Bills Digest no. 95 2014–15
PDF version [798KB]
WARNING: This Digest was prepared for debate. It reflects the legislation as introduced and does not canvass subsequent amendments. This Digest does not have any official legal status. Other sources should be consulted to determine the subsequent official status of the Bill.
Dr Rhonda Jolly
Social Policy Section
7 May 2015
Contents
The Bills Digest at a
glance
Purpose
of the Bill
Structure
of the Bill
Committee
consideration
Policy
position of non-government parties/independents
Position
of major interest groups
Financial
implications
Statement
of Compatibility with Human Rights
Key
issues and provisions
Appendix
: SBS Charter
Date introduced: 25
March 2015
House: House of
Representatives
Portfolio: Communications
Commencement:
Sections 1 to 3 on the day the Act receives Royal Assent; Schedules 1 to 3 on
the day after the Act receives Royal Assent; Schedule 4 on the 28th day after
the Act receives Royal Assent.
Links: The links to the Bill,
its Explanatory Memorandum and second reading speech can be found on the
Bill’s home page, or through the Australian
Parliament website.
When Bills have been passed and have received Royal Assent, they
become Acts, which can be found at the ComLaw
website.
Purpose of the Bill
- The
Communications Legislation Amendment (SBS Advertising Flexibility and Other
Measures) Bill 2015 (the Bill) amends the Special Broadcasting Service Act
1991 (the SBS Act) to allow the Special Broadcasting Service (SBS):
-
to
increase its potential revenue base by permitting it to employ more flexibility
in the scheduling of advertisements
- to
earn additional revenue through the use of product placement endorsements in
its commissioned programming.
- The
Bill also makes some minor technical changes to the SBS Act and the Australian
Broadcasting Corporation Act 1983 to provide consistency with the Broadcasting
Services Act 1992 and to repeal redundant provisions in both those Acts.
Background
- The
SBS Act, which established SBS television as a corporation, sanctioned
the introduction of advertisements or sponsorship announcements. Until 2006,
advertisements were only allowed during periods before programs commenced,
after programs had ended or during what was labelled ‘natural program breaks'.
The time limit for these advertisements and sponsorship announcements was five
minutes per hour; it did not include station promotional material.
- Since
2006, however, the term ‘natural program breaks’ has been interpreted by SBS
management also to encompass breaks which are deigned to occur within scheduled
programming.
- SBS
is permitted to broadcast 120 minutes of advertising and sponsorship
announcements within a 24 hour period.
Key issues
- The
Government argues that the changes in this Bill are twofold; they will make SBS
less dependent on Government funding, while at the same time they will assist
the broadcaster to secure for itself a sustainable, independent future. SBS
supports the proposed changes, maintaining that they will allow it to continue to
provide services at current levels, despite cuts to funding imposed through government
efficiency dividends.
- Commercial
broadcasters claim allowing these changes to the SBS advertising regime will
reduce their advertising revenues by effectively transforming SBS into a fourth
commercial broadcaster. This will mean that four networks will share the
dwindling sources of revenue available to traditional broadcasters as a result
of the rise of new forms of media.
- Public
broadcaster advocates who object to advertising on SBS and the Australian
Broadcasting Corporation (ABC) argue that the proposed changes will make it difficult
for SBS to function effectively within the conditions of its Charter, which requires
it to contribute to, and promote the diversity of Australian society. Moreover,
as a result of the proposed changes, the broadcaster will be more inclined to
place the needs of advertisers before the needs of viewers. Thus, programming will
be assessed on its ability to raise revenue, not on its potential to deliver on
Charter obligations.
This Communications Legislation Amendment (SBS Advertising
Flexibility and Other Measures) Bill 2015 (the Bill) amends the Special
Broadcasting Service Act 1991 to allow SBS potentially to increase its revenue
base by permitting it to employ more flexibility in its scheduling of advertising
and sponsorship announcements.[1]
Under the new arrangements SBS will be able to air more advertising and
sponsorship announcements in prime time viewing periods, provided it
concomitantly reduces the amount of advertising and sponsorship shown at other
times throughout a 24 hour period.
The Bill also clarifies that SBS is allowed to earn
additional revenue through the use of product placement endorsements in its
commissioned programming.
The Bill makes some minor changes to the SBS Act and
the Australian Broadcasting Corporation Act 1983 (ABC Act) to
provide consistency with the Broadcasting Services Act 1992 (BSA)
and to repeal redundant provisions in both those Acts.[2]
This Bill consists of four schedules:
- Schedule
1: details the new flexibility arrangements for SBS to allow it to increase the
time allocated to broadcast sponsorship announcements from five minutes per
hour to ten minutes per hour in certain time periods as it chooses. However,
the total amount of advertising and sponsorship announcement must not exceed
the current allowance of 120 minutes in each 24 hour period
- Schedule
2: authorises SBS to broadcast programs that include product placement and
requires the broadcaster to develop guidelines with regard to product placement
- Schedule
3: amends the SBS Act and the ABC Act to repeal certain
definitions and inserts a new definition of broadcasting service in the SBS Act
with the intention of ensuring consistency with the BSA and
- Schedule
4: repeals legislation which, according to the Explanatory Memorandum, the Government
considers ‘is spent or otherwise unnecessary’.[3]
SBS was established on 1 January 1978 as an independent
statutory authority to administer ethnic broadcasting in Australia. At the time
this consisted of two radio stations, 2EA Sydney and 3EA Melbourne. In 1980,
multicultural broadcasting was enhanced through the introduction of SBS
television.[4]
Initially, SBS television was funded solely through ‘such
moneys as [were] appropriated by the Parliament for the purposes of the Service’.[5]
However, after SBS gained the television rights to the World Football Cup in
1990 it took advantage of the increase in audience this event attracted and supplemented
its funding by seeking commercial sponsorship for the occasion. The success of
this commercial undertaking led SBS to lobby the Federal Government for
permission for advertising to be associated with all SBS programs, with the exception
of news and current affairs programs.
