News National The biggest challenge facing the ABC’s new boss
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The biggest challenge facing the ABC’s new boss

bc cuts
Michelle Guthrie announced the cuts while talking to colleagues on Tuesday afternoon. Photo: ABC
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The ABC’s new managing director Michelle Guthrie faces an immediate challenge in her first full week in command at the national public broadcaster.

Ms Guthrie, a former Google Asia, Foxtel and News Corp senior executive, will be sweating on Treasurer Scott Morrison’s first federal budget next Tuesday.

If the ABC loses a $20 million special annual budget supplementation initiated by former treasurer Wayne Swan, Ms Guthrie will have to sack 10 per cent of her workforce of 1000 journalists.

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The impact of the loss of this revenue has been made explicit by the ABC in its pre-budget lobbying. If Ms Guthrie and her executives see that the $20 million is to be retained, the management road ahead will be less fraught.

Since the Abbott government dishonoured its 2013 election commitment that there would be “no cuts to the ABC or SBS”, both broadcasters have downsized their staffing and cut programs, provoking protest rallies around the country, particularly in the states. The ABC is now seen as Sydney-centric with more than half its remaining 4000 staff working out of its Ultimo headquarters.

abc-shops-230715-newdaily
ABC Shops around the country will be closed and hundreds of staff affected, as the broadcaster moves to an online retail model.

Now in an election year, it is doubtful the Turnbull government would want a political firefight with vocal public broadcasting supporters. So the ABC is hoping the $20 million will last for at least another 12 months pending a review.

But with a federal government in indefinite deficit distress, the issue of just how to fund the ABC in the future becomes a political and management imperative.

Ms Guthrie has said everything is on the table, including advertising.

The ABC ranks third in Australia’s online news sites (behind News Corp and Fairfax Media). With this now well-established market penetration in mobiles, devices and desktops it could expect to earn considerable advertising revenue. If advertising was extended to its four TV channels – ABC TV, ABC 2, ABC 3 (children’s) and News 24 – its metropolitan and regional AM radio stations and national networks Radio National, and FM stations Triple J and Classic FM, the ABC could recover a significant proportion of its current taxpayer-provided base funding of $820 million a year.

ABC television multi channels had a 17.7 per cent market penetration in 2014-15. Audience reach across the broadcaster’s nine metros and 47 regional radio stations was 23.7 per cent.

iview
iview became available in 2008.

Monetising this market advantage across all existing platforms by opening them to consumer advertising would look very attractive to a cash-strapped new MD. Public broadcasters in New Zealand and Canada take TV advertising.

So why not the ABC?

Currently the ABC Act explicitly prohibits advertising on ABC television and radio. So even if Ms Guthrie recommended advertising, the power to implement rests with the Prime Minister, the government and the parliament.

It will not happen. All competing commercial media in Australia would oppose it aggressively. With threats from Google and global video streamers, global internet radio and free online news sites, the local commercial media industry needs every available advertising dollar it can get. It is highly unlikely Ms Guthrie would ever propose advertising.

She could monetise the ABC’s popular iView catch-up service. It has a massive audience with 31.6 million program plays in 2015. By asking users to subscribe through an account like iTunes, considerable revenue could be earned to offset iView’s $25 million a year operational costs.

Outgoing ABC Managing Director Mark Scott.
Ms Guthrie takes the reins from Mark Scott. Photo: AAP

Better still, why not start charging ABC viewers, listeners and online users a small user-pays subscription fee to supplement the taxpayer subsidy? It could be pitched so that the funds would be spent on more programs.

The politics of this would be problematic, akin to another tax and likely to encounter angry resistance.

With these political roadblocks it seems more likely that Ms Guthrie will have to rationalise ABC multi-channel services over her first five-year term to concentrate on maintaining and enhancing quality and distinctive output.

The broad consensus for those who want the ABC to survive the current digital disruption phase is that original Australian content across all platforms is the only strategy by which the broadcaster can sustain its audiences and the political support which comes with that.

With no more money, Ms Guthrie’s only available course seems to be to devise a survival strategy based on creative, innovative, imaginative, distinctive and quality programs which fully engage all Australians.

It should be all creative hands on deck at the national public broadcaster.

Quentin Dempster is political editor of The New Daily. He has more than 40 years’ experience in print and television (The Sun Herald, The Sydney Morning Herald, ABC TV) and is the author of three critically acclaimed books and a documentary on institutionalised corruption. He also has a Walkley Award and an Order of Australia for an ‘outstanding contribution to journalism’.

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