6
TV royalty and licence fees
Following is the speech by the Secretary for Broadcasting, Culture and Sport, Mr Chau Tak-hay, on the tabling of the Television (Royalty and Licence Fees) (Amendment) Regulation 1996 in the Legislative Council today (Wednesday):
Mr President,
I should like to say a few words about the Television (Royalty and Licence Fees) (Amendment) Regulation 1996 which has been tabled in this Council today.
This amendment regulation serves two purposes: first, it responds to the concern expressed by members of this Council about the impact of the growing competition faced by domestic television broadcasters for advertising revenue by cutting advertising royalties. We propose to reduce the top rate from 10% to 9%, and to raise the thresholds at which the higher rates apply. This will result in substantial savings for both ATV and TVB.
The proposed reduction in royalties is the second in three years, and demonstrates the Government's willingness to respond to changes in the television environment. We shall look again at both the basis and the amount of advertising royalties as part of the comprehensive review of the television environment that we shall undertake in 1998.
Secondly, the amendment regulation will implement the first phase of full-cost recovery licence fees. The licence fee is intended to recover the costs that are incurred in preparing and administering the licences of ATV and TVB, including monitoring their services to ensure that they maintain the broadcasting standards which reflect the values of the community. It is right that ATV and TVB, not the taxpayer, should meet these costs.
However, having listened carefully to the views expressed in this Council about the impact of introducing full-cost fees immediately, we now propose to phase them in gradually over a period of five years. Accordingly, the regulation provides for 20% of the full cost to be recovered in 1997. In 1998, we shall raise the rate of cost recovery to 40%, and so on, until full cost recovery is achieved in 2001.
The combined impact of these changes will be to reduce significantly the amounts paid by ATV and TVB to Government. Even after full-cost fees are phased in by 2001, both stations will still be better off in this respect than they are today.
Thank you, Mr President.
End