Senate defeats proposed legislation to allow SBS to double advertising in prime time
Proposed legislation to allow SBS to double its advertising in prime time has been defeated in the Senate, a move which SBS managing director Michael Ebeid says “leaves SBS with a $28.5 million hole in its budget over the next four years”.
The Communications Legislation Amendment (SBS Advertising Flexibility and Other Measures) Bill 2015 has been defeated at the second reading
— Australian Senate (@AuSenate) June 24, 2015
The vote was defeated 31-28 with Labor, Greens and key independents opposing the bill.
The amendment to the Special Broadcasting Service Act 1991 looked to increase the restriction of no more than five minutes per hour of advertising to 10 minutes of advertising in any hour of broadcasting on the SBS and clarify the network’s ability to earn revenue through the broadcast of programs containing product placement.
The proposed bill also included an amendment to the Australian Broadcasting Corporation Act 1983 to provide consistency between two the acts, repeal redundant provisions and add a reference to digital media services, as well as seeking to repeal 26 Acts and redundant provisions in four Acts in the Communications portfolio.
Ebeid has said the failed passage of the legislation is a “setback” which will force the public broadcaster to make cuts to programming.
“Following the ABC and SBS Efficiency Study last year, SBS’s funding was cut by $53.7 million. Of the cuts, $28.5 million was predicated on the Parliament giving SBS slightly more advertising flexibility through an amendment to the SBS Act, whilst maintaining its current daily cap of 120 minutes of advertising permitted,” he said.
“The failed passage of this legislation is a setback and leaves SBS with a $28.5 million hole in its budget over the next four years. Given this legislation did not pass and SBS has largely exhausted back-office efficiencies, this funding cut is unable to be absorbed without impacting programs and services.”
The SBS said it will now consider its contingency plans internally and will provide an impact report to the Federal Government as it reviews its overall funding.
Meanwhile, the industry body representing the main commercial free-to-air channels has described the defeat as a “win for good public policy”, with Free TV chairman Harold Mitchell saying the body is “grateful” parliament rejected the bill.
Mitchell said in a statement: “The failure of the SBS advertising bill in the Senate is great news for viewers and for the continued production of quality Australian content.
“It is a win for good public policy. It never made sense to turn SBS into a 4th commercial television licence, especially at a time when the television advertising pie is flat and we are facing increasing competition from global players who are unregulated and pay little or no tax in Australia.
“We are grateful that the Parliament has decided to reject these changes that the public did not ask for and which would have damaged Free TV broadcasters at a critical time.”
The Greens have welcomed the Senate’s rejection of the SBS advertising bill.
Senator Scott Ludlam, Australian Greens communications person, said in a statement today the party will continue to fight government moves “to weaken our public broadcasters and our national discourse”.
“Prime Minister Abbott promised no cuts to SBS or the ABC, but since coming to office they’re done just that and tried to effectively blackmail SBS with the threat of increased advertising or harsher cuts,” he said.
“People trust the ABC and SBS a lot more than the Abbott Government. The Greens strongly oppose the defunding or creeping commercialisation of a trusted and treasured public institution.
“We will continue to fight Abbott Government moves to weaken our public broadcasters and our national discourse.”
Miranda Ward
SBS managing director Michael Ebeid statement in full:
SBS’s special Charter to explore and celebrate Australia’s multicultural diversity is at the heart of the organisation.
Revenue raised through advertising goes directly to protecting SBS investment in great Australian programs and services that deliver on our Charter.
Following the ABC and SBS Efficiency Study last year, SBS’s funding was cut by $53.7 million. Of the cuts, $28.5 million was predicated on the Parliament giving SBS slightly more advertising flexibility through an amendment to the SBS Act, whilst maintaining its current daily cap of 120 minutes of advertising permitted.
A survey of SBS audiences showed that 73 per cent would have preferred to accept slightly more advertising in some programs than see SBS programs and services cut.
The failed passage of this legislation is a setback and leaves SBS with a $28.5 million hole in its budget over the next four years. Given this legislation did not pass and SBS has largely exhausted back-office efficiencies, this funding cut is unable to be absorbed without impacting programs and services.
