Hi Paddling Yes the single digit decrease forecast was for the...

Hi Paddling

Yes the single digit decrease forecast was for the amount that companies are likely to reduce their advertising spending on FTA networks so in turn will hit revenue. How this will then affect PRTs profit will depend on the changes PRT makes to reduce costs.

This is one of the reasons why Ian Audsley has been making so many trips to Canberra, to try and get across the fact that the first casualty in an earnings decline is going to be local programming in regional areas. This article from a couple of days shows the message he is trying to send:

http://www.mandurahmail.com.au/story/4512852/gwn-owner-warns-was-regional-tv-news-at-risk/?cs=12

That said, and in the unlikely case that the politicians will let this happen, PRT still has some room to manoeuvre if they, in the unfortunate case, are forced to stop making local content for regional areas.

PRT is also in a fairly unique position where channel 7 cannot broadcast to 25% of the population and need to have an affiliation agreement with PRT. Channel 7 took a fairly big hit on winning the rights to the Olympics but due to the way the affiliation agreement works PRT was able to make a profit. It will also be the same with the Australian Open tennis and other sporting events, one of the benefits of the anti siphoning laws. Australians love their sport and although I can't put a figure on it (maybe someone else can), the anti siphoning law is what will keep the advertising dollars coming in and the broadcasters in business.

At the end of the day I suppose, you either believe that FTAs are in a death spiral and will cease to exist in the next 10 years or so or you believe that they still have a roll to play and will continue to exist, although in a somewhat modified form of what they are today. Just as a side note, companies like Netflix and other streaming companies have been around in the US and UK for a lot longer than in Australia and in the last couple of years TV broadcasters have stopped declining and are now showing signs of recovery.