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Free podcasts don’t suit ABC’s results

Mark Day Blog | September 18, 2008 | 32 Comments

ABC managing director Mark Scott last week made a virtue of the fact that dear old Aunty provides its growing array of services across the broadcasting landscape free of charge. I would have thought true virtue lay in saving taxpayer dollars.

The ABC costs Australians $850 million a year. When the next triennium funding arrangements are put in place in the next few months, the bill will almost certainly go through the billion-dollar barrier.

At that price, it amounts to 13.5c a day for every Australian, up from the famous 8c a day of the 1980s.

It’s not a cost that I quibble with: Scott has the ABC in a purple patch at the moment with near record radio and television ratings, new digital services, online innovations such as iView internet TV, and an amazing 60million podcasts and vodcasts a year. 

And there’s more coming: a big push into mobile news services, a digital children’s channel and a 24/7 news channel designed to show democracy in action by becoming a kind of town square for debate and discussion. Scott says he needs only a marginal increase in funding to make these things happen.

Well, why doesn’t he raise it himself? In my view Scott should stand up to those who decry any hint of commercialism within cooee of the ABC and start charging for some products that have a value to consumers. This can be done without affecting in any way the ABC’s obligations to provide its main services free of charge.

This is because, in a digital age, it is possible to slice and dice any content for any platform. The first cost is in collecting the content and delivering it on the main platforms, which are, by legislative decree, free to all Australians. There are additional costs, although smaller, in preparing material for a variety of additional news applications, or podcasting and vodcasting, where individual packets are made available for downloading to customers’ MP3 players and the like.

The ABC makes about $20 million a year in profits from its long-established commercial arm. It already resells some of its products in its stores, and the online store will soon become its biggest outlet. You can buy, at commercial rates, books, CDs and DVDs that contain original ABC-produced material previously broadcast free on radio and TV.

What’s the difference, then, in charging for a podcast? The ABC has already met its charter by putting its material on air and listeners have had a chance to receive its programming free of charge. If they missed the original program but still want to be able to hear it, or choose to keep a copy of it, they ascribe a value to the property.

Scott and others say internet users expect to get content free of charge, and fear that if they whacked a fee of, say, $1 for each podcast, demand would dry up overnight.

Even if two-thirds disappeared, that would still leave 20 million downloads a year, and that would immediately double the ABC’s commercial take to $40 million a year. Instantly, Scott would have the extra dosh to fund 20 hours of TV drama, or 10 telemovies featuring the kind of Australian stories his audiences love.

Scott says he is keen to expand the ABC’s commercial arm, but “community consultations”—polling of about 1000 respondents—has made it overwhelmingly clear to him that “we must be very careful and conservative about what we commercialise”. Who would have thought it? Ask any audience if it wants something free or at a cost, and what answer would you expect?

Scott says the view is that the public believes it has paid for the ABC through its taxes and expects to get its services back free. Fair enough, but how may times, and in how many formats? The primary obligation has been met by free-to-air broadcasting.

Scott says the prevailing view within the ABC—a policy endorsed by the board—is that while he’s keen to increase revenues by licensing content to outside organisations such as mobile phone companies, this should not damage the integrity of the brand.

He believes limiting the reach of the ABC by charging for downloads would have a negative impact on the brand. “We are better off extending our audience’s relationship with the ABC,” he says.

Speaking of the board, an emerging theme about the Rudd Government centres on a perception of it dithering, a point seized on by Malcolm Turnbull on his first day as Opposition Leader when he quoted the line: “They hit the ground reviewing.”

Communications Minister Stephen Conroy has been accused of dithering over the national broadband project, which has no chance of being built according to the timetable proposed before last year’s election. Whatever the merits of those claims, it is undeniable that Conroy has left the ABC board running on empty.

Two members have retired this year: John Gallagher QC in February and Ron Brunton in May. Neither has been replaced. The seven-member board is now five (plus Scott as managing director), and if one member were absent through illness, it would not have a quorum.

Conroy’s office says the reason for this is the time it is taking to establish a new board appointment process aimed at ending political interference.

This was an election promise designed to ensure appointments were made on merit (which I hope includes broadcasting experience) rather than ideological stance.

