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Why more ads will be bad for SBS

Last December, Save Our SBS was invited to appear before a joint Party Senate Select Committee looking into the budget cuts imposed on SBS and the government’s proposal to increase SBS advertising. Save Our SBS gave oral evidence having made a written submission to the Committee.

Save Our SBS President, Steve Aujard addressed the Committee-

Thank you for inviting Save Our SBS to this hearing.

Save Our SBS has a dual purpose–advocating as a supporter and friend of SBS and also for consumers of SBS. Whilst we put the case for greater public funding for SBS, we also scrutinise it to see that it operates in a fair and transparent manner and is faithful to its charter.

The Prime Minister and the Minister for Communications have said that the cuts to SBS and the proposed changes in the advertising arrangements are an efficiency dividend. We say that anything that puts into doubt SBS’s ability to adhere to its charter is not an efficiency dividend.

Aside from the direct cuts, there is very strong evidence that any increase in advertising would seriously impact on SBS’s ability to adhere to its charter, thereby making it less efficient not more efficient.

But the Lewis review recommends a doubling of advertising in peak viewing periods, plus product placement. Page 85 of the review acknowledges that ‘further changes to advertising content may risk charter related content and decrease distinctive content in favour of a broader, more populist schedule’. Such concerns are not some airy-fairy whim; they are based on solid evidence that points to the struggle SBS faces to be faithful to its charter.

That struggle increases proportional to the placement of advertising.

The Lewis study noted this, saying:

… there will be greater pressure on SBS management to consider the trade-off of delivering on commercial expectations, against delivering those functions described in the SBS Charter.

This morning SBS’s managing director, Mr Ebeid, referred to the polling Save Our SBS did of 2,044 viewers of SBS last year. He said the methodology was flawed because the survey did not ask, and I am paraphrasing, ‘Would you like a reduction in advertising and suffer a loss of services too?’ We actually did include the line of questioning that was said to be absent; it is the control question in the study.

SBS Managing Director, Michael Ebeid (earlier): "If I were to ask anybody, ‘Would you like a pay rise?’ most people would say yes. If you were to ask people, ‘Would you like to see ads off SBS?’ most people would say yes…If you position the question differently, to say, ‘Would you like to see ads on SBS versus a reduced level of good Australian content?’ most people would say no… the methodology used in that [Save Our SBS] survey was flawed"

Steve Aujard (continued):

Respectfully, any suggestion that the methodology was flawed is wrong.

For the record, 93.4 per cent said they would opt to restrict advertising between programs, even if that meant little or no expansion of SBS and less local content, whereas 6.6 per cent said they would prefer to keep in-program commercial breaks–as it is now–with an expanded SBS and possibly more local content.

But there was more than one poll–there was the one of 2,044 viewers, which had a 2½ per cent margin of error, and the other of 1,733 viewers–and they were not just about ‘do you want ads or not’. They also looked at the impact of advertising. In these two comprehensive studies, and upon reading SBS’s charter, three-quarters of viewers nationally said that since SBS TV introduced in-program advertising it is less faithful to the charter now than it used to be. This strongly suggests that any increase in advertising in any part of the schedule will worsen SBS’s ability to adhere to its charter obligations. There is a graph of that on page 7 of our submission.

source: SOSBS, 10/12/14, Impact of budget cuts and increasing advertising on SBS in primetime (a national study of 2044 SBS viewers), pg 7

Studies of the impacts of advertising on a public broadcaster are nothing new. In 1999 a study of public service broadcasters in 19 different countries commissioned by the BBC and carried out by McKinsey and Co concluded that an increased dependence on advertising led unavoidably to a more populist and a less distinctive schedule. And then there were the findings of Dr Chris Lawe Davies from the University of Queensland, now senior lecturer in journalism, in the same year when he completed his PhD thesis on SBS program policy. And the list goes on.

