Friday, October 27, 2006

The SBS reply

This the letter I received back from the TV station SBS. They just don't get it, re quality of broadcasting being about a viewing experience.

SBS has taken this course of action following a great deal of
consideration and investigation. It was not an easy decision to make,
but the alternative was far less palatable. SBS could continue with its
current format, but its ability to commission quality Australian
productions and to purchase the world's best films, television
programs and sporting fixtures would become more and more restricted due
to limited Government funding and the prospect of diminished advertising
revenue as a result of competition from Pay TV, the Internet and other

SBS obtains about 80% of its funds from Government. But in the May
budget SBS suffered a $3m shortfall in its appropriation for this
current year (excluding digital transmission and distribution costs) and
received no extra funds at all for program making.

The remainder of SBS funding comes from advertising revenue. Even
though that amount is relatively small, it is vitally important revenue
that goes exclusively to the purchase, commissioning and production of

Under its Act, SBS is obligated to operate in an efficient and
cost-effective manner and, importantly, it is required to actively
pursue funding opportunities independent of Government funding.

Since 1991, SBS Television has broadcast a maximum of five minutes of
ads per hour between programs and in natural breaks. This is far less
than the average 13-15 minutes of advertising permitted on the
commercial television networks.

Until now, SBS has broadcast up to five minutes of ads as well as
several minutes of program promotions in a single block between
programs, meaning 6-10 minutes would elapse before the next program
began. During this time, we consistently lost more than 50% of our
viewers. They would simply change channels or switch off.

With smaller audiences, SBS's advertising rates (already well below
the commercial networks) had to be reduced still further. The result has
been a curtailment of our program-making capabilities because less money
from ads means less money for the commissioning and the production of
original programs.

Under the new format the maximum of five minutes of ads per hour still
applies, but the ads will be spread across the hour in three separate
breaks, each containing 90 seconds of commercials. In half-hour
programs, there will be two 60-second commercial breaks.

This will restore true commercial value to SBS's ad breaks. By
placing short ads within programs, when SBS reaches its peak audiences,
our advertising rates can be increased. We estimate that this will raise
at least $10m in the first 12 months of operation. All of this
additional revenue will go into program making and the commissioning of
programs from independent Australian producers.

With this extra revenue we will launch a one hour news program in
January that will expand our coverage of international and national
news. The bulk of the additional funds will go to the commissioning of
quality Australian drama, documentaries and other programs.

By dramatically reducing the time between programs, we believe SBS
audiences will be encouraged to stay, especially because the in-program
breaks will include program promotions about forthcoming programs. It is
important that information about other programs on SBS reaches the
largest possible audience. Currently these messages, in the form of
promos, are lost in the middle of lengthy and cluttered breaks between
programs. Too often our audience tells us they would have watched a
particular program "if only I had known it was on". The placement of
promos in a more accessible place helps overcome that communication

We understand your concerns regarding in-program breaks, but these
changes will enable us to continue to provide our viewers with the
highest quality and most diverse programming available on free-to-air
television in Australia.

Yours sincerely,

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