FAIR, Ms Bridget, Group Chief, Corporate and Regulatory Affairs, Seven West Media

HERD, Ms Annabelle, Head, Broadcast Policy, Network Ten

McCARTHY, Ms Justine, Legal Counsel, Regulatory and Business Affairs, Seven Network Operations Limited

WILSON, Mr Ian, Regulatory Manager, Network Ten

[14:33]

CHAIR: I now invite you to make a brief opening statement before the committee proceeds to questions. I am not sure how you want to do this. Will there be one statement from Network Ten and then Seven Network?

Ms Herd : I think we thought, since there are two of us and time is short, that we are happy to proceed to questions if that is preferable to the committee.

CHAIR: All right. Yes, please. I remind the committee that we have very little time for the next two witness groups, so we will need to keep it extra tight.

Mr STEPHEN JONES: The first question is whether the networks themselves conduct research into audience perceptions of advertising—and, if so, what is the nature of that research?

Ms Fair : I am not aware that we conduct any research of that nature.

Mr STEPHEN JONES: This is your major source of revenue, and you do not do any research into the impact that it has?

Ms Fair : I am not saying there is not research, but I am not aware of it. I do not think it is a major feature of our activities. Our advertisers certainly keep a close eye on the effectiveness of their advertising.

Mr STEPHEN JONES: One of the propositions that has been floated throughout the course of this inquiry is whether there should be some limitation on the promotion of gaming throughout sports broadcasts and, if so, when and how. It strikes me that it is always preferable, notwithstanding the evidence that was given immediately before yours, that there is some self-regulation in this area before a government would seek to ban or limit something. Would you be willing to do any research into audience perception of gaming advertising during sporting contests?

Ms Herd : What we can tell you is the level of complaint that we have received. That is one measure of how the audience is receiving what has been going on to date. Ten has had four complaints since 2006 related to gambling advertising. That compares to the 98 complaints that we have had in that period about there being too many ads during programs. In an incident that attracted a lot of outrage last year, we had somebody go on to one of our shows and say something derogatory about a prominent Australian. We received 3,000 complaints about that very quickly. I guess that gives us feedback about the level of concern from our viewers about what Ten has been doing in this area.

Mr STEPHEN JONES: It strikes me that that may be a little bit of ostrich with buckets of sand available.

Ms Herd : I am just talking about the complaints we have received that we have recorded, that is all.

Mr STEPHEN JONES: Is The Project one of your programs?

Ms Herd : Yes.

Mr STEPHEN JONES: There would have been more complaints during one half-hour segment on The Project last week where you ran a segment on this particular issue complaining about it. So it strikes me as a little strange that you are unaware of the issue.

Ms Herd : I am not saying we are not aware of the issue. We are very much aware of the issue and we are taking it very seriously. We have engaged in a process with the government to put in place not a self-regulatory process but a co-regulatory amendment to the Commercial Television Code of Practice. You simply asked me about what our audience had told us, and one measure of what the audience tells us directly is the number of complaints we have received. I am certainly not saying we are not aware of this; we are very much aware of it.

Mr STEPHEN JONES: I will leave my question at this: would the networks be willing to do quantitative research on their viewer perception of gaming advertising during sporting fixtures? If the overwhelming response to that research were in the negative, would the networks be willing to respond to that by limiting the exposure of gaming advertising during sporting broadcasts?

Ms Fair : To answer the second half of your question, we have put in place limits on the amount of gambling advertising in sports broadcasts. Certainly in the case of Channel 7, as Annabelle alluded to, we have been in discussions with government about a co-regulatory code that will form part of our industry code of practice and be administered by the ACMA. In advance of that process being concluded, Seven has adopted an internal policy that implements all of the requirements that we have discussed to date with the government. That includes no commentator promotion of live odds, no promotion of live odds during events, and requirements to ensure there are responsible gambling messages. Our code also provides for commentators not to include representatives from betting organisations. We are of course aware of the issue. We take it very seriously. Whilst we think that gambling advertising should be allowed, there clearly is some community concern around it and therefore it needs to be handled carefully and responsibly, and we think we have put in place steps to try and do that.

Ms Herd : We have taken the same approach at Network 10.