The SBS Act, which established SBS television as a
corporation, sanctioned the introduction of 'advertisements or sponsorship
announcements'. Advertisements, however, were to be only those 'that [ran]
during periods before programs commence, after programs end or during natural
program breaks'.[6]
It has been argued that Brian Johns, Managing Director of SBS when the SBS
Act was passed, was the principal force behind the advocacy for advertising
on the broadcaster. The Managing Director’s reasoning was said to be that limited
advertising (of five minutes per hour) would provide the broadcaster with supplementary
funding which could then be used to assist it to fulfil its charter obligations
by producing local content.[7]
SBS advertising policy remained unchanged until June 2006, when:
... the SBS Board reinterpreted the concept of natural program
breaks and approved the inclusion of in‑programming advertising across
the SBS schedule. SBS managing director at the time, Shaun Brown, defended this
broader interpretation of natural program breaks using a similar argument to
that which Brian Johns had used—the SBS Charter requires the broadcaster to
produce Australian content, and funding needed to be found to meet this charter
obligation.[8]
The introduction of in-program advertising, particularly
in news services, drew considerable criticism from SBS audiences. SBS historian
Ien Ang comments:
This was seen as the worst example of commercialisation,
tainting the news and its special role within public service broadcasting. By
introducing a commercial element into the news, public trust and public
interest were seen as threatened. Critics argued that the news was now
vulnerable to ratings pressures and its editorial independence was in danger.[9]
Almost 30 per cent of SBS funding averaged over recent
years now comes from advertising.[10]
It has been claimed elsewhere that this situation is the result of the failure
of both Labor and Coalition Governments to fund Australia’s public broadcasters
adequately.[11]
Regardless of the reason, however, it appears as Brian Johns, Shaun Brown and
others, such as SBS board member, Melbourne multiculturalist Hass Dellal have stated,
that advertising has become fundamental for SBS survival.[12]
Given the outcomes of the 2014–15 Budget, which imposed a one per cent
efficiency levy on the ABC and SBS, and the reports of the National Commission
of Audit and the Lewis Inquiry into the efficiency of the ABC and SBS, which
have expressed the view that both public broadcasters could, and should, rely
less on government support, this situation is unlikely to change in the near
future.[13]
Indeed, the Lewis Report specifically suggested that there
was scope for SBS to increase its revenue under a more flexible advertising
regime as proposed in this Bill. Lewis presented a number options, such as
increasing advertising time during sporting events, introducing branded content
and sponsorship in particular program genres as well as increasing advertising
during peak viewing times.[14]
Senate Environment
and Communications Legislation Committee
The Bill has been referred to the Senate
Environment and Communications Legislation Committee for inquiry and
report by 8 May 2015. Details of the inquiry are at the inquiry
webpage.[15]
Parliamentary Joint Committee on
Human Rights
At the time of
writing, this Bill had not been considered by the Parliamentary Joint Committee
on Human Rights.
The Australian Greens are vehemently opposed to in-program
advertising on SBS. In 2008, 2009, and again in October 2010, the party introduced
legislation to prohibit the practice, with the intention, according to Greens
Senator Scott Ludlam, of putting the onus back on government to support the
broadcaster.[16]
In relation to this Bill, Senator Ludlam has given no indication that the
Greens’ position has changed.
In Senate Estimates questioning on 25 February 2015, Senator
Ludlam noted also that he was ’extremely sceptical’ that any legislation to
increase advertising would be passed by the Senate.[17]
In addition, the Senator has been reported in the press as saying that the
Government was attempting to ‘blackmail’ the Senate into
supporting the advertising changes—a reference to the efficiency funding cuts
which could be potentially offset by increased advertising revenue.[18] In an interview with the
online newsletter Crikey Senator Ludlam remarked that he was:
... concerned about the remarkably divergent estimates about
the amount of money the proposal would actually raise (the commercial TV
lobbies say it would be $200 million over five years, but SBS says it expects
around half that). [The Greens] won't be in a position to announce our final
voting intention until we know who's right and who's wrong about the estimates,
and secondly, till we know what'll happen if, as is looking likely, the bill
fails—we want to know whether the government is going to go ahead and cut SBS'
finances anyway...[19]
The concerns of other Senators and Members appear to be
focussed on the misconception that this Bill will increase the amount of time
allocated to advertising on SBS. This is not the case, as the number of minutes
SBS is allowed to allocate to advertising and sponsorship announcements will
not change under the proposals in this Bill from the current 120 minutes
allowed per 24 hour period. There may, however, be more advertising shown in
peak viewing periods. As a result, Senator Ricky Muir for example has expressed
concern about the impact ‘an increase’ in advertising will have on SBS and its
ability to comply with its Charter obligations. The Member for Fairfax, Clive
Palmer has also commented that an increase in advertising will change the
nature of SBS.[20]
While in opposition before 2007 Labor criticised the
introduction of in-program advertising on SBS, but during its term in
government between 2007 and 2013, it did little to reverse the situation. Indeed,
in response to a series of questions from the Save Our SBS organisation prior
to the 2010 election it made clear that its intention was not to disallow
in-program advertising ‘as it would substantially reduce the amount of funding
available to SBS to support the provision of high quality and diverse
programming’.[21]
In November 2014, however, Labor indicated that it was opposed to budget cuts
to SBS and the ABC.[22]
Senator Bob Day from Family First, and Senator David
Leyonhjelm, from the Liberal Democratic Party, have indicated that they are
likely to support the changes in this Bill.[23]
Senator Leyonhjelm has declared that he would be happy if SBS so decreased its
dependence on taxpayers that it no longer required any government funding to
operate. A spokesperson for Senator Day has stated that the Senator believes
commercialisation of SBS has made it ‘a far more efficient operation than the
ABC’.[24]
Despite there being some support among cross bench ranks, as
the cartoonist for one media outlet observes (see the cartoon in Figure 1 below),
it is likely that the Bill will not be supported by most non-government
Senators and Members:
