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Simons: ABC News 24 runs on the smell of an oily rag

What is the true cost of ABC News 24, the ABC’s 24-hour television news service?

It is a question that has preoccupied ABC watchers for more than a year since the service was launched. When the new channel was announced, ABC managing director Mark Scott was uncharacteristically cagey about how he had scraped together the money. He had, after all, failed to get the any more dough from government for the channel in the 2009 triennial funding round.

Scott decided to go ahead in any case. At first he declined to say how much it cost, claiming that the money had been sourced from savings achieved through, among other things, the automation of studios.

Since then he has given the figures of $20 million that was achieved in savings, with some, but not all, spent on ABC News 24.

Now Aunty is gearing up for the next funding round in 2012. Since the service was launched, there have been persistent allegations from inside the ABC that resources are being diverted from other news-gathering activities to pay for the new channel. And other critics (including me) have complained that the channel is too slow to switch to breaking news.

So what is the truth of the matter?

Last year, using the YouCommNews audience drive commissioning site and contributions from donors I put in a freedom-of-information request asking for the real story.

There was a convoluted response. As you can see on the YouCommNews blog posts, on one view the ABC doesn’t know how much the service costs, because Aunty’s accounting systems are not set up to count the dollars by platform or channel.

As ABC FoI officer Judith Maude put it: “My understanding is that the actual costs of ABC News 24 are intermingled with other cost areas and it is not possible to isolate all of  the particular costs which could be attributed to ABC News 24.”

But eventually the ABC released not the actual cost  but rather the budgetary outlook that went to the ABC board on April 15  last year, and on the basis of which it gave ABC News 24 the go-ahead.

The board was told that there would be one-off costs of $3.5 million to establish ABC News 24. This included designs and sets ($365,000), launch of special stories ($200,000) project management ($254,000) and contingency ($250,000). There were capital costs of $1.26 million for cameras, field kits and a server system, and an operations production cost of $560,000.

Marketing and promotions absorbed a big $616,000 of the one-off costs.

Ongoing operational costs were budgeted at $15.6 million. Of this, $9.6 million came from “ABC-wide operational efficiencies”, according to the ABC.

The rest included the existing amounts already budgeted for Breakfast News ($3.6 million) and the ABC’s continuous news centre ($2.4 million).

So much for the budget. What about the actual costs?

The past year has been an enormous drain on newsrooms all over the world,  but particularly in Australia with world disasters, local floods and that extraordinary federal election and its aftermath.

The ABC’s figures make it impossible to separate out what providing news would have cost had ABC News 24 not existed. As  Maude puts it:

I have investigated the possibility of providing you with information based on a comparison of annual budgets/expenditure before and after the launch of ABC News 24. However, as you would expect, there are an enormous number of variables which affect the annual expenditure of the news division. Accordingly, comparing expenditure in 2008-09 with 2009-10 (i.e. after the launch ABC News 24) does not provide a meaningful measure of the costs of operating ABC News 24.”

The ABC nominated Alan Sunderland, head of policy for the news division, to field my questions on the figures. He was insistent “not one dollar” had been diverted from other news services to pay for ABC News 24.

The $15.6 million figure, he said, was not the real cost of establishing a news channel. Rather it was the additional cost of a new platform that made use of all the existing resources and coverage.

Sunderland agreed that the news budget had been under strain. He also agreed that ABC News 24 had used far more live-to-air coverage than had originally been planned.

But he painted a cheery picture of reporters happy to do the extra live crosses because it was good for their profile. News conferences and the like could be live streamed for little or no extra dollar cost, he said.

So what conclusions can we draw?

The figures released confirm ABC News 24 is a smell-of-an-oily-rag operation.

And despite the assurances, nobody can really be sure about the impact the demands of a 24-hour service has had on the depth and quality of news gathering.

It seems likely that the biggest impact is in human cost, the pressure on reporters to provide content for more for more platforms. For any broadcaster, this is an opportunity and a burden.

Now the question must be whether in the next triennial funding round, the ABC’s adventurism in establishing the service with so little cash will be rewarded, or not.

And if anyone from inside the ABC or elsewhere has more information, I am interested.

Note: YouCommNews is an audience-driven commissioning website run by the Foundation for Public Interest Journalism at Swinburne University. I am the chair of the foundation. Given that Crikey has published this story, the donations received to fund it will be, with the donors’ consent, redirected to other pitches on YouCommNews.

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  • 1
    Mike Jones
    Posted Monday, 15 August 2011 at 1:43 pm | Permalink

    Margaret, I strongly suspect that your title is not syntactically correct.

    When you said ” ABC News 24 runs on the smell of an oily rag”, I felt that the meaning would have been more pungent if you had said “ABC News 24 smells like and oily rag on the run”.

    Hope this helps.

  • 2
    Posted Monday, 15 August 2011 at 1:46 pm | Permalink

    I understand how the ABC might not budget or account for expenditure by platform or channel. However, it should. It is similar to hospitals introducing casemix funding and universities knowing how much each program and graduate costs. While it may not reflect the organisation’s internal operations it is basic information for internal control as well as external accountability.

