If I offered you money for something, an offer you didn’t have to accept, would you call it a grab?
What if I actually owned the thing I offered you money for, and the offer was more of a gentle inquiry?
Welcome to the world of television, where the government (which actually owns the broadcast spectrum) can offer networks the opportunity to hand back a part of it, in return for generous compensation, and get accused of a “spectrum grab”.
If the minister, Paul Fletcher, hadn’t previously worked in the industry (he was a director at Optus) he wouldn’t have believed it.
Here’s what happened. The networks have been sitting on more broadcast spectrum (radio frequencies) than they need since 2001.
That’s when TV went digital in order to free up space for emerging uses such as mobile phones.
Pre-digital, each station needed a lot of spectrum — seven megahertz, plus another seven (and at times another seven) for fill-in transmitters in nearby areas.
better ways of introducing digital television than by granting seven megahertz of spectrum to each of the five free-to-air broadcasters at no cost when a standard definition service of a higher quality than the current service could be provided with around two megahertz
de facto further grant of a valuable public asset to existing commercial interests
Seven, Nine and Ten got the de facto grant, and after an uninspiring half decade of using it to broadcast little-watched high definition versions of their main channels, used it instead to broadcast little-watched extra channels with names like 10 Shake, 9Rush and 7TWO.
Micro-channels are better delivered by the internet
TV broadcasts are actually a good use of spectrum where masses of people need to watch the same thing at once. They use less of broadcast bandwidth than would the same number of streams delivered through the air by services such as Netflix.
But when they are little-watched (10 Shake got 0.4% of the viewing audience in prime time last week, an average of about 10,000 people Australia-wide) the bandwidth is much better used allowing people to watch what they want.
It’s why the government is kicking community television off the air. Like 10 Shake, its viewers can be counted in thousands and easily serviced by the net.
The government’s last big auction of freed-up television spectrum in 2013 raised A$1.9 billion, and that was for leases, that expire in 2029.
Among the buyers were Telstra, Optus and TPG.
The money now on offer, and the exploding need for spectrum, is why last November Fletcher decided to have another go.
Rather than kick the networks off what they’ve been hogging (as he is doing with community TV) he offered them what on the face of it is an astoundingly generous deal.
Any networks that want to can agree to combine their allocations, using new compression technology to broadcast about as many channels as before from a shared facility, freeing up what might be a total of 84 megahertz for high-value communications. Any that don’t, don’t need to.
All the networks need to do is share
The deal would only go ahead if at least two commercial licence holders in each licence area signed up. At that point the ABC and SBS would combine their allocations and the commercial networks would be freed of the $41 million they currently pay in annual licence fees, forever.
That’s right. From then on, they would be guaranteed enough spectrum to do about what they did before, except for free, plus a range of other benefits
The near-instant reaction, in a letter signed by the heads of each of the regional networks, was to say no, they didn’t want to share. The plan was “simply a grab for spectrum to bolster the federal government’s coffers”.
And sharing’s not that hard
It’s not as if the networks own the spectrum (they don’t) and it’s not as if they are normally reluctant to share — they share just about everything.
That’s right. Nine and Seven use the same computers, same operators, same desks, to play programs.
One day it is entirely possible that a Seven promo or ad will accidentally go to air on Nine, just as a few years back some pages from the Sydney Morning Herald were accidentally printed in the Daily Telegraph, whose printing plants it makes use of.
There’s a good case for going further, taking almost all broadcasting off the air and putting it online, or sending it out by direct-to-home satellite, removing the need for bandwidth-hogging fill-in transmitters.
Seven, Nine and Ten have yet to respond. Indications are they’re not much more positive than their regional cousins, although more polite. They’re standing in the way of progress.
This is an edited extract from The Weather Obsession by Lawrie Zion, published by Melbourne University Press.
When Olympic swimming champion Giaan Rooney was asked to fill in presenting the weather segment on Melbourne’s Channel Seven weeknight news program just before Christmas 2012, she was taken aback. She pointed out that she knew nothing about weather and that her credibility was in sport. “Don’t worry, just do the weather,” was the reply from the network. Six weeks later, the 30-year-old Rooney was invited to continue in the role, replacing the 52-year-old presenter and trained meteorologist David Brown, who had been presenting on Seven for 20 years.