Figure 1: cross bencher reaction to SBS advertising
proposals
Source: Cartoon by Golding in M Knott, ‘Ads
up: is the antenna wrong on SBS changes?’ The Sunday Age,
1 February 2015, p. 2, accessed 20 April 2015.
Opposition to changes
Immediately following the introduction of this Bill, Free
TV Australia urged the Senate to block the legislation. Free TV Chairman Harold
Mitchell claimed the advertising proposals would, in effect, ‘create a new
commercial broadcasting licence by stealth’ as SBS would be able to schedule
the same amount of prime time advertising as commercial broadcasters and it
would target the same advertisers.[25]
The Free TV Chairman contested claims by the Government and SBS that the
broadcaster would only earn an additional $28.5 million over four years from
the changes proposed in this Bill, arguing that there was ‘no transparency’ for
this figure.[26]
He claimed in fact that an independent analysis ‘demonstrated that SBS will
have the potential to earn an additional $148 million in advertising revenue
over four years’.[27]
Free TV’s press release maintained a position the lobby
group had taken previously, as did its submissions to a consultation on the
Regulation Impact Statement (RIS) for this Bill and the current Senate inquiry
into the Bill. The Free TV RIS submission declared:
Commercial broadcasters should not be required to subsidise
funding cuts to a government-funded broadcaster. Free TV members pay extremely
high licence fees on top of Australian corporate taxes. Unlike SBS they are
also subject to increasingly onerous Australian content obligations.[28]
Indeed, according to Free TV, if this Bill is passed, there
will be an ‘inevitable’ loss of revenue for commercial broadcasters, particularly
in regional areas, and this will mean that Australian content production will
suffer and this will result in industry job losses. Free TV’s argument is that
while commercial broadcasters are required to satisfy ‘heavy’ Australian
content obligations which resulted in their spending over $1.54 billion on
Australian content in 2013–14, Australian programming comprises only ten per
cent of the SBS broadcasting schedule. According to Free TV, this will not
alter as a result of increased commercial revenue gains.
It could be argued in response to these claims, that this
argument is not relevant to proposals that are principally intended to offset
revenue losses from the Government’s efficiency dividends, rather than provide
a new, additional source of income. In addition, given that the Charter
obligations of SBS are to provide services which satisfy the needs of a
multicultural society (see Appendix A for more detail), it would be impossible
for SBS to attempt to satisfy this requirement by producing in-house content unless
it was provided with a phenomenal increase in its revenue and staffing bases.
Therefore, its recourse to foreign programming as a major source of programming
could be considered both practical and justifiable.
Free TV questions the assertion made in the RIS on this
Bill that ‘it is not certain that any increase in SBS advertising spend will
draw away revenue that would otherwise have gone to other commercial
free-to-air broadcasters’.[29]
It argues that there is a finite amount of advertising money available and that
SBS and commercial broadcasters target the same advertisers for that finite
resource.[30]
In addition, Free TV disputed the RIS claim that the ten minute
hourly cap is ‘well below the hourly limits imposed on the commercial
broadcasters’.[31]
It argued that because advertising under the SBS Act does not include
program promotions SBS could choose to broadcast four minutes of program
promotions per hour and still have 84 minutes of ‘non-program matter’ available
to sell as advertising space in prime time. Commercial free-to-air television, on
the other hand, because its 15 minutes limit on non-program content includes
promotion, could be in a situation where it is permitted only the broadcast of 78
minutes of ‘non-program matter’.[32]
Free TV was similarly adamant that SBS should not be
allowed to use product placement to supplement its revenue—for the same reasons
it opposed changes to the advertising regime on the broadcaster.[33]
The Free TV remarks supplemented comments made previously
by representatives of the major free-to-air commercial networks. Network Ten Chief Executive, Hamish McLennan, for example, asserted in late
2014 that commercial businesses would be made to ‘foot the bill for the public
broadcasters’ ongoing inefficiencies’ if legislation of the type proposed in
this Bill was passed.[34] At the same time, Chief
Executive of Nine Entertainment, David Gyngell, called for a reduction in
licence fees to compensate commercial broadcasters if SBS prime time
advertising increased, a demand with which his colleagues agreed. Tim Worner, Seven
West Media Chief Executive, objected to commercial broadcasters being asked
effectively ‘to put our hands in our pockets’ to fund public broadcasters[35]
In its submission to the current Senate inquiry,
Foxtel remarks that while there has been considerable debate about the effect
changes to SBS advertising requirements will have on free-to-air broadcasters,
there has been little consideration of the impact they will have on advertising
revenues for subscription television. While Foxtel acknowledges that its
primary source of income is subscriptions, it notes that nevertheless, a
sizeable proportion of its income comes from advertising. And, according to
Foxtel, this will be affected if SBS is given permission to introduce more
advertising in prime time and to include product placement in such areas as
sport and food programming, both of which represent important niche programming
areas for subscription television.[36]
SBS supporters have been opposed to in-program
advertising on the broadcaster for some time. Before the 2012–13 Budget for
example, the Save Our SBS group encouraged people to send messages urging the
Government to increase funding for the broadcaster and to instigate the removal
of ‘disruptive’ commercial breaks. Over nine thousand people responded to the
Save Our SBS plea.[37]
In response to the current proposals, film critic Margaret Pomeranz and journalist
