Speech to the Commercial Radio Australia
9 October 2015
The National Radio Conference via video message
Thank you for extending the invitation to talk with you today.
It's great to be speaking with you again this year and I would particularly like to thank Joan and Adam Lang (Chairman, CRA) for organising to beam me in. I'm sorry I'm not able to be with you on the Gold Coast today but as you might imagine, it's been quite a couple of weeks…
Well, what a difference 12 months can make…Last year I was in Melbourne regaling you with my (almost) radio career – regrettably I've never had the chance to use 'Switch to Mitch' – and this year I join you as the Minister for Communications and the Arts.
As you know, I am not a complete stranger to the Communications portfolio and its stakeholders, but I am looking forward to expanding my knowledge and engaging more closely on the challenges and opportunities for commercial radio broadcasters.
In a time of enormous disruption, the commercial radio industry is both resilient and innovative in adapting to change.
While Australia's media landscape is experiencing significant changes in this time of digital disruption, radio remains an essential part of Australians' lives.
It keeps us well-informed and abreast of news, current affairs, and important weather and emergency information. Not to mention entertainment. And in my case that includes 80s music.
Breakfast – closely followed by drive – are still the most popular times for Australians to tune in.1
But the news is good across the board, with audience figures rising again in 2014, demonstrating a continued uptake in listeners. What could better reflect the centrality of radio than this?
In Australia's metropolitan areas, more than 10 million people tuned in each week throughout 2014 – that's up more than 4 per cent compared to 2013.2
Corresponding with this is the industry's financial position, which also reflects healthy audiences. I see that growth in metropolitan advertising revenue was above 5 per cent for the financial year ended June 2015.3
These are results that the industry should take pride and confidence in.
I am sure that, in addition to the broadcast of existing AM and FM stations, new and genre-specific digital radio services are helping to attract more listeners. The success is reflected in CRA's recent announcement of its intention to start focusing on advertising for digital-only stations.4
As many here would understand, the cost and complexity of rolling out digital radio services across regional Australia presents major challenges for the industry. The need to cover large geographic areas with small and dispersed populations is a unique challenge which has not been faced in many international markets.
The Government's Digital Radio Report released in July considered the regulatory framework for digital radio as well as the arrangements required to facilitate the rollout of digital radio in regional areas where it is economically feasible to do so. The capacity of digital radio to be extended to the regions will require significant upgrade to existing transmission towers and site infrastructure.5
A key recommendation from the report was the establishment of a Digital Radio Planning Committee for Regional Australia – a Committee which CRA is a crucial member of. I understand the Committee's first meeting was held only recently on 18 September and a technical planning meeting was held earlier this week.
I look forward to working with members of the industry to achieve the best possible outcome for digital radio operators and listeners.
There is much to talk about when we consider the future of radio.
While traditional broadcasters are facing challenges from the increasing popularity of streaming services, there are also fantastic initiatives coming from industry in this area.
Development of the I Heart Radio product is a great indication of how this brand is adapting to the streaming environment by partnering with local and international acts.6
PwC's annual media Outlook report forecast new opportunities for revenue in the market, as the personalisation of listening choices is likely to correspond to an exciting new direction of programmatic advertising.7
On top of this, I note that the industry's methods for measuring audiences is being enhanced through new technology, with the introduction of the e‑diary system, launch of an audience behaviour panel and significant software developments to analyse radio listeners data from the industry's official audience measurement provider GfK.8
While the industry can continue to grow and succeed through the delivery of innovative services and compelling content, government also has a role to play.
The Australian Government recognises that the broadcasting industry is subject to areas of regulation in need of updating, and that changes are needed to allow broadcasters to adapt and thrive now and into the future. I can assure you that the Government is committed to positive reform of broadcasting law to reflect the rapid changes occurring in Australia's media industry.
As a start, the Government has pursued a broad deregulation agenda since 2014, aimed at boosting productivity and reducing unnecessary red tape.
We've reduced auditing, reporting and notification requirements; addressed frustrating legislative anomalies and streamlined aspects of the ACMA's activities. But there will always be more work to do.
In addition, the Government is reviewing the licence fee arrangements for commercial radio and television broadcasters. The Department of Communications and the Arts has commenced the review and will provide its findings to the Government to consider in the context of the 2016-17 Budget.
As Minister, I look forward to consulting with the industry more closely on these important issues over the coming months.
At a broader level, the regulatory settings for media ownership is another area where the Government is considering potential reform.
The Government understands the significance of digital disruption and rapid structural changes in media caused by digital technologies that have lowered barriers to entry for new media outlets, increasing the competition in traditional media.
I will continue to consult with industry on potential changes to the media ownership rules, continuing conversations initiated by the former Minister in 2014.
While it will be important to achieve a level of broad consensus among stakeholders before proceeding with any changes, unanimity across the industry may be difficult to achieve given the commercial realities.
Finally, the Government has progressed two major reviews of note to the commercial radio industry.
The Spectrum Review looked at the policy and regulatory changes that are needed to cope with the increase in demand for spectrum and changes in technology, markets and consumer preferences. In line with the Government's deregulation agenda, the review sought to simplify the spectrum management framework.
As you may know, the Government has agreed to implement the recommendations of the Review and released a timeline of activities for revising the framework. The Government expects the new framework to commence from mid‑2017.
Meanwhile, the Government's review of the Australian Communications and Media Authority will examine the objectives, structure, and operation of the ACMA to ensure it remains fit-for-purpose for both the contemporary and future communications regulatory environment.
In relation to both of these reviews, and the various other regulatory matters being considered by Government, I thank CRA and its members for their considered and insightful submissions.
I thank you again for the opportunity to reflect on the future of radio, and to speak to some of the complex and challenging issues the industry is facing.
Given the resilience of radio over many decades, I trust that the industry will continue to respond and evolve to the changing environment.
As the newly appointed Minister for Communications I look forward to engaging with you further on these issues.
1. Commercial Radio Australia (press release), Figures show a strong year in commercial radio, 23 January 2015 http://www.commercialradio.com.au/content/mediareleases/2015/2015-01-23-figures-show-a-strong-year-in-commercia
2. Commercial Radio Australia (press release), Figures show a strong year in commercial radio, 23 January 2015 http://www.commercialradio.com.au/content/mediareleases/2015/2015-01-23-figures-show-a-strong-year-in-commercia
3. Commercial Radio Australia (press release), Good financial year growth in metropolitan radio ad revenue, 7 July 2015 http://www.commercialradio.com.au/content/mediareleases/2015/2015-07-07-good-financial-year-growth-in-metropoli
4. Commercial Radio Australia (press release), Commercial radio stations signal intention to further monetise digital radio, 12 August 2015 http://www.commercialradio.com.au/content/mediareleases/2015/2015-08-12-commercial-radio-stations-signal-intent
5. Department of Communications, Digital Radio Report, 8 July 2015, p. 4 https://www.communications.gov.au/publications/digital-radio-report