COONAN, Mr Michael, Head of Regulatory Affairs, Special Broadcasting Service Corporation

HEALD, Mr Marshall, Director, Television and Online Content, Special Broadcasting Service Corporation

[12:07]

CHAIR: I now welcome representatives from SBS to the table. Information on parliamentary privilege and protection of witnesses and evidence has been provided to you. We have your submission; it's already been referenced a couple of times here today. I invite you to give us a short opening statement if you like.

Mr Coonan : Thank you for the opportunity to appear at this hearing. This inquiry, as well as other recent inquiries, is a welcome opportunity to consider how policy settings can be optimised to ensure that Australia continues to have a vibrant and productive screen industry. The Australian screen industry needs to deepen and expand the production of content that reflects and celebrates the unique Australian culture, identity and people. SBS is essential to this process of reflection. We are committed to telling Australian stories to Australian audiences through local productions. Indeed, as Australia's multicultural and multilingual broadcaster, SBS is critical to building understanding and cohesion in a society where more than one-quarter of the population were born overseas and over 20 per cent speak a language other than English at home. At SBS, we've been reflecting Australia's true diversity for more than 40 years.

This is important because, as identified by Screen Australia research, Australia's minorities and marginalised communities are generally under-represented on TV. For Australia's diverse population, feeling included in society cannot be more important, and seeing yourself represented on a mainstream medium like television is a powerful tool in aiding inclusivity and cohesion. At SBS, we present compelling, distinctive and thought-provoking content like no other media organisation in Australia. Some excellent recent examples include the acclaimed drama Sunshine, set in a South Sudanese community in Melbourne's outer west; The Family Law, our warmly received comedy set in Queensland, which brought a predominantly Asian Australian cast to mainstream screens for the first time; Safe Harbour, a bold psychological thriller telling the story of a chance meeting between Australian friends on a sailing holiday and a group of asylum seekers; and Grace Beside Me, NITV's first live-action children's drama exploring the life of Fuzzy Mac, with one foot in the Indigenous realm of culture, country and spirits and the other in the world of a 21st-century teenager. In the documentary genre, we've recently presented Marry Me, Marry My Family, which looks at the stories of multicultural Australians embracing their Australian identity while also staying true to their culture; and Muslims Like Us, which followed 10 Muslim Australians with vastly different views on their faith living under one roof for eight days.

It was wonderful to see MPs, senators, production partners of ours and members of the community at our recent SBS drama showcase here at Parliament House, where we convened a fantastic panel of diverse talent. We've been very gratified to receive recent feedback about SBS's distinctive place in Australia's production ecosystem. Producers have called SBS out as 'bold and unique' and 'a network that embraces who we are as a nation, diverse and multicultural'. They've also noted that our dramas are an opportunity to put fresh new faces on Australian screens from underrepresented communities.

Local content makes a significant contribution to the Australian economy, with Screen Australia reporting that free-to-air television as a sector makes up almost $800 million of Australia's GDP and almost 4,000 full-time equivalent jobs. While SBS is a small player economically, in the last financial year we commissioned over 150 hours of television content, not including news, current affairs and sport, and we would love to see policy funding settings that enable us to do even more. Australian content is not, however, just limited to screen content, as this inquiry recognises. SBS Radio is at the heart of what we do. We're the world's most linguistically diverse public broadcaster, with almost 70 radio programs in languages other than English as well as a number of dedicated digital music channels. These audio services provide news about Australia and news from listeners' home countries with the independence and balance that has always been a hallmark of SBS's coverage. They are essential in providing settlement information for new migrants, and enable migrants' participation in Australian civic life.

In our submission, we have made a number of recommendations to support the future growth and development of the sector, including a fully funded Australian screen content quota for SBS, an increase in the producer offset for television dramas and docos to 40 per cent and a free-to-air distribution window for government-funded projects. With NITV, Australia's home of Indigenous broadcasting and an integral part of the SBS network, we have also recommended specific support for Aboriginal and Torres Strait Islander children's content. We welcome the opportunity to discuss these recommendations further and to respond to your questions.

