ABC-SBS merger may be forced by rise in streaming: analysts

Australian Conservatives Release

The ABC and SBS could be forced to merge as streaming services wreck the broadcast licence revenue that the government has used to fund public broadcasting, according to analysts at Morgan Stanley.

The Conservative Party has always recognised that reform of public broadcasting in Australia is inevitable and our policy is for a merger and a streamlining of the two, along with a review of their charters.

The Australian reports, in an examination of the impact of streaming services on traditional media, the investment bank said the federal government may need to consider licencing fees for streaming services to replace the licencing fees for radio and television broadcast spectrum.

As audiences move away from traditional broadcasting to streaming businesses such as Netflix and Stan, the loss of audiences and the advertising revenue that is based on it would fall away and with it the licencing revenue collected by the government.

Historically the fees are collected as a percentage of advertising revenue – around 10 per cent for television and 3-4 per cent for radio, peaking at $300 million in 2009 and declining ever since with the rise of streaming services.

Morgan Stanley said around 40 per cent of Australian households have at least one streaming service and this would rise to 60 per cent, putting pressure on traditional media revenues.

“One of the considerations for the federal government looking forward would be … with the eventual disappearance altogether of TV and radio licences fees, how can these dollars be replaced?” the Morgan Stanley analysts said.

“Perhaps some policy consideration needs to be given to an appropriate tax for the streaming TV companies.

“We think Australia’s two public broadcasters – the ABC and SBS – may have to consider merging, or explore other alternatives, in order to cut costs.”

Neither ABC nor SBS was expected to be immune from the same audience decline as the commercial broadcasters and this would cause increasing scrutiny of whether their combined $1.3 billion annual funding was “the best use of these taxpayer funds”.

/Public Release. The material in this public release comes from the originating organization and may be of a point-in-time nature, edited for clarity, style and length. View in full here.