Communications Minister Helen Coonan has announced a watering down of the harsh local content requirements for regional radio stations after accepting a series of recommendations from ACMA on the issue.
The Government has decided that the diversity of the Australian regional commercial radio broadcasting landscape is such that a ‘one size fits all’ approach to the licence
conditions that apply to regional commercial radio licensees is not appropriate. Instead, the required minimum amount of material of local significance “will be determined by
reference to the characteristics and circumstances of a licence.”
This means varying local content quotas for different licence types and licence areas.
The original mandated time of 4.5 hours of local programming each day will be dropped to three hours and in some very small markets and racing services this will drop to 30 minutes.
The Explanatory Statement tabled today by the Minister says: “The adjustment of the applicable number of hours from 4.5 hours to three hours is intended to ensure that the
local content requirement has little or no impact on the majority of licensees in terms of local content production costs.”
Control of commercial broadcasting licences is limited to 35 individual owners. Including joint ventures, the major regional radio licensees are: Macquarie Regional
Radioworks (85 licences), Super Radio Network (32), Grant Broadcasters (19), Redwave (9), Prime (10), Rural Press/Fairfax Media (9) and ACE Broadcasters (13).
74% of regional markets are radio monopolies; all but two of the remainder are duopolies. Licence areas differ in their population size and density, concentration of licences, and
media diversity. Areas range in size from Wollongong’s 1,089 km sq to Longreach’s 277,818 km sq.
Profitability also varies widely across the industry. Analysis undertaken by ACMA in preparing its investigation report indicates that average annual profit margin varies
from 10% in larger regional AM markets to 33% in medium regional FM markets.
ACMA’s investigation has found that there is significant variation in the levels of material of local significance currently being broadcast by licensees. Many medium and small stations broadcast less than the proposed 4.5 hours of local content per day according to ACMA’s findings.
In studying the costs required to increase local production the ACMA advice to the minister said:
“For an increase in a licensee’s local content production levels, the cheapest option is
to produce voice-tracked music programs. This is estimated to require a part-time staff member (0.3 of a full-time equivalent employee) to produce the program with annual costs of up to $20,000. Live music-based programs require an additional 0.5-1.0 full time equivalent
employee, at an annual cost of $30,000-$60,000.
The most expensive way to produce local content is to produce hybrid or talkback programs. This is unlikely to be a practical option for isolated licences as they have
difficulty attracting and retaining staff. Annual costs of introducing a hybrid or talk back program is according to advice obtained by ACMA $60,000 to $180,000 per
annum, comprising an increase in staff of one to three full time employees. These costs assume facilities are present in the local area [which is often not the case].”
ACMA advised:
“The local content requirements which form part of the Government’s media reform
package were introduced to ensure that the liberalisation of the media regulatory framework does not lead to further reductions in local content on commercial radio…. [But] it is important to ensure that the requirements are such that they do not
impose an unsustainable financial impost on licences to the extent that they are no longer commercially viable, which would result in a reduction in the number of
regional commercial radio broadcasting services and a loss of locally relevant services overall… As a general rule local content tends to rise with the size of the population in the licence area or at least the largest community centre. ”
Most operators will find this new setup more acceptable as this fits into the current scheme of a 3 hour breakfast show. The target is easier to achieve and according to the new rules the local programming can also be delivered on any five days of the week instead of the present demand for 4.5 hours on five business days each week, thus weekend sports shows may be included.
Four classes of licence holders will be required to broadcast only 30 minutes daily: small markets with fewer than 30,000 people, racing radio, remote area licensees and holders of Section 40 licences that use spectrum outside the broadcasting services band.
Other changes will mean that the local content window can fall between 5 am and 7.59 pm instead of the current 6am to 6pm, and further compromises have been promised after the election if the government is re-elected.
Regional radio industry leaders today were privately pleased with the result, but preferred to leave it to the industry body Commercial Radio Australia to speak for them. CRA chief Joan Warner, whom most credit with the success for today’s good result, has told radioinfo:
“We are pleased the Minister has listened to the industry and has taken the industry’s concerns on board by making some conditions of the legislation more flexible. We are also pleased to see the Government’s undertaking to pass important and necessary amendments to the legislation after the federal election.
“We have had very positive discussions with a range of Government members, in particular with Paul Neville and National Party MPs and Senators. While seeking to ensure a minimum level of local content, they were also willing to respond to the concerns of the regional broadcasters re unintended consequences on the day to day operation, and ultimately the value, of their businesses.”
One radio executive told radioinfo: “Joan Warner did a great job,” and most others privately praised the lobbying efforts of Warner and CRA.
The Labor Party has also given the commercial radio industry an assurance that it will support changes that can be made before the election and also indicated that a Labor Government will do at least as much in terms of the promised legislative amendments after the election.
Warner says commercial radio broadcasters “already provide a high level of local content, on average around 3.5 hours per day, and are closely involved with their local communities.” ACMA’s report, tabled today in the explanatory papers, confirms this viewpoint.
Communications Minister Coonan also announced, that if the government is re-elected, it will amend the legislation to:
• exempt remote area services and racing radio services from the local content requirement
• allow licensees to be credited for local content on any five days during the week (rather than business days only) to allow, e.g., for local sports broadcasts on weekends to be counted;
• provide a 6 week non-compliance period each year to allow for holiday periods.
The Minister also announced the Government will look at possible amendments to refine the definition of a trigger event.
Warner says the legislation as it stands is still “burdensome for regional operators” so CRA is keen to see the amendments that have been promised “become a reality as soon as possible.”
Not all commentators consider it a victory of course. Michael Tunn summarises some contrary views in an analysis for Crikey.com saying:
“The submitted reports look like a farmer’s application
for help during a drought. And when they can barely
promise three hours of local programming a day, it’s
time to jump off the sinking radio boat and find a new
medium, as this industry is looking very sick and the
El Niño of radio sees no end…
“Let’s salute the sole owners, or the small networks in
regional Australia who actually produce almost 24
hours of programming locally everyday, these brave
licence holders, mainly unlisted companies, are
obviously foolish when their bigger network
stocklisted partners can’t make a decent buck doing
it, they must surely one day have to amalgamate and
become part of one of the super networks, or go broke
serving their local communities.”