPW) share price stack up against rival furniture retailer Nick Scali Limited (ASX:…

Read more »

A medical researcher works on a bichip, indicating share price movement in ASX tech companies
Healthcare Shares

The Aroa (ASX:ARX) share price has surged 60% since its IPO

The Aroa (ASX:ARX) share price has surged 60% since the Polynovo (ASX: PNV) competitor listed on the ASX in July.…

Read more »

asx investor daydreaming about US shares
⏸️ How to Invest

How to buy US shares from Australia right now

If you have been wondering how to buy US shares from Australia to gain exposure from the highly topical market,…

Read more »

⏸️ Investing

Why Fox (NASDAQ:FOX) might hurt News Corp (ASX:NWS) shareholders

News Corporation (ASX: NWS) might be facing some existential threats from its American cousins over the riots on 6 January

Read more »