In its 2005 annual report, the ABC warned that the national public broadcaster is unsustainable on current revenues: ‘A critical point has been reached. Unless adequate funding is secured for the coming triennium, the Board will be faced with a range of fundamental questions about the extent and quality of ABC programming and services.’
A KPMG report commissioned by the Department of Communications, at the ABC’s request, reportedly finds that cuts to services will be inevitable if the ABC does not receive an extra $125 million over the next three years (over and above inflation).
The future of the ABC now rests with the priorities of the Howard Government as revealed by Treasurer Peter Costello’s Budget in May.
Thanks to Emo.
On 24 March 2006, Communications Minister Senator Helen Coonan announced her intention to amend the ABC Act to abolish the position of staff-elected Director on the ABC Board a statutory position which has prevailed since the creation of the corporation in 1983. The Minister’s announcement came one hour before nominations closed for the pending vacancy for staff-elected Director.
In an earlier interview with The Bulletin and in remarks in the Senate, Coonan indicated that, in the future, the ABC Board may well wish to consider advertising to enhance its revenues. She insisted that the Government did not currently intend to amend the ABC Act to allow advertising, but the comments may be taken as indicating Government thinking that the ABC must become more commercial.
These events come in the broader context of the digital revolution and the Minister’s recently released discussion paper Meeting the Digital Challenge. I want to examine that discussion paper briefly, to put the ABC’s future into a longer-term perspective.
The Minister’s discussion paper and its proposed ‘digital action plan’ appears to offer regulatory protection mainly for Foxtel (ie Murdoch and Packer). For instance, in moving the date for the switching off of analogue broadcasting to 2010-2012, Australia’s subscription (pay) television industry would be given an extra six years to consolidate its monopoly in multi-channelling.
Six more years! This ignores the recommendation of the recent House of Representatives inquiry into digital television ‘that the Australian Government remove all restrictions on multi-channelling for commercial free-to-air (FTA) networks on 1 January 2008.’
The ‘digital action plan’ would further assist Foxtel by introducing a ‘use it or lose it’ scheme from 1 January 2007 which would allow pay TV to de-list sports coverage from the anti-siphoning rules. What this means is that, over time, the Australian people risk losing access to much sports coverage on FTA television.
Coonan’s ‘digital action plan’ would entrench Australia in a monopoly pay television system committing consumers to expensive monthly fees without competitive choice. By contrast, for the once-only cost of around $100 per set-top box, consumers could be receiving 35 standard definition, fully commercial and public FTA channels with a capacity, when needed, for the exceptional picture quality of high definition. Compare this with the $50-100 per month for Foxtel’s offerings.
FTA multi-channelling is an extraordinary, low-cost/maximum-reach technology. It could transform communications in rural and regional Australia through low-cost digital cameras and desktop editing for both commercial and public broadcasters. On national public network channels, we could have English and other languages channels, technical and further education channels, as well as channels for kids, youth, history, documentary, innovative comedy, sport, entertainment and community engagement.
As Ziggy Switkowski, the former CEO of Telstra, told the National Press Club last year when he recommend the Government give set-top boxes to households to secure a switch-over to digital by 2008:
Once you’ve got digital broadcasting and an available market of 100 per cent of all households you can let your imagination go. New broadcast licences can be issued … which might be national, could be regional, or even more micro. Content and application developers can proceed in the confidence that a national market will be available for their products. New media players might see or invent business models that marry content with interactive applications … in ways few of us can anticipate today. And a vibrant competitive industry might emerge which will see today’s familiar media companies kick-start an era of product innovation … as they compete in an internet world.
Switkowski said today’s media companies don’t need to be protected: ‘They need to be liberated free to follow strategies of innovation and growth within a logical set of rules and light-handed regulation.’
Coonan’s ‘digital action plan,’ as currently stated, however, would intolerably slow the move to digital along with all the creative and business opportunities the digital revolution should bring.
Minister Coonan said in support of her digital reforms: ‘This is a compelling case for change and if the Government does not act, then there is a genuine risk that Australia will become a dinosaur of the analogue age.’
But the Government has not acted for change it has entrenched the status quo. Through this failure to seize the opportunities of the digital revolution, we are witnessing what amounts to a technological betrayal of the people of Australia.
Whatever the merits or deficiencies of Coonan’s ‘digital action plan,’ it must be acknowledged that the Government has a mandate to remove the cross-media and foreign ownership limits this was stated in the Liberal Party’s 2004 election policy documents. But it has no mandate to allow the ABC Board to plan for commercialisation, or to remove the position of staff-elected Director.
The staff-elected Director has evolved into an extremely important protector of both the ABC’s integrity in the media marketplace and its independence from the government of the day.
In 1992-96, the staff-elected Director helped expose breaches of the ABC Act and Board editorial policies through ‘backdoor’ sponsorship of television programs from external funding sources. The staff-elected Director was crucial when ABC management entered into a commercial partnership with John Fairfax Holdings and Cox Communications for a fully commercial, pay-TV news channel in 1993.
The staff-elected Director position was crucial to the public debate in 2000-01, when ABC management proposed a partnership with Telstra to provide all its programming content on Telstra’s broadband portal.
Surveys consistently show that the ABC is one of the most trusted entities in Australia. I believe this is primarily because the ABC has been driven by its Charter obligations (contained in the ABC Act) and not by commercial imperatives.
Now, in 2006, the ABC wants to fully exploit the potential of digital broadcasting and cyber-casting.
In the likely event that operational base funding is not substantially enhanced in the May Budget, the ABC faces either a reduction in services or a reduction in the quality of current services. Additionally, the ABC will be under both ministerial and self-imposed pressure to pursue commercial partnerships. All previous Boards have been in this position the last five triennial funding submissions have been rejected outright by government.
This is an intolerable Catch-22 for the national broadcaster. Despite knowing that full-scale commerciality would put at risk the ABC’s independence and the hard-won trust of its audiences, the Board is again
being enticed down the fully commercial road by funding deprivation.
The ABC is a major, daily producer of content on radio, television and online. With the digital revolution bringing rapidly expanding platforms like pod-casting and video pod-casting, downloads to mobile phones, internet broadband audio, video streaming, web TV and web radio, the ABC is well placed to grow its audiences.
But an ABC Board strapped for sustainable revenue will be forced to consider selling this content direct to users or to enter licensing agreements or exclusive partnerships with broadband service providers or global search engines seeking to wrap ABC content in advertising or individual program sponsorship arrangements.
What is wrong with that? It changes the purpose of the ABC to one of commerciality. Over time, content would be created and designed to meet the needs of a market and to drive commercial revenue returns. ABC Charter objectives of comprehensive content genres, innovation, rural/regional programming, and audience inclusiveness would be diminished in any corporate or business plan written with commercial revenues in mind.
While the Government avoids the consequences of this strategic uncertainty for the ABC, the protection of the corporation’s independence and integrity will remain of vital concern to those Australians seeking the survival of a public broadcasting system in this country.
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