07/07/2016

The ManagerContent, Projects and Policy SectionBroadcasting Safeguards BranchAustralian Communications and Media AuthorityPO Box Q500Queen Victoria Building NSW 1230

Dear Sir/Madam,

Submission on review of the captioning obligations in the BSA

Imparja welcomes the opportunity to provide comments in response to the ACMA’s review of the captioning obligations in the BSA and would like to take this chance to point out our unique situation and ask for some form of permanent exemption or exclusion.

About Imparja

Imparja Television is a unique broadcaster in Australia and is Australia's last truly independent television station. Founded and operated in Alice Springs, Northern Territory, Imparja Television is a 100% privately owned, commercially licensed television company operating under the Corporations Act 2001. It is unique in Australia and the world, being totally owned and controlled by Northern Territory and South Australian Aboriginal corporate shareholders, who have never requested nor received a dividend, preferring to invest any profit back into the development of the company and supporting a social responsibility platform within the remote and regional community we broadcast to.

Imparja is an affiliate of the Nine Network, and rebroadcasts the Channel Nine signal including their closed captioning, with the inclusion of local content and local revenue. Imparja’s broadcast area to remote and regional Australia is over 3.6 million square kilometres, spanning six states and territories – Northern Territory, South Australia, Tasmania, Queensland, New South Wales and Victoria, with an estimated potential audience of 500,000 plus travellers. Imparja’s signal is broadcast from 28 transmission towers, as well as direct to home by VAST satellite to some very remote indigenous communities and homes within its license area.

Imparja is the smallest commercial free-to-air broadcaster in Australia and it only makes up 2% of the regional revenue and has no other revenue stream to offset costs. Imparja’s profitability alone throughout the last five-years has been negative. Imparja’s revenue is around $9,000,000 annually and our annual broadcasting costs reach over $10,000,000 (transmission costs $1,500,000, affiliations fees $3,000,000, staff costs $3,500,000, playout costs $730,000, Optus fees $1,300,000 and Telstra fees $300,000). This year we have seen a major reduction in our revenue with major national advertisers pulling or drastically reducing their advertising dollars on Imparja, instead moving their advertising dollars to other media streams like catch-up television, which is available in Imparja’s footprint, but for which Imparja does not receive a dollar. Imparja’s multi-channels run at a loss, as the programming costs and staffing costs exceed the revenue generated on those stations (combined we report a $900,000pa loss across both stations). As part of the digital rollout Imparja was also forced to take on 50% ownership of CDT in our licence area, which has never turned a profit and will continue to lose money into the foreseeable future. In addition, another extra one or two channels have been added by the networks. Imparja has not been able to add these extra channels, as the extra cost would cripple the company.

When digital was first proposed and costed it was only supposed to be one channel (as per the then Minister Helen Coonan), but when Imparja started digital television it became five channels, for the VAST platform, which Imparja had to wear the extra operational costs. The digital rollout also cost more money than first anticipated and Imparja had to absorb those costs as well. We have also had larger ongoing costs due to the additional channels, including extra staff to schedule the additional channels and we now also have larger

Impar ja Televis ion P ty L tdABN: 78 009 630 120 www. impar ja .com

18 Leichhardt Terrace / PO Box 52 Alice Springs NT 0871 p (08) 8950 1411 f (08) 8950 1430email :imparja@imparja.com.au

programming/affiliation costs.

Imparja’s revenue did not grow because of digital television and the extra channels, in fact the revenue for our whole footprint has remained the same and is now shared between nine commercial and four SBS channels instead of the originally proposed three commercial and one SBS channels. In fact, revenue has also gone down due to the fragmentation of the market, with more competition with multi channels, Pay TV, catch-up television and IPTV/OTT.

