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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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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