Senator URQUHART: On children's content and the expansion of ensuring ATSI content, can you provide us with an overview of the current ATSI children's content that's available, and are commercial broadcasters investing in ATSI children's content or is it just left up to SBS?

Mr Heald : NITV has a very small budget overall. All of the projects that NITV make—I'm not sure if you know: with the creative teams, two out of three of the key creatives need to be Indigenous. In respect to kids' content, last year we funded Little J & Big Cuz, which was a really fantastic animated series about preparing Indigenous kids for school. This year we've got Grace Beside Me, which is the first live action tween series for Indigenous kids. But, with a small budget, those shows are few and far between. With both of those shows we have partnered with both the ABC locally and Disney so that they get some international money coming into them. With a very small funding base, we're always actively looking for partners to try to tell more stories that matter.

Senator URQUHART: Has that partnership been able to—is it doubled? What's the availability of access for that to now be shown?

Mr Heald : Across SBS and NITV, because our content is all very locally focused and very distinctive, we believe it's unrealistic to expect international finance to ever be more than about 15 per cent of the budget.

Senator URQUHART: In terms of commercial broadcasters, do you know how much they invest in ATSI children's content compared to, say, SBS?

Mr Heald : No, I don't.

Senator URQUHART: Okay, that's fine. I've had a look at your set of recommendations. Your submission states that SBS would welcome the implementation of a fully funded Australian content quota on its primary channel. What level of additional funding would this require?

Mr Heald : It's difficult to give an exact number. I think we can estimate a minimum of about $25 million a year, but it could be higher than that, to explain—depending on the genre of content, the costs vary widely. At one end you might find that an entertainment show shot in a studio could be produced for as little as $100,000 an hour, whilst a high-end drama is likely to cost $1.5 million to $2 million an hour. Secondly, we fund our shows through four means. There's direct investment from SBS, which in our drama slate is typically about a third of the budget. We work very closely with Screen Australia, who are a fantastic partner, but there are limits to their funding and their funding is under more pressure than ever before. We work with state based agencies. And we get international money coming in and the offset. So the exact amount is, really, subject to what those four different avenues look like. Does that make sense?

Senator URQUHART: Absolutely. If SBS did not compete with commercial broadcasters for material, that would otherwise be broadcast on those stations. Would existing levels of funding be sufficient to satisfy a local content quota?

Mr Heald : Absolutely not. At the moment, SBS produces between 100 and 150 hours of local content every year. Nearly 70 per cent of our total budget goes on funding content, so it's not possible for us to increase the amount of local content without additional support—also understanding what we think the natural cap is on international investment into our shows, understanding our very strong focus on telling Australian stories. International players are looking for international stories they can distribute internationally. We tell local stories that might have an international distribution.

To give you some insight, look at a show like The Family Law, which is incredibly distinctive and very different. Some of the feedback from the international market was, even though it had an almost predominantly Asian-Australian cast, it was too Australian to travel internationally. In some ways, that's one of the greatest compliments you can have!

Senator URQUHART: Yes, absolutely. Do you have a view on the operation of the tax incentives that are available for film and television projects? Do you think that they are adequate to support Australia's film and television production industries?

Mr Heald : In our submission we said we would like to see the offset increased to 40 per cent.

Senator URQUHART: Doubled.

Mr Heald : Yes.

Senator KENEALLY: Can I just follow-up there, Senator Urquhart?

Senator URQUHART: Yes, sure.

Senator KENEALLY: Is that specifically to drive drama content?

Mr Heald : Both drama and documentary content, and children's content.

Senator URQUHART: You submit that the project produced as a result of direct government funding to the screen industry should be made available to free-to-air distribution in a timely manner. Can you expand on the current situation as it now stands, in regard to projects that are broadcast on subscription and streaming services? Is there a significant delay in material being made available?

Mr Heald : I guess our point there is that the taxpayers are, effectively, being asked to pay twice for content: first, in terms of the tax they pay to the government; and, second, in a subscription fee to access this content. Effectively, what we're saying is we believe there should be a secondary window for taxpayer funded content, to make sure that all Australians can access that content.

