SBS boss – expect free TV to get a lot worse

The economic downturn will see free TV slash budgets slash budgets and cut back on programming, the boss of SBS has predicted.   

Speaking at a broadcasting conference in Sydney, Shaun Brown, the MD of SBS, told the audience: “While I do not believe the prognosis is terminal, undeniably there is a general air of pessimism about the prospects of media companies and broadcasters across the world.

“While profit downgrades are disturbing for shareholders, let me suggest the real impact will be felt by viewers and listeners. A downturn in advertising revenue has an immediate knock‐on effect for content. In television, the biggest discretionary budget is in programming. When times are tough, this is the easy target for cost‐cutting.

“I wonder too whether private equity investors, who now have such a slice of the free to air market, will fully appreciate that while cutting program budgets may provide short term relief for the bottom line, such cuts will almost certainly destroy long term value.”

But despite SBS being reliant on advertising revenue for a portion of its income, he said the dramatic slump in adspend was not as big an issue for the broadcaster as it was for Seven, Nine and Ten. He said: “We have been bruised by the advertising market downturn but unlike our commercial comrades, we have not been cut off at the knees.

“SBS has, for at least the last 12 years, been dealing with its own annual financial crisis which has equipped us not only to handle financial adversity with familiar ease but also to find ways to protect our content budgets in tough times as well as find creative ways to grow them.”

However, he warned: “While we are a rarity in the Australian market in that we are still experiencing year on year growth in our advertising revenues, the growth is below our expectations and we are preparing for a demanding fourth quarter.”

He used the speech to lobby for greater funds in the coming Federal budget, describing SBS as subsiding on gruel. As part of the argument for funding, he warned that SBS’s level of commitment to digital broadcasting would depend on it. Following ABC’s statement yesterday that it would be delaying its digital launches until July, he said: “We won’t be launching our digital radio services with our commercial colleagues in May. The scale and timing of our roll out will depend on the budget outcome.”

He warned that the changing economies for the free to air commercial broadcvasters would see them demanding to be released from their quotas on locally produced programming.  He said: “There’s every possibility those quotas will be substantially modified, or even abandoned.

“The Government will find it increasingly difficult to justify a regulatory regime that applies to free to air broadcasters when existing and emerging competitors on other platforms are not or cannot be regulated in the same way.

“The responsibility will and should fall on SBS and the ABC to maintain the Australian voice and the Australian experience on television, radio and online. I invite the Government to extend and even expand the commercial broadcasters’ quota obligations on to the shoulders of the public broadcasters.”


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