SBS boss says no strategic or cost benefit to merging with ABC
SBS managing director James Taylor has emphatically rejected the case for a merger with the ABC and has hit out at social media behemoth Facebook for failing to strike a commercial deal for use of its content.
Mr Taylor said there was no strategic and cost benefit to bringing the two organisations together, arguing there was still a role for the multicultural Special Broadcasting Service in a modern media climate.
“You need a strategic imperative to bring [ABC and SBS] together,” he said. “There isn’t one. You need a cost imperative to bring them together. There isn’t one. There isn’t a revenue synergy because we are commercially exposed in a way that the ABC is not.”
SBS managing director James Taylor.Credit:Eddie Jim
The comments were made in a wide-ranging interview with Mr Taylor as SBS announced new programs and guidelines that will shape the way it operates this year. SBS will receive government funding of $953.7 million, which is an increase of $56.7 million over the current triennium. It will also receive funds to expand audio description services for the blind and vision impaired.
Merging SBS and ABC has been the topic of debate in government for years.
It was an idea floated by ABC former managing director Mark Scott 2016 (he argued it could save the government $40 million a year). In mid-2021 Senator Concetta Fierravanti-Wells said it was the right time to merge. The two broadcasters already share back-end resources to save money. But Mr Taylor said beyond that, there was no reason to merge the two companies or moving them into a single office space.
“You only proceed transactions where there’s a rationale for them and in the absence of a rationale, then you just move forward with the model you have,” he said.
Mr Taylor said he was proud of SBS’ ability to manage costs and commission local content that fits within its charter. He said even in a modern world where people are working from home, there is still a need to keep SBS’ headquarters in Artarmon, which it owns and operates.
But he was disappointed that a commercial deal with Facebook for use of SBS content in the “newsfeed” – which could be used to invest in local journalists – was still not struck. Other media companies including Nine Entertainment Co, owner of this masthead, have received money from Google and Facebook for their content under new laws.
Australia’s other taxpayer-funded broadcaster, the ABC has deals in place with both Google and Facebook which it is using to hire regional journalists.
“I’m pleased for the ABC that they have a deal,” Mr Taylor said. “I think it’s odd that given that the bargaining framework specifically contemplates the public broadcasters, the national broadcasters, but Facebook didn’t avail itself of an opportunity to have even an initial conversation with us about how our content might play into their platform.”
Communications Minister Paul Fletcher said Facebook should have done a deal with SBS. “The Government’s view is that there are two national broadcasters: while it is pleasing that Facebook has done a deal with one, we expect that it should also be doing a deal with the other,” he said.
Mr Fletcher announced the latest triennium funding for ABC and SBS earlier this month. Mr Taylor said the latest round of triennium funding and an agreement with Google would ensure the broadcaster could invest in making more local content and hiring journalists to deliver news in different languages.
He said there was a place for SBS in a world where platforms like Netflix were investing millions in international programs like major hit Squid Games.
“We think about ourselves as being hyper differentiated,” he said.
“If you’ve come here, and you speak Arabic as your first language, what does the SBS give you? It gives you a settlement guide … which helps you understand the society you’ve joined, it helps you understand how to get a driver’s license, how the electoral system works, how to enrol to vote, what beach safety is and what you need to know, what to do to prepare your house before a bushfire.
“It goes beyond programs. It’s about providing a lifecycle approach to making people feel engaged.”
The new round of funding will be focused on commissioning more local content and building out digital technology to house it. Mr Taylor said the company’s online video service, SBS On Demand, was outperforming global streaming peers.
“If you to the Apple App Store and search streaming platforms – all the global behemoths, domestic players … ones that are ad-funded, the subscription ones – SBS On Demand is the highest-rated streaming platform in the country.”
SBS On Demand rose to prominence in 2017 when it acquired the exclusive rights to the adaptation of Margaret Atwood’s award-winning novel The Handmaid’s Tale. But it also drew criticism from other commercial broadcasters who said SBS should be using government money on local production rather than international formats.
Mr Taylor said the idea the company was competing against domestic and international players was a fallacy. “We’d love to make more Australian content, but you’d probably understand the five to 10 times cost difference between a piece of content that is made and one that is acquired,” he said.
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