It’s a noble idea, but essentially window dressing. Appointments are still made by the minister and Conroy will be in a position to overrule the selection committee should he not approve of a recommendation.

Conroy is also planning to re-establish the position of staff-elected director. Legislation to achieve this is expected during the present session of parliament, so we can expect at least another couple of months—and probably more if the Senate gets antsy about it—before the depleted board can be returned to full strength.

If it takes a year to replace an ABC board member, I’d say that’s a definition of dithering. Whatever, the new board should revisit the matter of raising more revenue through the sale of its products.


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Jane Smith
Thu 18 Sep 08 (02:21am)

I have to say, I couldn’t disagree with Mark Day strongly enough.  I love that ABC provides most of their visual content online, and in such a large variety of formats. 
Everyday it means I’m up to date on the news and current affairs within Australia and across the Globe.  And moreover, I’m glad a portion of my taxes allows this to occur.  I’m proud that our government continues to fund out national broadcaster.  The alternatives, such as the UK’s TV Licensing scheme for example, with an annual fee over £120 in addition to your taxes is not something I’d like to see in Oz.

Clark Kent
Thu 18 Sep 08 (02:32am)

And how, as a pensioner, would I pay my $1. I do not have credit cards. And why should I? I can download BBC and NPR and others for free. I read The Australian, the New York Times, The Graudian, and (hate to admit this) The News of the World on Sunday. My broadband connection costs less than the price of the Daily Murdoch. I seldom watch TV; I do listen to a little wireless program on ABC RN at 10 pm. Five hours. How about I send you a dollar a week. But how?

rc
Thu 18 Sep 08 (07:03am)

I say keep those grubby little merchant fingers off the public’s assets. If product is produced then it is part of the public commons and should be beyond crass commercialism. Slice and dice all you want but keep the money changers out of the temple.

robyn
Thu 18 Sep 08 (07:49am)

Mark, Keep your nose out of it an leave it free, Scott is right. Pensioners and ill people,all people, students and children all use this 24/7 especially when commercial stations dish up garbage. Ever been up at night and tried to watch commercial TV after 2am? As for your quip about Turnbull hitting the ground running, I believe this sentence can only be attributed to Rudd.

Mark Day
Thu 18 Sep 08 (09:35am)

It was not my quip about Turnbull: it was from Turnbull’s first press conference after election when he borrowed a line about Rudd: “He hit the ground reviewing.”

Asianplumb
Thu 18 Sep 08 (07:58am)

The price of rice has gone up 300% in 18 months without tasting better and with our incomes not enjoying one tenth of that increase. Of course the ABC requires more money too. Despite the budgetry hammering Howard gave them in an attempt to silence, the ABC and SBS are the two main true news providers in the country and without them we’d be left with the disgusting commercial stations and pulp press to find out what’s really going on. In short, we’d be mushroomed completely. Your view Mark, is as always tainted by your place of work and love of Howard’s way!

Pauljp
Thu 18 Sep 08 (08:07am)

The ABC provides me with one of the few, unpolluted by commercial interest, media resources via TV, Radio and Internet. This (ABC) resource funded by the taxpayer is basically free, although I do contribute, in addition to via income tax, directly and indirectly to the distribution infrastructure costs (particularly to a very costly and data restrictive, Australian internet).
In reality I already pay for a supposedly free service, via taxpayer funding of the ABC and its products, purchasing packaged items at ABC shops and internet data charges.Imposing further ABC related costs on me (apart from increased taxpayer funding) is not reasonable or sensible.

DC
Thu 18 Sep 08 (08:18am)

If Stephen Conroy is judged by his inept performance during Question Time in Parliament, God help the ABC.

Ross
Thu 18 Sep 08 (08:29am)

Thanks Mark for an innovative blog.
However, as an enthusiastic listener to some programs on ABC, I am also employed and often not free to listen to them when they are broadcast.  I am probably like many ‘poddies’ in that respect and I consider that because of the progressive tax scales, ‘user pays’ already applies.

keith russell
Thu 18 Sep 08 (08:38am)

There is a very simple solution to Mark Day’s problem with the ABC and funding: impose a tax on ISPs for all Internet traffic and direct the funds raised to the ABC, SBS and education initiatives by any commercial broadcaster who wishes to contribute.

