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Whingeing about us isn’t a business model, ABC boss Guthrie tells commercial TV bosses

TV bosses should stop whingeing about the ABC and focus on serving their own audiences, managing director Michelle Guthrie has said in her most hard-hitting speech since taking the helm last year.

Guthrie: Attacking the ABC is not a viable business model

In the speech to the ABC Friends conference dinner on Friday night, Guthrie focused on News Corp boss Michael Miller, Nine CEO Hugh Marks and Ten chief Paul Anderson, suggesting that in arguing for changes to the ABC’s charter, they were looking for a scapegoat for their own commercial failings.

She said: “There is no evidence that the Charter is impacting on the commercial models of existing local companies. Assertions that the ABC is abusing the Charter or exploiting its confines are just plain wrong. They are hurled at the ABC by executives and media commentators who are simply looking for scapegoats for their own woes in a disrupted landscape.

“I refer them to the comments of a former Communications Minister, Malcolm Turnbull. The Prime Minister, who has some expertise in the economics of the media sector, has consistently pointed out that these media companies are reaching more people than ever before, using new digital platforms to add to their existing distribution channels. Their challenge is monetising those audiences. The ABC is not after their advertising revenue. As Mr Turnbull remarked at the relaunch of the ABC Parliamentary Friends Association in 2014, while Fairfax and News Corp may have many problems in this new landscape, the ABC is not the cause of them.”

And she added: “I would say the same for the commercial free-to-airs and to Foxtel, whose CEOs seem to spend more time whingeing about the ABC than addressing their own audience challenges. My advice to them is that attacking the national broadcaster does not – and will never – constitute a viable business model. Restricting the ABC’s right to use digital platforms, which appears to be the clear intent behind pressuring the Government for a competitive neutrality inquiry, will not protect them from digital disruption. All it does is hurt the community.”

She asked the audience: “Should your children and grandchildren be denied the right to watch Play School and Peppa Pig on an iPad because Hugh Marks, Michael Miller and Paul Anderson are finding life tough?”

Although she did not directly name Pauline Hanson’s One Nation party, which has been investigated by the ABC’s investigative journalism program Four Corners, she appeared to be referring to the political party when she said: “The ABC Act and Charter should not be tampered with simply to suit political or commercial agendas. I go further in relation to the proposed changes to the ABC Act likely to be introduced into Parliament in the next few weeks. Legislation designed to further a political vendetta by one party uncomfortable with being scrutinised by our investigative programs is not good policy-making. ”

Guthrie also predicted that changes to the media ownership laws – justified as giving local organisations the opportunity to bulk up to compete with the likes of Facebook and Google – would not work.

She said: “The objective behind the changes, clearly stated by media CEOs, is to allow existing players to build scale through mergers and acquisitions to compete with the new global giants like Google, Facebook and Netflix. I wish them luck: a viable local commercial sector is also important to diversity. But as a former Google executive, I question whether consolidating the number of local players to build size is the panacea the CEOs are proclaiming it to be.

“The combined worth of the three major commercial free-to-airs is about $2.1bn. Southern Cross and Prime add another $1bn. Fairfax has a market cap of about $2.2bn.

“In stark contrast, Facebook has a market cap of $US500bn; Alphabet, the Google parent, an even higher $US 660bn and Netflix, that rising upstart, is now valued at over $US 70bn.”

And she told the audience that political deal making involved in getting agreement to the law changes was now leading to the ABC being “assailed”.

She said: “The ABC’s role in the media law reform debate was supposed to be as an interested bystander. We had no skin in the game. Or so we thought. We now find ourselves very much impacted by the deal-making and with a real need to ensure that the public interest – as opposed to vested interest – is protected. Diversity on one side is shrinking. While on the other side, the role and ability of the ABC to provide real choice and a vital public good is being assailed.”

Guthrie then focused on Nine boss Marks for a second time, criticising his hostility to Netflix and the ABC’s tie-in with it on the series Glitch.

She said: “Moreover, it isn’t going away, no matter how much Hugh Marks and company rail against it. I have no problems doing deals with Netflix, as we have done with Glitch and with the exciting series now going into production called Pine Gap.The financing that Netflix supplies enables us to create world-class programming without having to make upfront investments that would drain our entire drama budget.”

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