I am grateful for the opportunity to address you today to outline SBS’s ambitions in the digital television arena and the role we intend to play in the lead up to analogue switch off.

Forget about the switch from black and white to colour, from film to tape: this is the most fundamental change to television since it began.

And while efforts to shift consumers to digital commenced some time ago; with deadlines looming and international markets beginning analogue switch-off, the switchover force is gaining momentum in Australia.

One thing is clear — as an industry, cooperation and collaboration are paramount if we are to succeed.

While to some, television may be just the glowing box in the corner of the room; the imaginable volume of the outcry that would follow millions of screens fading to black indicates that television makes a far greater contribution than it often gets credit for.

And, policymakers elsewhere, are cognisant of the logistical and practical challenges of implementing switchover.

The US recently delayed its proposed switchover for fear of a massive backlash from consumers who were not ready to risk losing their television services. This was after an expensive set-top box subsidy scheme had run out of money and despite a major education campaign about digital switchover.

In recognition of the enormity of the task, most countries have chosen to switch off analogue on a market by market basis to ensure a smooth transition.

This has usually started with a manageable market which is used as a control experiment.

So next year we will start with the Mildura/Sunraysia area in Victoria, before concentrating our attention on the major metropolitan centres and remote Australia towards the end of 2013.

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A vital service

It is difficult to overstate the significance of television to Australian society; it operates on so many levels. It is a lifeline — a comfort, a source of entertainment and information; and it helps define our culture and our community.

It is a powerful medium for good and there is no better example of that capacity than SBS’s historic and ground-breaking documentary series First Australians.

This series demonstrates how television content can inform a nation, educate generations of Australians about our collective history and, in some way, contribute to healing the hurt of the past.

We have sold First Australians to both Canada and New Zealand and expect strong interest in the documentary series at MIPDOC which is currently being held in France. It gives us an unprecedented opportunity to showcase our history and our culture to the world using television as the medium.

And just think how many other transformative shared experiences have been facilitated by television — the first man landing on the moon, Cathy Freeman’s gold medal win, the inauguration of the first black American President.

Through television we share the joys and triumphs of our sporting and cultural heroes and we witness the trauma and the pain of ordinary Australians who battle floods and fires.

And despite the proliferation of new platforms and increasingly savvy consumers seeking new ways to access content, television will continue to be a critical element of media consumption in Australia.

Someone told me the other day they thought traditional television is now the equivalent of a hand written note in the age of twitter. Perhaps. There are many ways to access content. But I suggest nothing quite has the resonance, staying power or sentimentality as the television.

Much of the power of traditional television is derived from its total connectedness. Everyone has it. It’s been the champion of the shared experience and the constant, yet endlessly refreshed, source for water cooler discourse.

Moving from this comfortable, familiar analogue armchair to a more demanding yet ultimately more satisfying digital suite may be a little unnerving but it’s a challenge that has to be seized with alacrity and purpose.

I’ve been asked recently whether the timetable for analogue switch off is too aggressive, whether there’s a case for further delay. Well, I applaud the Government for putting an end to an era of digital denial and setting an achievable, if demanding, timetable toward switch off. The procrastination of the past, fuelled by bizarre restrictions on multi-channelling and a poorly disguised analogue addiction by some network proprietors is over.

Whatever the justifications for past delays, now is the time for Government and broadcasters to invest in our digital future.

Not investing may cost more

Of course the global financial crisis is not helping. But if broadcasters are to emerge from these challenging economic times relatively unscathed, then we must cooperate as an industry and we must invest in our product. Not just for the sake of a smooth digital transmission but for the wellbeing of our industry overall.

Taking a short-term view of budgets in this climate is very likely to produce an adverse affect for consumers and for people whose livelihood is dependent on a strong media and cultural sector in Australia.

After all, the media industry in Australia represents some large employers, we invest significant amounts in the local economy and there is a significant supply chain relying on our continued investment.

I recently made the argument that even a modest investment from SBS could immediately have a positive effect on jobs in the independent production sector because every dollar we receive for local content is leveraged and invested outside the four walls of SBS.

I am of course lobbying for sound investments to be made — particularly in SBS — that is no secret.

But rather than this representing unnecessary spending at a critical juncture for the global economy, there is a pay-off and an inevitable financial dividend over the next few important years.

Investment in the economy aside, ensuring as many consumers as possible voluntarily make the switch to digital, reduces the need for an expensive subsidy program for those who cannot or will not make the switch.

To do this, digital television needs to offer Australians something new.

While digital offers an immediate benefit in terms of signal and sound quality for many consumers, this is simply not enough to justify an investment in a new digitally capable television or set-top box.