As it turned out, Brown remained with the network and eventually went on to present the weather for Seven’s Sydney weeknight bulletin. But the switch from Brown to Rooney illustrates a dilemma that has never been resolved. Just who should present the weather on television?
Commenting on Rooney’s appointment soon after the announcement, the Sunday Herald Sun’s Susie O’Brien wrote:
…the old adage that people like a mature man to tell them the serious news and a pretty face to tell them the weather still seems to apply. The real question is why we need a nice-looking woman who isn’t a meteorological expert to tell us the weather at a time when climate issues have never been more
important. The fact that we are still having these debates is a sign we have a long way to go. Sadly, I think we will continue to see women used as decorations on network TV for a while to come.
What O’Brien saw as an anachronistic decision needs to be understood in the context of the role of weather segments in television news bulletins, and the changing demographics of broadcast news audiences.
Weather presenters have long been a crucial component of any television news team, and are promoted as such. For many in the audience, they’ve also been the main conduit of weather information. Ten years ago 90% of Australians received at least some of their weather information from television. This has since fallen to 71%, according to a Bureau of Meteorology survey. But that’s still a lot of eyeballs. And with their segments usually perched at the end of bulletins, the extent to which weather presenters connect with viewers helps to determine whether their station can carry the valuable news audience over to the start of the next program.
When it comes to sheer numbers, TV news audiences may have generally held up well with older viewers, but younger viewers aren’t drawn to these programs to anything like the extent that their parents were. The result is that around half the audience is over the age of 50, and therefore more likely to go for the familiar than the experimental. So while the steady evolution of graphics means that weather reports look very different now from how they appeared in the early days of television, the format has remained more predictable than the weather itself.
We all know the ritual: What happened today? What will happen tomorrow? And beyond tomorrow? Across the country? If it’s a local bulletin the state and/or city forecast will precede the sign-off. As Channel Nine Brisbane news presenter Andrew Lofthouse has put it: “The weather reports are still one of the constant reassuring things that people can rely on.” This might partly explain why changes to who presents the weather attract so much attention within the media itself.
Despite an overall tendency to play it safe, what this actually means tends to fluctuate, with appearance, personality and specialist credentials all deemed to be relevant factors to varying degrees. As O’Brien put it in the context of Brown’s replacement by Rooney: “Presumably Channel Seven has tired of the serious approach and in the midst of falling ratings is going for the well-worn route of installing an attractive female to freshen things up.”
Hiring attractive women as weather presenters is a time-honoured global tradition. Writing about the history of TV weather in America, Robert Henson points out that it became clear in the 1950s that women could be accepted as weathercasters, as long as the focus was kept on clothing, hairstyle or anatomy. “So began the brief ascendancy of ‘weathergirls’, a term that speaks volumes about the differences in status between these women and their male counterparts in weathercasting.”
But while the weathergirl craze abated in the United States by the early 1960s, in Australia, where television had been introduced relatively recently, it was just beginning. In 1961, an item in the Bureau’s in-house publication, Weather News, noted that in Brisbane, “the majority of stations appear to favour the glamour-girl type of telecaster for weather presentations”, and that “Bureau staff have had the pleasure of indoctrinating and briefing two ‘Miss Australias’ and one ‘Miss Queensland’ in the short time that television has been operating in this State”. The background training included explaining the need for weather information to be presented seriously and faithfully, “and particularly for the more glamorous the need to submerge their glamour behind the prosaic highs and lows”.
In 1965, Melbourne’s Channel 9 hired model Rosemary Margan to present the weather. One evening in 1969, she appeared in a fur coat before stripping to a bikini during her live segment, sparking a steady stream of responses from viewers. In the 1970s, when searching for a replacement for the then pregnant Margan, the station hired the 15-year-old schoolgirl Kerry Armstrong, whose job application had led them to believe she was 22. While often appearing in short, tight garments, Armstrong, who went on to become a celebrated actor, did on one occasion break away from the standard weather script, when she informed viewers that “due to the drought, 1,000 head of cattle died. But don’t worry, beachgoers, it’s going to be another great day tomorrow with a top of 35 degrees”.
