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FreeTV: Projected SBS ad revenue “not credible”

Commercial networks dispute the amount of ad revenue pie that SBS could attract if it doubles its primetime advertising.

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Commercial TV networks have again spoken out against plans for SBS to increase their advertising, to double the current allocation of prime time ads.

FreeTV Australia, which represents commercial networks, claims it is “effectively forcing private companies to subsidise SBS funding” because SBS will be attracting a bigger slice of the ad revenue pie. Under a government proposal, total SBS advertising would not increase, but it could direct more time to primetime share and lift its revenue.

While SBS estimates it can attract an additional $28.5 million over four years, Free TV disputes the figures with specialist market research and intelligence company, Anomaly, citing up to $148 million over four years.

“Even adjusting the Anomaly model to match the much lower assumptions claimed by SBS, the additional revenue available to SBS over 4 years is still $114 million,” it said in a statement.

“The SBS figures are not credible. The Parliament is being asked to believe that SBS will only earn another $7 million a year from doubling its prime time advertising to ten minutes.

“If those figures are to be believed, SBS clearly has a much larger problem with its Sales Department.

“On their own numbers they could make the money they say they are aiming for within their current
available inventory, just by improving their sales performance.”

An SBS spokesperson said, “In an environment where public broadcasting is under pressure and SBS is operating in a highly competitive media market, the ability to generate more of our own revenue would help us to secure the future sustainability of the organisation, without compromising our content.

“The Charter is at the heart of our organisation and should this legislation pass Parliament, SBS would only look at averaging our minutes in programs and timeslots where the advertising return could genuinely aid our ability to invest in more Australian content.

 “There are no changes proposed to the total amount of advertising which would remain capped at 120 minutes a day, this proposal is about giving us greater flexibility to average our minutes over the schedule. Free TV assumes that SBS would put an incremental five minutes an hour in prime time and SBS does not believe that it is practical or desirable for the network to be operating at those maximum levels given our focus on content which meets our Charter and considers that such an increase would need to be offset by a decrease in minutes in other times of the day. It is important to note that SBS’s total TV ad revenue currently makes up under 2 per cent of the total market annually.

“SBS best understands the external and internal factors affecting its revenue generation and we stand by the modelling we’ve done.”

Amongst other proposed changes, commercial networks have recently called on government to dump licence fees too.

Hopefully not just a case of having their cake and eating it too?

8 Responses

  1. The commercial networks aren’t subsiding SBS, that is prosperous, they are just competing with it. This just a small increase in competition from SBS, far less than the increasing competition from the internet they are facing.

    Again just the FTA networks trying to get the government to legislate profits for them by restricting competition.

  2. why are they so threatened about SBS? SBS gets ratings of a tiny fraction of what Seven, Nine and Ten get, so likewise at best they’d get a similar ratio of ad dollars, which shouldn’t bother the big boys’ ad revenue too much.

    Also the networks might talk about ad minutes per hour but they seem to overlook that outside of that limit they each have 24-hour channels that play nothing but commercials. SBS isn’t after any of that market.

  3. Your last line basically says it all about the commercial networks David.

    But just to confirm, the total SBS advertising time does not increase but they increase the number of ads in primetime? So this means that ad time will have to decrease elsewhere?

      1. This is the same rule that 7,9,10 already enjoy, it’s called “averaging”.
        For these channels 20 mins/hour of ads in prime-time is not uncommon , SBS is asking for 10.

        1. They can only show 15 minutes of ads in prime-time (except during an election). Of course they fit in as well sponsors announcements, sponsored ads for news and information segments and there is always product placement.

    1. SBS is a national network, operating on a “Category A” licence(I prefer Category to class as the latter word implies a quality too often going missing from programmes on all stations), ABC holds the same licence category. The conditions of this category of licence include an absolute ban on advertising. SBS are in blatant violation of their licence conditions, aided and abetted by the government!

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