Quentin Dempster, in conjunction with Save Our SBS and GetUp, have launched another
plea for public support through a petition to implore the Government to
preserve SBS’s ‘integrity’.[38]
Save Our SBS President, Steve Aujard, has stated
that if passed, the proposed changes will make SBS look ‘no different from
commercial TV’.[39]
In response to the RIS, Save Our SBS argued that the changes will force the
broadcaster:
... to concentrate on programs that aggregate audiences and
demographics to enhance advertising revenues. The Charter requires that SBS
broadcast programs in the preferred languages; contrary to this, the dominance
of English language-only programs on SBS ONE in television primetime (compared
to the period before SBS commenced in‑program advertising), indicates
that commercial bias is already occurring. Extending this through product
placement and ad averaging (actually a doubling of primetime advertising) will
destroy SBS's raison d'être.[40]
Save Our SBS agrees with the commercial television argument
that the changes proposed in the Bill will result in SBS being able to air 14
minutes of advertising (and promotion) in prime time and reinforces the argument
by pointing out that its ‘spot checks’, conducted since 2009, consistently show
that SBS ONE already airs its currently allowed advertising allocation plus
four minutes of promos per hour from 6pm to 12 midnight.[41]
An important argument made by Save Our SBS and alluded to
by some parliamentarians in their comments on this Bill is that increased
dependence on advertising may to lead to SBS becoming ‘more populist’. Save Our
SBS cites internal studies undertaken in 2008 and 2013 in support of its
contention. These studies ‘strongly suggest that SBS will be less efficient in
Charter delivery if it were to double primetime advertising’. It believes the
reason that this will be so is that in-program advertising makes advertisers
the clients of SBS with the sole purpose of on-selling audiences to advertisers.
The SBS viewer becomes a product to be on-sold. In Save Our SBS’s view, when
advertising was between programs only, the viewer was more clearly the client.[42]
It is interesting that the Lewis efficiency review also
made this point:
... there will be a greater pressure on SBS management to
consider the trade-off of delivering on commercial expectations, against
delivering those functions described in the SBS Charter.[43]
It is equally interesting that Peter Lewis did not attempt
to consider how the broadcaster could attempt to balance what must be
acknowledged are critical tensions for a public broadcaster increasingly tasked
with funding revenues while delivering to a diverse audience.
Findings from the Save Our SBS 2013 study are shown in Figure
2 below. They indicate that of the 2,044 study participants, 72 per cent
considered SBS less faithful to its Charter since the introduction of
in-program advertising and 94.5 per cent wanted the broadcaster to devise a
plan to remove all advertising from within programs:
Figure 2: adherence to SBS Charter as result of
in-program advertising
Source: Save our SBS, A
study of 2044 viewers of SBS television on advertising, Charter, relevance and
other matters: a submission to the SBS Community Advisory Committee and the SBS
Board, July 2013, pp. 12 and 20, accessed 22 April 2015.
In the view of the lobby group GetUp, the proposed
changes in this Bill will have ‘a detrimental impact on the integrity’ of SBS,
placing the needs of advertisers before the needs of viewers as programming is
assessed on its ability ‘to raise revenue’. GetUp also cites the findings of
the Save Our SBS studies into in-programming advertising and concurs with the
assessment that it has made it increasingly difficult for SBS to meet its
Charter obligations as a result. GetUp assesses the changes in this legislation
as a means through which the Government will justify further reductions to the
SBS budget.[44]
In favour of changes
The SBS submission to the current Senate
inquiry disputes that changes to its advertising regime will interfere with its
Charter obligations.[45] According to this submission, since 1991 SBS has
had to manage how it deals with the situation of being a public
broadcaster with commercial activities. Hence, it has in place policies and
practices which deal with this situation and hence, it is well-positioned to deal
with increased flexibility in advertising and sponsorship, while maintaining the
integrity of its Charter. SBS insists that additional revenue will not only assist
the organisation to maintain investment in multicultural and multilingual
Australian programs and services, but it will also help to secure the future
sustainability of the organisation—without compromising service levels.[46]
SBS is adamant that if the advertising changes in this
Bill are not accepted, given that its ability to make efficiency changes has
been exhausted, the broadcaster will be forced to make immediate cuts to programs
and services.[47]
The Federation of Ethnic Communities’ Councils of
Australia (FECCA) supports the proposals in this Bill. The FECCA argues its
support is premised on its assessment of the current financial state of SBS
under which advertising changes are the means through which SBS can make some
recompense for lost government funding support. FECCA notes that it has ‘repeatedly
expressed its disappointment’ over funding reductions to the broadcaster and it
is concerned that these cuts may result in ‘SBS losing its core multicultural
focus, providing a major impediment to enabling the exchange of important
information and promoting the diversity of our society’.[48]
Save Our SBS has claimed that FECCA’s support of
advertising changes is the result of its receiving sponsorship from SBS. In
response, FECCA has countered that despite receiving some funding for a 2013
conference its recommendations have been influenced solely by its analysis of
the proposed amendments.[49]
A further view
In an interview with the online journal Crikey,
Max Baxter, Chief Executive of advertising agency Universal
McCann (UM) Australia, regarded the reaction to this
Bill from the commercial television broadcasters as ‘extreme’. Baxter did not
