Mr Peter Harris, Secretary

Mr Daryl Quinlivan Deputy Secretary, Infrastructure Group

Mr Andy Townend, Deputy Secretary, Broadcasting and Digital Switchover Group

Mr Abul Rizvi, Deputy Secretary, Digital Economy and Services Group

Mr Daryl Quinlivan, Deputy Secretary, Infrastructure Group

Ms Marianne Cullen, First Assistant Secretary, National Broadband Network Implementation Division

Ms Pip Spence, First Assistant Secretary, Networks Policy and Regulation Division

Mr Brian Kelleher, Assistant Secretary, Regional Backbone Blackspots Branch, National Broadband Network Implementation Division

Mr Mark Heazlett, Assistant Secretary, Implementation Study Branch, National Broadband Network Implementation Division

Mr Rohan Buettel, Assistant Secretary, Networks Regulation Branch, Networks Policy and Regulation Division

Mr Philip Mason, Assistant Secretary, NBN and Fibre Rollout Regulation Branch, Networks Policy and Regulation Division

Mr Brenton Thomas, Assistant Secretary, Spectrum and Wireless Services Branch, National Broadband Network Implementation Division

Mr Abul Rizvi, Deputy Secretary, Digital Economy and Services Group

Mr Keith Besgrove, First Assistant Secretary, Digital Economy Services

Mr Simon Bryant, First Assistant Secretary, Australian Broadband Guarantee Branch

Mr Richard Windeyer, First Assistant Secretary, Digital Economy Strategy

Mr Andrew Maurer, Assistant Secretary, Regional and Indigenous Communications Branch

Mr Simon Cordina, Assistant Secretary, Cyber-Safety and Trade Branch

Mr Lachlann Paterson, Assistant Secretary, Content Programs Branch

Ms Mia Garlick, Assistant Secretary, Digital Economy and Convergence Strategy

Mr Duncan McIntyre, Assistant Secretary, Consumer Policy and Post Branch

Mr Andy Townend, Deputy Secretary, Broadcasting and Digital Switchover Group

Dr Simon Pelling, First Assistant Secretary, Broadcasting and Digital Switchover

Ms Karen McCormick, Assistant Secretary, Communications and Media

Mr Robert McMahon Assistant Secretary, Household Assistance

Ms Ann Campton, Assistant Secretary, Broadcasting and Switchover Policy

Mr Greg Cox, Assistant Secretary, National Community and Radio Broadcasting

Mr Richard Oliver, First Assistant Secretary, Corporate and Business Division

Mr Don Markus, General Counsel, Legal Services Group

Mr Simon Ash, Chief Financial Officer, CFO Group

Mr Mark Scott, Managing Director

Mr David Pendleton, Chief Operating Operator

Mr Michael Millett, Director Communications

Mr Chris Chapman, Chair, Australian Communications and Media Authority

Mr Chris Cheah, Member and Acting Deputy Chair, Australian Communications and Media Authority