Mr STEPHEN JONES: I acknowledge that those steps have been put in place. I am not trying to brush those aside, but there is a live question on whether the community believes that those steps are adequate or not. I guess if it were not a live question this inquiry would not be occurring. Would you be able to help the committee with this question—I also asked it of the subscription television association—and that is the proportion of your advertising revenue that comes from gaming advertising?

Ms Fair : I do not have those figures, I am sorry. I would not imagine that it would be an extremely high proportion.

Mr STEPHEN JONES: Not a high proportion?

Ms Fair : Not a high proportion, no.

Mr STEPHEN JONES: So, if the government were to seek to limit the advertising of sport or if the codes themselves were willing to move in a voluntary way, you could not see this having a significant impact on the revenues for the free-to-air stations?

Ms Fair : All revenue is important—

Mr STEPHEN JONES: I understand this.

Ms Fair : particularly in a market where we are already struggling. We are not fans of overregulation in these areas.

Ms BRODTMANN: Just quickly: The NRL, the AFL—the major sporting codes—have already adopted their own codes on this issue. We have heard from subscription television today that they have adopted codes that are all very public, out there, open and transparent and that they have been developed in consultation with the community and in consultation with ACMA and the government. You have your internal policies. You are moving towards a code. It just seems like you are a bit behind the eight ball in terms of this. I know that these are all recent events in terms of the codes that the NRL, subscription television and others have developed but you are the last—

Ms Herd : I do not think we are. I do not think ASTRA has put out their code for public consultation yet, as far as I am aware. They are about to.

Ms BRODTMANN: They have got one already and they have got an enhanced one that they are putting out.

Ms Herd : That is what we will be doing at about the same time. I think we are running parallel, and I think what we are saying is that we have been acting as though the code were in force for many months now. So, practically speaking, we are behaving as though that code were in force.

Ms Fair : Can I also say that it is not for lack of trying. These discussions have been ongoing for some many months. It is not through any failure on our part to try and address these issues.

Ms BRODTMANN: Do your codes or your internal policies adopt that 30-minute either side rule?

Ms Fair : Yes.

Ms BRODTMANN: You refer in your submission to the overseas sports broadcasts. You make mention of the fact that, realising that this is a growing industry, 'any proposals on restriction advertisement needs to be developed in consultation with a range of other players'. I want to get a sense from you of what those restrictions should cover for the overseas broadcasting as well as for sportscasts?

Ms Fair : The amount of gambling advertising that you are likely to see in an overseas broadcast would be fairly limited in any event. We certainly have not included in that restriction material that we added in separately ourselves. So we were not trying to look for a loophole where something came from overseas and we could just add things in. It is more the fact that, if somebody is delivering a sporting event to you live and you are trying to play it live, your ability to sit there and pixilate out various signage around the grounds or other elements is fairly low. That coverage does not usually include, and it would not be very helpful to include, somebody actually having live-odd spots in there, because obviously they would be talking about somewhere that probably is not that relevant to Australia. It is really more a question of the fact that, with something that comes in live, there is limited ability to change the footage.

Ms BRODTMANN: And that that needs to be acknowledged, if there is going to be any regulation developed on that front.

Ms Fair : Yes.

Ms Herd : This is something that the communications department's interactive gambling inquiry looked at, because we had had issues before with, as Bridget said, sport that has come in live that has been branded with different interactive gambling services. We had to either not show the event or try somehow to blur it, which is actually impossible to do if you are live, or even on a slight delay. That inquiry recommended that clarity be given to allow overseas broadcasts to have some gambling advertising, as long as we were not getting any direct financial benefit from that advertising, which we were not.

Mr CIOBO: You mentioned before, Ms Herd, that you had had four complaints since 2006. Is that right?

Ms Herd : Yes.

Mr CIOBO: How many complaints do you get about the content of news programs, with respect to children—in other words, complaints from parents who feel that what was broadcast in the news was not appropriate or suitable for their children?

Mr Wilson : I can certainly get back to you on the specifics, but in terms of the strength of footage in these programs, there would certainly be more than four. It is hard to say off the top of my head. We are talking perhaps in the tens on an annual basis.