believe more advertising dollars for SBS would significantly detract from
commercial revenues.[50] Paul Brooks, national head of partnerships
and investments at the Carat media company, also considered any impact from
added SBS revenue would be negligible and that figures quoted by the commercial
networks were ‘inflammatory’. Brooks also cast doubt on the SBS estimation of
potential revenue,considering it to be too high.[51]
Steve Allen of Fusion Strategy advertising
agency agrees with these assessments noting that one significant reason SBS is
unlikely to affect the fortunes of the commercial networks is because of its
small audience
share—around five per cent of the metropolitan audience.[52] Allen made a
number of other relevant points. Allen believes, for example, that ‘the rise of
[I]internet advertising through YouTube and the like, and the movement to
advertisers self‑publishing, are far greater threats to commercial [television]
fortunes’ than advertising on SBS. In Allen’s view, which accords with findings
from the Save Our SBS research, SBS is ‘hamstrung’ when it comes to introducing
more advertising, for if it adds too many commercial breaks, it is vulnerable
to viewer backlash.[53]
At the same time, Allen acknowledges that
there are plenty of advertisers interested in targeting the linguistically and
culturally diverse audience of SBS as well as what he labels the broadcaster’s
wealthy, niche audience. Max Baxter agrees. He concludes:
SBS plays a niche role within the broader
media mix for advertisers ...The type of advertiser who is spending big dollars
on Seven, Nine or Ten isn’t the type who’ll lift their dollars and drop them
into SBS. The demographics are just so different. But you can use SBS as a
specialist supplement to your core programming strategies. You don’t buy a
commercial network or SBS — you buy them together.[54]
It is anticipated in the Explanatory Memorandum to the
Bill that the changes to advertising requirements for SBS will deliver an
increase in advertising revenue of $28.5 million over four years from 2015–16.[55]
This calculation is based on SBS estimations with reference also to a table
included in a Ministerial press release (see Figure 3 below) and further
comments in the Explanatory Memorandum which draw conclusions from audience
share statistics for SBS to conclude that the broadcaster could earn up to five
per cent of television airtime revenue per annum.[56]
As noted earlier in this Digest, free-to-air television
broadcasters dispute SBS and the Minister’s calculations of the potential
financial benefits of this legislation for the public broadcaster. They cite
independent analysis in support of their claims that SBS has the potential to
earn nearly five times more than has been estimated.[57]
Figure 3: SBS and free-to-air commercial television advertising revenues since 2006-07
|
Financial Year
|
SBS
|
All Commercial FTA
networks
|
|
2006-07
|
41.7 million
|
3.6 billion
|
|
2007-08
|
50.2 million
|
3.8 billion
|
|
2008-09
|
56.9 million
|
3.5 billion
|
|
2009-10 World Cup
|
77.6 million
|
3.7 billion
|
|
2010-11
|
57.2 million
|
4 billion
|
|
2011-12
|
51.9 million
|
3.8 billion
|
|
2012-13
|
58 million
|
3.8 billion
|
|
2013-14 World Cup
|
73.4 million
|
3.9 billion
|
Source: M Turnbull (Minister for Communications), Facts
about SBS advertising, media release, 24 March 2015, accessed 16 April
2015.
As required under Part 3 of the Human Rights
(Parliamentary Scrutiny) Act 2011 (Cth), the Government has assessed the
Bill’s compatibility with the human rights and freedoms recognised or declared
in the international instruments listed in section 3 of that Act. The
Government considers that the Bill is compatible as it does not engage any
applicable rights or freedoms.[58]
This Bill consists of four Schedules. The following provides
details of the major changes in the Schedules. The Explanatory Memorandum
provides explanation of all proposed changes.
Schedule 1: advertising flexibility
Item 1 of Schedule 1 deals with the most
controversial of the changes proposed in Bill. This item repeals paragraph
45(2)(b) of the SBS Act and inserts a new paragraph which varies
existing requirements for advertising and sponsorship announcements on SBS.[59]
Under the current SBS Act SBS is allowed to broadcast
no more than five minutes of advertising and sponsorship announcements per hour
over a 24 hour period—that is, 120 minutes each day. Proposed paragraph
45(2)(b) will allow the broadcaster to include up to ten minutes of
broadcasting per hour in times it may choose, up to a limit of 120 minutes per
24 hour period.
As noted previously in this Digest, the Government argues
that this will provide the broadcaster with more flexibility to determine the
times it will broadcast advertising and sponsorship announcements. While this
amendment will potentially increase advertising revenue, it will not increase
the overall amount of advertising allowed on the broadcaster.
The proposed change has been extensively criticised.
Commercial broadcasters see it as effectively transforming SBS into a fourth
commercial broadcaster, thereby reducing their perspective client pool.
Supporters of public broadcasting are equally concerned about the
commercialisation of SBS. Their concerns, however, are that allowing more
advertising will compromise the principles behind public service broadcasting—principles
of media that is financed by the public, for the public, free from political
interference and pressure from commercial forces. Moreover, that in the case of
SBS, further commercialisation will undermine multicultural broadcasting and
make it increasingly difficult for SBS to fulfil its charter obligations.
It should be noted in relation to the comments by
commercial free-to-air broadcasters, which posit that allowing more advertising
revenue to flow to SBS will effectively result in its becoming a commercial
network, that the proposed changes in this Bill are likely not to result in SBS
receiving financial support anywhere near that which the commercial
broadcasters currently enjoy from government. For example, these broadcasters
have consistently complained about licence fees and lobbied for reductions.
