CHAPTER 7
AUSTRALIA TELEVISION
Background
7.1 Australia Television (ATV) was established in December 1992 as a
joint initiative of the Federal Government and the ABC. For the ABC, the
establishment of a satellite television service was a means of meeting
its Charter obligation to broadcast to countries outside of Australia.
[1] The previous Government saw the venture
as a vehicle for propagating an Australian regional identity.
7.2 In order to insulate the ABC from any financial risk and to ensure
accountability for the venture, the Government decided that ATV should
operate as a subsidiary of the ABC (Australian Television International
Pty Ltd). Other provisions of the venture included the ABC agreeing
to accept commercial sponsorship for the service and to repay the establishment
grant when ATV became profitable.
7.3 ATV was launched by the then Prime Minister on 17 February 1993,
who declared 'that from now on, the people of our region will know us
better. ATV will bring Australia and the South East Asian region significantly
closer'.
ATV Delivery to the Region
7.4 Most ATV programs are either transmitted to Darwin via satellite
from the ABC's Sydney studio at Gore Hill or recorded "off air
" in Darwin for broadcast overseas.
7.5 ATV uses the Palapa C2 satellite which has a footprint extending
west to the Indian sub-continent north to Beijing and east to the South
West Pacific. It covers 33 Asian and Pacific countries and territories.
Budgetary constraints have prevented ATV from extending its footprint
to other Asian countries and the Middle East.
7.6 As well as delivering its programs direct to the region via satellite,
ATV has established rebroadcast agreements with cable and terrestrial
broadcasters thereby increasing ATV's potential audience. As a result,
a full or part ATV service is available to audiences (without satellite
receiving equipment) in Cambodia, China, Hong Kong, India, Indonesia,
Laos, Nauru, Papua New Guinea, the Philippines, Singapore, Sri Lanka,
Taiwan, Thailand, Vanuatu and Vietnam through the services of 120 licensed
local operators.
7.7 ATV indicated to the Committee that a further 300 operators (most
of them in the Philippines) carry ATV programs.
7.8 The following is a current list of cable operators and domestic
broadcasters with whom ATV has established rebroadcast agreements:
Table 7.1: ATV Rebroadcast Agreements
| Country |
Rebroadcaster |
Agreement |
| Cambodia |
TV9 |
Selected Programs |
| China |
Guangdong Cable |
Selected Programs |
| Hong Kong |
Wharf Cable |
World At Noon, ABC News, Foreign Correspondent |
| India |
Asianet
Business India Television
|
Five Hours Daily
Selected Programs
|
| Indonesia |
IndoVision Distribution |
Entire Service |
| Laos |
Lao National Television
Lao TV3
|
Selected Program
English-Have a Go
|
| Nauru |
Nauru Television |
50-60% of AusTV's Daily Schedule |
| Papua New Guinea |
Hitron |
Entire Service |
| Philippines |
92 Cable Operators (official)
315 Cable Operators (unofficial)
|
Entire Service |
| Singapore |
Singapore CableVision (Cable)
Singapore Cable Vision (UHF)
|
Entire Service
Australia Television News
|
| Sri Lanka |
MTV Channel (Pvt) Ltd
Telshan Network (Pvt) Ltd
|
9-12 Hours Daily
Selected Programs
|
| Taiwan |
Jet Cable
New Cable
Twin Country Cable
Shu Lung Cable
TWT Comm. Cable
Powerful Cable
KTS CATV
W.S. Wire Trans.
Yangmingshan Cable
NCATV
Pao Fu CATV
|
Entire Service
Entire Service
Entire Service
Entire Service
Entire Service
Entire Service
Entire Service
Entire Service
Entire Service
Entire Service
Entire Service
|
| Thailand |
IBC Symphony Co.
Thai Sky Cable
Suchat Telecom
|
World At Noon, AusTV News Foreign Correspondent
Selected Programs
Selected Programs
|
| Vanuatu |
VBTC |
2-3 Hours Daily |
| Vietnam |
Vietnam Television
Hanoi MMDS
HCMC MMDS
Vung Tau MMDS
|
Selected Programs
Selected Programs
Selected Programs
Entire Service
|
Source: ATV Submission
7.9 On 9 April 1997, ATV announced that it had entered into agreement
with RPG Netcom in Calcutta to carry the entire ATV service. This will
be the second major network in India to take the ATV service. ATV said
that RPG Netcom presently 'have 25,000 cable homes connected through 14
nodes and hope to have 24 nodes and 100,000 subscribers by the end of
the year'. [2]
7.10 In addition, ATV has developed a hotel distribution network with
more than 400 first class hotels providing ATV to guests.
7.11 This overview of the distribution network shows that despite the
increasing range of international news channels broadcasting to the
region, ATV has managed within a short period of time to establish a
unique service encompassing news, information and entertainment.
7.12 The success that ATV has had in negotiating rebroadcast arrangements
demonstrates the region's acceptance of ATV's service and the relevance
of its programming.
Viewer Audience
7.13 It is difficult to establish precisely ATV's viewing audience given
the nature of satellite broadcasting. However, based on a study by NeilsenSRG
Research Services (Hong Kong) for the Australian International Education
Foundation, published in December 1995, ATV's penetration in the Asia
region is equal to CNN and the BBC, and second only to the Hong Kong based
Star Television. The study estimates that ATV currently reaches 20.4 million
households via satellite, cable or terrestrial rebroadcast. According
to ATV, 'This gives the Australian service the same reach as its much
wealthier and more established competitors, the United States-based CNN
and BBC World from Britain'. [3]
7.14 Details of the number of households in Asia and the Pacific with
access to ATV via cable and terrestrial rebroadcast agreements are set
out below.