In 2015 Imparja sadly had to close our broadcast from Alice Springs and move to a playout centre in Sydney. This was due to rapidly changing technology, the cost of replacement technology, rising operational costs and lower revenue. This meant Imparja had to make one third of our staff redundant. The loss of staff and the loss of the broadcast stream from Alice Springs has impacted the business in the small town of Alice Springs.

These changes and any additional costs have the potential to make our business model fail.

What uncaptioned local content means to Imparja

Imparja understands that a small percentage of our audience require captioning, but almost all of our audience are in regional and remote areas of Australia and a large portion of those are indigenous. Below I have included the 2006 census data of Indigenous communities and a map of our licence area. As you can see by this more than half of Australia’s Indigenous communities reside in Imparja’s licence area. We know that the 2011 census saw an increase in these figures, as more indigenous populations were surveyed and we believe this number will grow again in 2016.

These are the minorities that Imparja was founded to provide for, these are the minorities that government commercials are clearly trying to target in their advertising on Imparja and these are the minorities that will be missing out because of closed caption regulations imposed on their local content.

Imparja’s local Indigenous programming choices provide a positive light with strong role models, they aim to preserve culture, language and be inclusive. When we show local programming in remote communities, we receive many requests from schools and community groups finding out exactly what time it will be broadcast so they can all watch together and we receive requests for copies of programs.

1

1 www.aph.gov.au/Parliamentary_Business/Committees/Senate/Former_Committees/indig/

2

Imparja also tries to deliver local content of relevance to our remote and regional audience. A large majority of Imparja’s viewing audience own 4-wheel drives, dirt bikes, live in country towns, remote areas or on the coast. We play weekly 4-wheel drive, motorbike, fishing or camping programs on the weekend out of primetime. We also play the annual Finke Desert Race, an iconic annual off-road motorsport event for cars, buggies, bikes & quads out of Alice Springs. These programs supply information, tips and tricks and more importantly, to Imparja, a lot of it is filmed in our footprint and encourages travel to these remote and isolated

reports/2008/report1/c02

3

destinations. Imparja receives emails from viewers if these programs are absent for a week or if they change scheduled days.

Imparja also broadcasts paid local content to our licence area. This paid local content provides a service for remote audiences which enables them to purchase goods and services, not normally available to them because of the distances that they reside from major population centres. It also provides a vital revenue stream that assists to support our ability to maintain a viable business whilst at the same time provide essential services to the RCEA region viewers.

Almost all of Imparja’s local content is broadcast outside of primetime, with the exception of the local News (if we can ever get it off the ground), News Updates and some exceptional programs like the Finke Desert Race or Talking Language with Ernie Dingo. The News would account for one hour a day in primetime and the exceptional programs would account for approximately 10 hours or less of primetime per year.

Imparja does not have the finances to be able to caption our local content. Imparja does not pay for our local content, as we cannot afford to and as such it is given free of charge by its program producers. If Imparja could not broadcast its local content without captions we would lose over $500,000 in annual revenue, but also more importantly to our local viewing audience, we would lose the broadcast of local content.

CAPTIONING OBLIGATIONS – FREE-TO-AIR TELEVISION

Imparja Television will and always has passed on the closed captions from the network(s) to our viewers. However, Imparja will never be in a position to be able to deliver local programs, local revenue programs or local news to our viewers with closed captions. Imparja cannot deliver closed captions on these products due to it being economically burdensome, the lack of the necessary specialised live captioning skills in our region, the lack and cost of captioning equipment, data lines and DVNs, the cost of outsourcing captioning and the difficulty in delivering the program to a captioning service.

We understand the importance of Closed Captions for our viewers, but Imparja also understands the importance of local programs for our viewers, as well as the importance of local revenue programs to be able to continue to be able to afford to deliver our service to our viewers. Imparja’s audience is made up of mainly small regional towns, rural and indigenous populations. We try to deliver a small amount of content that is relevant to our viewing audience, which they do not receive from our retransmission of the Channel 9 programming.

