Fix The ABC? Expect Another Repeat

At the end of January, Communications Minister Malcolm Turnbull announced an inquiry into the efficiency of both public broadcasters ABC and SBS under the guidance of Peter Lewis, former chief financial officer of the commercial television network Seven West Media. Its findings are likely to make comparisons between the efficiency of public sector broadcasting and that of the commercial sector.

Although some commercial television reporters complain about the excessive number of cameramen the ABC can send to cover news stories, no one should hold their breath hoping for any scandalous findings to emerge from this inquiry. In recent years, the ABC has itself commissioned external consultants to conduct similar exercises and has already implemented their recommendations. In fact, it was the prospect of $20 million worth of savings from one of these efficiency audits that allowed the ABC to go ahead and launch its twenty-four-hour television news channel in 2010.

Nor should anyone expect any radical change in the administrative structure of these organisations. The day he announced the inquiry, Turnbull was asked whether a merger between ABC and SBS might be proposed as a cost-saving measure. Turnbull said he found that idea “pretty naive”. “It’s something that’s been put to me, mostly by people associated with the ABC, I might say, for quite a few years, and I have always been a sceptic.”

However, there is another measure of efficiency that no one is talking about, but ought to be. This is the cost of broadcasting in comparison to audience size. This is one of the imperatives of commercial television, especially television advertising, but is an alien concept to public broadcasters—how many people do you reach for what cost, or how much bang per buck? The terms of reference for Turnbull’s inquiry do not mention television ratings. Yet surely a critical measure of whether public broadcasters are working efficiently is the cost per head, or cost per thousand heads, of reaching their audiences.

We have taken it for granted for so long that ABC television will get much lower ratings than its commercial rivals, and that SBS will reach only a small fraction of the audiences of the other networks, that this now seems a perfectly natural outcome, indeed beyond question. It is part of our media status quo that no one seems to want to upset. Yet there are good reasons to do so.

I am writing this in mid-February and here is last night’s television ratings (audience share, five-city metropolitan) for the public broadcasters, courtesy of tvtonight.com.au:

ABC 1                         10.0 per cent

ABC 2                         2.9 per cent

ABC 3                         0.9 per cent

ABC News 24              1.1 per cent

ABC total share                       14.9 per cent

SBS 1                           3.0 per cent

SBS 2                           0.9 per cent

NITV                           0.1 per cent

SBS total share                        4.0 per cent

The total ABC network’s ratings are bad enough: a total audience share of only 14.9 per cent compared to Network Seven’s 33.1 per cent, Network Nine’s 25.8 per cent and Network Ten’s 22.2 per cent. But what deserves most attention are the abject ratings of the new channels the ABC has been granted in the process of moving to digital broadcasting over the past decade. Between them, the three new ABC networks attract less than 5 per cent of the available audience.

Of these new channels, ABC 2 seems by far the least defensible. It is simply a collection of old programs, some from the ABC but most originally made for commercial networks, thrown together with little purpose except to fill the time available. Mind you, some of it is good stuff, especially the re-run of The Wire in 2011. But by the time this program reached ABC 2 its first season in the USA was more than ten years old and everyone in Australia who wanted to see it had bought the DVD boxed set years before. There is no justification for publicly funding the ABC to re-broadcast programs like this.

Equally disappointing is ABC News 24, which on the night I checked attracted only 1.1 per cent of the available audience. I don’t know what bang per buck this amounts to but, given its $20 million annual budget, it means ABC News 24 probably costs more per head than any other free-to-air channel—bar one. It is time to admit it is a failure in its present format. On the same night, each of the new commercial digital channels out-rated ABC News 24 by a factor of from two to six.

The most expensive television outlet per head is definitely the new SBS NITV channel, which gets $15 million a year from a special five-year grant of $158 million given to SBS in 2012 by Labor’s Stephen Conroy. I initially thought its audience share of 0.1 per cent might be an aberration, but that is its rating most nights. On the remaining nights it drops to 0.0 per cent. Given that Aboriginal and Torres Strait Islander people in the 2006 census amount to 2.5 per cent of the Australian population, very few of them are watching the NITV network.

Moreover, much of what SBS now does on radio is completely redundant. Any recent immigrant with an internet connection can log onto networks from his home country to hear broadcasts in his native language, twenty-four hours a day. Many countries now provide twenty-four-hour television too, and you don’t need a satellite dish any more.

This all leads to a question that calls for a genuine inquiry. If public broadcasting is attracting such small audiences and is struggling to find relevance, what is the justification for its funding?

The ABC receives $1.4 billion a year from the government yet can provide no coherent rationale for its role as a public broadcaster. In 2011, when Mark Scott was asked by an English journalist to describe the ABC, the best he could do was call it “a market failure broadcaster”, meaning it pursued fields the commercial networks couldn’t or wouldn’t touch.

This might have been true in the early years of television when the ABC, thanks to its relationship with the BBC, could show the best of British drama and comedy, and even some opera and symphony concerts. Moreover, its evening news was more concerned with national issues than the commercial channels’ focus on local crime and scandal. Public broadcasting then justified its existence on a clear distinction between “quality” and “commercial” programs.

That distinction has long gone. The ABC no longer has a special connection with the BBC, which sells most of its product to commercial channels. There is nothing especially high quality about anything the ABC does on television. It can no longer claim to offer a superior news service. Most nights, its main evening news bulletin has the same lead and the same story line-up as the Seven and Nine network news. Occasionally, ABC’s drama and comedy divisions score a major hit, such as Summer Heights High, but these are few and far between. There is more and better Australian drama and entertainment on the commercial networks now than on the ABC, which is one of the main reasons its ratings are as low they are.

When Mark Scott talks about market failure, he does so from experience. Before he was made ABC managing director, he was editor-in-chief at Fairfax newspapers, where he presided over a decline in newspaper sales that he and others blamed on market forces and technological change. However, instead of overturning the left-wing newsroom culture that had driven off the once loyal conservative readers of the Sydney Morning Herald, Scott never saw it as the real problem.

It is heavily ironic that, while this was occurring in Sydney, Rupert Murdoch in New York was giving the world a counter-example of how to turn market failure into commercial success. In the USA in the early 1990s, left-wing journalists and broadcasters dominated the news bulletins of the three national television networks, NBC, CBS and ABC. Murdoch saw their failure to cater for that half of the American population who supported the Republican Party as a business opportunity. The result was a fourth national US television network, Fox News. The creation of this conservative news network was central to rescuing Murdoch’s media empire from its losses in the 1990–91 recession and making him a new fortune.

Despite this clear demonstration of the huge, untapped demand for conservative news, the other US television networks never got the message. Unfortunately for Fairfax, neither did Scott or his successors at those newspapers, whose circulations continued to erode. At the ABC, Scott still remains oblivious to the fact that left-wing news and current affairs that appeal to only one side of politics are a sure road to decline and fall.

Nonetheless, there still remain some areas of the ABC, especially in radio, where the market-failure theory applies and where quality material that commercial interests won’t touch, can be found. The standouts are ABC Rural Radio and ABC Classic FM, plus a few segments within Radio National. They could make a case for continued public funding, justified by either well-founded community need or the preservation of valued cultural traditions that have stood the test of time. But for most public broadcasting, especially television, the audience has already expressed its opinion by voting with their remote controls.