Commercial networks against SBS ad increase

Free To Air broadcasters have lashed out at the Government’s decision to double SBS prime time advertising -to increase from 5 to 10 minutes maximum per hour.

Free TV Australia Chairman, Harold Mitchell said the increase in prime time advertising on SBS will come at the expense of the commercial free-to-air broadcasters and hit regional news and local content.

Free TV disputes Malcolm Turnbull’s estimates, claiming independent analysis shows the likely increase in SBS revenues of approximately $200 million over five years, not the $28.5 million claimed by the Minister.

“Even the Minister in his speech has conceded that his own efficiency review put the figure at a much higher level of up to $20 million per annum,” Mitchell said.

“The Minister’s figures are very rubbery.”

“This government was elected on the basis of being pro-business, but this decision has been taken without any consultation or consideration of the impact on our businesses.

“There is a finite advertising pie and any increase in SBS revenues will come directly from commercial broadcasters who will in effect be subsidising a government funded broadcaster.”

Last year commercial free-to-air broadcasters invested a record $1.54 billion on free Australian content in 2013/14, up 11.6% from $1.38 billion in 2012-2013.

But the government has in recent years also reduced commercial TV license fees from 9% to 4.5%, which made no mention in the Free TV statement.

“We are already operating in a challenging environment where broadcasters are competing against new services that are unregulated, pay little or no Australian taxes, and invest virtually nothing in local content production,” Mitchell said.

“Any further erosion of our revenue base will inevitably impact on broadcasters’ ability to continue their record investment in quality Australian content.”

“We call on the government not to penalise Australian businesses.

“We will be seeking the support of the wider production sector and all members of Parliament, to ensure that our valuable Australian production industry is not damaged.”

TEN Chief Executive Officer, Hamish McLennan, described the change as creating a fourth free-to-air network by stealth.

“All media companies, including Ten Network, have made painful and difficult cuts over a number of years in response to major structural change and a soft advertising market,” he said.

“But this government is clearly unwilling to tackle the difficult decisions when it comes to the ABC and SBS, instead making commercial businesses and their shareholders foot the bill for the public broadcasters’ ongoing inefficiencies.

“This is a bad decision being dumped on the industry – and SBS’s viewers – without any transparency or consultation. The government needs to be held accountable and needs to explain itself to viewers, the shareholders who own the free-to-air television networks, Australian television production companies and the tens of thousands of people who will be hurt by this decision.”

Seven West Media CEO Tim Worner said, “We love our public broadcasters but we are being asked to put our hands in our pockets to fund our public broadcasters. This is simply not on.

We can’t be asking commercial broadcasters to foot the bill. If they had asked us all to make a donation to SBS of $5m a year, our response would have been totally predictable. SBS needs to live within its means.

“Our business is facing more competition from more directions than ever before. In the face of these changes we have had to redesign the way we operate and make difficult choices about how to reduce costs. I can’t see any reason why ABC and SBS cannot do the same.”

Today SBS Managing Director Michael Ebeid welcomed the change to a more flexible playout of its advertising, increasing ads in primetime.

“I am confident and committed that should this legislation pass Parliament, SBS would only implement additional advertising in programs and timeslots where the advertising return could genuinely aid our ability to invest in more Australian content,” he said.

Amended.