This lobbying has increased as the popularity of new online media offerings has
threatened their traditional sources of revenue.[60]
The previous Government responded to the broadcasters’ complaints by reducing
licence fees by regulation by 33 per cent in 2010 and 50 per cent in 2011.[61]
Legislation was passed in 2013 to make the 50 per cent reduction permanent.[62]
In April 2015, one media report speculated that the current
Government intends to accommodate the commercial broadcasters by delivering a
further 75 per cent reduction to be realised in full by 2017, regardless of
what happens with SBS advertising.[63]
Given the amount of revenue to government
already forgone as a result of previous reductions, and the projected losses of
further licence reductions for enterprises that are purely profit-generated,
the trepidation expressed by the commercial free-to-air broadcasters appears
somewhat overblown. It could be argued that this is especially so given that SBS
is predicted to generate less than $30 million in additional revenue over four
years. Reports are that the commercial free to air broadcasters currently benefit
from licence rebates by at least $100 million collectively each year. Even if
SBS were to achieve greater than anticipated financial gain annually, it is
unlikely that it would reach this figure.[64]
In addition, as one report comments, licence fee rebates are not the only
benefits that commercial free-to-air broadcasters enjoy, they also gain from
other government largesse. One example of this largesse can be seen in insistence
of successive governments in retaining an anti-siphoning list, which prevents
certain televised events as listed by the government, from being appropriated
or ‘siphoned off’ by pay television operators so that only those that subscribe
to a pay service are able to view those events.[65]
It is claimed the benefits from such largesse in total amount to over $1
billion per year.[66]
Schedule 2: product placement
Item 1 of this Schedule proposes to define advertisement
in the SBS Act for the purposes of distinguishing advertisements from
product placement. The Schedule does not define product placement, but
nonetheless, item 3 specifically authorises SBS to broadcast product
placements and to include product placement on its digital services (item 8).
At the same time, items 4 to 6 increase the current
obligation on the broadcaster to develop and publicise guidelines on the kinds
of advertisements and sponsorship announcements ‘that it is prepared to
broadcast’ also to address the kind of product placements it is prepared to
include in the programs it broadcasts.
Allowing SBS to earn money from
product placement in the programs it commissions is in direct contrast to the
situation that currently exists in the United Kingdom. The British Broadcasting
Corporation (BBC) does not allow product placement in programs produced in-house.
The BBC guidelines state it:
... must not commission, produce or co-produce
output for its licence fee funded services which contains product placement.
All programmes made by the BBC, or an independent producer for broadcast on BBC
licence fee funded services, must be free of product placement. [67]
The BBC can broadcast an acquired
programme containing product placement if it receives no financial benefit from
the placement, but it must not acquire a programme from a third party on the
condition that the product placement within the programme will be broadcast.
The BBC’s guidelines contain a number of other restrictions including those
that result from the 2010 European Union Audio Visual Media Services Directive
prohibiting product placement in news and children’s programs.[68]
Similarly, Australia’s principal public
broadcaster generally prohibits product placement. The ABC states:
Product placement and other forms of embedded or
surreptitious advertising are prohibited. In exceptional cases, the ABC may use
content that already contains product placement provided:
-
the ABC played no role in the commissioning or production of the
content
-
the content has intrinsic editorial value
-
the product placement is not unduly frequent or unduly prominent
and
-
the ABC’s editorial independence and integrity are not undermined.[69]
It could be argued that because SBS
operates under a hybrid model that the above restrictions should not apply and
that product placement is a less intrusive way for the broadcaster to
supplement government funding than direct advertising. However, SBS purists are
likely to take the view that advertising is advertising, whichever way it is
packaged.
Schedule 3: technical amendments
Schedule 3 proposes: to make technical amendments to the Australian
Broadcasting Corporation Act 1983 and the SBS Act to repeal the
definitions of election, election period, Parliament and referendum (items 1
and 13).[70]
These definitions are not used in the Acts. The Schedule also proposes in item
2 to amend the SBS Act so that broadcasting service has the
same meaning as in the Broadcasting Services Act 1992 (BSA),
which is:
... a service
that delivers television programs or radio programs to persons having equipment
appropriate for receiving that service, whether the delivery uses the
radiofrequency spectrum, cable, optical fibre, satellite or any other means or
a combination of those means, but does not include:
(a) a
service (including a teletext service) that provides no more than data, or no
more than text (with or without associated still images); or
(b) a
service that makes programs available on demand on a point-to-point basis,
including a dial-up service; or
(c) a
service, or a class of services, that the Minister determines, by notice in the
Gazette, not to fall within this definition.[71]
Consequential amendments are to be made in other places in
the SBS Act to reflect this change. The Explanatory memorandum provides
more details on these sections.
Schedule 4: spent and redundant
legislation
Schedule 4 (items 1 to 25) repeals a number of
pieces of amending or repealing legislation in the Communication portfolio.
These are listed in the Explanatory Memorandum on page 22.
The Schedule also repeals in full the Telstra
(Transition to Full Private Ownership) Act 2005 and sections of the AUSSAT
Repeal Act 1991, the Competition and Consumer Act 2010, the National
Transmission Network Sale Act 1998 and the Telstra Corporation Act 1991 (items
26 to 33).