Imparja’s revenue is already drastically down, due to large clients preferring to move their content to other mediums, like catch-up television which reaches our market anyway. Imparja’s paid local content has been drastically reduced and the clients are pointing to the fact that there are just too many channels now and their audiences are down due to this. Since the extra digital channels were released Imparja’s revenue from this stream has dropped from an average of $584 to the current $375 average a program.

Imparja was exempt from the Broadcasting Services (Additional Television Licence Condition) Notice 2014 and the regulation to broadcast a local News Service. However, Imparja has been trying for a couple of years and will continue to try and find a cost effective way to deliver a News service to our local audience that is for them and about them.

Imparja’s News would have modest audiences, but they would serve local communities well. News services at a regional station are extremely costly, operate on a tight budget and there is no revenue return, but a remote News service that has 3.6 million square kilometres to cover, with very little regional revenue becomes a mission impossible. Add to that a Closed Captioning cost and the idea of a local News service becomes untenable.

Imparja would really love the opportunity to be able to deliver a local News to our remote and regional audience, but the initial outlay for equipment and then the large annual running costs for a News service are always a concern for Imparja. The extra cost impost, regulations and uncertainty of Part 9D of the Broadcasting Services Act 1992 (BSA) was the most recent reason Imparja stopped its perusal of a local News. Prior to that, the impending changes to the media laws combined with a very soft advertising market, meant that Imparja was not in a position to commit the funds at both Capex and Opex levels. Speculation regarding mergers and acquisitions under a revised BSA could mean significant and dramatic changes for Imparja and hence we are not in a position to make any long term decisions regarding News or other enhancements to our current broadcast operations.

In 2013 Imparja was involved in the review of operation and effectiveness of section 43A of the Broadcasting

4

Services Act 1992 (the BSA), which relates to the provision of local content by regional commercial television licencees. The outcome of the report found that Imparja was one of the nine regional and remote licence areas not subject to the licence condition.

The report found that some local content is provided without a regulatory obligation in the areas of remote, central and eastern Australia. It also found that the importance of local content by our viewing audience was between 80-90%2 and 87%3 were happy with the level of access in our licence area. The report acknowledged the high level of cost of local content and that it is not necessarily profitable in all markets (Imparja included).

Key findings of the report 2

- Ninety-one per cent of regional Australians consider local content to be important, and 62 per cent consider it to be very important.- Regional Australians are generally satisfied with the amount of local content available, with 91 per cent of those surveyed by the ACMA believing they had access to all the local content they would like.- Television is the preferred and most used source for local news (and for access to local content on a daily basis), websites are the preferred and most used for local weather, and local print newspapers are the preferred and most used for local sport and community information.- Providing local content on commercial television is a high cost activity and is not necessarily profitable in all markets. For example, regional broadcasters reported in their submissions to the ACMA that the local content they are currently providing costs between $224,000 (for updates alone) and $7.6 million per year (for updates and bulletins).- More generally, the ACMA found that regional commercial broadcasters have maintained low profitability and will face continued pressure as audiences and advertising revenues further decline.- The ACMA concluded that the current local content obligations under the Broadcasting Services Act 1992 are operating effectively and that there is no clear case for their extension to additional regional areas.

2 ACMA Regional Commercial Television Local Content Investigation Report – Page 29-30

5

3

4

3 ACMA Regional Commercial Television Local Content Investigation Report – Page 184 ACMA Regional Commercial Television Local Content Investigation Report – Page 20

6

When the Broadcasting Services (Additional Television Licence Condition) Notice 2014 was released Imparja’s 3 licence areas (2898, 1130135 & 1130136) were omitted from the additional condition of this Act4.

5

Part 9D of the Broadcasting Services Act 1992 (BSA) and its regulations could mean the end of the local content Imparja is trying to broadcast in our licence area. If Imparja had to follow the current captioning obligations, we would have to drop uncaptioned local content in exchange for captioned national content. This will impact on Imparja’s revenue and Imparja’s delivery of content relevant to our audience and discriminate against the majority of our viewing audience.