Decades later, the “weather girl” tag has proved hard to shake, as current Melbourne Channel Nine weather presenter Livinia Nixon told The Age in 2010. “TV and radio are very much boys’ clubs; they’re industries that are still very, very male-dominated,” she says, acknowledging that a male who presents the weather is a weather man, whereas she is a “weather girl”. “I wonder at what point you lose the ‘girl’?” she asks, having presented the segment on Nine’s 6pm weeknight news since 2004. “What age do you have to reach to not be called a girl any more?”
What if the woman presenting the weather has a relevant tertiary qualification? Back at Seven in Melbourne, Giaan Rooney remained in the role of weather presenter until taking maternity leave, when she was replaced by model and television personality Jo Silvagni, who was in turn replaced in late 2014 by Jane Bunn – who, as it happens, is also a qualified meteorologist. Her appointment also attracted media attention. When Nixon was asked about her new on-air rival, she told the Herald Sun that she didn’t think this would lend Seven’s bulletin any more clout. “I think it’s fantastic that Jane’s a meteorologist – hats off to her for doing the hard yards – but I’m confident working in conjunction with the Bureau (of Meteorology),” she says. “I feel very confident relaying all the information we get from them. Their accuracy rate has gone up over the years.”
Did Nixon, who had replaced the veteran weather presenter Rob Gell on Nine in 2010, have a point? A trained meteorologist of either gender might make the weather segment seem more credible to some, but would they enhance the substantive quality of information that is delivered? Historically the Bureau has insisted that provision of its information comes with a requirement that the media doesn’t mess with the message. TV stations can and do use the services of private weather companies to provide graphics, but the actual forecasts are still meant to be broadly consistent with the Bureau’s. So whichever nightly news channel you watch, won’t the next-day forecast be essentially the same?
With this and others questions in mind, I went to Melbourne’s Seven studios in Docklands to meet Bunn. After completing a Bachelor of Science at Monash University and a Graduate Diploma in Meteorology, Bunn worked for the Bureau in Sydney before turning to presenting the weather on television. “I loved the forecasting part of it but hated it when the message was being changed in the
media by people who got their terms muddled, so I decided I wanted to present it,” she tells me, citing an incident where a forecast of “fine and mostly sunny” was abbreviated to “mostly fine”. “You can have trust in what we are saying because that message might be jumbled up elsewhere. You’re better off
getting your weather from a meteorologist than a presenter because you know it’s as good as it can be.”
But Bunn doesn’t simply recite the Bureau’s forecast. Before her main segment goes to air at 6.55pm she checks the forecast models from Europe and Australia, which are updated after the Bureau releases its late afternoon forecast, to see if there are developments that might require some additional interpretation. She also analyses those same models to take the Bureau’s seven-day forecast one step
further, providing viewers with an eight-day outlook.
For all her specialist knowledge, however, Bunn’s appearance has also been a talking point both in social media and in the gossip columns. “Jane Bunn had the farm boys panting when she was the weather girl on regional television,” began one Herald Sun story, before conceding that “she doesn’t fit the weather girl stereotype”. Bunn accepts that her image is to some extent constructed by others. When I bring up the subject of how she is characterised in social media, she points out that other people have considerable input into how she appears before the camera. “I’ve purposely made it so hair and make-up and wardrobe decide what I actually look like – and that allows me to concentrate on my craft which is forecasting.”