Historically, content that was made for pay television was made exclusively for that platform. Unless you were a subscriber to that platform you would never effectively access it. In the last couple of weeks—I think—Wentworth, which was a Foxtel show, has been on the ABC. So we do live in times of change. But I think some sort of legislated requirement that required taxpayer funded content to go to a free-to-air provider, at some point in the future, would be to the benefit of all Australians.

Senator URQUHART: What would be the benefit of a more timely release, so that there wasn't such a long time lag between?

Mr Heald : We need to make sure that SVOD providers or subscription providers can get value from the content. Timeliness is a question. We would certainly, for example, suggest that a period of, perhaps, three years after it had been released on a subscription platform would be a good time for it to come across to free-to-air.

Senator URQUHART: That seems like a very long time to me, but that's not in television land, clearly.

Senator KENEALLY: Can I jump in here? When I read this recommendation, what came to mind instantly was Gogglebox, which seems to be a joint production of Foxtel and Channel Ten, meaning it's available one night on Foxtel and the next night on free-to-air. Is something like that perhaps what you have in mind?

Mr Heald : I think Gogglebox is all about what's on television that week, so it's driven by the timeliness of the content. Effectively, people are watching audiences—

Senator KENEALLY: That's one way that it could happen?

Mr Heald : That's right. Absolutely. But you'd probably look at each kind of genre and—

Senator KENEALLY: But it would be driven by content—

Mr Heald : That's right.

CHAIR: Could I clarify? When you talk about publically funded production, this is any show that has gone through a process of having Screen Australia involved in contributing to that? How do you decide what's publicly funded and what isn't?

Mr Heald : Direct investment.

CHAIR: Direct investment?

Mr Heald : That's right.

Senator KENEALLY: Would there be a risk that you would then have an unintended consequence that governments might do non-direct investment funding, the way they've done with the $30 million to Foxtel? It's very hard to tell what that is actually for. The now post-justification that it was for women's sport is convenient, but it's hard to see that in the announcement at the time or draw a direct line.

Mr Heald : It's difficult for me to comment on government policy.

Senator KENEALLY: My point is more: is there a risk that, if it were direct investment, you would perhaps encourage people—

CHAIR: If there were requirements over the direct investment?

Senator KENEALLY: You could perhaps, instead, encourage these general grants to become more commonplace?

Mr Coonan : Our focus is on the established direct funding framework. We don't really have any comments to make about other means of funding.

Senator KENEALLY: Okay.

CHAIR: Do you have other questions, Senator Keneally?

Senator KENEALLY: Well, not a very serious one. I'm disappointed that Mr Ebeid isn't here. I'll say that for the record.

Mr Heald : We'll pass that on.

Senator KENEALLY: However, speaking of Australian content, how much support has SBS given to Mark Humphries' Logie bid?

Mr Heald : It deserves a lot more than it's received. He is an extraordinary comedian and we do enjoy his daily forays.

Senator KENEALLY: So you've given him some support?

Mr Heald : Moral and emotional, but certainly not financial!

Senator KENEALLY: That seems appropriate. Thank you.

Senator URQUHART: In your submission you note the recommendation of the House of Representatives' report on the inquiry into the Australian film and television industry regarding a contestable fund being established to support the creation of quality Australian children's programs and that that replaces some or all of the hours based quota for first-release children's screen content. Does SBS have a view on whether this fund would provide the same level of support for the production of children's television as the existing quota obligation?

Mr Coonan : I think it would be a matter for government regarding the level of support that would go into that fund. There are obviously a number of support levers being assessed across this inquiry, the government's screen content inquiry and the one that you mentioned from the House of Representatives. Our position is not that we have a view on what the commercial free-to-airs should have or not have in relation to children's content quotas but more that, if a contestable fund were established, we think it would be appropriate for SBS, for example, to access that fund to do important Australian content, including the Indigenous children's content that we mentioned earlier.

Senator URQUHART: Given that public broadcasters are not subject to the same quota obligations, should they be able to access that fund if there were a fund set up?