If the captioning laws were to extend 24 hours Imparja would again ask for more reduction during the hours of 12:00am – 6:00am to play our local revenue content, as well as local content that we use to time back into the network due to trying to play content from all markets to appease our six states and territory viewing audience.

EXEMPTION AND TARGET REDUCTION ORDERS

Imparja has found the Exemption and Target Reduction Orders are an increase in government red tape, time consuming and a large cost to our business, as well as inadequate and non-inclusive of viewing audiences.

Unlike the large National and Regional broadcasters of Australia, Imparja does not have staff dedicated to produce these orders and already overworked staff are having to add producing these orders to their workload. Each time we fill out a new order it is time consuming and costs our already small scale business. We have also found it difficult, as we would like to put in submissions for the full five years, but cannot as we cannot predict what the Networks are planning to do or doing, as we are only told 2-3 weeks prior to broadcast and that includes the addition of extra channels. We also believe that they are more likely to be knocked back if they are for five years.

Imparja feels that the decisions made through this process punished us for more than meeting our targets and did not take into account Imparja’s viewing audience. For example, in 2014 Imparja put in a submission to change the already granted Target Reduction Order, as we were yet to start our News service and we were receiving more local programming than we had anticipated. In addition to this the Nine Network changed the duration of their News service from 30 minutes to 60 minutes, which meant we would not be able to broadcast our local News without closed captions, as that meant we needed double the allocated time for our News service to be uncaptioned. Imparja completed our new Target Reduction Order and further information, where Imparja explained all the changes that had unfolded. After all of the information we had gathered and all the extra information we delivered, Imparja was denied the change in our Target Reduction Order. 5 Broadcasting Services Additional Television Licence Condition Notice 2014 – Page 3

7

6

The denial meant that we had no extra time to provide extra uncaptioned content and therefore could not provide an uncaptioned News service. Imparja understood we had the right to appeal the decision and spend more time and money doing so, but the easiest and cheapest solution was to accept the ruling. So again Imparja scrapped its plans for a local News service.

What was failed to be recognised during this process was Imparja’s viewers. Viewers who are in some of the most remote and regional areas and are screaming out for a News service that is relevant to them where not considered. Indigenous viewers who, for a large majority English is their 3rd or 4th language and may only be spoken and delivering programming to them is a huge part of what Imparja is all about were not considered. What about these minorities?

As we can see by the criteria below, the ACMA regard the nature of detriment to the company and the impact on deaf or hearing-impaired viewers, but nowhere do I see the impact on the viewing audience. This is what Imparja considers when selecting local content for broadcast.

7

At this stage, if there was no revenue attached to local programming Imparja would find the easiest solution would be to just drop the local programming. The continual effort of Imparja trying to push to be able to play local content uncaptioned, the time and cost of applying for continual Target Reduction Orders and the absence of a permanent exemption or exclusion for a Remote Satellite Service, is not worth the effort, time or money spent trying to deliver local programming that is relevant to our viewing audience.

REPORTING AND RECORD KEEPING

Imparja has found the reporting process an extra burden on our company, an addition of more government regulation, red tape and increased cost to our business.

6 FTA TRO-00011 - IMP - SL2898 Statement of Reasons – Page 57 Review of the captioning obligations in the BSA_consultation paper – Page 24

8

The addition of Part 9D of the Broadcasting Services Act 1992 (BSA) and its reports came at a time when the government made a strong commitment to reduce the regulatory burden in the communications sector.

These reports are time consuming and costs our already small scale business. Unlike the large National and Regional broadcasters of Australia Imparja does not have staff dedicated to produce government reports and already overworked staff are having to add producing these new reports to their workload.

