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Ads to double in SBS primetime

Moves are afoot that could see advertising soon double in primetime programs on SBS but government taking the proceeds of the extra revenue from the increased ads as a payment in efficiency dividends.

Effectively, the current cap of five minutes advertising per hour will increase to 10 minutes.

But an increase in one hour will mean a decrease elsewhere. ‘Ad averaging’, as it is called, is a possible outcome of the Communications Department’s Efficiency Study into SBS that was conducted earlier this year. A draft copy of the Study has been given to SBS.

Currently, SBS retains all revenue from advertising to spend as it sees fit. However, Save Our SBS understands that SBS has been given an ultimatum. Either it hand over the extra revenue to government – possibly about $40m to $60m per year – or face a slash in government funding.

Holding firm, SBS’s Managing Director, Michael Ebeid was reported as being “stubborn” in meetings with the Minister. SBS believes it should be allowed to keep the extra revenue. And so it should. Mr Ebeid is right.

It would be a very dangerous precedent to shift the purpose of SBS from that of broadcaster to revenue raiser for government. This proposal is effectively a tax on SBS, a big bad tax.

Annual government funding to SBS was $273m but in May, the government chopped $8m over four years. Before the election Mr Abbott said ‘there will be no cuts to SBS‘.

Compared to other broadcasters, SBS operates on a shoe string budget – about a quarter that of the ABC and significantly less than the wealthiest commercial network – so is hardly in a position to face further cuts, real or notional. The idea of facilitating a means for SBS to increase advertising revenue but not keep the money (or reduce government funding in real terms instead) is counter-productive.

The current SBS Act limits advertising to five minutes per hour; promos and community announcements are additional and outside the Act, about four minutes in each hour of broadcast. In a legislative amendment, advertising would be averaged over an entire day so that SBS would not be allowed to exceed an average of five minutes per hour when an average was taken over a transmission day, with a 10 minute cap applying to any one hour.

The plan, which would see 14 minutes of disruptions per hour – akin to commercial television – is a back-door method to double the quantity of advertising in primetime. At present, many daytime programs contain little or virtually no advertising, a period worth far less than primetime.

If the idea comes to fruition, not much would change in daytime viewing but primetime would be saturated with a lot more advertising with more disruptions in every program.

Save Our SBS is bewildered that Minister Turnbull would support an effective increase in hourly advertising albeit through averaging – especially without requiring SBS reduce in-program breaks – when he personally dislikes advertising on SBS.

In 2011, Malcolm Turnbull told Save Our SBS that if he had been in the Parliament in 1991 – the year that SBS was granted permission to broadcast advertisements – he would have crossed the floor and voted against that.

However, since the Coalition was elected to government, Malcolm Turnbull’s office has discussed in-program advertising with SBS of which he, along with most viewers, is not a fan. But SBS has been resistant to comply with current community standards.

According to a national study of 2044 viewers of SBS-TV, 94.5 percent of Australians want all advertising from within programs on SBS to be removed, while 91.7 precent say, “most in-program advertising breaks look forced or artificially contrived and it would be misleading to describe these as natural program breaks”. The law permits in-program advertising if it is in a natural program break and Senate Estimates has established that SBS forces about 6000 breaks per year into programs.

To avoid compliance and public accountability, SBS removed the definition of natural program breaks from their Codes of Practice in 2006, the year in-program advertising commenced. According to the national study, 87.6 percent of viewers want a definition to be included in the Codes (not SBS guidelines).

If the idea of ad averaging had been approached differently, it could have been implemented to pave the way for SBS to make a partial or full return to block advertising – advertisements between programs. But it won’t – unless the legislators require that.

Under current legislation, one of SBS’s arguments against block advertising is that the broadcaster has no means to make up an advertising shortfall in one hour against another. However, under ad averaging, instead of placing a number of breaks in a movie or any program that spans more than one clock hour, potentially SBS could reduce a program’s break structure to only one break mid-program without any loss of revenue, but with ads before and after. Similarly, ad averaging makes more attractive the notion of not disrupting programs delivered in unbroken format – those not scripted, produced or edited for commercial television – such as BBC programs. But if anyone imagines these incentives will be utilised by SBS, take a reality check, especially if the broadcaster has no right to claim the extra revenue earned from ad averaging.

With a little modification, the idea now under consideration could have been a facilitator of SBS becoming more efficient in Charter adherence.

The national study found a direct link between in-program advertising – the commercialisation of SBS – and Charter non-adherence. Upon reading the SBS Charter, three-quarters of those studied said, “since SBS-TV introduced in-program advertising, [it is] less faithful to the Charter now than it used to be“. Viewers will have even more reason to believe that, if the number of advertisements and commercial breaks doubles in primetime.

The slippery slope that SBS triggered in late 2006 with the introduction of in-program advertising is about to become far worse while primetime will become an advertiser’s paradise.

Although ad averaging provides a frame work for SBS to return to block advertising should it wish, it fails to require that, and therefore does nothing to address community concerns as reported in the national study.

Ad averaging over an entire transmission day is definitely open for abuse. The idea of borrowing 30 minutes of unsaleable spots from daytime and adding the notional lost time to evening viewing could mean SBS primetime will be no different to commercial television and the temptation to pay lip service to the Charter will be even greater. But if averaging were limited to the three adjacent hours either side of the hour to exceed five minutes of advertisements, such concerns might be partly addressed.

Alternatively, ad averaging across SBS networks – where one channel uses the unsold air time sales of another channel – could enable SBS to establish one channel totally free of advertisements while the other would max up to the full 10 minutes of ads per hour (plus promos). However, without legislative protections built in, how long would it be before either SBS or a future government wanted full commercialisation across all SBS services?

It is bad enough that the public broadcaster has any advertising but an increase with no required trade-off to wipe out in-program advertising or provide a commercial-free channel is bad policy.

Save Our SBS is uncomfortable with the current consideration because there is nil suggestion of ‘giving anything back to the viewer’ in terms of requiring a cessation of in-program commercial breaks or alternatively providing a totally commercial free channel, and it removes SBS’s right to retain the extra income it generates. There is no dividend to the public or SBS.

Given that ads on SBS are here to stay, if properly developed, ad averaging could potentially improve our multicultural broadcaster. But if legislative amendments are along the lines of that being considered, it will be the final nail in the coffin of SBS. To gain community support, any amendment in legislation that allows ad averaging must also address community concerns, the most recent of which may be found in the national study on advertising, in-program commercial breaks, Charter adherence and SBS’s Codes.

If properly developed, a simple idea could become a good idea but in its current form, the government’s approach would be unfair and counter-productive. As it stands, it is the thin end of the wedge setting a dangerous precedent that will draw SBS into a commercial abyss from which it will never recover. The wider public will be the losers.

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