7.15 Mr Mann told the Committee that it was impossible to determine
how many home viewers watch ATV. He went on to say:
We know pockets of the direct to home viewers. In Indonesia,
for example, where we have done our most research, we know that there
are 110,000 households watching us every day. I must point out here
that there is a lot of difference between radio and television. Radio
Australia measures its audience per week and we measure ours per day.
What percentage of that block of Australians make up a percentage of
our audience I cannot tell you, but there are quite a lot of Australians
out there watching our programming. [4]
Table 7.2: Households with access to ATV
| Country |
Cable |
Terrestrial |
| Cambodia |
|
200,000 |
| China |
400,000 |
|
| Hong Kong |
306,000 |
|
| India |
10,725,000 |
|
| Indonesia |
22,900 |
|
| Laos |
|
70,000 |
| Nauru |
|
2,000 |
| Papua New Guinea |
9,600 |
|
| Philippines |
700,000 |
|
| Singapore |
105,861 |
|
| Sri Lanka |
1,795,000 |
|
| Taiwan |
265,000 |
|
| Thailand |
262,200 |
|
| Vanuatu |
|
N/A |
| Vietnam |
700 |
5,500,000 |
| TOTALS |
14,592, 261 |
5,772,000 |
Source: ATV submission, p. 11.
7.16 Dr Hart Cohen of the University of Western Sydney, Nepean, has
co-ordinated audience research projects in Indonesia in 1995 and 1996.
According to our research results, the strongest broadcasters
in the region in terms of audience draw are the large global players:
CNN, STAR TV, MTV ASIA. These organisations specialise in particular
genres (News, Video chips, Sports) and have substantial reach in terms
of access to their signals. There are a total of 32 television channels
in the Medan media environment - of these, 15 broadcast predominantly
in English.
Australia Television manages to be competitive with these channels
though it takes a different tack using a general programming strategy
with a regional focus. ATV consistently rates in the top five channels
in most categories of watching.
In international radio the BBC rates the highest in English
language programming, though was equal first with Radio Australia
in the popularity of Indonesian language programming. Radio Australia
is second to the BBC in most categories of listening frequency. Twenty-three
per cent said they listened to RA most days, sixteen per cent at least
once a week.
Apart from the BBC and RA, six other international radio services
have a regular listening audience in the region though with smaller
audiences than either the BBC or Radio Australia. Voice of Malaysia
has a strong presence in Indonesia broadcasting in the Malay language.
[5]
7.17 In 1995, a survey showed that ATV's weekly audience in the Philippines
was estimated at about 250,000 people. [6]
7.18 ATV submitted that:
At a time of increasing awareness of Australia within the Asia/Pacific
regions, many viewers turn to AusTV for an insight into a country where
they do business, send their children to university, holiday or plan
to invest. Many others watch because AusTV remains the only free-to-air
English language service produced within the region by a regional broadcaster
who gives priority to regional issues. [7]
7.19 In DFAT's submission to the Mansfield inquiry, it commented:
The audience reach of ATV has considerable room for improvement
and there is a need to keep changing the formula to get it right.
ATV was always seen as a long term project and it would be regrettable
to abandon it in its relatively early stages.
7.20 Although the first statement is qualified by the second, it is
very unclear what is the basis of DFAT's implied criticism of ATV's
audience reach. After operating for only four years, there is of course
considerable potential for increasing audience reach. DFAT does not
indicate what it believes should have been the audience reach of ATV
in September 1996, the date of the submission. It also does not say
what was the problem with the then 'formula'.
7.21 DFAT went on to say that:
DFAT believes that, recognising economic constraints, it should
still be possible for ATV to provide a viable and valuable service
through initiatives such as private partnerships in programming, more
aggressive marketing strategies or privatisation. The overall resources
available to the service, however, should not be further reduced in
the process.
7.22 As this was the last paragraph of the part of the submission dealing
with ATV, it is not clear whether the suggestions in this paragraph
refer to ways of improving audience reach or to improving ATV programming
(criticised earlier in the submission), or both. The lack of detail
not only makes the meaning obscure but also raises the question as to
the extent to which DFAT had thought through its ideas in this area.
7.23 DFAT's lack of co-operation with the Committee in this inquiry
by not making a submission and by not allowing reasonable questions
to be answered by officers at a public hearing, meant that the Committee
was unable to explore further some of these issues with the Department.
The Committee therefore had to take their statements to Mr Mansfield
on face value.
7.24 The Committee believes that ATV has done an exceptional job in
securing an audience reach similar to CNN and BBC World in Asia in just
four years and at the cost of a little more than $6 million a year.
Although many international broadcasters operate in the Asian market,
no other operator in the Asian market has matched ATV's success in its
short history.
7.25 There is considerable anecdotal evidence that among ATV's audience
there are many Asian and Pacific leaders and other influential people,
who not only are made aware of Australian perspectives on regional and
global issues and events, but who are also shown graphic images of Australia,
our lifestyle, culture and economic and technological achievements.
Programming
7.26 ATV broadcasts 16 hours of Australian produced material each day.
The mix of programming encompasses Australian news, information, sport
and entertainment. At the same time, programming includes regionally
focussed news, current affairs, educational and sport items. The challenge
for ATV has been to bring a multi-faceted image of Australian society
to the Asia-Pacific region while providing news and information services
for the region.
