WIN loses streaming case against Nine

A bid by billionaire Bruce Gordon's WIN Corporation to stop Nine Entertainment from streaming its channels into regional Australia over the internet has been rejected the NSW Supreme Court, in a blow to other regional broadcasters as they negotiate deals with their affiliates.

WIN, which launched the case in February, sought to argue that streaming was included in the affiliate agreement between itself and Nine.

Nine launched its 9Now service in early February, giving viewers access to the free-to-air broadcaster's regular 'linear' channels over the internet as well as on-demand programming.

The case was centred on the understanding of the word broadcast and whether live-streaming is included in that definition.

Bruce Gordon appeared to have a deal sewn-up.Credit: Rob Homer

Justice David Hammerschlag on Thursday ruled that the affiliate agreement between Nine and WIN does not give the regional broadcaster domain over online streaming in its broadcast areas.

'Not broadcasting'

"I have concluded that live streaming is not broadcasting within the meaning of the PSA (program supply agreement), and Nine is under no express or implied obligation not to do it. WIN's claim for an injunction must therefore be refused," Justice Hammerschlag wrote in his judgment.

"The implied negative stipulation relates only to Nine broadcasting free-to-air. There is nothing to inhibit it from internet live streaming into areas covered by the WIN licence areas, or at all. This is what the parties bargained for [in their affiliate agreement]."

A Nine spokesperson said: "We are pleased with the result and it vindicates our position."

Bruce Gordon, who wholly owns WIN, is Nine's second largest shareholder with 14.83 per cent through his investment vehicle Birketu.

WIN chief executive Andrew Lancaster said the broadcaster was disappointed with the outcome of the case.

"This case further highlights the absolute absurdity of the 75 per cent audience reach rule in this digital age and the need for the Turnbull government to remove this outdated legislation with a greater sense of urgency," Mr Lancaster said.

The government is proposing to remove the reach rule, preventing TV networks from broadcasting to more than 75 per cent of the population, and the two out of three rule, preventing media companies from owning a TV station, radio network and newspaper in the same market.

Legislation delayed

The legislation, brought forth by Communications Minister Mitch Fifield, has been delayed until after the federal election, which is earmarked for July 2.

The court ruling will no doubt be analysed closely by rival regional broadcasters Prime Media and Southern Cross Austereo, which have affiliate deals with Seven West Media and Network Ten respectively.

Seven live streams its channels via the internet through its Plus7 service and Ten live streams selected programming.

Mr Lancaster also implied that the ruling would have implications for upcoming affiliate negotiations – contracts between WIN and Nine, as well as Ten and Southern Cross expire at the end of June – with metro networks looking to extract larger payments but the content no longer being exclusively because it can be streamed over the internet into regional areas.

"The case should also serve to remind regional broadcasters entering into affiliation agreements that the value of these agreements is decreasing as metro broadcasters set out to erode regional broadcaster value by directly competing with their affiliates for viewers and revenue in regional Australia," Mr Lancaster said.