As well as presenting all the usual weather details, Bunn has the scope to discuss seasonal forecasts and weather news in her segment, which provides her with the opportunity to embed her meteorological knowledge in her reports. Despite such individual touches, however, weather presenters in Australia, including Bunn, stick far more closely to the official forecasts than their American counterparts. In the United States, it is commonplace for local TV stations to hire meteorologists to present the weather, and many of these develop their own forecasts, which may be based on National Weather Service (NWS) data, or on those of other private providers whose predictions may also differ from those of the NWS. And television has long been a much more popular source of weather forecasts than the NWS. A 2006 survey of more than 1,400 Americans found that 72% of them caught a local TV forecast at least once per day, but less than 20% obtained daily forecasts from NWS websites, with just 4% tuning in to National Oceanic and Atmospheric Administration (NOAA) Weather Radio each day.
It might be just as well that Australia has not gone down this track. As American data journalist Nate Silver has noted in the American context, “the further you get from the government’s original data, and the more consumer facing the forecasts, the less reliable they become. Forecasts ‘add value’ by subtracting accuracy.” This is particularly the case with precipitation predictions. Non-National Weather Service forecasters, it turns out, tend to overestimate the probability of rain. There is a logic of sorts to this “wet bias”, says Silver. “People don’t mind when a forecaster predicts rain and it turns out to be a nice day. But if it rains when it isn’t supposed to, they curse the weatherman for ruining their picnic.”
In the short term, Ten has to focus on reducing costs by renegotiating contracts with its suppliers. Over the long term, Ten has to contend with changing demographics and falling television advertising. The company has to receive more revenue from the content it already has, and the best way to do that may be through a tie-up with Foxtel.
How to make Ten viable
Entering voluntary administration provides an opportunity to reorganise Ten and renegotiate contracts. Changing media ownership laws would doubtless make this easier, by allowing some of the major shareholders to take the company private.
In the short term, Ten should aim to reduce expenses, aiming for annual savings of A$80 million. In a release to the ASX, Ten talks about renegotiating contracts with the studios it buys content off, notably CBS and 20th Century Fox. Ten had already identified these cost reductions, but entering voluntary administration will give the company a stronger bargaining position.
However, these negotiations are just the beginning of content changes. Ten will need to produce content more cheaply and aligned to a changing target demographic. As younger viewers moved away from traditional television, Ten’s programming has suffered. Voluntary administration will give Ten more power to renegotiate contracts with domestic suppliers too.
Longer term, Ten needs to protect and expand its revenues. With television advertising declining, Ten needs to reach more viewers so that it can maximise the revenue from the content it has. Distributing content through more channels, such as realising the full potential of streaming, would enable more efficient use of content and increase the potential audience.
But developing these channels by itself might not be a viable option as Ten has neither time nor financial resources. This is why it makes sense to tie up with Foxtel, already a major shareholder and a big player online.
A common theme to these strategies is that Ten needs to compete more effectively for content and advertising revenues. This means that regulatory constraints must be removed if it is to fight for long-term financial sustainability.
Overcoming financial hurdles
A major contributor to Ten’s recent half-year loss was a one-off impairment charge – the company wrote down A$214.5 million from the value of its television licences.
But, even allowing for this one-off item, there was still a substantial loss and the financial pressures have been building for some time. Much of this pressure stems from a decline in revenues from A$998 million in 2011 to only A$689 million in 2016. The 2016 annual report even notes a structural change in advertising as a risk facing the company.
Over this same period Ten has been working to reduce operating costs, but obviously this has been difficult. The financial reports do not give exact breakdowns of costs, but we do know that content contracts with CBS and 20th Century Fox are substantial and need to be reduced.
If there is one thing we can be certain of, it is that there must be substantial change in the business for Ten to recover.
Further contributing to Ten’s woes are loan facilities that expire in December. This includes borrowing that amounted to A$73.8 million at the end of February and which needs to be repaid in the short term.
Unless Ten can negotiate an extension to its loan facility at the Commonwealth Bank, the solvency of the business becomes doubtful. Failure to get backing for a new loan to replace the current one in December is reportedly one of the reasons Ten decided to go into voluntary administration.
Previously, major shareholders had provided guarantees for Ten’s banking facilities, but this is difficult to justify given the state of the business. Regardless, it would not resolve the underlying issues. For Ten to be viable, it needs to get a handle on costs and reach more viewers with the content it has.