7.27 Programming material is sourced from the ABC, SBS, Network 10, Channel
9, Channel 7, Film Australia, the National Sound and Film Archive and
from independent producers. ATV's expenditure on programming is close
to $1 million a year. [8]
7.28 Approximately one-third of ATV's programming is news and current
affairs. Programs include, from the ABC, ABC News, Lateline, Four Corners,
Stateline, Foreign Correspondent, The World at Noon and the 7.30 Report,
from SBS, Insight and Dateline and from Network 10, Meet The Press.
ATV also produces a bulletin of Australia Television News on weekdays
specifically for the service's Asia-Pacific audiences.
7.29 With regard to other programming, ATV described it as follows:
Sports programming over the past year has included coverage
of Australian Football League matches, Rugby Union, Australian Rugby
League, the Melbourne Cup, the National Basketball and Soccer Leagues
and a range of other sporting disciplines of interest to AusTV's Asia/Pacific
audiences as well as the 80-100,000 expatriate Australians able to
access the service.
In 1996, AusTV launched a weekly two hour program of Australian
contemporary music, The Bridge, and
carried an AusAID funded educational series called English-Have
a Go. It also show-cased such outstanding series as
Janus, Australian Story, Landline, Compass, Quantum,
World of Style, The Great Outdoors and
Healthy, Wealthy & Wise.
Children's programming included the highly acclaimed ABC children series,
Playschool, and the international award
winning series, Ship to Shore. [9]
7.30 Despite the rapid increase in the number of international satellite
channels broadcasting to the region, ATV is the only English language
comprehensive service produced by a regional broadcaster. While other
international broadcasters, such as BBC World, CNN, CNBC and ABN provide
general news or business news, ATV produces a range of programs (news,
documentaries, children's entertainment and arts and educational series)
with an emphasis on news and current affairs affecting the region.
7.31 The uniqueness of ATV's programming mix together with its regional
focus was emphasised to the Committee in written submissions. As one
expatriate living in Phnom Penh wrote:
What I value most about Australia Television is its beauty, colour
and unhurried professionalism which is obvious but understated compared
to the arrogant self promotion and bombardment of stressful visuals
from CNN. Australia Television shows a wonderful variety of programs
about Australia's multicultural, cosmopolitan and rural lifestyles ('Great
Outdoors', 'Healthy, Wealthy and Wise') and current affairs on the national
and regional international news ... sports coverage variety is excellent
... [10]
7.32 Many submitters compared ATV very favourably with other international
services available to them. For example:
Comparisons with other international broadcasters is extremely
unfair to other broadcasters. These broadcasters are in a nutshell
very poor indeed. The CNN and BBC focus is predominantly on Europe
and USA and concentrate on news items which may be of passing interest,
but which are unfortunately belaboured for hours on end (or it seems
so).
The sports channels provided by ESPN are great if you enjoy
basketball - you can almost guarantee coverage most hours of the day.
Star sports are equally unimpressive with coverage of table tennis,
cricket in Singapore, and bike racing which again seems never ending.
Their tennis and golf coverage is of interest, but often not timely
(eg. we watched the Hopman Cup about 4 weeks after the event concluded).
Local television is equally enthusing with South American soapies
dubbed to the Indonesian language, or Japanese and Chinese martial
arts experts doing their best to rid the world of their many evil
opponents.
To be fair to all of the above broadcasters there is interesting
information and entertainment from time to time but regrettably the
times are few and far between. [11]
7.33 The essence of the above views was reflected in many submissions.
Many Australian expatriates, and others, commented that there is no
alternative to ATV for people wanting news about Australia and the region.
Although other broadcasters include Asian items in their news broadcasts,
none provides the range or depth of Asian news stories covered by ATV.
No other broadcaster provides Australian news except for disasters or
other major items.
7.34 ATV's strong emphasis on news and current affairs is a recognition
of the primary uses of satellite broadcasting for news and information,
the rebroadcasting of programs through cable and domestic broadcasters
providing an extension of this service. Most people who wrote about
programming in their submissions rated ATV news highly, focussing on
its independence, integrity, relevance to the region and presentation.
Although a few people thought that ATV's accurate portrayal of Australia
and regional countries (the less seemly aspects of life as well as the
good aspects) did a disservice to Australia and denigrated our neighbours,
most found the honesty and integrity displayed by ATV as its strength,
not its weakness. They could rely on the news and current affairs broadcast
by ATV.
7.35 Mr Ross Petzing, Program Department Manager, English-language
News of the International Broadcasting Corporation, submitted that:
We operate Thailand's largest subscription television network
and broadcast Australia Television news programs on our multi-channel
system. We have several reasons for doing this.
One is Australia TV's consistently excellent coverage of news
from and about Australia itself. It gives our audience a comprehensive
view of events in Australia that, is simply unobtainable.
Another reason we admire Australia International TV is its
top-notch coverage of Asian news, While other networks carry at least
some news from Asia, the breadth and depth of Australia International
TV's coverage of the region is unmatched.
More than 95 per cent of our audience is Thai, and most of the
remainder is from other Asian nations. Therefore, you can imagine how
highly we regard Australia Television's news programming, given its
comprehensive examination of Asia. [12]
7.36 Programming generally was the one area of ATV operations which
attracted some criticism in submissions from viewers. The Committee
received seven submissions which had negative comments about programming
and another 43 which suggested improvements to programming. Although
these statistics covered both ATV and RA, most related to ATV. Another
256 submissions had positive comments to make about programming.