Mr CIOBO: So, to borrow a phrase from the chairman, more than double? I guess you had to be here earlier—I am being a little bit mischievous! So, in terms of policies by the broadcasters with respect to advertising that irritates the public—and this must be something you have all discussed numerous times, because there are a hell of a lot of irritation advertisements—

Ms Herd : I think most of it irritates the public!

Mr Wilson : I think that is why Annabelle used the example of too many ads, because I think that falls into that 'irritating' bucket—'I am trying to watch my sport and there are too many stoppages for ads'.

Mr CIOBO: I am just trying to reconcile the view that is frequently put that this is a massive problem. that everyone is complaining about it and every poll that has been done has indicated that the public has had a gutful of it. With what you are getting at the coalface—which would appear to be not much—what about other irritating advertisements? I do not want to mention anyone in particular, but do you get four complaints over six years or whatever it has been? I am just trying to put some numbers around.

Ms Fair : The Advertising Standards Board usually deals with complaints about the content of commercials, so they might be able to tell you better than we can whether people like or dislike certain advertisements.

Mr CIOBO: When people have had enough of something they are probably more inclined to call you, if they are watching your channel, rather than call the standards board.

Ms Fair : We get very few complaints about the content of advertisements of any kind. The majority of our complaints deal with news and current affairs programming, classification matters for general programming, the amount of advertisements in some cases—'you've shown too many ads altogether and we don't like that'. Those are probably the main categories.

Mr Wilson : If you wanted something more specific, so far this year we have had more, as in we have had some. Again, I am really only talking about a handful of people who have been unhappy about the number of funeral insurance advertisements that are appearing on TV, because unfortunately it perhaps provides negative connotations for them. They may well be elderly and not happy about having these reminders.

CHAIR: Do you have any concerns with the current prohibition on the advertising of gambling during that period of the day when children watch TV?

Ms Fair : Well, we comply with that requirement.

CHAIR: Do you think it is good policy? Do you have any concerns with it?

Ms Fair : It is good policy to advertise these services responsibly to the appropriate audience.

CHAIR: This is your chance to speak up if you want to change it. Do you think it is appropriate that we prohibit the advertising of gambling services during the time that children watch TV?

Ms Fair : We are not seeking any change in that area but, if I can just maybe predict where you might be going with your question, the number of child viewers in sporting telecasts is actually very low. Generally speaking, in the under-12 audience it is about five to seven per cent and under-18 is less than 10 per cent in our highest rating sporting broadcasts.

CHAIR: For Saturday afternoon footy—I had better be clear about my code—probably the AFL?

Ms Fair : We are AFL.

CHAIR: How many people under the age of 18 would be watching that Saturday afternoon game of AFL?

Ms Fair : I would have to take that on notice and get back to you with proper figures. The figures I have just given you are overall. If you wanted something specific about particular games we would have to come back to you.

CHAIR: Do you know what the audience is for an AFL game on a weekend afternoon?

Ms Fair : On a weekend afternoon? I have nights here; I haven't got afternoons. My apologies.

CHAIR: Would it be in the hundreds of thousands?

Ms Fair : For sure, yes.

CHAIR: Is it reasonable to assume that tens of thousands of children are watching those same games?

Ms Fair : If was around five to seven per cent there might be some thousands of children watching in the company of parents in general.

CHAIR: Do you find it contradictory that children are not allowed to see a gambling ad just after lunch but that it is okay for them to see a gambling ad an hour later during a sporting game accompanied perhaps by their heroic sporting figure wearing the name of a gambling company across his chest?

Ms Fair : I think it is a different experience to have child viewing hours where children are likely to be during television by themselves, unaccompanied and unsupervised, from watching a sporting event which we know generally occurs with children in the company of adults and where messages in advertising content can be discussed in a very different way.

CHAIR: Are you suggesting that Saturday afternoon footy should be rated PG? It is a serious question: are you suggesting that?

Ms Fair : It is not rated at the moment. Sports and news are not classified content. I am not suggesting any classification in areas where there is not already classification.

CHAIR: But are you saying it is okay for children to see gambling ads during daytime so long as they are in the company of adults and can be counselled by those adults?

