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Responding to concern expressed by legislators and commercial television broadcasters about the increasing competition for advertising revenue faced by ATV and TVB, the Government has agreed to introduce a new scale of advertising royalties, and to cut the top rate from 10 per cent to nine
per cent.
It is intended that royalties will be reviewed as part of the 1998 review of the television environment.
"On the basis of advertising revenues in 1995/96, this would save ATV about $45 million a year, while TVB, which will benefit from the cut in the top rate, would save about $20 million," said the spokesman.
The new scale, introduced in the Television (Royalty and Licence Fees) (Amendment) Regulation 1996, is as follows:
Advertising Revenue
Rate
On the first $200 million
0%
On the next $100 million
1%
On the next $100 million
3%
On the next $100 million
5%
On the next $100 million
7%
On the next $100 million
9%
On the next $100 million
11%
On the next $100 million
13%
On the next $100 million
15%
On the next $100 million
17%
On the next $100 million
19%
On the next $100 million
21%
On amounts above $1,300 million
23%
(Subject to a maximum royalty of nine per cent of advertising revenue.)
New full-cost licence fees were also introduced under the same regulation. Until now, ATV and TVB have paid nominal licence fees of $1,000, with the cost of administering the licences being borne by taxpayers.
ATV and TVB will now be required to pay licence fees which reflect the costs incurred by the Television and Entertainment Licensing Authority (TELA) and the Office of the Telecommunications Authority (OFTA) in administering their licences, including monitoring television broadcasts, and ensuring compliance with licence conditions and codes of practice.
Both TELA and OFTA have streamlined their operating procedures in order to keep costs down, the spokesman said.
No comments yet.
Private notes are available after approval.