ACMA’s recent report on digital television in Australian homes acknowledged that content is a key driver in take-up and that consumers would more easily make the switch if they were being delivered something different or something new.

Without that impetus the Government faces expensive and unattractive alternatives.

Consider for a moment that in the UK, despite all the preparatory work, funds have had to be set aside for a set-top box subsidy scheme that may well be accessed by around seven million people and, in the US, a similar scheme ran out of money with 6.5 million homes still unprepared for switchover. Even in a smaller market like Australia any subsidy scheme will involve a significant investment.

The only way to avoid that is to create an appetite among consumers for voluntary and prompt take up of digital. The more we invest in new content and services for consumers, the more likely they are to see the benefit in investing in new equipment that will enhance their free-to-air television experience.

And once we reach switchover in 2013, the Government stands to reap the return of valuable amounts of spectrum which can be auctioned off as well as being relieved of the expense of funding the analogue-digital simulcast of SBS and the ABC.

These are very real savings that could be delivered over the life of the next Budget’s forward estimates.

During an address he gave in Australia last year, the Deputy Chief Economist from the Federal Communications Commission in the US, Jonathan Levy, pointed out the staggering dollar value of spectrum in the US.

The first auction of 74 MHZ of spectrum in the US reaped $19.6 billion and the second (in which not all the available spectrum was sold) raised $19 billion.

Now obviously there are differences between the US and Australian markets but Levy estimated that the spectrum freed up by switchover in Australia could raise between US$576 million and $2.5 billion if it went to auction.

Even taken with a grain of salt, there is potential for the revenue from the digital dividend to be significant. So much so, it could more than compensate for some modest investments in the Australian broadcasting and production sectors over the next few years.

Collaboration is the key to success

The switch to digital affects the entire broadcasting sector in Australia and little can be achieved without an across the board effort to reach consensus on the best path to switchover.

A lot of work has been done to research and define milestones and barriers to digital switchover.

International experience has been useful in identifying steps that need to be taken for a smooth transition — but the unique geography of Australia and its sparse populations will ultimately mean that a bespoke switchover plan is necessary.

This is a time for cooperation, for collaboration and for partnership — something I note the head of the BBC called for recently amidst the turmoil affecting the broadcasting industry in the UK.

In Australia, by working together we can reduce duplication, share marketing budgets and trade technical and transmission information for mutual benefit.

The efforts of the free-to-air broadcasting sector in Australia through Freeview is the perfect example of where cooperation is paying off.

Later this year Freeview will launch as the platform for the Australian free-to-air digital television experience.

A similar service was launched in the United Kingdom a few years ago and it was recently voted the technology that has had the greatest impact on the way consumers watch television.

New services on the UK Freeview platform were a key element of its success in driving take-up of digital television.

I think all of the broadcasters taking part in the Freeview platform need to recognise that its success is dependent on a genuine commitment to providing new services to Australian consumers.

The early signs are positive.

Channel 10 has just launched its HD sports channel, the ABC has ABC2, and ambitions for a children’s channel if it receives an increase in funding from the Government.

Channel Nine indicated last week that it is likely to launch a general entertainment channel on the Freeview platform to complement its main channel with Seven likely to follow suit.

SBS too has serious ambitions in the digital space and would like to see up to four channels on our digital platform by 2013 deepening the range of content we show from Australia and overseas.

Digital offers free-to-air broadcasters the opportunity to reinvent themselves to face new challenges from new platforms. Multi-channels, PVR capabilities, broadband and interactivity must be embraced and exploited if we are to survive.

SBS … too

SBS and the ABC are critical to the successful transition to digital television in Australia. In many ways it is disappointing that constrained resources have meant SBS, in particular, has not been able to do more.

I hazard a guess that we would be further advanced along the path to switchover if SBS and the ABC had been properly funded to exploit the opportunity presented when multi-channelling restrictions were lifted in 2006.

Clearly it is not an acceptable outcome for SBS to be marginalised in the digital world, which is why we have asked the Australian Government for adequate funding which would enable the launch of a fully fledged SBS2 and, in the future, expansion to SBS3 and SBS4.

And while we await the outcome of the May Budget, SBS has also decided to show our hand as a gesture of good faith to our audience and to the broader Australian community.

Therefore, today I can announce that on June 1 this year SBS will launch SBS2.

SBS2 means more of the world’s best stories, more in-language and first run films, more sport, more news and current affairs and more chances to engage with the best that the world has to offer.

SBS2 will not simply be a time-shifted version of SBS1 although we will increase the opportunity for Australians to access our quality news, current affairs and sports content that is so popular on our main channel.

