Free-to-air TV stations get leg up

Federal government announces permanent 50% cut to TV licence fees

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

The federal government has today permanently reduced TV licence fees by 50%, which is estimated to save the TV networks around $100 million a year.

Communications Minister Stephen Conroy announced the move today along with a new press standards model and the introduction of a public interest test for nationally significant mergers between media players.

A parliamentary committee will also investigate the so-called reach rules, with a view to abolishing them. Current rules prohibit a metropolitan television broadcaster from taking over a regional group and extending its “reach” beyond 75% of the population.

Changes to the media regulations have been previously proposed way back in December last year, although media commentators had expected the reach rule to be scrapped.

Tensions have been running high in the free-to-air sector with speculation rife that Ten Network Holdings’ (ASX: TEN) regional affiliate Southern Cross Media (ASX: SXL) was seeking a tie-up with Nine Entertainment.

Seven West Media (ASX: SWM) which owns the Seven Network, has come under fire from Nine after first supporting the abolition of the reach rule, but has since changed its mind to prevent Southern Cross joining Nine on the couch. WIN Corp, Nine’s regional affiliate is reported to be unhappy with mooted rule changes, because it is trying to renegotiate its affiliation deal with Nine, which expired in June 2012. Seven owns 11% of its own affiliate, Prime Media Group (ASX: PRT).

As part of the 50% reduction in licence fees, networks will be required to broadcast an additional 1,490 hours of Australian content by 2015. TV producers and the actors’ union have slammed that idea, suggesting that there is no incentive to commission new programming, and the networks could show repeats of any Australian show, such as Blue Heelers, Prisoner or The Sullivans if they wanted.

Foolish takeaway

Expect more media machinations in the weeks ahead, as the government puts the proposed changes to parliament within in the next two weeks.

In the market for high yielding ASX shares? Get three “Rock-Solid Dividend Stocks” in our special FREE report. Click here now to find out the names, stock symbols, and full research for our three favourite income ideas, all completely free!

More reading

The Motley Fool’s purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool’s free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead.  This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. Motley Fool writer/analyst Mike King doesn’t own shares in any companies mentioned.

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

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 »

asx share price competitions represented by businessmen arm wrestling
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 »

person reading news on mobile phone
⏸️ 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 »