The whole purpose of TV advertising is to on-sell audiences to the client–that is, to the advertiser. There was a time when the viewer was the client, but all that changed with the advent of in-program advertising. When SBS was permitted to broadcast advertisements back in the 1990s, with a cap of five minutes per hour, we were told SBS would never reach that and for many years they did not.

But SBS now have a 100 per cent fill in prime time on SBS ONE virtually every night. If section 45 of the SBS Act is amended as discussed, then eventually SBS will manage to fill the entire 10 minutes per hour and that will change the flavour of SBS.

You and all viewers of SBS television will see 14 minutes of disruptive commercial breaks every hour from 6 pm to midnight and during sports broadcasts. We are not talking about six or seven minutes; it will be 14 minutes. That is the same as commercial TV.

Currently SBS has five minutes of ads and close to four minutes of promos per hour in prime time. The duration of promos is not restricted under the Act. If SBS were to double the quantity of advertising to 10 minutes while retaining four minutes of promos, be prepared for 14 minutes of intrusive commercial breaks every hour at night. The impact on the charter adherence will be significant. No-one wants that. By the way, it is not just television; the proposal also includes SBS Radio.

Before closing, I would like to quickly make a couple of other points.

At the Senate Environment and Communications Legislation Committee inquiry on 25 November 2014, Senator Canavan asked if SBS wanted to increase advertising before the Lewis review. Answering for the Department of Communications, Ms Nerida O’Loughlin, Deputy Secretary, and Dr Simon Pelling, First Assistant Secretary, Consumer and Content division, said, overtime, ‘yes’. Dr Pelling absolutely confirmed that SBS had raised increasing ads before the Lewis review, saying: ‘It is not something that SBS has been secretive about’.

We do not for a moment doubt the honesty of the individuals just named but for the record, aside from an informal comment made in mid-2012, we as a major stakeholder in SBS–and the board of management have referred to us respectfully as a major stakeholder from time to time–have never been told of this specific proposal. I have asked my colleagues at senior level within the ethnic communities, and was told that they too have never been informed by SBS that this was on the cards.

Regardless of who came up with the idea, or when, there is no community support to increase advertising, albeit through averaging. We do not want SBS to resemble commercial TV at any cost. It is a bad idea.

When SBS introduced in-program advertising in late 2006, SBS promised that all the money would be used to commission more local content. A fine ideal–but it failed. On 19 October 2012, Senate committee question No. 2386, subquestion 11(b), revealed that SBS invested only 37 per cent–$17.4 million–of their advertising revenue on local content.

SBS are not required by any law or regulation to broadcast any local content, so any claim now that we will see more local content as a benefit of increased advertising is entirely unbelievable.

Lastly, a word about the figures: there are at least three sets of official ad revenue figures going around. They are summarised in our submission. Apparently no-one can agree on the figures. This seems like a lot of pain–to present TV programs in a disrupted manner, with bad TV presentation, under a cloud of official figures that are all very rubbery.

Finally, other than for advertising, in the main the Lewis review did not compare efficiency against revenues but only expenditure, and the method to arrive at the make-up of the $53.7 million worth of cuts lacks transparency.

It is not possible to comprehend how the government arrived at specific reductions, or how SBS fares against other broadcasters. If it were compared, we believe–at least in terms of monetary efficiency–SBS would be proved to be highly efficient: not worthy of any cuts.

From our perspective and that of the wider community, the conversation is all wrong.

Rather than talk about cuts and increased advertising, the parliament should be talking about supporting SBS, and finding a way to remove all advertising from within programs–not double it; and certainly not agreeing to a practice that threatens SBS charter adherence forever.

When more than 80 per cent of viewers say–and they have–that advertising ought to have no place on SBS but should be left to commercial broadcasters instead (the reference is on page 15 of our submission), we would ask that the committee resolve to reverse the commercialisation of SBS, not ramp it up.

SBS is a vital link in engaging culturally and linguistically diverse people in our broad, multicultural society, and does not deserve to be treated like this.

The full transcript is here.


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