Google, Telstra (ASX: TLS) warn government against changes to smart TVs

Smart TVs – devices that allow people to watch television through an internet connection – are increasingly common in Australian households. But manufacturers such as Google, Samsung, Toshiba and Sony often have relationships with international tech and media companies, such as Netflix and Amazon Prime Video, and strike global deals to feature their apps in favourable positions on their interfaces.

Local television networks argue that this hinders their ability to increase audiences and generate advertising revenue.

The Consumer Electronics Suppliers Association, which represents Sony, Samsung and Panasonic, said the legislation would compromise television quality.

“It would generate significant costs … this would also likely result in a much smaller range of TVs available to Australian consumers,” a submission said. “It is also perverse that local commercial stations charge TV manufacturers to advertise with them and yet see no reason to reciprocate with payment for app placement or advertising on device menu/home page.”

“[It will] instead will result in imposing a cost on the manufacturers of regulated TV devices. These costs will ultimately be borne by Australian consumers.”

Telstra’s submission

Telco giant Telstra is strongly opposed to the legislation, arguing it would stifle innovation and lead to price rises across devices. In its submission, it warns against the introduction of laws for mobile phones, laptops, and tablets. The telco also puts the onus back on free-to-air broadcasters to make content easily accessible through measures such as consolidating the content onto a single app that can be integrated into smart TV devices.

“We are concerned that a legislated prominence framework is a blunt instrument that is not necessarily capable of solving the government’s concerns related to the availability and consumption of Australian content,” it said. “Instead [it] will result in imposing a cost on the manufacturers of regulated TV devices. These costs will ultimately be borne by Australian consumers.”

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A prominence framework is a key election commitment of Rowland’s and will go ahead irrespective of Google or Telstra’s concerns. Free TV, the lobby group that represents Nine Entertainment Co (the owner of this masthead), Seven West Media and Network 10 believe prominence is the most urgent regulator issue for the sector.

Global streaming giant Netflix, which often appears as an app on smart television remote controls, said it supported a “must carry” obligation, but that any measures should respect customer needs.

“A ‘must carry’ obligation will adequately address the government’s policy objective to ensure the availability of diverse Australian programming,” Netflix said in its submission. “In the context of a thriving market … there is no demonstrable need for more prescriptive regulation to ensure Australian content is available to Australian audiences.”

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