Media planners and buyers, and their advertiser clients would be surely tempted by a commercial ABC. The ABC viewer tends to spend more time with the ABC than anywhere else. Whilst these viewers do dip into Commercial TV, it is occasional, so they are harder to reach. The attraction of the ABC audience is that they tend to a be highly educated white collar professions… the wealth owners of Australia. This is a valuable audience and a very attractive market for most advertisers.

The ABC Radio audiences tend, with different variations, toward the same trend, mostly with even stronger biases.

The ABC audiences are more difficult to reach and they are sizable. As a broad generalisation, ABC TV has 14% of the overall viewing audience and 18% of overall radio listening audience. Better than this, the program format, programs and environment are often unique and very desirable. Whilst commercial stations often poach, borrow or copy, the ABC does its own unique thing, often well and successfully. In television, take for example Four Corners, Australian Story, Media Watch, Enough Rope, Foreign Correspondent, Spicks and Specks to name a few. These are really different, creditable, if not unique, environments, and much as there are some Commercial TV approximations, they’re nothing like the originals.

The idea of the ABC being made semi-commercial (basically the SBS model where commercial breaks are only “in between” programs and around five mins per hour of commercial airtime), or fully commercial (around 12 minutes of commercial airtime per hour) and advertisements integrated into commercial breaks within program, has been floated and talked about four or five times in the past decade. We did some extensive work back in 2001 to value the resultant scenario. The results and figures of that examination still work today and are not all that different.

Potential Advertising Revenue

Semi-commercial Fully commercial
Television $240 million $520 million
Radio $75 million $170 million

This accords the ABC no premium for quality of audience, nor unique factors.

Reality needs to be wound into this, on two fronts. Firstly the SBS example. SBS shares many audience characteristics with the ABC. It has a strongly growing (up 32% last year, up another 6% this year so far) audience and holds a 5+% share of (peak night) viewing. On simple fundamentals it should command roughly $80 million advertising revenue. Yet it has only built to half of that after many years of trying. The reality might be that the ABC could only hope to capture half our revenue forecasts. This would still be a substantial contribution to its revenue and would permit it far more original production.

The further reality is that the millions which could be captured by the ABC would not be given up easily by other players (the SBS position demonstrates that). We do not believe much incremental revenue would derive from ABC’s commercialisation. Thus we’re likely to see a fight for a share of the revenue pie from very seasoned and professional opposition. A tough job.

On a personal note, but one which would be amplified by ABC loyalists, full commercialisation of the ABC would so alter it, it would probably ruin it. Some of the reason for watching and listening to the ABC is it is not mainstream, not therefore ratings and popularity obsessed, and not cluttered with commercials. In some respects, a bit of a sanctuary from the real commercial world. I for one would not like to see that dramatically change. Is any of this likely to occur in the near future? Even without John Howard, we think not. This would be a highly emotive and political battle not easily won.

Peter Fray

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