  • 3
    Joceyln Tan
    Posted Monday, 15 August 2011 at 1:57 pm | Permalink

    The most obvious fact in this data is that the ABC planned to fail. The fixed cost increment says that no new capacity was put in place, which means that the whole plan assumes that existing infrastructure is adequate. The operating cost budget is plainly just enough to turn on the lights in the barely tarted-up studio(s) and nothing like what it costs to go LIVE to major events such as Pakistan floods, Christchurch earthquakes, Afghan terrorist bombings, London riots, Horn of Africa famines, Washington, Athens, Rome, etc debt dramas and so on.
    If Mr Scott did not intend to make LIVE TV, why oh why is he spending a dollar on ABC News 24?????

  • 4
    Suzanne Blake
    Posted Monday, 15 August 2011 at 2:02 pm | Permalink

    ABC News 24 is extremely left wing. They just rabbit on the ALP and Green line

  • 5
    David Hand
    Posted Monday, 15 August 2011 at 3:17 pm | Permalink

    ABC News 24 is my primary source of televised news and information.

  • 6
    Suzanne Blake
    Posted Monday, 15 August 2011 at 3:22 pm | Permalink

    @ David Hand

    Do you like being 2 - 8 hours behind!!!

  • 7
    Pamela
    Posted Monday, 15 August 2011 at 4:02 pm | Permalink

    ABC NEWS RADIO - YES - DO-ABLE and vital
    but watching re run clips on ABC tv News- urrrgh
    What about putting the money into some entertaining exciting drama
    Some of us need distraction - our own lives and too tied up with the news
    My two bobs worth

  • 8
    David Hand
    Posted Monday, 15 August 2011 at 4:06 pm | Permalink

    Suzanne,
    News 24 covers all the stories in a timely way as far as I’m concerned although their ability to gear up for a big, breaking news story is clearly not there. But I did get to see someone throw a cream pie at Rupert Murdoch live on News 24…..
    The fluff on commercial TV is just rubbish, celebrity gossip and cross promotions for other TV programmes.
    Virginia Trioli is my favourite TV journo.
    Sky? They’d be second.

  • 9
    Suzanne Blake
    Posted Monday, 15 August 2011 at 4:21 pm | Permalink

    @ Peter Hand

    I agree Virginia is good. But News 24 is too much old news. Recall they were rubbished for being 5 hours late on the Bomb Hoax a few weeks ago. All they had was a news ticker, nothing live until 7 hours after the event started at 2.20pm

  • 10
    Hugh (Charlie) McColl
    Posted Monday, 15 August 2011 at 4:34 pm | Permalink

    Seven hours later than the others reporting a hoax bomb. Er, priorities Suzanne. Doubtless numerous other hoaxes weren’t reported at all.

  • 11
    stephen martin
    Posted Monday, 15 August 2011 at 4:38 pm | Permalink

    @ Pamela - I heartily agree with regarding News Radio, I listen to each morning before getting out of bed. BUT in the evening when I go to bed at 11pm it has morphed into the BBC World Service. Pity really.

  • 12
    Scott
    Posted Monday, 15 August 2011 at 5:05 pm | Permalink

    The BBC run a similar 24 hour news channel. From their annual report, costs of BBC News channel work out at 2% of total spend at the BBC (2010)
    If we apply the same percentage to the ABC, with it’s total spend of $1.1 billion (2010), you are looking at around $22 million +- 10%
    That would probably be the best guestimate of the expenditure.

  • 13
    zut alors
    Posted Monday, 15 August 2011 at 5:46 pm | Permalink

    Agreed on ABC RADIO news. One quickly tires of seeing news footage on Lateline still being replayed on ABC24 up until almost 24 hours later (regularly on The Drum).

    Surely there are more than half a dozen fresh stories breaking internationally every day? We know there are many many more.

  • 14
    Jean
    Posted Tuesday, 16 August 2011 at 6:21 am | Permalink

    3.6 million for the breakfast show? I can understand 3 million for Virginia Trioli, but what do they spend the rest on?

  • 15
    michael crook
    Posted Tuesday, 16 August 2011 at 11:50 am | Permalink

    Did someone call the ALP left wing? They must have mistaken it for another ALP somewhere.

    The ABC no longer provides a credible television news service. Most of the feeds appear to come direct from the commercial media and the ABC continually breach their own charter by advertising commercial entities. They even, Virginia included, refer to news reports in the commercial media as if they were somehow based on fact, an incredible assumption.

    There is still some small vestige of the original ABC left on Radio national.

  • 16
    Mike Pat
    Posted Tuesday, 16 August 2011 at 4:36 pm | Permalink

    From somone who knows, I can tell you that cost-savings have occurred by employing no, or very few, new journalists outside of Sydney (and probably not many new journos in Sydney) and expecting the added burden of work to be shouldered by existing journos. Compared to the commercial stations, the ABC are very understaffed. This was before having to report for ABC24 as well. I have regularly heard stories where reporters were asked to provide crosses for TV and radio on the same news event when there should have been staff assigned for each medium. Now ABC24 has been thrown in to boot. Most the staff are very supportive of ABC24 and want it to work but appear frustrated by the lack of support they receive from management (which is in part a product of government funding).
    Coming from someone who is also a big fan of the ABC I find it disappointing to hear stories and see evidence of the ABC trying to compete with the commercials rather than concentrating on the unique service they provide and doing this well. (e.g. the number of live crosses demanded during the news, even when these may be irrelevant). Maybe management should wake up and realise that the reason people follow the ABC is for the qualities that sets it apart from the commercials - i.e. high quality journalism provided by journalists with the time to deliver this quality, and attention to the story and facts rather than sensationalism.

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