EMERGENCY WARNINGS

Imparja broadcasts it’s signal over 3.6 million square kilometres of Australia, including six States and Territories and well over 2,000 towns and larger communities and an undocumented number of smaller communities and outstations. This has proved a problem in many areas, i.e. broadcast time zones, sporting interests and program relevance. Many regulations have been created or modified with Imparja excluded or with exemptions made for Imparja, because of the scope of our broadcast and the size of our business.

Imparja believes that in its unique circumstances we are burdened with the largest warning sector and believe that this is not feasible and there was no consideration to the resources that are required. Imparja broadcast to the largest licence area, the smallest audience and has the smallest revenue, this provision means that almost every warning for Central and Eastern Australia applies to Imparja. Many warnings can build up and stay around for days or weeks and can include constant changes 30 minutes apart. There can also be multiple warnings in our licence area running at the same time. Also, due to the nature of broadcasting signals, we are warning of impending weather only, as once the weather is in the area the digital service is already out or disrupted. The digital service can be disrupted days before the impending weather hits and be out for days or even weeks after the weather has passed. Meaning Imparja is only broadcasting the weather warning to the areas that are not and will not be affected.

In order for Imparja to fulfil this provision we would need to hire a team of four to six staff just to be able to man the number of warnings for our licence area. They would need to be shift workers and be paid penalties due to being on call, overtime and out of hours’ work. All of which Imparja does not have the resources or finances to pay these staff. On top of that it takes 30 minutes or longer from receiving the warning to the warning available for broadcast and in that time sometimes the warning has been preceded by a new more up to date warning. Meaning that we are broadcasting and giving information which is out dated. However, a crawl we can get to air in 2-5 minutes.

A warning runs an average of 2-5 minutes and we only have two options for placing in our schedules. We either need to place the warning over program content or over commercial content. So the question is, do we interrupt program or do we lose revenue? To drop commercial content would send us broke and to drop program content would lead to multiple complaints from areas up to 3,000kms or more away, who say the warning does not concern them at all and say that they missed a program segment because of it. If we have more than one warning for our region it would make a program unviewable because the warnings would take up more than half of the program content.

We have approximately 10 hours of news a day, not to mention the extreme cases where there are special News bulletins for major disaster. These programs can deliver the current warnings in the quickest and most up to date fashion.

It would be impossible for Imparja to caption these warnings and believe that the on-air text is the same as captioning the warnings.

ALTERNATIVE APPROACH RECOMMENDED BY IMPARJA

Imparja requests consideration and regulation change to acknowledge the hardship of being a small broadcaster in one of the largest and most remote licence areas in Australia and nowhere near as profitable as the larger National and Regional broadcasters.

Imparja objects to the extension of the obligations to 24 hours and the inclusion of the multi-channels. This would just mean more Target Reductions that Imparja would be seeking.

Imparja wishes to remove the need to continually apply for Target Reduction Orders and request that either a Remote Satellite Service or Public Benevolent Institution (PBI)/Not For Profit organisation exemption be added. Or that our service licence numbers not be included in Part 9D of the Broadcasting Services Act 1992 (BSA), as in the Broadcasting Services Additional Television Licence Condition Notice 2014. Imparja would like to have its local content, local revenue, News and News updates be exempt or excluded. Or that all

9

affiliate programs broadcast on a national network and/or multi-channels with closed captions be closed captioned on Imparja with an allowance for a 20% non-captioned programming exemption for local programming, which would include local News services.

Imparja suggests alternatives to annual compliance reporting. Either that the report be a random annual selection of broadcasters or a reporting system similar to the Free TV Code Of Practice complaints system, that when a Closed Caption complaint is lodged the broadcaster investigates and answers to the complaint and then ACMA can conduct its own investigation.

Given the huge potential to disrupt broadcast due to the sheer weight of warning numbers in our broadcast area and equitable service run crawls only across the bottom of programs for Cyclones or where it is apparent or highly likely that there is extreme peril if people are not notified.

10