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Thursday, 19 March 1987
Page: 1189


Mr JULL(8.55) —The honourable member for Eden-Monaro (Mr Snow) has spelt out the provisions of these three Bills that are being debated here tonight-the Television Licence Fees Amendment Bill (No. 2), the Broadcasting Amendment Bill (No. 2) and the Radio Licence Fees Amendment Bill-and therefore I will not follow that particular pattern of debate, except to affirm that the Opposition certainly is not opposing these three Bills. However, I would like to spend a few minutes of my time bringing to the attention of the House something that I think is quite relevant to these particular Bills; that is, a crisis that I believe is developing in the radio industry in Australia today. I do not use that term lightly, because I think the crisis is more than just an economic crisis for some of the commercial radio stations at the moment. There is a crisis of planning, and I think that that particular crisis affects radio across the board. It certainly affects the future of Australian Broadcasting Corporation radio and, indeed, the public broadcasting systems as well. All of a sudden technology has well and truly caught up with us. I refer specifically to what has been happening in terms of the FM band and its acceptance in Australia.

One thing that Australians do very well is adapt to new technology, and the acceptance of the AM radio band has really been quite remarkable in terms of the time it has taken to take off. If we look back over the last decade I am sure we will see that there have been decisions made by governments of both political persuasions that have helped bring about this crisis that I am talking about tonight. What is virtually happening is that a monopoly is now developing on that FM band of one major commercial radio station. The effects of that are manifold. I said a moment ago that it is not only a financial crisis, although the state of commercial radio in Australia at the moment is the worst that it has been since 1940. The latest figures available-and I think they are available only to 30 June last year-indicate that, in fact, there were a number of stations in a loss situation in Australia. That figure was 43. There were 14 metropolitan radio stations in a loss situation; there were 29 country stations in a loss situation; and I would think that the figures that will be available to the end of this financial year will probably show that the situation has become worse.

In terms of the commercial sector, what has happened is that basically the one major commercial FM radio station in the major capital cities has taken so much of the audience that it is now commanding 25 per cent of the advertising revenue. In the case of Sydney or Melbourne seven or eight stations would be sharing what is left of that radio revenue at a time when radio revenues are at least static, if not declining. They are certainly declining in some of the country areas. The announcement by the Minister for Communications (Mr Duffy) just a few weeks ago of the calling of new licences in those particular markets would also indicate that that crisis might extend into some of the major rural areas of Australia as well in the not too distant future.

This is not the first time that I have risen in this House to talk about what is happening in terms of the Department's work in the clearing of the FM band and some of the problems that it has been encountering in getting that work done. While I suppose we can sympathise with the pressures that are on the Department, one really wonders how much longer we will have to wait until we see the whole thing fall into place and, indeed, when its reports are finally finished, exactly what option we will have in these particular markets. It would seem that at the most we will have an allocation of about eight frequencies in the FM band to be shared between commercial radio, the Australian Broadcasting Corporation and public radio. I believe that that is a nonsense. I have never had successfully explained to me why we should have those particular problems in Australia when one can go into a market such as Los Angeles and pick up 55 stations on the FM band there and when the independent studies of the availability of FM frequency bands in Australia indicate that in capital cities we should be able to get at least 20 frequencies available for the radio spectrum.

What I am leading up to tonight is this: I believe we must soon make a decision, if we are going to see a successful, competitive and, most importantly, an innovative radio industry continue in Australia, to allow all broadcasters the option of getting into the FM band as soon as we possibly can. Obviously, there are ramifications for the commercial industry. But even when one looks at what is happening with the ABC's FM station at the moment, one will see good programming. I guess that many people enjoy it. But it is not the channel that is really providing the innovation of which the ABC is capable. One wonders what will be the future of the ABC AM stations five or ten years down the track. Will that wealth of talent, innovation and capacity to bring such diversity of radio entertainment and information to the public that we have today be lost as technology overtakes the whole industry? I really think that that is the crux of my concern with the industry at the moment. It must be, I believe, a priority of whichever government might be in power to open up that FM band to make sure that we do not lose any of that capacity.

Of course, the FM band is ideally suited to music. The ABC FM stations are providing classical and jazz music, and we appreciate that. But the innovative programs are not being provided. In regard to the allocation of the initial FM stations the licensees saw the potential of what the FM band could provide. They provided the cheapest possible form of entertainment. They provided modern music-and there is surely a place for modern music on the FM band. They managed to hire radio announcers or presenters who were usually not the top-paid people in the list. They managed to provide a very cheap operation, and the stations are now totally acceptable in the market and are virtually licences to print money. There is probably nothing wrong with that, but I would hate to see the day when that innovation for which the ABC and the commercial industry in Australia have been famous-indeed, in terms of radio we have always been a world leader in what we can produce-is lost because of government inaction.

The full effect of FM is pretty obvious, having regard to what is going on at the moment in the radio industry. We read in the papers the tremendous amounts of money that are being paid for FM stations at the moment. It is not for me to judge whether one should believe those reports, or whether they are exaggerated by the Press, as to what these stations are pulling in when they are sold. But I suppose it is an indication of the value of the FM stations to the commercial industry. For example, in recent days it is alleged that 2DAY FM in Sydney was sold for $70m and the 2MMM-3EON combination allegedly went for $92m. That is a huge amount of money.

What really gave the game away was the sale of 2UE in Sydney, which has always been regarded as one of the great radio stations of Australia and one of the greatest innovators in the radio industry in the world. It was sold recently by its then owners, the Lamb family, to the Packer organisation, I understand, for about $20m. Of course, once 2DAY FM was put on the market, guess who swooped in at a great rate of knots and bought that station? The Lamb family. They gave away what traditionally had probably been one of the greatest radio stations that this nation has seen. They sold it for that sum. They went to the FM band because they knew what the future of the FM band was. The escalation of the value of these stations is just unbelievable.


Mr Hawker —Like 3EON.


Mr JULL —Yes, I referred to that. Let us look at stations such as 3UZ, which was probably one of the other great innovators in the commercial radio game. A few years ago 3UZ was sold for only $6m to $8m. Everyone thought that that was probably a fair indication. I would hate to think what the value of that station might be on the market today.

I guess that my appeal to the House tonight is that we should really try to get the FM question into perspective. We should make sure that that band is cleared as soon as we possibly can, and the allocations are made available so that as many of those stations as possible are placed on the band as soon as we possibly can, because the youngsters soon will not know what real radio is all about. I think it would be a pretty sad reflection on Australia if our younger generation grew up thinking that all that radio was about was pop music, with a disc jockey who might speak once every 20 to 25 minutes. It is more than that. Radio is a great innovator, a great educator and a great provider of news. I would hate to see that industry and that particular talent lost in Australia, because we can preserve it if we want to.

I will conclude my comments at that point. I strongly urge the Government and the Department to see what can be done to open up the FM band to all sections of the industry. If it is done properly there are frequencies that would be available at the moment, especially in the metropolitan areas and in the major provincial areas, which would cover the full spectrum of radio. There would be a future for AM in some of the more remote areas. Let us hope that we do not make a mess of the planning of this very valuable resource.