SBS ads revenue hit

The income to SBS from air time sales has taken a blow. SBS has suffered a double whammy according to SBS Managing Director, Shaun Brown.

In his opening presentation to last week’s Senate Estimates hearing, Brown told the Senate Committee that SBS needed to find a way to offset the hits to the broadcaster’s commercial revenue that have occurred.

Brown said that the hits to SBS’s advertising revenue had come about: “firstly as a consequence of the global financial crisis and secondly because of the explosion of multichannels from commercial broadcasters which has doubled the amount of commercial inventory in the market”. Brown added this was “having an impact on the revenue that SBS can derive”.

Brown was alluding that the value of the SBS advertising dollar has been diluted with the introduction of ONE, SEVEN-TWO and GO. Previously SBS only had to contend with 7, 9 and 10. And now that community television has begun transmissions on digital 32 and the ABC will soon have four television networks, the spread of viewers across 13 metropolitan free-to-air channels will mean that SBS will have far fewer viewers than a year ago. That’s not overly attractive to advertisers who want numbers. It throws into doubt the emphasis that SBS gave to depending on income from in-program advertising breaks, as a reliable source of income. It no longer is.

In what could be called a justified but subtle plea for further funding, Brown told Senate Estimates that a way needed to be found “to resource new and emerging platforms so that SBS remains a vital part of that expanded landscape”. Later Brown discussed some of those platforms, including the Internet and SBS-TWO.

However there has been no particular funding granted to SBS for these platforms and SBS has been habitually under funded by all governments. Taking these factors into account, SaveOurSBS.org wrote to the Treasurer in December 2009 urging that specific funding be made available to SBS for its online services before the next triennial funding period commences in 2012. That specific request was on the back of earlier submissions to government that SBS deserves greater funding to free the broadcaster from any need to rely on advertising.

In August 2008, SaveOurSBS.org made a submission to the Minister for a massive injection of public funding for the current triennial period (2009 to 2012) so that SBS would not need to rely on advertising.

Since 2007 in other submissions to government, SaveOurSBS.org has repeatedly predicted that SBS would ultimately suffer, and the current model that has caused SBS to turn to advertising as a source of income, is flawed. Brown’s revelation to the 24 May 2010 Senate Estimates that SBS needs to “find a way to offset the hits to [SBS] commercial revenue” is spot on. A way is needed.

Considering the disruptions to regular programs for advertisements remains grossly unpopular with viewers and that many in government have deep philosophical objections to those disruptions, SaveOurSBS.org (again) submitted in March this year that the interruptions of programs for commercial breaks will need to end as a first step in SBS rebuilding support from its viewers and obtaining greater public funding. Adequate funding for SBS remains years overdue.