The unprecedented early announcement of the federal government’s intent to freeze ABC funding as part of the 2019-22 triennial funding is aimed at a single audience: the long-suffering media oligopolies, particularly News Corp, Nine Entertainment and Seven West Media.
In the normal course of things, the ABC’s triennial funding arrangements are announced in the budget immediately before the three-year deal starts — in this case, it would be in the 2019 budget after an extensive to-and-fro of semi-public lobbying. The only point in announcing these cuts a year ahead is to send a message. And this message comes reinforced with a further government supervised “efficiency” review and hot on the heels of the “competitive neutrality” review.
Ostensibly, the competitive neutrality review was payback to Pauline Hanson (and by Hanson) for supporting the changes to media ownership rules last year. But, through The Australian, News Corp has been keen to claim credit, pointing out it came “after media industry leaders demanded a review of the charters outlining the purpose of the ABC and SBS in light of evidence they were ramping up activities that encroached into the commercial sector”.
In proposing a freeze over the three years, Australia is following the lead of the New Zealand National government which froze Radio New Zealand funding for eight years, only relenting with a partial increase last year.
The message is simple: “We’re on your side.” Where “we” is the LNP and “you” is the old media oligopolies. That’s why the message was too urgent to wait until after the election. There’s a message to the ABC in all this as well: leave the emerging digital space to the private sector and, in particular, to the existing private sector players.
Of course, in its digital activities, the ABC is not doing anything that couldn’t be done by the free-to-air broadcasters or Foxtel or pretty much anyone with a computer and a broadband connection. However, the traditional oligopolies seem to have the view that their business model would be fine if people couldn’t access the ABC (or, if there wasn’t so dang much of the ABC to access). In that parallel universe, we’d all keep watching the free-to-air channels (topped up by Foxtel for a bit of diversity), just like we did in the good old days.
The public broadcasters are not immune to the challenges of the media business model. In fact, the budget had to provide about $14 million in additional funding to SBS to offset the fall in its advertising income. But no small part of the success of the ABC (and of SBS) is that it has that key commodity in the digital world: trust. The ABC has plenty of that. The media oligopolies? Not so much. Or at least so every reputable survey says. The ABC has tried to pander to these concerns, closing The Drum, for example, although perhaps regretting that when the Emma Alberici corporate tax brouhaha blew up.
But the ABC can’t both fulfil its charter in the digital space and keep old media happy. In managing the threatened cuts, the ABC needs a sophisticated handling of a complex political environment — the very skill it’s been shown to lack in the past few years. The board wants to keep its collective head down. And, for all their other skills, political and bureaucratic lobbying is not a core competency of current management.
That sophisticated messaging needs to be aimed at Labor, not the government. Despite Shorten’s welcome rhetorical promise to adequately fund the public broadcasters, he fell short of saying that Labor will drop the cuts.
So the ABC needs to find some Goldilocks savings for the first year. Not too soft, so that no one notices; but not too hard that they anger their own supporters. It needs cuts that are just right — publicly visible with just a touch of pain — to encourage Labor to commit to maintaining real funding if it’s elected in the next 12 months.
But truly painful cuts to the digital vision will be inevitable in years two and three, and will likely be forced on them by a re-elected government.