Reporters at the Ten Network relayed the news of their employer’s voluntary administration, during a staff meeting. The network was looking to refinance to the tune of A$250 million, after its existing finance was due to expire on December 23.
But Ten’s directors said they were left no choice but to appoint administrators from KordaMentha to try to recapitalise or sell the business. Lachlan Murdoch, who owns a 7.7% share of Ten (via his private investment fund Illyria), and Bruce Gordon, who owns 14.96% (via Birketu), are now teaming up to offer a rescue package to restructure the network, though the details are still to be sorted out.
This will see the two shareholders treated as an association rather than a merged entity to prevent triggering a compulsory acquisition provision or a breach of the existing two-out-of-three cross-media ownership rule.
While this all may appear to be contemporary issues for the company, Ten has faced many hurdles during its lifespan of little over 50 years.
Ten has been in trouble before
The network began in the 1960s, originally named the Independent Television Network, before promptly being renamed the 0-10 Network. The network’s Melbourne-based station (ATV-0) began its official broadcast on August 1 1964, with other metro stations starting the year after.
Ken Inglis argues in his book, Whose ABC?, that Ten struggled during its early establishment and that the Whitlam government made attempts to buy the network to use it as a second channel for the ABC.
But the network debuted popular shows during this time, such as Number 96, and its high ratings pushed the price higher than the government was willing to pay.
Ten also faced a crisis after Frank Lowy bought the network from Rupert Murdoch. Murdoch was forced to sell due to changes to the media ownership laws in 1987, which prohibited a media company owning both a newspaper and television station in the same city.
Lowy said that “TV was like any other business”, although he quickly found out it was not. Lowy asked Ian Gow, who had previously worked at the Nine Network, to run the network. According to Gow, Lowy had “bought the worst house in the best street and [wanted] to renovate”.
Despite the initiatives Gow implemented, including selling off the Adelaide, Perth and Canberra stations, the network was forced into receivership in September 1990. Communications corporation CanWest Global bought 57.5% of Network Ten from Westpac Bank for A$275 million and then re-established a capital city network in 1995.
During 1999 Ten formed a joint venture with Village Roadshow Limited, Village Ten Online (VTO). Network Ten argued this was a “strategically defensive move” to develop and market content for the next generation. Ten stated in its 1999 annual report that the joint venture planned to produce a series of websites targeted specifically at the under-40s market.
The first major announcement of the venture was Scape.com, which was launched in October 2000. The CEO of Ten Ventures, Peter O’Connell, described Scape as:
An exciting new presence on the Internet, with all the necessary attributes to appeal to increasing numbers of online service users.
But in March of the following year, less than six months from its launch, Village Roadshow and Network Ten released a joint press release stating that Scape had been placed in voluntary administration and ceased operation. Both companies had contributed A$22 million to the joint venture.
Ten’s future is unclear and this will not only impact the network, but some of its key stakeholders.
This recent announcement will affect Bruce Gordon, who holds a 14.96% share in Ten and also owns WIN Television, in two ways. The first is due to his financial stake in the network, which could expose his investment companies to liability. Secondly, WIN Television is the regional affiliate of Ten. Any changes to Ten or its programming would impact WIN and its regional stations across Australia that rely heavily on Ten’s programming.
Foxtel is another major shareholder that could be affected by any changes made to Ten. Any restructure or sale could impact the recent approach by both Foxel and Ten to partner in programming including GoggleBox, Common Sense, A-League and V8 Supercars. This approach could be used as part of the negotiations for the upcoming Cricket Australia media rights. Ten holds the rights for the Big Bash League and, while it would not like to lose these rights, a partnership with Fox Sports could allow it still to gain access to some games.
What is clear is that Ten will have to attempt to break the traditional broadcast model and rethink what a television network is in the current media landscape. If it can achieve this it could potentially place the network in a strong position to compete not only with other local television broadcasters, but also with new media players that are stealing their ad revenue and audience share.
How Australians watch cricket on screens in the future could depend on what happens with the Nine Network’s current discussions with Cricket Australia over the 2018-23 media rights.
