Operations and funding


Current Issues

Special Broadcasting Service (SBS): Operations and funding

E-Brief: Online Only issued 28 March 2007

Dr Rhonda Jolly, Analysis and Policy
Social Policy Group

Introduction

The Australian Broadcasting Corporation and the Special Broadcasting Service (SBS Corporation) are independent statutory authorities established under the Australian Broadcasting Corporation Act 1983 and the Special Broadcasting Service Act 1991 respectively. Both broadcast radio and television to Australia in competition with commercial broadcasters.

The SBS Corporation is Australia's multicultural and multilingual public broadcaster. It was established to define, foster and celebrate Australia's cultural diversity in accordance with obligations in its Charter to provide multilingual and multicultural radio and television services that inform, educate and entertain all Australians and, in doing so, reflect Australia's multicultural society .

Operations

SBS Radio

SBS Radio began in 1975 when the experimental ethnic stations 2EA in Sydney and 3EA in Melbourne commenced broadcasting in seven and eight languages respectively. The radio service was formally established three years later. In 2007 SBS Radio broadcasts a five signal service over a network of 14 transmitters to every capital city and key regional centres.

SBS Radio produces more than 13,500 hours of language specific programs each year, in 68 languages. It broadcasts a variety of programs including news and current affairs, sport, documentaries, drama and music.

Independent audience surveys of Australia's largest language groups show SBS Radio reaches up to a million listeners each week. It is acknowledged as the main source of news and information for a majority of people in these language groups and also their primary source of information about government and community services.

SBS Television

SBS Television began transmission in 1980 in Sydney and Melbourne. In 2007 its analogue service reaches 95 per cent of Australians. Digital television services which began in January 2001 currently reach an estimated 80 per cent of the population.

SBS Television presents a mixture of Australian produced and international programs from over 400 national and international sources and is watched by more than eight million Australians each week. Based on prime time viewing share of viewers over 16 years of age in the 6 pm to midnight timeslot, SBS television audience in 2005 was 6.4 per cent.

Programs broadcast by SBS in languages other than English are accessible to all viewers through SBS produced English language subtitles.

SBS Independent

SBS Independent is responsible for commissioning Australian drama and documentaries for screening on SBS television. Since its establishment in 1994 it has commissioned more than 800 hours of work from independent Australian filmmakers, many of whom are from non-English speaking backgrounds.

In 2005/06 SBS Independent commissioned over 367 hours of documentaries, dramas and entertainment including such diverse offerings as the films Ten Canoes and Look Both Ways.

SBS Independent is responsible for a Special Production Fund of approximately $7 million annually.

Sport

SBS covers a number of significant sporting events, including the FIFA World Football Cups. The 2006 FIFA World Football Cup broadcast in Australia and several countries in Oceania increased audience share and generated $11.4 million in extra revenue for the Corporation.

SBS Online

SBS Online extends and enhances SBS television and radio programming. It provides text and video services as well as audio-on-demand in 68 languages. SBS Online incorporates over 130 websites that deliver news, current affairs, sport, entertainment, and documentary services and details of its radio programming.

Funding

About 80 per cent of funding for the SBS Corporation is derived from the Australian Government through triennial funding arrangements. Funding is legislated annually through the Budget Appropriation Bills.

Information relating to SBS funding can be found principally in

Department of Communications, Information Technology and the Arts documents also provide information on SBS Corporation funding.

The remainder of SBS revenue is derived from independent sources. These include advertising and sponsorship, production services and sale of programs and merchandise.

One source of complementary revenue for SBS is derived from the broadcast of commercials. This practice began in 1991 following amendments to the Special Broadcasting Services Act. Unlike commercial television which, according to the Commercial Television Industry Code of Practice, is allowed to broadcast approximately 15 minutes of advertising per hour, advertisements on SBS are limited to a maximum of five minutes per hour. Until recently, SBS broadcast commercials and program promotions in a single block between programs. From June 2006, this policy changed to allow the inclusion of commercials and promotions within programs. SBS argued it adopted this change to address the loss revenue that resulted from extended breaks between programs.

All revenue from SBS derived from independent sources is used for the purchase, commission or production of programs.

Table 1 below sets out revenues for SBS by source of funds for each year since 1998/99 in actual dollars.

Table 2 below sets out revenues for SBS by source of funds for each year since 1998/99 adjusted to 2004/05 dollars.

In considering the tables it is necessary to take into account the following:

  • Consolidated revenue

SBS Annual Reports present operating revenues for the SBS Corporation alone and for Consolidated revenue, which includes the accounts of both SBS and Multilingual Subscriber Television Ltd (MSTL), a wholly owned subsidiary company of SBS.

