The ABC expects the average cost of its prime-time program lineup to jump by more than a third this financial year as competition from new digital mutli-channels and online competition continues to increase.
The warning is contained in a submission to a senate enquiry into the ABC’s recent decision to cut a number of in-house programs and jobs. The move has sparked a backlash from the Community and Public Sector Union and high profile ABC staff such as Quentin Dempster.
However, the ABC said its budget has been hit by declining commercial and Screenrights revenues while the average cost of acquiring content has increased due to the introduction of digital multi-channels, the growing popularity of online streaming and other new devices to watch television.
"The end result is increased cost pressure on broadcasters as they adjust their activities to meet audiences needs and expectations," the submission said.
The introduction of 16 digital multi-channels has particularly increased competition for content.
“Since mid-2009, the average price paid per hour of acquired content for ABC1 has risen by 8 per cent,” the ABC submission said. “The ABC estimates that hourly rates for ABC1 prime-time programmes will increase by 36 per cent across 2011-12.”
In a separate submission, five independent production houses (Cordell Jigsaw, Princess Pictures, Zapruder’s Other Films, Giant Dwarf and Token Artists) called on the ABC to raise its level of outsourced production by adopting the model used by the BBC.
The independent production sector and state agencies have largely supported the ABC’s shift in recent years, under boss Kim Dalton, to a mixed model of internal and external production.
The submission by the five independent production houses, which have produced ABC programs such as The Gruen Transfer, Enough Rope, Two in the Top End and Angry Boys, said the ABC still produces between 80-90 per cent of its commissioned broadcast hours internally.
The BBC, by way of contrast, commissions 25 per cent of its programs from independent producers in all genres and also puts an additional 25 per cent through an internal and external tender process.
“Overshadowing debate over the appropriate levels of internal/external production is the broader issue of overall funding at the ABC,” the submission said.
“Allocations for commissioning entertainment shows have fallen by 40 per cent in real terms in the last four years alone. This affects both internal and external productions. It is in this shrinking funding environment that recent programming decisions have been made.”
However, the CPSU said many of its members believe the ABC is lost and that it no longer has a clear vision of where it is headed after the recent axing of programs such as New Inventors, Art Nation and sports such as lawn bowls.
“The recent decisions to axe programs are part of an ongoing process over the past five years to systematically destroy the ABC’s ability to generate its own programs. The significant public investment in its infrastructure is being wasted. The CPSU argues that the drive to outsource production is not cost effective.”
However, the Screen Producers Association of Australia submission said that the ABC is able to leverage its limited budget further through external production, partly because it can then access the 20 per cent Producer Offset tax rebate. It said the ABC committed $84 million to independently-produced documentaries, dramas and children’s projects in the three years to 2008-09, which generated $257 million of production.
“This equates to an overall gearing ratio of $3 to $1 of ABC funds.”
The independent producers’ submission also criticised the ABC’s high fixed costs, such as outside broadcast facilities.
“Nearly 65 per cent of funding for entertainment, factual and arts programs is tied up in these fixed costs and unavailable for actual commissioning.”