The first few months of SBS2 will be an exciting demonstration of the potential multi-channelling has to deliver free-to-air content to audiences.

In July we will deliver audiences some of the most exciting and anticipated events on the sporting calendar — the Ashes in England and the Tour de France.

Every ball and every agonising pedal stroke will be captured across our television and online platforms.

We will show both events live and free-to-air. The Ashes, as a sport on the anti-siphoning list, will be shown live on SBS1 while the Tour will be broadcast live, free-to-air on SBS2, streamed live online and shown live on SBS1 between the Ashes matches.

SBS has been a passionate supporter of keeping key sporting events on free-to-air television and on SBS in particular.

SBS stepped into the anti-siphoning fray in the lead-up to the 2005 Ashes cricket series after public outcry and ensured that coverage of the most exciting Ashes series in the history of the game was available freely.

SBS has also played a vital role in delivering football and cycling fans regular doses of World Cup action or showing international fixtures such as the Tour live and free-to-air.

And, where possible, we partner with other broadcasters to show sports or events where we are not the official or exclusive rights holder such as the Olympics.

SBS2 allows us to do even more to reward the support and passion of Australian sports fans.

The Ashes and the Tour will be followed by an expansion of our dedication to the best of

international film. We also plan to expand our in-language entertainment and documentary offerings across a range of genres our audiences will be familiar with.

We will utilise our new branding and our tagline of six billion stories and counting to bring Australians ‘more’ of what SBS does best.

Today I can unveil the first look at our new channel logos for SBS1 (show logo animation) and for SBS2 (show logo animation).

These are an exciting evolution of our new logo we unveiled last year.

But let me be clear. We are launching SBS2 ahead of Government funding assurance because we believe without new services like this the public will remain indifferent to digital take up. But only Government support will ensure we can continue with this new service.

And without Government support we certainly won’t be able to implement the full range of SBS2 content. Which is why our intentions to expand our in-language news services and add English language tuition and in-language children’s programming are on hold.

We will also not be immediately able to include the planned strand of Asia-Pacific focused content.

I am hopeful this will be recognised during Budget deliberations this year. If funding is forthcoming, SBS will work quickly to ensure the missing elements of SBS2 are introduced to our new service.

It will take time for SBS2 to become a fixture in Australian homes – both domestic and international experience shows this.

But through our own efforts, coupled with a strong marketing push from both the Australian Government in relation to digital television and Freeview, SBS hopes to educate our audiences about SBS2 over the coming months.

From my remarks today the only conclusion that can be reached is the definitive need for SBS to have a real presence in the digital landscape. We recognise this and we want to have an expanded and compelling presence on the Freeview platform.

We know that times are tough but we also encourage other free-to-air broadcasters to dedicate even a modest amount of resources to making Freeview the best it can be, come launch time.

SBS is a vital part of the plurality and diversity arguments that underpin any informed discussion about the digital television landscape. We intend to do all we can to reward the Australian people for their support.

SBS is testament to the tenacity of television as a medium. In spite of all the pressures of new platforms and threats of fragmentation, we have almost doubled our audience share in the last decade.

I can acknowledge that we were coming off a pretty low base, but we have steadily built our audience share through a commitment to telling Australian stories, by demonstrating that we are the home of the world’s best stories and proving to audiences that we offer something different and distinctive to Australian viewers.

Australians feel passionately about television – particularly in the case of free-to-air television — and there is an incredible depth of feeling and ownership about public broadcasters such as SBS and the ABC in this country.

We are part of the national fabric of Australia.

More than 2400 submissions were received in response to the Australian Government’s recent review about the future of SBS and the ABC — the majority supporting the retention and expansion of the free-to-air services both broadcasters offer.

Many were also passionate about the role public broadcasting plays in introducing consumers to new services and technologies.

They see us as innovators and broadcasters that can take risks on content unconstrained by the commercial interests that make other broadcasters think twice.

I recently made reference to SBS being the Oliver Twist of the broadcasting landscape in that we are asking for more. Well, yes we are asking for more and we think we have a very good case for doing so.

At SBS we are currently making incredibly difficult decisions about what we can invest in. These decisions include putting on hold local productions that we and the independent production sector are passionate about bringing to fruition.

If we are not able to fund these productions, Australian audiences miss out – but more than that, jobs will not be created, investment will not made and an entire industry and an entire audience will suffer.

SBS wants more but we also want to deliver more for very good reasons. More Australian content and new services on television, radio and online. More jobs and investment in the local production sector.

And we would dearly love to be delivering more in-language content across all platforms to serve existing language communities and the new and emerging language communities.

SBS2 is just the beginning of our ambitions.

Peter Fray

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