SBS will now need to consider its contingency plans internally, provide an impact report to the Federal Government and review our overall funding. Once this process is complete, SBS will be in a position to outline further details about the impact the failed legislation will have on the organisation.
Free TV statement in full:
Free TV Chairman, Harold Mitchell says “The failure of the SBS advertising bill in the Senate is great news for viewers and for the continued production of quality Australian content.”
“It is a win for good public policy. It never made sense to turn SBS into a 4th commercial television licence, especially at a time when the television advertising pie is flat and we are facing increasing competition from global players who are unregulated and pay little or no tax in Australia.”
“Viewers can be assured that there won’t be more ads on SBS in prime time and that Free TV broadcasters will be able to continue to fund the great Australian programs they love”.
We understand that governments have to make decisions difficult budget decisions. Our concern has always been that any savings should not be at the expense of privately owned companies subject to a range of rules and taxes which SBS does not face.”
“The SBS has an important role in Australian television as do the commercial free-to-air broadcasters”
“We are grateful that the Parliament has decided to reject these changes that the public did not ask for and which would have damaged Free TV broadcasters at a critical time.”
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This is a bit of a shame frankly, and TBH I feel for SBS.
No doubt they’ll continue to bolster their digital and online properties as these likely sit outside of the rather out-dated screen mandate. Their eurovision companion website experience was a fantastic example of what can be done by broadcasters on the second screen.
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Good public policy??? How about protecting the big boys bacon just a little bit longer, so more of the fat cats can sell down their investments.
The big three want protection against anti siphoning, reductions in broadcast licences and?(some want) changes to reach rules. All of which benefit them.
The moment there are some alternatives put on the table that would be good for TV they shoot it down.
They use a “logic” that TV advertising revenue is flat, therefore we shouldn’t have more competition. How about that audiences are moving away from TV and if SBS can’t adjust their commercial model this will further push advertisers off TV all together on to other mediums.
At least by opening up the odd minute in peak on SBS that can be sold instead of it going to waste at 3am it may take a bit of pressure off the other networks and maybe allow them to deliver the promised results for advertisers and maybe restore a bit of confidence in the medium too.
Given Harold’s influence here, I’m sure Seven will be very happy with him being able to stop reach rule changes too (if his past history with Tennis Australia is anything to go by).
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I expect the Labor Party and Greens will find they start getting a lot of positive comments and stories on the commercial broadcasters that matter. (News Corp’s Channel ten doesn’t since no one watches it)
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Great news !!!!!!!! What’s the use of shoving MORE ads into shows when more and more people are zapping through them or getting onto social media during the break?
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This is a bad decision because if their revenue is not going to come from more advertising, they will want more from the taxpayer instead. No thanks.
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SBS radio has lots of efficiency standards they could address..as I understand it, if someone from ,say the Italian language program, does a one hour program on a Sunday, he or she gets paid for 24 hours work….worth checking…..
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Heres a good contingency plan to balance the budget:
1) merge back offices like payroll, marketing, publicity
2) Lose some executives – SBS is very top heavy with high paid thumb twiddlers
3) Stop using aussie taxpayer money to import english chefs to make shows here. e.g. Rachel Coo, Heston. Doesn’t seem very multicultural to me. Or on charter. Or a good use of the production budget.
4) Get rid of SBS2
5) Stop firing journalists without a good reason. Will probably save you some legal fees.
6) Start commissioning edgy, creative shows again – like you used to.
7) Don’t fly MD’s partners around the world in business class
8) See item 2.
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If SBS need to generate a new revenue stream quickly they should look at monetising their Regional TV signal which is already set up?? Agencies rarely include SBS Regional in their TV media briefs for either ad hoc campaigns or annual deals, and this might be the opportunity for SBS to finally become the 4th Regional TV network in the eyes of the media agencies and national marketers the same way they are considered in the Metro markets. If set up properly and run by a separate sales team (either internally or externally) that can chase and respond to regional briefs and budgets would likely see most of the $28.5m shortfall realised over the next 4 years….surely a sales team of a truly national TV network with a 4% share could write at least $7m pa??
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