Patrick Delany, head of the News Corp-controlled pay television operation, Foxtel, has expressed stern concerns over the media reforms proposed by the Albanese government.
In an interview with AFR, Patrick Delany described the situation as a “feeding frenzy” of regulation, and suggested the changes favour free-to-air networks while jeopardising Foxtel’s interests.
“For 28 years, we’ve been the most regulated media company in Australia. No one’s regulated across sport, drama, and then all of the standard regulations in terms of what you can and can’t put to air,” Delany expressed.
A significant component of the government’s reforms is the introduction of laws concerning anti-siphoning, content quotas, gambling advertisements, and prominence.
The latter aims to uplift the presence of Australian-produced TV series, films, and music, ensuring they can effectively compete with international content on web-based devices. The anti-siphoning regulations, on the other hand, consist of a list ensuring certain sports events remain accessible to all Australians without a paywall.
Furthermore, streaming entities might soon face quotas mandating them to produce a higher volume of Australian content. Another topic of discussion is the future and extent of gambling advertising – a notable income source for media conglomerates, Foxtel included.
Delany points out that these potential reforms would have a distinctive impact on Foxtel.
“It’s a feeding frenzy of regulation, and we are the only media company in the firing line,”
With Foxtel’s broad portfolio, including the pay television network, streaming services like Kayo Sports and Binge, and broadcasting rights for major sports like AFL and NRL, Delany feels the company is disproportionately targeted.
Financially, Foxtel reported revenues of $2.8 billion and a pre-depreciation profit of $515.7 million in the year ending June 30. The firm’s ownership is split between News (65%) and Telstra (35%).
When quizzed about a potential Initial Public Offering (IPO) for Foxtel, Delany refrained from commenting, stating it was a decision for the shareholders. Robert Thomson, News Corp’s chief executive, added that Foxtel was now cash positive and enjoyed “the option of optionality”, though the looming regulatory changes might pose challenges.
A notable proposal that would directly affect Foxtel is the push by the lobby group Free TV, which represents networks like Seven, Nine, and Ten. They propose that new television sets and their operating systems prioritise live TV and native apps, like 7plus and 9Now, on the home screen. This has implications for Foxtel’s upcoming TV platform, Magneto, which might be legally bound to give precedence to free-to-air channels.
Research sponsored by Foxtel and conducted by YouGov suggests Australians might resist such regulation. Their survey indicates 94% of respondents oppose governmental control over the arrangement of TV apps. Additionally, 80% felt that the choice of what to watch should remain personal. The study also revealed that Australians typically spend around $2000 on their Smart TVs.
Delany draws a parallel with mobile phones, suggesting government control would lead to public outrage.
“If I said to you tomorrow that your mobile phone is going to be regulated by the government, the government is going to order the apps that you see on its first page … you would be outraged,” he argued.
Addressing content quotas, Foxtel has historically been mandated to allocate 10% of its content budget, approximately $25 million annually, to new local drama series. These are showcased to both traditional subscribers and Binge streaming users. Delany believes Foxtel should not be subject to the same quotas intended for international streaming platforms like Netflix and Disney+.
He also feels that the anti-siphoning list puts Foxtel at a negotiating disadvantage and calls for its revision. Contesting its relevance, Delany highlighted that not all games of events like the Australian Open, AFL, and NRL are aired on free-to-air platforms.
“If something’s been put to air on free-to-air TV forever, then it probably is of significance and should stay,” Delany concluded.
SOURCE: AFR