As a substantial investor in Pan TV, an independent company which produces the World Movie Channel for the Australian subscription television market, MSTL contributes to the overall revenue of SBS. Purchase of films for the World Movie Channel by Pan TV usually involves free to-air rights for SBS for screening at a later date.

Table 1 and Table 2 present Consolidated revenues.

  • Transmission service cost

Neither SBS nor the Australian Broadcasting Corporation broadcast over their own transmission networks. Prior to 1992, transmission services to the public broadcasters were provided by Telecom and the then Department of Transport and Communications. From 1992 to 1999 these services were provided by the National Transmission Agency. The National Transmission agency was privatised in April 1999. From May 1999 transmission services have been provided to SBS on a commercial basis by NTL Australia Pty Ltd, which is owned by Macquarie Bank Ltd. Commonwealth operating revenue shown in Table 1 and Table 2 for 1998/99 do not include the transmission free of charge component ($8.8 million).

  • Capital use charge

A capital use charge was part of changes introduced with the Accrual Budgeting framework in 1999-2000. It was levied on Commonwealth authorities and agencies to reflect the cost of government investment in those entities. Funding for the capital use charge was included in the annual appropriations for SBS from 1999-2000 to 2002-03 and is included in the operating revenues columns in Table 1 and Table 2. The capital use charge has since been abolished.

  • Analogue transmission extension

In 1999 2000, SBS received $70 million from the Government s Television Fund and $3.4 million from Appropriations to meet the costs over 12 years of analogue transmission extensions to areas of Australia with populations over 10,000 that did not have access to the analogue signal. Funds not immediately required for this purpose were invested in accordance with the investing requirements of the Special Broadcasting Service Act 1991 and the Commonwealth Authorities and Companies Act 1997. The amount received, including interest accrued, is only recognised in Annual Reports as revenue when the related expenditure is incurred.

Amounts reported as spent on transmission extension are as follows:

  • 2000/01 - $24.9 million
  • 2001/02 - $6.1 million
  • 2002/03 - $5.9 million
  • 2003/04 - $5.5 million
  • 2004/05 - $5.6 million
  • 2005/06 - $6.5 million (less funding for the Television Black Spots Alternative Technical Solutions Program. Breakdown of amounts allocated to each program is not indicated in the SBS Annual Report). This revenue is not included in the tables.

Table 1

SBS Revenues

(actual dollars)

Year

Revenues (a)

Independent revenue (b)

Commonwealth revenue

     

Total

Operating revenue (c)

 

Capital / equity

 
 

$m

$m

$m

$m

 

$m

 

2005/06

241.2

58.8

182.4

176.5

 

5.9

 

2004/05

204.5

40.7

163.8

158.2

 

5.6

 

2003/04

190.1

36.8

153.3

145.8

 

7.5

 

2002/03

176.9

30.9

146.0

137.4

 

8.6

 

2001/02

169.5

34.3

135.2

127.2

 

8.0

 

2000/01

173.5

29.5

144.0

120.6

 

23.4

(d)

1999/00

152.2

34.6

117.6

108.5

 

9.1

 

1998/99

118.0

30.3

87.7

84.0

(e)

3.7

 

(a) Total revenue from Commonwealth and Independent sources

(b) Revenue from sales of goods and services, rents, interest and miscellaneous sources

(c) Revenue from Appropriations Acts not including equity injections

(d) The bulk of this equity injection was to assist in digital conversion

(e) Includes a transmission free of charge component

Table 2

SBS Revenues

(adjusted to 2004/05 dollars)

Year

Revenues (a)

Independent revenue (b)

Commonwealth revenue

     

Total

Operating revenue (c)

 

Capital / equity

 
 

$m

$m

$m

$m

 

$m

 

2005/06

229.7

56.0

173.7

168.1

 

5.6

 

2004/05

204.5

40.7

163.8

158.2

 

5.6

 

2003/04

197.6

38.3

159.4

151.6

 

7.8

 

2002/03

191.0

33.4

157.7

148.4

 

9.3

 

2001/02

188.5

38.2

150.4

141.5

 

8.9

 

2000/01

197.6

33.6

164.0

137.4

 

26.7

(d)

1999/00

181.0

41.1

139.8

129.0

 

10.8

 

1998/99

143.4

36.8

106.6

102.1

(e)

4.5

 

(a) Total revenue from Commonwealth and Independent sources

(b) Revenue from sales of goods and services, rents, interest and miscellaneous sources

(c) Revenue from Appropriations Acts not including equity injections

(d) The bulk of this equity injection was to assist in digital conversion

(e) Includes a transmission free of charge component

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