Mr Coonan : We're just looking for a framework to provide some increased certainty to provide funding for children's content. If all those were taken into account and it was determined that a fund was established, we think that it would be appropriate that we could access it to create that distinctive—

Senator URQUHART: But what about public broadcasting?

Mr Coonan : Our position is that, as a public broadcaster, as with other direct funding mechanisms, it would be appropriate for us to be able to access that.

Senator URQUHART: Thanks.

CHAIR: Do you agree with the sentiment that we heard from Mr Anderson from the ABC in relation to the fact that audiences are consuming more than ever before but it's just what, where and when? If so, how could there possibly be an argument from Australian broadcasters that it's too hard to be investing in Australian content? Let's be honest, it's not from SBS, but that is what is coming from the commercial operators. They see it as a burden. When they appear, they can correct me if they like. Can you unpack that a bit for me? If the audience is growing and what they're consuming is growing, how on earth is this not commercially viable?

Mr Heald : We're certainly living in a time of enormous change, and media operators, whether they're commercial or public, need to operate across a broader swathe of platforms. Depending on the type of content offer that you have, your success will vary across different platforms. If you are a television network which is all about live events and getting audiences to watch a show at a particular point in time then television is still the very best platform for doing that.

SBS doesn't have the budget or the desire to really compete in that live event or reality TV space. For us it's really important to understand that SVOD players like Netflix have changed consumer behaviour. When audiences want to watch drama these days, they want to watch all of it at once. And so, as a small network who despite having very large reach often can be a second choice and drowned out by those big reality or sporting franchises, I think I can say we have been a sort of pioneer in the digital space. Audiences love our shows, but we need to make it easy for audiences to enjoy them. So we've really pushed quite aggressively in the digital space to make sure that audiences can access our content.

By the same token, I think everyone should understand that, when a behemoth like Married at First Sight is delivering enormous numbers on TV, it is also delivering enormous numbers on 9Now. I think we're at a relatively early part; the market is still developing and changing.

CHAIR: In terms of the ratings and how that's counted and shared, is it partly that we haven't quite caught up to understanding really the audience numbers for on-demand and catch-up services in parallel with the free-to-air broadcast?

Mr Heald : That's right. The measurement system is going through evolution. Right now, for example, for SBS our digital consumption is measured on a subset of our digital platforms. For example, it's measured on desktop and mobile devices but not on connected TVs. And so, if you want to—

CHAIR: Not on connected TVs?

Mr Heald : No; that's right. The measurement standard isn't in place yet for connected TVs, but they actually represent about 30 per cent—

CHAIR: So there are all these smart televisions being bought across the country, and yet, at the moment, that's not being counted?

Mr Heald : That's right, as part of the official numbers. The measurement system is kind of evolving. But, if you are a commercial organisation, if there isn't an industry audited reporting system in place, then effectively you're asking advertisers to buy space based on trust, rather than an audited system. But all those things are changing over time.

CHAIR: If the commercial broadcasters did not have to subscribe to a quota system—let's take kids' television specifically for this—what impact would that have on the production and the industry that is wrapped around that?

Mr Heald : SBS has never been funded to produce children's content. We've spoken a lot about NITV and the fantastic work that they do. I think as a public broadcaster we would love to make more children's content, especially content focused on Indigenous audiences. As long as we were funded to do it, we would be very happy to pick up the slack and make more of those shows, if the commercial operators didn't want to be in that space.

CHAIR: Can you see value in ensuring that kids' content is still available, though, through those other platforms? Do you have to see kids' television just through the public broadcasters and that's it? Is there not a responsibility for other players to have diversity?

Mr Heald : It's incredibly important for Australians to see themselves on television. I have three children. It's incredibly important that their experience is shown on Australian television as well. Seeing yourself on television creates inclusiveness. This is what enables people to participate in the society in which we exist. So I think it's of enormous importance that there is a continuing focus on Australian children's content. That is to the betterment of the society that we live in and will create an enormous social dividend for the society in which we live.

CHAIR: So it's in the public interest?

Mr Heald : Absolutely.

CHAIR: It's not just about ensuring that there's an audience there and there's a demand, so therefore there needs to be a supply chain?

