Media Abundance and Economic Difficulty
David Sutton
Head of Corporate Strategy and Governance
Australian Broadcasting Corporation
Presentation notes with selected slides
Session 1, Public Broadcasters International 2009
7–8 December 2009, Kyoto
As you’d expect, I’m going to talk about the ABC’s experiences.
The ABC was created in an era of media scarcity—and created to address specific
problems flowing from that scarcity. Digital television has trebled the number of free-to-air
channels available to Australian viewers from five to 15, while pay-TV offers more than 200.
Digital radio—which only came to Australia this year—has the same effect. The internet and
mobile platforms offer audiences even more, while the Australian Government’s ambitious
National Broadband Network promises limitless content and competitors from Australia and
around the world.
Soon audiences will have more media options than they will know what to do with.
The question the ABC has to address today is: what its role is in such an age of abundance
that potentially challenges the assumptions upon which it was founded?
While the details of the circumstances will differ from country to country, I believe this
essential problem—shifting from media scarcity to abundance—confronts all public
broadcasters.
I suspect that the current economic difficulties—from which, as I’ll explain, the ABC has
been largely insulated—have functioned as an accelerant, bringing some of the debates and
tensions inherent in this inexorable shift from abundance to scarcity into sharper relief.
At the ABC, we believe that public broadcasting is as important in an environment of media
abundance as it ever was—quite possibly more so. We believe that the core values of public
service broadcasting do not necessarily change, but that the ways in which we express
them must adapt.
We are also well aware that that is a case we have to make to the Government and the
Australian people.
Before I try to talk about what this transition means for the ABC and how we’re attempting
to navigate it, I should probably talk a little about the ABC’s circumstances, as I know there
are roughly as many of models of public broadcasting as there are public broadcasters.
We are the larger of Australia’s two public broadcasting services.
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PBI 2009 Presentation: Media Abundance and Economic Difficulty
We operate three television channels, five
radio services and one of Australia’s largest
online sites, including a streamed catch-up
television service, iView. We also broadcast
internationally, delivering radio and
television services to Asia and the Pacific.
(Slide 1.)
We operate in an environment which has
always had strong commercial players that
are wealthier than we are. We compete with
and complement them. (Slide 2.)
Slide 1
We are also one of the few public
broadcasters in the world that is funded
almost entirely by government
appropriation. We don’t draw on a licence
fee. We are forbidden from taking
advertising.
This has several consequences: first, we
haven’t been directly affected by the
downturn in advertising spend that has
accompanied the global economic
downturn.
Slide 2
2009 has been a good year for us—in this
year’s Budget, we received a funding boost
of $167 million over three years. Our largest
funding increase since we were in
incorporated in 1983.
It was a reversal of a continuing decline in
our real funding over much of the past two
decades. (Slide 3.)
The funding increase essentially supports
three new initiatives: increasing our output
Slide 3
of quality Australian drama, launching a
dedicated channel for school-age children
(which we did on 4 December) and broadband hubs in regional Australia.
The fact that the bulk of this funding was for specific projects reflects the other
consequence of our direct appropriation: while we are statutorily independent and
answerable to the Australian Parliament as a whole, our funding is determined by the
Government of the day. If they have other priorities or don’t like what we’re saying about
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PBI 2009 Presentation: Media Abundance and Economic Difficulty
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them, we have to make do with less. As you can see, that’s what we’ve had to do for most
of the last 25 years.
The low-point in the middle reflects a 10% funding cut across all government agencies. It is
worth noting that every funding increase since then has been tied to specific projects that
the ABC has proposed and the Government of the day has been prepared to support.
For the record, this happens with governments on both sides of Australian politics.
It makes it difficult when you’re trying to find the money to innovate and build your digital
future to meet changing audience expectations, while at the same time keeping faith with
the still-sizeable audiences who just want traditional radio and television. But that is
precisely what we have done—seeking and finding efficiencies—because it’s what we have
to do in order to go with our audiences into the digital media age.
If the economic downturn hasn’t directly affected the ABC, it has definitely affected our
competitors. And they have been fortifying themselves in response. It’s no accident that the
level of criticism and public contestation of our role by commercial media has increased in
the last year.
We have been heard it argued that we shouldn’t be allowed to deliver new services into
regional markets where commercial providers, particularly newspapers, are struggling. That
Government funding for new initiatives should be contestable, rather than given to public
broadcasters. That we should be confined to correcting market failure.
I’m sure everyone in the room has heard these criticisms—probably in more focused forms.
For our part, we would say we’ve consistently been in regional Australia—both when they
were profitable and commercial players were plentiful, and when they weren’t and the
commercials walked away. We are happy to see contestable funding in circumstances
where it isn’t abundantly clear that only a public broadcaster can deliver the desired service.