7.37 Many of the criticisms appear to reflect the individual tastes
of those viewers although the meagre funds available for programming
would make it difficult for ATV to maintain programming standards. The
many repeats of some programs also drew criticism in a number of submissions.
This, too, is mainly a resource problem. Even where criticisms of programming
are made, the submitters generally expressed a positive view of ATV
programming in overall terms. ATV will need to refine its programming
strategies to take account of the criticisms which arose in the many
submissions that addressed this issue.
ATV's Contribution to Foreign Policy and Trade
7.38 This cannot be valued in dollars and cents. It is about the subtle
messages conveyed to the peoples of the region, particularly the educated
people, about life in Australia, the beauty and sometimes starkness
of our countryside, our hopes and disappointments, our achievements
in many fields and our disappointments, our democratic principles and
our perceptions of issues and events which affect Australia, the region
and the world. It is about creating an awareness of Australia, an understanding
of our way of life and the multicultural nature of our society and showing
that our future is inextricably linked with Asia and the Pacific, even
though we maintain strong ties with countries in other regions from
which many Australians have come.
7.39 ATV's contribution in furthering Australia's foreign policy interests
is by providing images of Australia which influence people in the region
to do things which contribute to our interests. It may simply be to
imbue viewers with a feeling of warmth towards Australia so that when
they have choices to make which include Australia among the variables,
that they choose Australia. It may be the destination for schooling
or tertiary education for their children, the location of their next
holiday, the purchase of an Australian product or service, support for
Australian views on regional or global issues, or simply the more ethereal
embracing of Australian liberal democratic principles.
7.40 You cannot measure this influence in an empirical way. But there
is considerable anecdotal evidence to support it. Submissions from people
living in the region refer to visits to Australia by their local friends
or acquaintances to see places which they had seen on holiday programs
shown by ATV. Other submitters said that local people chose Australia
for their children's education because they had been convinced by ATV
programs that Australia was a clean, stable and safe place for overseas
students.
7.41 A number of submitters told the Committee that ATV programs showing
Australia as a successful multicultural society had helped to dispel
doubts about Australian racial tolerance following inaccurate accounts
of the race debate broadcast on local media stations. In other words,
ATV provides an Australian voice in the region to counter mischievous
news items which hurt Australian interests. Without such a voice, there
is no other means to tell Australia's side of the story.
7.42 In its submission to the Mansfield inquiry, DFAT said that:
The media is the most important tool available to strengthen
an awareness of Australia in the region. Through its news and current
affairs broadcasts, ATV informs its diverse audience of Australian
political, economic and social affairs. It provides a vehicle to project
Australia's technological innovation and cultural sophistication and
a source of entertainment programs which could expose viewers to Australian
culture, ideas and values.
If a positive image is not there and up-to-date, then Australia
loses out.
7.43 Mr Michael Mann, Chief Executive of ATV, told the Committee that:
I know from the feedback we are getting, and particularly from
senior government and leaders, that we are making our mark ... I do
know that President Ramos watches Australia Television most nights.
We also got feedback recently that the Deputy Prime Minister of Malaysia
is a regular viewer of our service. When you are accessing people like
that and they know more about Australia, how our process works and what
our society and culture is all about, I think that has a tremendous
impact on our foreign affairs and trade relationship. [13]
7.44 In terms of trade, there is no way of calculating the influence
of ATV in generating trade and investment between Australia and countries
of the region. Mr Michael Mann recounted to the Committee one instance
where an ATV program influenced an $18 million investment in Australia.
He said that if he had not been told personally about the story he would
not have known about it. [14]
7.45 Under the ABC Charter, one of the obligations of the ABC, and
through it, ATV, is to provide information about Australian affairs
and Australian attitudes on world affairs to Australians abroad. There
are an estimated 100,000 Australians living in the Asia Pacific region.
Many, if not most, of these expatriates view ATV or listen to RA, or
both. Not only does ATV provide a link for these Australians back to
their homeland, it also, as pointed out in many of the submissions,
makes life just that bit more bearable for them and their families.
Many Australians live in remote areas in the region because they are
employed by mining or other companies, or are aid workers or volunteers
abroad.
7.46 Australians living abroad are also ambassadors for Australia.
By keeping up-to-date with events and issues in Australia, they pass
on that information to many of the local people with whom they work
or do business and with whom they mix socially. Without that knowledge,
they would not be in a position to argue against inaccurate or unfair
criticisms of Australia which might have been carried in the local media
or to provide the latest information about political issues or commercial
trends or activities. Australians who are abreast of recent developments
in Australia will influence their friends, colleagues and acquaintances
to think 'Australia' for holidays, education, business and other ways.
7.47 ATV is really about projection of Australia to the region so that
we are a relevant consideration when people make decisions that could
benefit Australia. Australia spends more than two billion dollars a
year on foreign affairs, overseas aid and trade promotion. A large amount
of that is focussed on Asia. For less than $2.5 million in 1995-96 (ie
after deducting sponsorship revenue), ATV must be the most cost effective
service promoting Australia, our foreign affairs and trade interests.
What other Australian organisation, other than Radio Australia, can
reach 20 million people in Asia and influence them toward Australia's
interests. And ATV is only four years old!
Funding for ATV
7.48 ATV was established by the ABC with a conditional one-off grant
from the Government of $5.4 million. As it was originally conceived
as a self-funding body, the conditions attached to the grant included
the ABC repaying the grant when ATV became profitable. However, ATV
did not live up to its early expectations in relation to profitability.
Its financial viability has been the subject of several reviews.
