Ads stay: SBS disappointed

After months of reviewing their internal operations, SBS has decided to continue with advertising. The broadcaster would have been delighted though if government had offered funding so that in-program advertising would become a thing of the past. During the election campaign, Labor said “in the current economic climate” it could not offer that. The Greens did.

The Chairman of SBS, Joe Skrzynski, told SaveOurSBS.org that as a consequence of not receiving additional funding from Government, SBS must continue to take advantage of its commercial license.

No doubt by the time the Budget is announced for the next triennial funding for SBS (2012-2014), there will be a different economic climate. In a different economic climate or with prompting from the Greens and Independents, the government might feel more inclined to provide the funding SBS seeks to surrender in-program advertising and expand its operations. SBS may become a beneficiary of the hung parliament.

Sometime during the course of this hung parliament the Greens Communication’s spokesperson, Senator Scott Ludlam will move that his Special Broadcasting Service Amendment (Prohibition of Disruptive Advertising) Bill 2009 (Bill Number 165/2009) become law. If passed, that would mean SBS-TV would only be allowed to place advertisements between programs and not in them. The Greens also want SBS to receive additional public funding to offset lost revenue due to stopping in-program advertising.

SBS believes that if television ads were placed between programs only, income from TV advertising would be reduced by about half, compared to interrupting programs.

In March this year, SaveOurSBS.org made a formal submission to SBS that it ought to cease interrupting programs on SBS television for advertisement and promo breaks. However the plans that SBS now have to further pursue the commercial path are outlined in the recent SBS Corporate Plan 2010-2013. It provides forecasts for revenue from advertising and sponsorships. The Plan does not separate television advertising from radio, internet or other advertising. However, it is well known that advertising on SBS-TV accounts for most of the income from advertising.

The Corporate Plan (page 13) predicts that advertising revenue will be in the order of $86,666,000 for the current financial year and that this will rise by 6.68 percent to $92,457,000 in the 2011-2012 year. It will rise by a further 6.03 percent in 2012-2013 amounting to $98,040,000. Thereafter SBS forecasts a massive increase of 27.32 percent for the year 2013-2014 resulting in $124,827,000 from advertising. The Corporate Plan does not explain why SBS expects an increase of 27.32 percent for a period three years into the future nor why they have forecast a decline of minus 11.94 percent for the year 2014-2015, giving a stated income of $109,917,000 for that year from advertising and sponsorships. SBS predicts that by 2013-2014 revenue from all advertising will peak at 57.84 percent of government appropriation monies. The full projected finances (revenue and expenditure) including forecast funding from government can be viewed here.

From a strategic point of view SBS needed to provide advertising revenue forecasts. It may need to draw on those advertising figures to argue a case for public funding equal to half that generated by advertising, if legislation is passed to prohibit advertising during programs. But it will need to justify the figures and explain their methodology substantially better than that outlined in the Corporate Plan.

Given the evidence that SaveOurSBS.org had presented to SBS in March as to why in-program advertising should be aborted and the 15,427 emails sent by the electorate before the federal election opposing in-program interruptions, many had hoped to find a sentence in the SBS Corporate Plan that expressed a clear desire on the part of SBS to abolish ads and promos from interrupting programs. By failing to make such statement, SBS may have done itself a disservice to attain the full support needs for the (other) priorities outlined in the Plan.

The Corporate Plan states that the Strategic Plan will be reviewed annually (page 11). The decision to “look for commercial opportunities consistent with the SBS Act” (page 8) falls under the Strategic Direction of the Plan. The Goals of the Plan are outlined on page 9. It contains two contradictory points: – “15. Grow commercial revenue in a fragmenting market”. [versus] “16. Deliver on stakeholder expectations to justify support and proper funding”. But it is well established that the stakeholders (ethnic communities and viewers of all demographics) favour public funding over commercial revenue (A, B, C, D, E,). Many believe that SBS is acting in a dishonourable manner by taking advantage of poorly worded legislation. SBS were present at a Senate Estimates Committee when Senator Conroy explained that the legislators and those that drafted the SBS Act in 1991, never intended that programs be interrupted in the way that SBS now do.

SaveOurSBS.org will continue to present the case that SBS-TV ought to be funded adequately and should do so without interrupting programs for advertisements. We favour legislation to achieve that. Currently there is nothing in the SBS Act that obliges SBS to interrupt programs.

The SBS Corporate Plan 2010-2013 deals with many other matters aside from advertising.

It outlines the overall direction that SBS is headed for the next few years.

Aside from the lack of courage to publicly express a desire to aim in the direction of abandoning in-program advertising (and seek government funding to do so), the broad direction of the Plan has much merit. It contains many desires on the part of SBS that will never be achieved unless government decides to fund the multicultural broadcaster adequately. In the new paradigm of the hung parliament, funding to offset lost revenue resulting from prohibiting in-program advertising may become a priority over some of the things that SBS has outlined in their Corporate Plan.

The Plan states that SBS would like to attract younger audiences and it recognises the importance of social inclusiveness as fundamental to SBS. It seeks to make a greater commitment to multilingual content across all platforms:- television, radio and internet. SBS would like everyone to be able access their material no matter when or how they wish. Not many people are aware that SBS has never received funding for their internet services. In December 2009, SaveOurSBS.org made a submission to government to urge funding to assist SBS with its internet operations. That was on the back of our August 2008 submission for a massive injection of funding for SBS for the current triennium and to free it from advertising.

The SBS Corporate Plan 2010-2013 says that SBS will explore the possibility of establishing further SBS-TV channels and it recognises the changes in the make up of Australian society (in particular the increase in the number of Australians from Asia, the Middle East and Africa). The Plan says that SBS would like to respond to that.

Rightly, SBS also have emphasised their role in telling original Australian stories that explored the multicultural nature of our society. In discussing their past achievements SBS highlighted First Australians. That was the landmark documentary series. Landmark because it covered Indigenous Australian history which had not been done before. Other programs were mentioned too including the many awards that SBS productions have won.

The Plan also discusses SBS Radio which broadcasts in 68 1anguages. It explains the role of the SBS pay channels:- STVDIO and World Movies.

The SBS Corporate Plan 2010-2013 was signed off by the Board and forwarded to the Minister last month. It is expected to be presented to the October Senate Estimates, Communications Committee. It can be read in full here.

The SBS website has a PDF of the SBS Corporate Plan 2010-2013 at
http://media.sbs.com.au/home/upload_media/site_20_rand_1685307411_sbs_corporate_plan7.pdf