Ralph
Thu 18 Sep 08 (08:54am)

If ABC started chargeing for downloads, I would simply wait for someone else to pay - load it onto a torrent tracker and then I would download it for free.  I think its fair to say most ABC iview users under 30 would do the same. This possibility would factor into the ABC’s decision not to charge for downloads I’d say.

Michael J.
Thu 18 Sep 08 (09:38am)

The last thing I want to see is commercials on the ABC. At present, it is an oasis free of the banal ads that we are forced to suffer on commercial TV. The ABC is still relatively cheap for the government to run and it should remain entirely commercial free and should have no need to sell products. Even at 13.5 cents a day or even a little more, it is hardly a burden for tax payers. Once it goes down the commercial road it compromises its neutrality for good. No doubt elements in the for-profit world have an agenda to access the ABC’s broadcasting reach. Is that what this article is really about, I wonder?

Eric Blair
Thu 18 Sep 08 (09:40am)

Lies, damned lies and internet statistics. Most podcasts are downloaded automatically and nobody knows how many are actually used. It could be 10%. A one dollar price tag would decimate the stats, if not the real usage. Lets say 10% is close enough and usage was halved - Mark Day’s $20m revenue becomes $3m. Now deduct the additonal costs and revenue share with rights owners. Worth it?

Mark Day is half right. The ABC is justified in extending the life and reach of its programs to its time-poor audience (who have already paid for the content) but there should be a limit. Whether that’s a week, a month, or some other period, is up for debate. But there’s no easy way for the ABC to make $20m.

James Ferguson
Thu 18 Sep 08 (10:21am)

Clearly you’re new to the intertubes Mark.

In the online world people rarely pay for music and movies that are intended to be charged for, because digital tech makes it too easy to copy.

Far from your absurdly optimistic two thirds refusing to pay for podcasts the figure is more likely to be 99%. In which case the podcasts would probably find it hard to pay for themselves, while the ABC would simultaneously alienate everyone under 50 who is enjoying moving beyond TV.

There’s a reason the ABC doesn’t charge. The number of paid podcasts you can find online can likely be counted on one hand.

john wellung
Thu 18 Sep 08 (10:47am)

Whats $850 million a year for a quality T.V. channel when John Howard spent $2 Billion plus on Government advertising over a decade,$5 Billion on the Iraq war,underfunded the national health system by$5Billion over a decade and allowed duplication costs between Federal/State bureaucracies to blow out to $9Billion a year according to the Business Council of Australia?
Not only that if the ABC goes this country’s media will be dominated totally by Rupert Murdoch,James Packer and Kerry Stokes-something the people of this country need like a coffee enema.

ShosOn
Thu 18 Sep 08 (10:48am)

Charge money for a podcast!? HAHAHAHHAHAHAHHAHAHAHHAHA

Meanwhile, back in the real world…

Ian
Thu 18 Sep 08 (11:35am)

If the ABC were really up with the times it would allow paid advertising on TV, but provide 100% free content online.

john fraser
Thu 18 Sep 08 (11:38am)

I must disagree with your suggestion about the ABC charging for any online services. I find that the ability to listen to or see a programme online at any time has made an enormous difference to my life.I often go back to the same programme more than once.I would prefer to pay more tax to keep the ABC fee-free. It works so well at present. It aint broke so dont fix it.

Andrew G
Thu 18 Sep 08 (11:55am)

And why doesn’t News Limited charge 2 cents for every post on Mark Day’s blog. News Limited could have earned 26 cents by now (28 cents now when we count my 2 cents worth!!!)

Trevor
Thu 18 Sep 08 (12:24pm)

Odviously you live in a city area where you can actually get radio national and all the resr of the ABC offering.
Living in a country area where radio national is not always of very good quality, sometimes none at all, the only option is to download a pod cast of particular interest.
On a dial up internet connection, it is non an option to live stream the program
have you ever tried to keep track and account for 20million individual payments? I can only begin to imagine the cost and staff involved in controlling and auditing this volume of transactions.

sajaraki
Thu 18 Sep 08 (12:50pm)

Mark,

There are a few reasons why your figure of 20 million downloads under a pay-per-download scheme is vastly over-inflated.