7.49 According to the August 1994 review by the Department of Communications
and the Arts, Australia Television Review of Financial and Management
Arrangements, the failure was due to the fact that ATV did not proceed
with a subscription service but went free to air, the over-estimate of
sponsorship revenue by the ABC, and a 275 per cent increase in transmission
costs over the initial estimate. [15]
7.50 In 1995, following a review of the financial and management arrangements,
the previous government agreed to provide additional funding of $1.9 million
(paid on 1 July 1996) and a further $6.2 million per year for three years
commencing in 1996-97. [16] This committed
funding has now been withdrawn by the current Government.
7.51 According to ATV's submission, total funding for the operation
of the ATV service compares favourably with other international broadcasters
in the region:
Satellite broadcasting is an industry still very much in its
infancy but AusTV's audience and revenue growth figures have placed
the service firmly among those operators likely to succeed. Indeed,
AusTV's performance compares favourably with competitors like the US
based CNBC business news service, which was launched in 1995 and is
expected to lose US$100 million a year by 2000 and Hong Kong's Star
TV, which is losing US$100 million a year. It is worth noting that Star,
which cost News Corporation US$800 million, is said to reach just over
60 million homes while Australia Television on an annual budget of just
Aus$6 million is accessible by more than 20 million. [17]
7.52 ATV has shown that it has been able to provide a cost effective
service. Its expenditure on news production and the purchase of news
and current affairs programs represents less than half the cost of transmission
charges - the Palapa Transponder lease accounts for more than one-third
of ATV's total budget.
7.53 The Committee also notes that ATV was the first government-funded
broadcaster in the Asia Pacific region to provide an international television
service to the region via satellite.
Profitability of ATV
7.54 ATV was established on the basis that it would become self-funding
but retaining its structural link with the ABC. Net revenues from advertising
and sponsorship were projected to meet the marginal costs of the service
within three years.
7.55 To date, as the table shows, ATV has not achieved profitability.
Table 7.3: ATV Profitability
| 1992-93
(5 months)
|
1993-94 |
1994-95 |
1995-96 |
| Revenue |
|
|
|
|
| Sales |
0.13 |
0.95 |
1.49 |
2.64 |
| Transponder sub-lease |
- |
- |
1.88 |
1.76 |
| Government support |
2.91 |
2.49 |
- |
- |
| Total Income |
3.04 |
3.44 |
3.37 |
4.40 |
| Expenses |
3.04 |
6.35 |
8.00 |
6.78 |
| Profit (loss) |
- |
(2.91) |
(4.63) |
(2.38) |
| Value of ABC Resources provided |
1.91 |
4.06 |
2.53 |
2.82 |
Source: ATV submission, p. 19.
ATV also provided the following abbreviated balance sheet for the information
of the Committee.
Table 7.4: ATV abbreviated balance sheet
| 30 June 1993 |
30 June 1994 |
30 June 1995 |
30 June 1996 |
| Total Assets |
0.15 |
0.88 |
1.25 |
1.74 |
| Total Liabilities |
0.15 |
3.79 |
8.79 |
10.77 |
| Equity |
- |
(2.91) |
(7.54) |
(9.03) |
Source: ATV submission, p. 19.
7.56 ATV added that for the year ending 30 June 1997, total expenditure
is forecast to be $6.6 million.
7.57 A major source of income for ATV has been the leasing of its satellite
transponder during "down time", initially to CNBC and currently
to TVSN, the Australian-based Television Shopping Network. Advertising
and sponsorship have also contributed to revenue.
7.58 The Committee notes, however, that ATV would already be in profit
if the National Transmission Authority (NTA) covered ATV's transmission
costs, as the NTA does for RA and the ABC's domestic radio and television
services.
7.59 The 1994 review also noted that on current projections, ATV would
continue to rely on ABC financial support until at least 1999-2000. In
particular, the review noted that the future capacity of ATV to meets
its operating costs depended on sponsorship revenue. [18]
As the review acknowledged, sponsorship revenue was slow to develop.
7.60 Satellite broadcasting in Asia is a new industry and, inevitably,
it takes time for such new ventures to become profitable. Mr Mann told
the Committee:
The international television industry is a very young industry,
and the advertising industry is only now catching up with it. A company
such as Fosters CUB only for the first time this financial year has
put in its marketing budgets some money for international television.
It took that company three years before actually setting aside, and
seeing the value of putting, marketing money into international television.
We have found over the last three years that you go to Australian
companies and they will say, `Yes, we want to advertise with you,
but at present we do not have any budget for that. Come back when
we re-arrange our marketing budget and we will put money aside for
international television.' Slowly those budgets are starting to appear.
People now understand that there are more statistics available at
present - not only about Australia Television but other networks -
as regards audience. So people are willing to put money into international
television.
Two years ago in Asia there were about 15 international television
networks; now there are about 25. As I understand, only one is making
a profit - and that is Home Box Office, the premier movie channel. Of
course, the other 24 then are making a loss. They believe now, in my
discussions with the other networks, that you will need 10 years to
break even in international television. Two years ago it was five years,
and it has been extended another five years. People are not withdrawing
their money from international television; they are keeping at it. They
believe that there will be a pot of gold at the end of the rainbow.
[19]
7.61 Recognising the benefits of satellite television, major Australian
companies such as Telstra, AMP, BHP, Ansett, Qantas, the New South Wales
and Queensland tourism authorities, the Australian Meat and Livestock
Corporation and universities and educational institutions throughout
Australia have used ATV as a successful advertising medium.