As the Explanatory Memorandum notes, the Telstra
(Transition to Full Private Ownership) Act 2005 and the various sections it
is proposed to repeal under this Bill are ‘spent or otherwise unnecessary’.[72]
It is unlikely that there will be any objections to the
repeal of the Act or sections cited with the possible exception that some
consumers may question whether the repeal of section 152ELB of the Competition
and Consumer Act, reduces the ability of the public to comment on the
making of procedural rules under that legislation.[73]
The Explanatory Memorandum explains the current situation and the repeal
provision in detail.[74]
(1) The principal function of SBS is to provide
multilingual and multicultural radio, television and digital media services
that inform, educate and entertain all Australians and, in doing so, reflect
Australia's multicultural society.
(2) SBS, in performing its principal function, must:
(a) contribute to meeting
the communications needs of Australia's multicultural society, including
ethnic, Aboriginal and Torres Strait Islander communities; and
(b) increase awareness of
the contribution of a diversity of cultures to the continuing development of
Australian society; and
(c) promote understanding
and acceptance of the cultural, linguistic and ethnic diversity of the
Australian people; and
(d) contribute to the
retention and continuing development of language and other cultural skills; and
(e) as far as practicable,
inform, educate and entertain Australians in their preferred languages; and
(f) make use of Australia's
diverse creative resources; and
(g) contribute to the
overall diversity of Australian television and radio services, particularly
taking into account the contribution of the Australian Broadcasting Corporation
and the community broadcasting sector; and
(h) contribute to extending
the range of Australian television and radio services, and reflect the changing
nature of Australian society, by presenting many points of view and using
innovative forms of expression.[75]
Members, Senators and Parliamentary staff can obtain
further information from the Parliamentary Library on (02) 6277 2500.
[1]. Special Broadcasting
Service Act 1991, accessed 5 May 2015.
[2]. Australian Broadcasting
Corporation Act 1983 and Broadcasting Services Act
1992, accessed 5 May 2015.
[3]. Explanatory
Memorandum, Communications
Legislation Amendment (SBS Advertising Flexibility and Other Measures) Bill
2015, p. 22, accessed 5 May 2015.
[4]. Enabling
legislation was the Broadcasting
and Television Amendment Act 1977, accessed 16 April 2015.
[5]. Section
79Z of the Broadcasting and Television Amendment Act 1977.
[6]. Special Broadcasting
Service Act 1991 (SBS Act) section 45, accessed 16 April 2015.
[7]. I
Ang, G Hawkins and L Dabboussy, The SBS story: the challenge of cultural
diversity, University of New South Wales Press, Sydney, 2008, p. 250.
[8]. R
Jolly, The
ABC: an overview (updated), Research paper series 2014–15, Parliamentary
Library, Canberra, 2014, p. 47, accessed 16 April 2015 Cites Ang et al, pp.
250–51.
[9]. Ang
et al, op. cit. p. 204.
[10]. Figure
deduced from analysis of recent SBS Annual Reports.
[11]. Jolly,
op. cit., p. 48.
[12]. Ibid.,
cites F Farouque, ‘In
defence of SBS’, smh.com.au, 5 August 2010, accessed 17 April 2015.
[13]. Australian
Government, ‘Part
2: expense measures’, Budget measures: budget paper no. 2: 2014–15, p.
66; National Commission of Audit (NCoA), Towards
responsible government: phase one, February
2014, pp. 193–95 and Department of Communications, ABC
and SBS efficiency study: draft report, (Lewis report) April 2014,
accessed 17 April 2015.
[14]. Lewis,
ABC and SBS efficiency study, op. cit., p. 85.
[15]. Senate Environment and Communications Legislation Committee, Inquiry into the Communications Legislation Amendment (SBS Advertising
Flexibility and Other Measures) Bill 2015 [Provisions], The Senate, 2015, accessed 7 May 2015.
[16]. S
Ludlam, ‘Second
reading speech: Special Broadcasting Service Amendment (Prohibition of
Disruptive Advertising) Bill 2009’, Senate, Debates, 7 September
2009, p. 5737, accessed 7 May 2015.
[17]. S
Ludlam, Environment and Communications Legislation Committee, Official committee Hansard, 25
February 2015, p. 61, accessed 7 May 2015.
[18]. M
Knott, ‘Bid
to double SBS ads comes under fire’, The Sun Herald, 1 February
2015, p. 10, accessed 20 April 2015.
[19]. M
Robin, ‘SBS
ad averaging bill likely to be stymied in the Senate’, Crikey, 11
March 2015, accessed 20 April 2015.
[20]. M
Knott, ‘Bid to double SBS ads comes under fire, op. cit.
[21]. Save
Our SBS, ‘Labor
SBS policy for the 2010 federal elections', accessed 20 April 2015.
[22]. ‘Take
a stand for “our” ABC, implores Shorten’, The Advertiser (Adelaide),
24 November 2015, p. 12, accessed 23 April 2015.
[23]. M
Robin, ‘SBS
ad averaging bill likely to be stymied in the Senate’, Crikey, 11
March 2015, accessed 28 April 2015.
[24]. M
Robin, ‘SBS ad averaging bill’, op. cit.
[25]. Free
TV Australia, SBS
Legislation creates 4th commercial TV licence by stealth, media release,
24 March 2015, accessed 14 April 2015.
[26]. Ibid.
[27]. Ibid.
[28]. Free
TV Australia, Submission
to Department of Communications [inquiry into], SBS Advertising
Flexibility—Regulation Impact Statement, 10 March 2015 (RIS
submission), p. 2, accessed 20 April 2015.
[29]. Regulation
Impact Statement in Explanatory Memorandum, op. cit., p. 9.