First of all, many of the programmes made available by podcast are sliced up into individual items. For example, today’s Radio National Breakfast program has 13 segments available for download. It would be unrealistic to expect someone to pay the same price for one of these segments as they would for an hour-long programme. It’s the same story with Lateline and the 7:30 Report, if I recall correctly.

Another problem is that most of those downloads in the original figure of 60 million probably never got listened to. I use iTunes to download podcasts and subscribe to about 15 different programmes. Each time a new podcast becomes available it gets downloaded. This way, everything is available on my iPod for whenever I feel like switching it on. To be honest, I doubt that I listen to or watch more than 20% of everything that I download. I’m sure there are many people out there that do the same thing.

Another reason is that there is so much out there that is available free of charge. Have a browse of the podcast directory in iTunes some time and you’ll see what I mean. If the ABC started charging for downloads, I would probably just subscribe to something else, or listen to those other shows that I download but rarely have time to listen to!

Can I hazard a guess that you don’t listen to podcasts on a regular basis? grin

Mark Day
Thu 18 Sep 08 (01:02pm)

Good guess. Yes, I have downloaded podcasts, but no, I’m not a regular. It’s hard enough to find the time to listen/watch/read everything I want to, let alone the things I have missed!

bill
Thu 18 Sep 08 (01:26pm)

Mark Scott shows great wisdom. My greater concern would be with politicians. Once charging starts or advertising in any form for programs then it will gradually expand over time - politicians would not be able to help themselves. SBS is falling away for me as a result of advertising.

GW
Thu 18 Sep 08 (01:33pm)

But we’ve already paid to produce the program through our taxes, why should we have to pay again to hear it?

Dougally
Thu 18 Sep 08 (01:56pm)

Mark,
Listen mate, you need to understand that the bulk of these Podcasts and Vodcasts are repeats of existing free to air programming which anyone with VCR or Tape recorder could record for timeshifting purposes.  These days with the internet, PC’s do this same task.

So really all the service allows for is the convenience of not having to remember to record the media programs you want. Accordingly, people will generally not pay for most of the content. Your estimate of 1/3 is therefore way over the mark.

The only areas of opportunity I see for the ABC to possibly charge around 50cents to $1.00 for are to get low quality replays on my PC of TV shows I missed in the last week like David Attenborough or Grand Designs etc, or perhaps $5 to $10 for a high quality Vodcast I could play back on my TV.

Justin Christie
Thu 18 Sep 08 (03:11pm)

My reply to Mark Day’s comment concerns his statement that:

“The first cost is in collecting the content and delivering it on the main platforms, which are, by legislative decree, free to all Australians.”

I have no doubt that for an employed Radio National listener driving to a job which has a 9am start, then their main platform for receiving breakfast radio content is the car radio. 

For the worker with a 6am start, “the main platform” then becomes the download option from the internet.

This is particularly because, “by legislative decree”, many workers have, by choice or by forced circumstances, adapted to a new world of work in which terms of fairness and flexibility have been redefined.

As a consequence of this, legislation has to then be adaptable to change so that workers get to enjoy flexible and fair conditions in other areas of life outside work. That includes redefining what is meant by the ABC’s “main platform” of service delivery.

Readers should note that Industrial Relations is again a front-page issue on both covers of The Australian and The Age today. 

It would have seemed a coincidence to me that this front page headline appears the same day as Mark Day’s comments, except that I’ve already considered a connection between these two issues from experienceb (I’m the worker that starts at 6am!)

What the ABC should do is establish a Google-search style online archive that all content gets sent to after a podcast passes an expiry date of between two and four weeks. 

It is by then that the ABC have truly served all their public obligations and only then should they be free to pursue market opportunities.

Bassman
Thu 18 Sep 08 (03:49pm)

john wellung:-actually,according to The Oz,Howard has spent $20billion on the ridiculously named war on terror(whatever that means!).But that aside.What about people who are living overseas.Because the times zones are different I like to download Tony Delroy’s Nightlife shows.I don’t watch TV but I watch EVERYTHING on my laptop-news,movies,all,Insiders,7.30 Report,4 Corners and much more...mostly downloaded.If I started being charged for EVERY little thing,eventuallly it would cost me a fortune.Small initial charges would be the foot in the door.Once a charge starts it goes only ONE way...NORTH!


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