Seven West chief executive Tim Worner has repeated his call for the government to scrap television licence fees as part of its overhaul of broadcast rules.
Mr Worner told a house inquiry into rural and regional broadcasting that, unless the costly licence fees were scrapped, removal of the so-called reach and two-out-of-three rules could lead to merged companies cutting costs by producing less local content.
"More than anything else, that would genuinely help broadcasters to more effectively compete with the likes of Facebook and Google," Mr Worner told a hearing in Sydney on Monday.
This change would allow us to invest in more and better local content and to transform our businesses for the future.
Mr Worner called local content the lifeblood of Seven West Media.
"For us, funding that is one of the biggest challenges we face," he said.
After years of lobbying by media companies, the government is proposing to dump the rule that prevents a company controlling more than two of three radio, television and newspapers in an area, along with the rule that prohibits a proprietor from controlling a TV licence that reaches more than 75 per cent of the population.
That could allow regional broadcasters such as the WIN Network and Prime Media to make acquisitions or even look at mergers to save money through scale.
The proposals outlined by the government include a look at the licence fees, a writedown in the value of which was key to the three major commercial free-to-air networks losing a combined $2.8 billion in 2015.
Julie Flynn, chief executive of Free TV Australia, said licence fees remain the most critical issue facing the commercial free-to-air industry her organisation represents.
"It says to us; `We want you to compete, we want you to pay up to 4.5 per cent of your gross revenues as a broadcast licence fee, and we want you to underwrite the Australian production sector', which we do, and - by the way - `we want you to compete with people who we don't regulate and who pay literally no tax in this country'," Ms Flynn said.
That is not a sustainable position for this industry.
WIN Network chief executive Andrew Lancaster, Prime Media chief executive Ian Audsley and Southern Cross Austereo head of regional media Rick Lenarcic backed the removal of the reach and two-out-of-three rules.
Mr Audsley warned that jobs, including those in local news, would be vulnerable if Prime needed to cut costs due to declining revenues and high affiliate fees paid to the metropolitan broadcasters.
"We have very few levers left to us," Mr Audsley said.
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