Ms Herd : We agree, but we think that gets to the balance of weighing up, of getting the right point. PG means parental guidance. If you already have an audience that is being guided by parentals—75 per cent to 80 per cent of kids watching have got a parent there—we think that is the right balance.

Mr Wilson : I think it is partly about the likely audience. To use the news example: I think we all have news bulletins that appear in G-classification periods, but the material itself is not necessarily at a strictly G level. There is an expectation that the news sometimes contains stronger material and that is allowed for when there is an expectation that when you're watching over news you will perhaps see—

CHAIR: I'll be frank with you; I am a bit thrown. We have had a number of witnesses today justify the allowing of gambling advertising during daytime sports matches. We have had a number of witnesses say that they think it is okay because most children are accompanied by adults at that time. That seems to be a fairly loose safety net under those children.

Ms Herd : That is not the only safety net. You're looking at a code—the code we are talking about—which has other protections in addition to that simple raw data about what children are watching and who with, and there are other controls around gambling advertising, as well. For example, with the live odds stuff you cannot show a family happily betting together, you cannot be directing this stuff at children—

CHAIR: But your code will allow in a break an advertisement for gambling services.

Ms Fair : It is not allowed in any break; it is only allowed in scheduled breaks in play. In the case of most games that is half-time. In AFL that would also include quarter time, although we do not show ads at quarter time for gambling services currently.

CHAIR: Aren't we splitting hairs a little bit here? If children are watching their favourite team on a Saturday afternoon they are probably still going to be watching it during half-time or quarter time.

Ms Fair : We are not saying that there is a problem with them seeing some of these advertisements. What we are saying is that there ought to be responsible limits on the amount and how those advertisements are presented—both of which are issues we have addressed in our code.

CHAIR: Why shouldn't gambling advertising be allowed earlier in the afternoon during the matinee movie, or whatever it is called, when children might be watching that as well? What is the difference, apart from the fact that, as a number of witnesses in the industry have said today, there is a likelihood they will have adult supervision?

Ms Fair : I think there is a difference when there is adult supervision. I think it goes to the question of whether there is a need for further regulation in the area.

CHAIR: That is exactly our point.

Ms Fair : Exactly. I know that is your point.

Senator DI NATALE: I just want to be clear about this point. It seems we are confusing the promotion of live odds and ads. Ads can be shown at any time through the broadcast, can't they?

Ms Fair : If we break from the sport then we can show any kind of ad.

Senator DI NATALE: You have been saying 'advertising', but you are talking specifically about the promotion of live odds. We are not talking about advertising per se. So Sportsbet can run an ad at any time through the broadcast. It might be at quarter-time, half-time or after a goal has been kicked.

Ms Fair : The code that we have implemented deals with the promotion of live odds.

Senator DI NATALE: I just want to be clear. I think you were saying 'advertising'. We are not talking about advertising; we are just talking about the promotion of live odds as it applies to the code?

Ms Fair : Yes.

Senator DI NATALE: I want to get to this question of the total number of kids who watch sports. It keeps being presented as a percentage, but I want raw numbers. Let's take your top-rating sports broadcast. It is probably the AFL grand final, is it? That would be right up there.

Ms Fair : Yes.

Senator DI NATALE: Let's use that as an example. Give me the ballpark figures. How many millions of people watch the AFL grand final?

Ms Fair : Oh, gosh. It would be over three million sometimes. It depends on who is playing.

Senator DI NATALE: Let us say three million. So we are talking about 10 per cent of that audience—300,000 people—that are young kids being exposed to advertising through the medium. What is your top-rating kids' viewing program? Would it achieve even close to those numbers?

Ms Fair : No. Children's viewing does not achieve that, but almost all of the audience is children.

Senator DI NATALE: Sure. But, again, I take issue with the fact that you keep presenting this as a proportion—'It is only five per cent or 10 per cent of viewers.' If we are talking about a raw numbers, more kids are watching the footy than are watching Sesame Street, the Wiggles or—I am showing my age here—or something a young teenager may watch. Degrassi High was big when I was growing up! My point is that if you are a young person there is a far greater likelihood you are going to be watching sport than a program that is directed at you. Is that a fair comment?