7.62 In a press statement released by The Lincoln Electric Company
(Australia) Pty Ltd on 25 January 1995, the company stated:
Lincoln Electric have recorded a 25 per cent increase in sales
throughout South-East Asia since advertising on Australia Television.
In our opinion, the sheer size of the Australia Television audience
presents advertisers seeking Asian markets with the most cost effective
advertising vehicle available.
7.63 In its submission to the Committee, ATV drew attention to a number
of factors impacting on its profitability. It stated:
That link [with the ABC] has involved the service in five separate
inquiries over the past three years. AusTV believes that the air of
uncertainty created by these inquiries has deterred many potential
advertisers and sponsors who would otherwise have committed themselves
to long term contracts. It must also be said that the commercial expertise
within the ABC needs to develop further before it would provide an
environment in which AusTV would be able to operate in an optimal
way.
AusTV also believes that its basic funding arrangements have
left it seriously under capitalised as is evidenced by its inability
to reach audiences in North Asia, Western India, Pakistan and the Middle
East or produce or purchase programs likely to enhance its viewing audience.
[20]
Commercial Value of ATV
7.64 The tendering process undertaken by the ABC to secure ATV's future
raises a number of issues including the basis for the valuation of ATV
and whether it is in the public's interest in the longer term to divest
itself of this asset. Although the ABC has not revealed how much it
has valued ATV, Ms Rosemary Church, representing the ATV Joint Committee,
told the Committee that it had been valued at $28 million.
7.65 Ms Church said that future digitalisation of ATV's broadcast signal
would significantly alter the valuation of ATV. The switch to a digital
signal would allow ATV to broadcast through four channels instead of
only one. In other words, it could retain one for its own use and lease
out the other three. Ms Church went on to say that a trial, with the
digital signal alongside the analog signal, had shown that this would
be a feasible option for the future. It would, of course, require digital
receivers. Digital television is on the horizon for both domestic and
international television broadcasting and it is simply a matter of time
before its introduction. This has the potential to be one of the ABC's
most valuable tangible assets and could help in the future funding not
only of Australia's international broadcasting services but also domestic
services.
7.66 The Committee is concerned that precipitate action on the part
of the Government and the ABC to sell off ATV, without examining longer-term
options in order to cover a minuscule short-term cost, could lead to
a decision which is contrary to the national interest, not only in terms
of maintaining an Australian voice in the Asia but also in financial
terms.
Privatisation of ATV
7.67 In July 1995, the Board of the ABC decided that it could not allocate
further funds to sustain ATV. The Board went to the Government, which
decided to provide $18.6 million to ATV over three years to put ATV
on a more secure footing. However, following the change of Government,
the Minister for Communications and the Arts, Senator Alston, in a media
release dated 16 July 1996, in which he announced the appointment of
Mr Mansfield to review the ABC, said:
The Government will also ask the ABC to explore the possibility
of delivering the services currently being provided by Australia Television
more efficiently.
The Government will discuss with the ABC Board the scope for
ensuring the maintenance of ABC program content on Australia Television,
particularly news and current affairs, while tendering the operation
of the service to the commercial sector.
7.68 In August 1996, Senator Alston advised the ABC inter alia that:
Ministers agreed in the context of the 1996/97 budget deliberations
that the service provided by Australia Television be contracted out
with any net savings to be returned to the budget. [21]
7.69 On 23 December 1996, the ABC sought expressions of interest from
other parties in order to develop the service. Further expressions of
interest were sought through the Far East Economic Review on 2 January
1997. ATV submitted that:
More than 50 responses are now being sorted by the Australia
Television Board and consultants, Communication Equity Associates and
Turnbull and Partners. It is expected that some Australian entities
will be invited to conduct due diligence during April 1997. [22]
7.70 In discussing this process, the Managing Director of the ABC,
Mr Brian Johns, told the Committee:
We have established broad criteria for any future restructuring
and we are very anxious within that to maintain ... an Australian involvement
and an ABC involvement, in particular by the provision of programming
- again, using current affairs and quality ABC programming - so that
there is an Australian presence in the area. [23]
7.71 The broad criteria are as follows:
- Have substantial net asset backing and cash flow to enable them
to provide equity and loan capital to support Australia TV operations
for five years;
- Be able to demonstrate that they have - access to management with
professional broadcasting experience in the Asian Pacific region other
than staff currently employed by Australia Television - advertising
media sales or subscription TV experience which would enhance that
currently residing within Australia Television;
- Be able to demonstrate that they can secure Australia TV content
supply lines over and above those from ABC;
- Be able to demonstrate that extension into the broadcasting industry
of the Asian Pacific region is consistent with their established business
and strategic plans.
7.72 The Committee noted that these criteria did not refer in any way
to the broadcasting of ABC programs. This was a matter raised by the
Community and Public Sector Union (CPSU) when the CPSU and ATV Joint
Committee representatives appeared before the Committee on 3 April 1997.