UBS media analyst Eric Choi said the current deal costs Nine about A$100 million a year but generates only A$60 million to A$70 million in gross revenue.
Choi said the network should either ask for access to more content at no additional cost, or step away from its long association with cricket.
The ramifications of Nine’s decision could be broad, impacting not only its potential revenue and viewers, but also participation rates among Aussies playing grassroots cricket.
Cricket’s current standing
The current media rights deal for cricket includes the Nine Network and Network Ten. Nine has the rights to international tests, one-day internationals and T20 international games played in Australia, whereas Ten has the rights to the Big Bash League (BBL).
The free-to-air (FTA) broadcasters are also currently requesting that the government reduce license fees and reconsider plans to further restrict gambling ads during the broadcast of sports.
Ten has said it expects its revenue to be “above the 1.2% increase” it outlined in February this year. Yet it will still need to undertake a “significant focus” on a corporate cost-cutting program and profitability as a priority.
With FTA broadcasters under financial pressures, any increase in new rights will require new stakeholders.
Foxtel currently shows international cricket matches played overseas, but does not have local coverage rights. If it could gain local cricket rights, this would further strengthen Foxtel’s sports offering of AFL, NRL, A-league, V8 Supercars, and many international sports.
Australia’s anti-siphoning regulation could prevent Foxtel completely dominating the cricket media rights. But this list is expected to be trimmed further by the government this year, furthering opening up the sports media battleground for pay television in future rights deals.
The future for digital rights
Digital rights will also be a major consideration with the new cricket media rights. While most would be looking at Telstra and Optus, there have been new players in this area who may also wish to place a bid.
Currently Cricket Australia has the Cricket Australia Live app which allows users to pay a subscription (A$30 per year or A$5.99 a day) to gain access to live streaming of games, but the new rights could also see this change.
Optus may continue its affiliation with cricket. It recently become the official mobile media partner of Cricket Australia, and principal sponsor of the Melbourne Stars Big Bash League team. Customers can access cricket content via the Optus Sports app, which also includes Optus’ recently acquired English Premier League.
Twitter has had success with broadcasting the US National Football League (NFL) and the Melbourne cup last year. This year it signed a two-year deal with the US National Lacrosse League. Twitter may consider its interest in a global sport like cricket.
Amazon, which recently launched its Prime Video service in Australia, could also be a contender. This year Amazon won the rights for NFL Thursday night matches. It paid US$50 million for ten games, five times the price paid by Twitter last year. Amazon may look at the cricket as another potential global sport to add to its catalogue.
Can you “slice and dice” too much? This is a question being asked in the US by CBS chief executive Les Moonves with regard to the NFL.
Adding another stakeholder to cricket will impact the viewers’ experience. This year the new AFL media rights created some frustration linked with the way the rights had been negotiated, particularly the digital rights.
Telstra, the digital rights holder, is restricted by its agreement to limit live match videos to a 7-inch screen size. Highlights and replays are available in full-screen size 12 hours after the match ends. (Foxtel, meanwhile, can stream the games full-screen.)
This change has outraged some fans who paid the A$89 subscription fee for the AFL Live app. Because of the screen size restrictions, Telstra users with a large phone or tablet have a large amount of black space on their screen.
The media rights for sport can be looked at far more broadly than solely the coverage of the game itself.
In the United Kingdom there has been ongoing debate associated with cricket’s coverage. Since the sport moved to pay-TV, there has been a decline in participation levels, which many argued is primarily due to the game no longer being broadcast free to air.
There are now steps being taken to introduce a new Twenty20 tournament in the UK, built around the success of the Indian Premier League and Australia’s BBL, which had some games live broadcast in the UK during the last season.
This is an interesting case study for Cricket Australia, which only last year announced cricket as “No 1 as the current top participation sport in Australia”.
Any changes to the rights that impact the percentage of Australians with access to the coverage, could also see a decline in participation based on the UK experience.
It’s about time – indeed past time – that politicians were challenged and taken to task over their refusal to answer questions. My solution – don’t let them back on if they don’t answer the questions asked.