Commercial networks will ‘fund SBS budget cuts’, as Free TV warns of quality erosion
Network Ten and Free TV have attacked the government decision to double the hourly amount of advertising SBS can sell, claiming the move has created a “fourth free-to-air network” that will damage the quality of Australian TV production.
Ten chief executive Hamish McLennan branded the move “very concerning” while Free TV chairman Harold Mitchell reiterated claims that $200m worth of advertising revenue will vanish to SBS over five years. Communications Minister Malcolm Turnbull had earlier suggested the figure was nearer $28.5m.
SBS managing director Michael Ebeid predicted raising the cap will bring in between $20m and $30m additional revenue over five years.
While the daily limit of advertising will remain at 120 minutes, SBS will have greater flexibility in selling more inventory during prime time programs.
McLennan said the budget cuts have effectively been funded by commercial broadcasters who will see advertising revenue vanish to the public broadcaster.
“Today’s announcement that commercial broadcasters will be funding SBS budget cuts is very concerning and a damaging move by a government that says it is pro-business. The government is clearly creating a fourth free-to-air network by stealth,” he said.
“All media companies, including Ten Network, have made painful and difficult cuts over a number of years in response to major structural change and a soft advertising market.
“But this government is clearly unwilling to tackle the difficult decisions when it comes to the ABC and SBS, instead making commercial businesses and their shareholders foot the bill for the public broadcasters’ ongoing inefficiencies.”
He said this “bad decision” had been “dumped on the industry and viewers” without any transparency or consultation.
“The government needs to be held accountable and needs to explain itself to viewers, the shareholders who own the free-to-air television networks, Australian television production companies and the tens of thousands of people who will be hurt by this decision,” McLennan said.
“Commercial broadcasters pay 4.5 per cent of their gross revenue in licence fees, as well as corporate taxes. Unlike SBS or ABC, we have increasingly heavy Australian content obligations. Meeting those obligations will only get tougher thanks to the government’s decision today.”
Free TV warned that doubling the SBS prime time advertising limit will have a “direct impact on the continued production of quality Australian content”.
The move will come at the expense of free-to-air broadcasters with Mitchell claiming regional areas in particular will be “hit hard”.
“We are already operating in a challenging environment where broadcasters are competing against new services that are unregulated, pay little or no Australian taxes, and invest virtually nothing in local content production,” Mitchell said.
“Any further erosion of our revenue base will inevitably impact on broadcasters’ ability to continue their record investment in quality Australian content.”
He added: “There is a finite advertising pie and any increase in SBS revenues will come directly from commercial broadcasters who will in effect be subsidising a government funded broadcaster.
“This makes no sense. Why take money out of companies that not only employ over 15,000 people, but who are also the major investors in Australian content?”
Free TV said in a statement that commercial free-to-air broadcasters invested a record $1.54b on free Australian content in 2013/14, up 11.6 per cent from $1.38b in 2012/2013.
Steve Jones
It is pretty hard to stomach this stuff from the free to air commercial broadcasters. They’ve had their licence fees halved by the previous government, been given two digital channels each, bought cheap New Zealand programs to fulfil their Australian content obligations, get a 20% tax rebate on all new dramas and docusoaps and can also access Screen Australia subsidy for top end drama and docos. They have a rate of advertising per hour which is the highest in the world and are protected by the anti siphoning rules for major sports. I could extend this list if I thought a little more about it but I can guarantee their lobbyists sit constantly at the doors in Canberra telling everybody how bad it all is. Hamish McLennan would do everybody a favour if he just moved on and let someone else run Ten, somebody who knew about television. He is the man outgunned in ratings by the ABC and it wouldn’t surprise if last night even SBS outrated him with First Contact. If I knew as little about television as he has displayed I think I would remain silent and keep my head well down.
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From comments I’ve heard and read I gather that the biggest disappointment identified by the progressives among the electors of Australia is the feral minister for something called “communications”.
So big an intellect, but so small and lazy a response to the responsibilities of his portfolio. He’ll go down in history. Delete that. I mean: In history he’ll go down.
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If commercial broadcasters had made quality decisions about programming instead of “me to reality TV” choices, they would have no problems leaving SBS in their dust.
The real threat is boredom with what they are broadcasting and viewers like myself turning the TV off, to read a book or listen to music.
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Looking at their annual report, SBS employs over 1000 people and spend 10’s of millions of dollars on content too. Hey Hamish, maybe if you ran a better business at 10, and actually stood for something, you may not be so worried about SBS taking your position as the 3 rd commercial network…….you could always give back some of your pay to help channel 10 buy the next big thing like the Bachelor ?…..
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I guess Ten has the closest ratings to SBS – they should be concerned.
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Is Hambo actually suggesting job protection is one of the strengths of commercial TV?!
That’s some quality comedy right there. Schedule this man a standup show immediately!
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Imagine all the tarps we can buy its very exciting
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If I was running a comical TV network I would not want SBS to run more ads. There are only so many advertising dollars and there are not enough of them. But given Hamish McLennan has been offering free advice to the ABC on how to run a scaled back TV network, it might now be a good time for him to take his own advice. After all SBS will not take vast amounts from Ten.
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what a load of rubbish – the money goes where the audience is…Ten are the last media company on earth who should comment on just about anything concerning organized media
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Network Ten worrying about quality and Australian content?! Give me a break.
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So, no increase in the maximum minutes of ads per day (120 minutes).
Let’s call it ‘market regulation’ that allows them up to a maximum of 10 minutes per hour (as opposed to 7, 9 and 10’s 13 minutes) so that the market can decide.
Surely this is straight from the Murdoch hymn book yet they doth protest too much.
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SBS should merge with the ABC, multiple radio stations with audiences of 10 in some weird language is not value for money. Even ABC staff agree they should merge and share studios and facilities and get rid of all the back end staff for 2 stations.
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