Ms Rosemary Church told the Committee at the hearing that:
We have been told all along that one of the conditions of sale
was that the news and current affairs element would be retained. As
well as the domestic Sydney, Perth, Melbourne and Darwin news going
out into the region of Australia TV, we also tailor a half-hour news
specifically for the region. [24]
7.73 Ms Lisa Fowkes, ABC Section Secretary, CPSU, subsequently wrote
to the Committee to say that:
I understand that the range of 'outcome criteria' that the ABC
Board has established by which to assess the various bids does not include
any express requirement that the prospective operator/partner agree
to carry the existing Australia Television news service or any other
ABC news and current affairs. This was confirmed to us verbally by Ian
McGarrity, Head, ABC Development, who is the manager responsible for
handling the process. I believe the Board has expressed the view that
the successful bid must include a proposal to carry a substantial amount
of Australian content. [25]
7.74 In the ATV submission it is stated that:
Foremost among those criteria were that a significant English
language predominantly Australian content television service would remain
after any restructure and that the remaining English language television
service would be controlled by Australians. [26]
7.75 Apart from the third criterion, which is about the ability of
a prospective company having an ability to secure Australian content
programs, there is no specific mention in the criteria that the service
should be 'predominantly Australian content television' and there is
no mention at all that 'the remaining English language television service
would be controlled by Australians'. Ms Church also told the Committee
that 'it is almost nonsense to presume that you could actually sell
something with conditions attached'.
7.76 The benefit of ATV as a public broadcaster is that its main function
is to provide the Asia-Pacific region, or to wherever its footprints
extends in the future, with a portrayal of Australian life and culture,
our technological and economic achievements and our perspectives on
national, regional and global issues, as a means of advancing our national
interests. Within the resources available to it, ATV, as a public broadcaster,
does not have to take account of commercial profits and the pressures
of investors to make profits at the expense of advancing national interests.
Under current arrangements, it does, of course, have to strive to fund
its operations from commercial sponsorship but within very stringent
guidelines to protect the integrity of its programming. Commercial success
is subordinated to the requirements of national interests and journalistic
integrity.
7.77 The most recently published edition of the ABC Editorial Policies
provide that:
The ABC through Australia Television, Radio Australia and associated
media services is responsible for broadcasting news, current affairs
and general programs to international audiences, often in countries
whose media are more restricted than in Australia. Occasionally, reports
may create difficulties in Australia's foreign relations with other
countries. This problem is the price of a genuinely independent overseas
service and is recognised and accepted by the ABC and the Australian
government.
The Australia Television service aims to be a distinctive Australian
service directed to a region of cultural diversity. It will reflect
Australian values in information, entertainment, sport and the arts
while striving for relevance and accessibility to the regional audience.
Cultural sensitivities vary from society to society across the
region, both in nature and intensity, but there are areas of common
concern. In program selection and scheduling, Australia Television and
Radio Australia will be mindful of these concerns, particularly in the
areas of entertainment programs such as drama and comedy. [27]
7.78 ATV noted that in its four years of operation, it had not received
any official complaint from a regional government. [28]
7.79 A striking example of commercialism overriding all other considerations
was drawn to the Committee's attention by Mr Mann:
Star Television, News Ltd's Asian television service, when faced
with the reality of either accessing the China market or keeping BBC
World on its network, jettisoned BBC World. That is a commercial reality.
[29]
7.80 In its submission to the Mansfield inquiry, DFAT praised ATV's
news service but sounded a cautionary note about possible dangers associated
with privatisation of ATV:
DFAT supports the view that quality ABC news programming is
important and that sub-standard, sensationalist to tabloid news and
current affairs programming would be damaging to Australia's interests.
In this regard, ATV has it right with its editorial approach of 'Sensitivity
without Censorship'.
The Department also believes that the quality of the surrounding
general programming is of importance in terms of giving credibility
and attracting the right audience to the news and current affairs services.
There might be danger that a commercial broadcaster seeking broadly
based advertising revenue may produce news programming of much lower
production values designed to appeal to a mass audience. We would need
to avoid a situation where such a service might rely on programming
that would send negative images of Australia by over reliance on racing,
poor quality soaps or programs which would gratuitously offend the moral
standards espoused by our neighbours. [30]
7.81 Mr Mansfield did not consider DFAT's views because he regarded
the foreign affairs aspects of the ABC's international broadcasting
services as being outside the scope of his inquiry. Despite this, Mr
Mansfield still endorsed the Government's privatisation proposal and
then arbitrarily concluded that if the arrangements were not in place
by 30 June 1997, that ATV be closed down. It is incomprehensible that
Mr Mansfield could peremptorily dismiss such a cost-effective, successful
and important service without first considering the key aspects of its
role and possible alternatives to closure.
7.82 The Committee concurs with DFAT's view, as submitted to Mr Mansfield,
and similar views expressed by Ms Church above. Once privatised, the
Government's control over programming is significantly reduced. Although
the Government may enter into a contract with a buyer of the service
to impose certain contractual obligations on the part of the buyer with
respect to programming, it is questionable the extent to which the Government
could prevent the new owner from broadcasting particular programs or
advertisements. If the first commercial owner of ATV were to subsequently
re-sell it, then it is even more doubtful whether the Government would
be able to impose programming obligations on the new owner.
7.83 If ATV were sold, it is even not clear whether there would be
Australian content conditions imposed on the buyer, or whether the buyer
would be subject to other conditions relating to programming.
7.84 ATV cost the taxpayer a little more than two million dollars in
1995-96. If allowed by the Government and the ABC to concentrate on
broadcasting and given a period of stability so that potential sponsors
have confidence in its future, the Committee believes ATV would at least
break even financially within a few years so that Australia would have
a respected voice in the region to promote Australian views and interests
at no cost to the taxpayer. In budgetary terms, the present cost of
operating ATV is minuscule. The benefits even now to Australia are significant,
and once ATV becomes fully established in the region, the potential
benefits are enormous. Yet the Government seems determined to throw
all of this away. Such a decision for the sake of saving such a small
amount of money is quite illogical, economically irrational and completely
contrary to our national interests.
7.85 The Committee believes strongly that ATV should not be sold and
that it should remain a public broadcaster.
