Seven West Media has warned that the Federal Government's proposed media reforms could erode locally produced content if regional broadcasters are merged with metropolitan networks.

Chief executive Tim Worner told a senate inquiry that sweeping reforms being considered were dangerous, piecemeal and could threaten media diversity.

"It stands to reason that if entities are merged, the controlling entity is going to look very quickly for efficiencies," Mr Worner said.

"I think that when they do that they're going to find that the biggest costs are in local content production and I think that's where they'll go first.

"Changes to media ownership laws will not generate better services for metropolitan or regional areas. These changes to the laws are likely to result in less, not more, local content and less local presence in our regional communities."

Seven West would consider mergers, acquisitions

Mr Worner said Seven West did not seek the proposed reforms and did not necessarily oppose them.

However, the Kerry Stokes empire is pushing to abolish the current 4.5 per cent licence fee which is imposed on the gross revenue of all broadcasters.

Mr Worner said the axing of licences would allow commercial broadcasters to better compete with so-called over the top services, like Netflix and Stan, which are eroding advertising revenue.

While Seven West is lukewarm about the changes, Mr Worner signalled he would not necessarily sit on the sidelines if the media reform package is passed.

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Mr Worner was asked by Liberal senator James Patterson if Seven had contingency plans for possible mergers and acquisitions.

"It's always a possibility. It would be irresponsible for us not to look at things," Mr Worner said.

The Federal Government has billed the proposed changes as the "biggest in a generation", and that they take into account the impact of the internet on traditional media.

Major changes includes scrapping the "reach" rule, which prevents mergers between regional television broadcasters and metropolitan networks, and abolishing the "two out of three" rule which stops any proprietor from owning a newspaper, radio station or television station in the same major market.

Follow Peter Ryan on Twitter @peter_f_ryan and on his Main Street blog.