Ms Fair : It is a very different viewing experience to be watching sport in a family environment—

Senator DI NATALE: The question is about the raw numbers. The raw numbers are simply that you are much more likely to be watching a game of footy, whether it is the NRL or AFL, than you are to be watching a program directed specifically at kids. That is just a simple yes-or-no answer.

Ms Fair : In raw numbers, there probably are more watching the AFL than watching our children's programming—that is right. But the viewing experience is very different, so I do not accept the premise of your question.

Senator DI NATALE: There is no premise. It is just a simple question of fact.

Mr CIOBO: I want to clarify that. You are talking about AFL grand final day. I want to know the average numbers based on all the rounds, which I am guessing is quite different to AFL grand final day. It may in fact not even be the same number. I think that is a very important difference.

Senator DI NATALE: My point is that, on average, there are more kids watching sport than programs directed at young kids. Please take that on notice, but I am more than happy to pre-empt the answer. You are right that it is a very different viewing experience. I contend that it is, in fact, more dangerous because at least when watching a kids' program you do not have Big Bird talking about the odds of getting two plus two right.

Ms Herd : Our code will make sure that you do not have the commentators doing that either.

Senator DI NATALE: We do not have Bert and Ernie talking about the odds of whether the Cookie Monster is going to come and eat half a cookie or three-quarters of a cookie. During a game of football we have this privileged space being afforded to gambling advertisers that is reaching far more children and in a way that makes the advertising experience much more interactive with the viewing experience. So I contend it is actually far more dangerous and more significant an issue than the restrictions that we currently have pertaining to kids' shows.

Ms Fair : Obviously we do not agree. We have put in place some rules around what we can do in terms of advertising in sporting broadcasts that try to strike a balance between the fact that it is reasonable to advertise legal services and taking into account concerns that people have expressed about not wanting too much of that kind of advertising and the nature of that advertising.

Senator DI NATALE: 'Concerns'. We heard that you have not had many complaints, but you have clearly made some decisions to support the proposed code. In fact you are, I understand, enacting the code before it has even been endorsed by ACMA. Why have you done that?

Ms Fair : We are keen observers of the political process and keen observers of public comment, and we like to be responsible corporate citizens. Clearly, there has been some discussion around these issues for some time, and we like to try and do the right thing. I know that people might sometimes find that astounding, but that is what we do.

Senator DI NATALE: No, I do not find that astounding at all. I suspect that you have a viewing audience that expects that of you. But we heard evidence that you have not had many complaints. I think Mr Ciobo presented a case that actually this is not a big issue and it is a bit of a beat-up, and yet—

Mr CIOBO: I never said that.

Senator DI NATALE: Well, I am paraphrasing.

CHAIR: We need to wind this up with the last question.

Senator DI NATALE: My issue is: why move on the code if it is really not that big an issue?

Ms Herd : I do not think we ever said it was not a big issue. The fact is that we have agreed to have an ACMA enforced amendment to our code which has serious consequences if we do not comply—it is not the burglar changing your locks, or whatever the last witness said. All of our regulatory requirements are pretty much as set out in our code of practice, and we are agreeing to amend our code of practice in a way that addresses your issue about knowing who is an advertiser and who is a commentator and making it very clear that there has to be a clear distinction between who is an advertiser and who is a commentator.

Mr Wilson : In terms of your broader question, it is always a challenge around what you screen in prime time per se. We have certainly heard arguments about the level of coarse language, sex and nudity—whatever—you should show at 7.30, 8.30 and so forth. In some people's opinion, you should not have anything really like that until 10.30, when kids go to bed, for instance. It is about a balance of protections and also providing a service and allowing adults the opportunity to watch.

Senator DI NATALE: And making a buck.

CHAIR: I will close it there.

Mr STEPHEN JONES: Can I put two questions on notice. One is in relation to the willingness of the free-to-airs—and to be fair and balanced we should put the same question to the subscription TV stations—to conduct some quantitative research of their audiences regarding the promotion of gaming during sports broadcasts. The second is on the aggregate numbers—I do not want the disaggregate numbers—of the proportion of revenue that the free-to-air industry as a whole gains from gaming advertising.

CHAIR: Network Ten and Seven Network, thank you very much. We are very grateful for your time. That was very helpful.