7.86 The Committee therefore recommends that (a) Australia Television
not be privatised and that (b) the Government maintain funding in accordance
with the three year funding package entered into by the previous Government
and supported in its election policy by the current Government.
Future Structure of Australia Television
7.87 The question was raised during the inquiry whether ATV should
remain with the ABC, be restructured as an independent organisation
(alone or with RA) or be attached to some other organisation.
7.88 At present, ATV is a subsidiary of the ABC, shares some facilities
and resources with the ABC and draws upon ABC programming, as well as
obtaining programs from other sources, including the SBS and commercial
networks. On the other hand, the success of ATV and RA has made the
ABC a respected broadcaster throughout the region and the sharing of
facilities and resources in Darwin has revitalised that office.
7.89 There are many synergies which can be exploited through a continuing
relationship between ATV and the ABC. In some respects, the arrangement
has worked very well, but not in all ways. There have been some tensions
between ABC staff, who work for a broadcaster that is prohibited from
using sponsorship and advertising and ATV staff, who are required ultimately,
to run the service on sponsorship. In other words, ATV is a public commercial
broadcaster, which has to adopt some commercial attitudes and practices
but still has to adhere to public broadcaster ethics and not allow commercial
imperatives to override national objectives. The Committee is also aware
of some difficulties arising from the fact that ATV is a very small
organisation which is obliged to adhere to staffing arrangements and
reporting requirements meant for a big broadcaster and not a small operation.
ATV should be allowed to manage its staffing and finance matters by
itself, subject to normal oversight by its Board.
7.90 Given the fact that the ABC since 1995 has not funded ATV from
its general budget, that Mr Mansfield recommended that the ABC should
focus exclusively on domestic broadcasting and that the ABC Board has
indicated that it would sacrifice its international services first in
meeting expected funding cuts, the Committee believes that oversight
of ATV should be the responsibility of a separate Board, comprising
representatives of the ABC Board, DFAT, the SBS Board, the Department
of Communications and the Arts, a few expert or interested individuals
(one of whom should be the Chairman) and the Chief Executive of ATV.
This Board would focus solely on developing ATV as an independent Australian
international broadcaster, which would be respected in the region for
the quality of its programming and the integrity of its news and current
affairs broadcasts, and to become self-reliant financially. By having
a separate Board, it would not be diverted from its charter by having
to address domestic broadcasting issues which obviously takes up most
of the time of the ABC Board.
7.91 The Committee considered the option of restructuring ATV as a
separate organisation either by itself or in association with RA to
form an Australian international broadcasting service. There is some
merit in this option but it would be more difficult, but not impossible,
to enter into arrangements with the ABC to share resources and facilities.
It would almost certainly be more expensive to run as some current overheads
might not be available free of charge from the ABC. Nevertheless, if
proposed changes suggested above are obstructed by the ABC or do not
work, it is an option that should be given further consideration. In
this period of financial stringency, the Committee wishes to try workable
options which are cost neutral or at worst minimise cost increases.
7.92 A further option that was raised during the inquiry was the merging
of ATV with SBS. Both provide television services, both accept sponsorship
and both have audiences with a range of ethnic backgrounds. However,
SBS provides programming for ethnic communities in Australia, whose
needs are very different to those of the same ethnic communities overseas,
which ATV aims to satisfy. If the two did merge, ATV would lose the
synergies which it currently has with the ABC even though working arrangements
between ATV and the ABC could be agreed. Although the Committee does
not favour a merger at this time, it would not rule out such an arrangement
should it mean the survival of ATV as a public broadcaster.
Footnotes
[1] A charter function of the ABC under its
legislation is "to transmit to countries outside Australia broadcasting
programs of news, current affairs, entertainment and cultural enrichment
that will: (i) encourage awareness of Australia and the international
understanding of Australian attitudes on world affairs; and (ii) enable
Australian citizens living or travelling outside Australia to obtain
information about Australian affairs and Australian attitudes on world
affairs." (s.6 of the Australian Broadcasting Corporation Act
1983)
[2] ATV Media Release dated 9 April 1997 entitled
'New cable deal for Australia Television in India'.
[3] ATV submission, p. 10.
[4] Committee Hansard, pp 136-37.
[5] Dr Hart Cohen submission, p. 4.
[6] ATV submission, p. 11.
[7] ATV submission, p. 11.
[8] ATV submission, p.6.
[9] ATV submission, p. 7.
[10] Stephen Callender, submission no. 125.
[11] Mr Barry Cook, submission no. 106.
[12] International Broadcasting Corporation,
submission no. 323.
[13] Committee Hansard, p. 134.
[14] Committee Hansard, p. 134.
[15] For a summary of the review see Australia
Television Review of Financial and Management Arrangements, Department
of Communications and the Arts, August 1994, ATV Review - Key Findings
and Conclusions, pp. i-v.
[16] See Media Release, Minister for Communications
and the Arts, 25 October 1995.
[17] ATV submission, p. 19.
[18] ibid., pp 37-38.
[19] Committee Hansard, p. 134.
[20] ATV submission, p. 21.
[21] ATV submission, p. 20.
[22] ATV submission, p. 20.
[23] Committee Hansard, p. 131.
[24] Committee Hansard, p. 228.
[25] Letter to the Committee dated 9 April
1997 from ms Lisa Fowkes, CPSU.
[26] ATV submission, p. 20.
[27] ATV submission, p. 13.
[28] ATV submission, p. 13.
[29] Committee Hansard, p. 130.
[30] DFAT submission to the Mansfield review,
p. 3.