In the case of correcting market failure, while that’s part of our job, it is far too narrow a
characterisation of our responsibilities and the Australian people’s expectation of us.
Instead, we would argue that public broadcasting delivers offers a range of public benefits.
These include: Localism, Independence, Quality, Universality, Innovation, Diversity and
Australian Content (the last of which mucks up an otherwise elegant acronym).
Not all of these are necessarily unique to public broadcasting. Australia’s pay-TV operators,
for example, love to point out that they offer a greater diversity of programming than the
ABC can. What they don’t do it make it universally available. They offer a solution to just
part of the problem—the part that pays.
Only public broadcasting offers these public benefits complete—and I think that is a
significant part of why the ABC is so highly valued by its audiences. Moreover, in Australia’s
current and likely future media landscape, there is going to be more, rather than less need
for the ABC to deliver these public benefits.
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A key part of the ABC’s strategy in recent years has been to demonstrate its ability to
deliver these benefits: to be available for all Australians, to innovate and be local, to offer
quality and maintain our independence. We are both emphasising and adapting them to the
emerging environment. So that when we go to government and ask for further support, we
are asking them to invest in proven success. I think our successful funding bid suggests
that it’s working.
Take Australian drama. This is at the heart of the problem of media abundance.
Our commercial television broadcasters are required to air specific minimum levels of
Australia drama. However, television viewing in Australia is slowly, but inexorably declining,
while multichannel and online services are fragmenting audiences. As Australian drama is
expensive to produce, especially in contrast to popular content from overseas, it is really
only a matter of time before commercial providers begin arguing for a reduction—and
eventually a removal—of their local content quotas. The impact will be fewer Australian
stories on television and fewer jobs in the Australian production industry.
The ABC’s pitch to government was that telling real Australian stories required direct
funding and that the ABC could and should deliver this. It would appear they agreed.
Similarly, news and current affairs.
The reality in Australia is that commercial broadcasters have largely abandoned the field,
leaving serious news to the public broadcasters and the newspapers. Traditionally separate,
the online environment is where we meet and compete. I suspect we’ll see some tension
there.
At the ABC, we continue to put a strong emphasis on the editorial values that underlie a
credible, reliable and independent news service.
But at the same time, we’re adapting this traditional public service benefit. To deliver the
news and current affairs services the way our audiences are coming to expect, we have
merged our newsrooms, bringing radio, television and online news production together. The
result is flexibility and a capacity to tailor or output to different platforms—to maximise our
ability to give audiences news when, how and where they want it. Further, we are moving
beyond the punctuated deadlines of the radio and television broadcasting schedules to
deliver continuous news services at times that suit our audiences.
My third and final example is ABC Open—the regional broadband hub initiative I mentioned
earlier. To make sense of it, think of this…
PBI 2009 Presentation: Media Abundance and Economic Difficulty
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Australia has a land area roughly the size of
the continental United States and a
population slightly larger than Romania’s.
As you can see, most of them live on the
coast. Moreover, 70% live in the in the
eight capital cities. (Slide 4.)
This makes serving much of the country
simply uneconomical for commercial
providers and the last decade has
witnessed syndication of services to
regional Australia, if not simple withdrawal
Slide 4
from the regions.
By comparison, ABC Local Radio services
go where the population is. There are 60 of
them. They reach over 99% of the
Australian population. More than providing
local news, they forge connexions with
local communities. (Slide 5.)
In 2002, we began introducing Radio Online
Producers to create a multimedia capability
in the regions.
Slide 5
In the 2009 Budget, we received $15.3
million over three years to establish regional broadband hubs, which we’re now calling ABC
Open.
The project will formally launch early next year. It will capitalise on the coming rollout of fast
broadband in regional Australia to deliver a rich, online experience for audiences beyond the
capital cities. It will create considerable opportunities to better serve communities by putting
more than 50 people into regional areas whose responsibilities will include training
communities to create content themselves. We expect to witness a surge in user-generated
content, especially high-resolution video as high-speed broadband becomes available
outside Australia’s cities. The ABC will host and facilitate the best of this web 2.0 content
from regional communities. We will be looking for great content created by and with our
audiences.
And in a sense, that is the other key to dealing with the age of abundance. As public
broadcasters, we need to work with the public. To allow them to contribute. To be part of
us, just as, for so long, we have been a part of them.
In these and other ways, the ABC is emphasising and adapting its public service to meet the
new environment.
PBI 2009 Presentation: Media Abundance and Economic Difficulty
As I said at the outset, I believe that current economic conditions are accentuating the
tensions in this transition.
However, this is a time when public broadcasting is needed more than ever.
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