[30]. The
Free TV submission cites Nielson Adex data which reports that 85 per cent of
advertisers on SBS also advertise on commercial free-to-air television and PricewaterhouseCoopers
analysis from Australian Entertainment and Media Outlook 2014-2018 findings
that growth in free-to-air television advertising revenues has ‘remained flat
since 2008’, and has a Compound Annual Growth Rate (CAGR) forecast of just 1.4
per cent over the next five years, Free TV RIS submission, op. cit., p. 7, Note
references for the sources cited are not provided, but are included in the Free
TV, Submission
to Senate Environment and Communications Committee, Inquiry into
Communications Legislation Amendment (SBS Advertising Flexibility and Other
Measures) Bill 2015, 13 April 2015, accessed 22 April 2015.
[31]. Regulation
Impact Statement in Explanatory Memorandum, op. cit., p. 6.
[32]. Free
TV RIS submission, op. cit., p. 8.
[33]. Ibid.,
p. 10.
[34]. D Davidson, ‘If SBS ads double, we should get our licence fees back: Gyngell’, The Australian, 20 November 2014, p. 3, accessed 22 April
2015.
[35]. Ibid.
[36]. Foxtel,
Submission
to Senate Environment and Communications Committee, Inquiry into
Communications Legislation Amendment (SBS Advertising Flexibility and Other
Measures) Bill 2015, 13 April 2015, accessed 22 April 2015.
[37]. ‘Why SBS received a funding increase’,
Save Our SBS website, 8 May 2012, accessed April 20 1015.
[38]. Petition
on GetUp! Communityrun website, accessed 22 April 2015.
[39]. Save
Our SBS, Government wants to
fully commercialise SBS with new law, media release, 24 March, 2015,
accessed 22 April 2015.
[40]. Save
Our SBS, Commercialising
SBS by stealth: a response to the SBS Advertising Flexibility Regulation
Impact Statement, submission to the Department of Communications, 15 March
2015, p. 6, accessed 20 April 2015.
[41]. Ibid.,
p. 7.
[42]. Ibid.,
p. 5.
[43]. Lewis
report, op. cit., p. 85.
[44]. GetUp!
Submission
to Senate Environment and Communications Committee, Inquiry into
Communications Legislation Amendment (SBS Advertising Flexibility and Other
Measures) Bill 2015, 14 April 2015, accessed 22 April 2015.
[45]. SBS,
Submission
to Senate Environment and Communications Committee, Inquiry into
Communications Legislation Amendment (SBS Advertising Flexibility and Other
Measures) Bill 2015, 13 April 2015, accessed 22 April 2015.
[46]. Ibid.
[47]. Ibid.
[48]. Federation
of Ethnic Communities’ Councils of Australia (FECCA), Submission
to Senate Environment and Communications Committee, Inquiry into
Communications Legislation Amendment (SBS Advertising Flexibility and Other
Measures) Bill 2015, 13 April 2015, accessed 22 April 2015.
[49]. M
Robin, ‘SBS
brings out the big guns as questions raised about multicultural group's support’,
Crikey, 23 April 2015,
accessed 23 April 2015.
[50]. M
Robin, ‘A fourth network by stealth? Media buyers shrug off SBS’ threat to
commercials’,
Crikey, 20 November 2014, accessed 22 April 2015.
[51]. Ibid.
[52]. Ibid.
[53]. Ibid.
[54]. Ibid.
[55]. Explanatory
Memorandum, op. cit., p. 3.
[56]. Ibid.,
p. 5.
[57]. Free
TV, SBS Legislation creates 4th commercial TV licence by stealth, op. cit.
[58]. The
Statement of Compatibility with Human Rights can be found at page 15 of the
Explanatory Memorandum to the Bill.
[59]. Special Broadcasting
Service Act 1991, accessed 5 May 2015.
[60]. See,
for example, a diagram which provides a comparative analysis in F Papandrea, State
of the newspaper industry in Australia, University of Canberra, 2013,
p. 9, accessed 7 May 2015.
[61]. Television
Licence Fees Amendment Regulations 2010 (No. 1), accessed 7 May 2015.
[62]. Television Licence Fees
Amendment Act 2013, accessed 23 April 2015.
[63]. D
Davidson, ‘PM ducks fight with networks’, The
Australian, 17 April 2015, p. 4, accessed 22 April 2015.
[64]. K
Quinn, ‘TV
producers, actors slam licence fee cuts for commercial free-to-air networks’,
The Sydney Morning Herald (online edition), 3 November 2012,
accessed 23 April 2015.
[65]. For
more detail on the anti-siphoning scheme see R Jolly, Sport on television: to siphon or not to siphon?, Research paper, 14, 2009–10,
Parliamentary Library, Canberra, 2010, accessed 7 May 2014.
[66]. B
Keane and G Dyer ‘Television: the land where the age of entitlement never ends’, Crikey, 12 February 2014, accessed
23 April 2015.
[67]. Ofcom,
The
Ofcom broadcasting code, 2013, section 9 and BBC, Editorial guidelines,
BBC Licence Fee Funded Television Services and Product Placement, 2011, accessed 23 April 2015.
[68]. European Union, Directive
2010/13/EU of the European Parliament and of the Council, 10 March
2010, section 92, accessed 23 April 2015.
[69]. ABC,
Editorial
policies: principles and standards, 2011, accessed 23 April 2015.
[70]. Australian Broadcasting
Corporation Act 1983, accessed 5 May 2015.
[71]. Subsection
6(1), Broadcasting
Services Act 1992, accessed 17 April 2015.
[72]. Explanatory
Memorandum, op. cit., p. 22.
[73]. Competition and Consumer
Act 2010, accessed 6 May 2015.
[74]. Explanatory
Memorandum, op. cit., p. 23.
[75]. Section
6 of the Special
Broadcasting Services Act 1991, accessed 20 April 2015.
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