Mr Heald : SBS tells stories that no-one else does. We're very focused on telling certain types of stories which no-one else is telling. So we tend to be less interested in what others are doing and more interested in putting forward what we think is missing from the sector overall, which is diversity.

Mr Coonan : If I could just add to the social dividend that could arise from the particular types of Indigenous children's content that we're talking about, we think that relates to broader government policy around things like closing the gap. As I mentioned in the opening statement, certain groups are under-represented on TV at the moment. To the extent that we can have Indigenous children seeing themselves represented on screen, there are links to self-esteem and there is the fact that, with our Indigenous children's content, we extend the reach of that through our SBS Learn platform, which means that the messages from that content can be taken into the classroom with a whole range of teacher resources. You might expect to see a series of flow-on consequences that relate to school readiness, self-esteem, educational outcomes et cetera. So I think there is a particular social dividend in what we're proposing to do more of.

CHAIR: At this stage you're saying you haven't been given any funding specifically. SBS has never had funding specifically for kids' television—

Mr Heald : That's correct.

CHAIR: and, therefore, even in a sharper frame, I guess, kids' television that's targeted to and with first Australians?

Mr Heald : That's right. Our focus is very much on NITV and making sure that there be more children's content created for Indigenous children.

Mr Coonan : And, importantly, by, for and about Aboriginals and Torres Strait Islanders.

CHAIR: What is your view on other streaming services and on-demand services—Netflix, Stan? Should they be required to show, invest in and keep an easily accessible library of Australian content?

Mr Coonan : I guess it's a matter for government and the range of inquiries that we've talked about that are on foot as to whether those providers be subject to obligations. I know in some other jurisdictions there are prominence obligations, for example. But we would leave that to government.

CHAIR: SBS doesn't have a view as to whether it would be a competitive advantage or disadvantage for you if Netflix or Stan were required to have a certain amount of Australian-made drama, Australian-made kids' television or Australian-made Indigenous content?

Mr Heald : I think the issue for SBS is that the shows we are making, no-one else will make.

CHAIR: So they'd never be made for and with Netflix anyway? Is what you're saying—Netflix would never purchase them?

Mr Heald : They do purchase them. I spoke earlier on about the amount of money we get from international—given our very strong local focus, our shows don't necessarily tend to travel well. So if you have a big international player come into the Australian market, our question is: what sort of content will be made? Will it actually be international content or is it going to be strongly locally focused content? I suspect it's probably more the former than the latter. What we're all about is trying to make sure there is much stronger diversity on screens. So it's questionable to us whether international providers are going to be interested in that kind of core area.

CHAIR: So you're saying that, regardless of whether there were quotas or some type of requirement or government intervention, you don't believe that that would impact on the audience levels of SBS for the content that you provide or, indeed, a disincentive to be investing in content that SBS backs?

Mr Heald : I think the local content we make is very, very different from the content that other providers are making. No-one else would make The Family Law, no-one else would make Sunshine, no-one else would make Safe Harbour. We don't believe those players are going to be competing in that space. By the same token, there is competition for eyeballs generally, so having those large international players in the market certainly means there is more competition for eyeballs generally.

CHAIR: Obviously some of the commercial broadcasters—in front of this committee we've had a stoush between SBS and Nine, for example, over The Handmaid's Tale and a bunch of other things. They obviously think you're a threat.

Mr Heald : I take it as a compliment! We have a seven per cent free-to-air share of audiences. We have a limited licence to raise commercial revenue. We have a two per cent share of ad dollars on TV. Based on those simple facts, I struggle to understand that. Of course, every now and then we will pick up a show, and hindsight is a wonderful thing. The fact is that when we purchased The Handmaid's Tale it was at a very early stage of development and it's actually about pretty serious things. We didn't expect it to be a kind of breakout hit, but hindsight's wonderful. A lot of people come out of the woodwork and say, 'We really wanted that.'

CHAIR: Can I ask a bit more generally in terms of the industry? If there is a decline in investment of local content, whether it is drama or kids' television, because commercial broadcasters are saying, 'We don't want these requirements because we don't actually want to have the meet them', what does that mean for the talent and development of the talent across the board of the industry here in Australia? Will that have an impact on SBS's ability to back good shows or to have a talent pool from which to draw?

Mr Heald : The drama and documentary space is a very small industry, so any diminishing of commercial network support for that will have flow-on effects to the sustainability of the industry generally. Within that, though, there's a subset for SBS because we've got a really strong focus on diversity. Diversity for us doesn't only mean on-screen; it means behind the camera. So we're working very hard to try and find authentic multicultural stories. Even understanding the make-up of the industry at the moment, there is a very small pool of multicultural talent, whether they be writers or directors. So, through schemes like our diversity talent escalator, we are proactively out there trying to develop the next generation of multicultural and Indigenous talent. I mentioned before, with NITV, we have a rule that two out of three key creators must be Indigenous.

CHAIR: Is that something you've imposed on yourself?

Mr Heald : We believe that, in order for stories to accurately reflect the country in which we live, we need behind the camera content creators, as well as on-screen content creators, who come from those communities. This is a long-term commitment, which is something other organisations like Screen Australia have done a fantastic job of over many years. The calibre of Indigenous film-making we've seen over the last five years is really testament to a long-term investment that organisations like Screen Australia have made in developing Indigenous talent. We think developing more talent behind the cameras will have flow-on effects to the stories that are told, to more accurately reflect the society in which we live.

CHAIR: Can I ask about the issue of diversity more broadly across the broadcasters. Without some form of government intervention to insist on some level of diversity, whether we're talking cultural backgrounds, ages or gender—and Free TV are welcome to come and dispute this, and I would really like to tease the argument out. But it has been put to me that Free TV's submission to this inquiry and others is, 'Let the commercials get on with the mainstream,' whatever that means, and that, 'everybody who fits into some type of cultural or diversity group can be dealt with by the public broadcasters.' Doesn't that create a silo of audiences and, therefore, is not really playing into that role that you've suggested about the public interest?

Mr Heald : We would like to see more diversity across all of Australian television, not just from the public broadcasters.

CHAIR: While SBS has a special role, of course, you're saying you shouldn't be the only one who has Indigenous kids in your shows?

Mr Heald : No. We would like to see more diversity across television as a whole. Nearly 50 per cent of Australians now have one or more parents born overseas. We live in an incredibly diverse society. But, putting aside cooking shows, when you look at genres like drama, there is a very low diversity on TV. We made The Family Law two years ago, and the fact that that was the first Australian television show to feature a predominantly Asian-Australian cast is pretty appalling really.

Mr Coonan : I think the good news is the industry is taking steps to address that. There are a range of industry groups about promoting diversity that we participate in as well. But our point is that we've been living diversity for 40 years; we've got massive cultural diversity and linguistic diversity within the organisation, since we are the home of multicultural and multilingual broadcasting.

CHAIR: And that gives you an edge, but you're saying it's not good enough for everybody to think that you guys are just the diversity channel and, therefore, it's left to you?

Mr Heald : No, no. Look, we want to see more diversity everywhere. I think SBS—

CHAIR: How do you do that without government intervention or policy? Can you do that, or does it have to be a driven exercise?

Mr Coonan : We don't really have a view on whether the others should be subject to requirements like that. I would say that the census is showing that Australia is becoming more and more multicultural. I think advertisers are seeing the value in diversity. They certainly do when they advertise with SBS. As I mentioned, there are a range of industry initiatives to promote diversity. I think the more and more those factors come together, the greater diversity that we'll see.

CHAIR: There are some suggestions that there should be a paywall or some type of barrier to the free access to SBS On Demand and even ABC iview. What's SBS's response to that?

Mr Heald : We have no interest in that.

CHAIR: Would it impact?

Mr Heald : We believe taxpayers have already paid for the content that's on SBS On Demand, so we want to provide free access to that content to all Australians.

CHAIR: They've already paid for it?

Mr Heald : That's right.

CHAIR: So this links to the recommendation in your submission that, if something is publicly funded, it should be available in some type of free-to-air window?

Mr Heald : That's right.

CHAIR: Thank you.

Mr Heald : Thank you very much.