Ms Nerida O’Loughlin, General Manager, Digital Economy Division

Mr Giles Tanner, General Manager, Digital Transmission Division

Mr Brendan Byrne, General Manager, Legal Services Division

Ms Maureen Cahill, General Manager, Communications Infrastructure Division

Ms Dianne Carlos, General Manager, Corporate Services and Coordination Division

Ms Clare O’Reilly, Executive Manager, Legal Services Division

Mr Andrew Kerans, Executive Manager, Spectrum Infrastructure Branch

Ms Jonquil Ritter, Executive Manager, Citizen and Community Branch

Ms Kathleen Silleri, Executive Manager, Content and Consumer Branch

Mr Paul White, Executive Manager, Industry Monitoring Branch

Ms Andree Wright, Executive Manager, Security, Safety and e-Education Branch

Ms Linda Caruso, Executive Manager, Regulatory Future Branch

Mr Vince Humphries, Manager, New Communications Issues and Safeguards

Mr Grant Symons, Executive Manager, Unsolicited Communications Branch

Mr Mark Loney, Executive Manager, Operations Branch

Ms Olya Booyar, General Manager, Content Consumer and Citizen

Mr Mark McGregor, Acting Executive Manager, Infrastructure Regulation Branch

Mr Derek Ambrose, Executive Manager, Finance and Facilities Branch

Mr David Brumfield, Executive Manager, Allocation, Coordination and Policy

Mr Christopher Hose, Executive Manager, Technical Planning and Evaluation Branch

Mr Stuart Wise, Manager, Budget, Cost Recovery and Procurement

Mr Patrick Emery, Manager, Licence and Numbering Development

Mr Alistair Gellatly, Manager, Television Planning

Mr Mark Bidwell, Manager, Implementation and Evaluation

Ms Deborah Johnson, Parliamentary and Coordination

Ms Kylie Trengrove, Parliamentary and Coordination

Mr Jim Marshall, Acting Managing Director

Mr Paul Burke, Corporate Secretary

Mr Rod McDonald, Group Manager, Corporate Human Resources

Mr Michael Tenace, Group Financial Controller

Mr Stephen Walter, Group Manager, Corporate Public Affairs

Mr Don Newman, Group Manager, National Logistics

Ms Catherine Walsh, Manager, Employee Relations

Ms Christine Corbett, Manager, Strategy, Governance and Major Change

Mr Mark Pollock, Manager, Regulatory Affairs

Mr Mike Quigley, Chief Executive Officer

Mr Shaun Brown, Managing Director

Mr Jon Torpy, Chief Financial Officer

Mr Bruce Meagher, Director, Strategy and Communication

CHAIR (Senator McEwen) —I declare open this public hearing of the Senate Environment, Communications and the Arts Legislation Committee. The Senate has referred to the committee the particulars of proposed expenditure for 2010-11 for the portfolios of Broadband, Communications and the Digital Economy, the Environment, Water, Heritage and the Arts and Climate Change and Energy Efficiency and other related documents. The committee must report to the Senate on 22 June 2010. The committee has set Friday 30 July 2010 as the date by which questions on notice are to be returned.

Under standing order 26, the committee must take all evidence in public session. This includes answers to questions on notice. Officers and senators are familiar with the rules of the Senate governing estimates hearings. If you need assistance in that regard please see the secretariat, who have copies of the rules. I particularly draw the attention of witnesses to an order of the Senate of 13 May 2009 specifying the process by which a claim of public interest immunity should be raised, and which I now incorporate in Hansard.

The document read as follows—

(a)   notes that ministers and officers have continued to refuse to provide information to Senate committees without properly raising claims of public interest immunity as required by past resolutions of the Senate;

(b)   reaffirms the principles of past resolutions of the Senate by this order, to provide ministers and officers with guidance as to the proper process for raising public interest immunity claims and to consolidate those past resolutions of the Senate;

(c)   orders that the following operate as an order of continuing effect:

(1)   If:

(a)   a Senate committee, or a senator in the course of proceedings of a committee, requests information or a document from a Commonwealth department or agency; and

(b)   an officer of the department or agency to whom the request is directed believes that it may not be in the public interest to disclose the information or document to the committee, the officer shall state to the committee the ground on which the officer believes that it may not be in the public interest to disclose the information or document to the committee, and specify the harm to the public interest that could result from the disclosure of the information or document.

(2)   If, after receiving the officer’s statement under paragraph (1), the committee or the senator requests the officer to refer the question of the disclosure of the information or document to a responsible minister, the officer shall refer that question to the minister.

(3)   If a minister, on a reference by an officer under paragraph (2), concludes that it would not be in the public interest to disclose the information or document to the committee, the minister shall provide to the committee a statement of the ground for that conclusion, specifying the harm to the public interest that could result from the disclosure of the information or document.

(4)   A minister, in a statement under paragraph (3), shall indicate whether the harm to the public interest that could result from the disclosure of the information or document to the committee could result only from the publication of the information or document by the committee, or could result, equally or in part, from the disclosure of the information or document to the committee as in camera evidence.

(5)   If, after considering a statement by a minister provided under paragraph (3), the committee concludes that the statement does not sufficiently justify the withholding of the information or document from the committee, the committee shall report the matter to the Senate.

(6)   A decision by a committee not to report a matter to the Senate under paragraph (5) does not prevent a senator from raising the matter in the Senate in accordance with other procedures of the Senate.

(7)   A statement that information or a document is not published, or is confidential, or consists of advice to, or internal deliberations of, government, in the absence of specification of the harm to the public interest that could result from the disclosure of the information or document, is not a statement that meets the requirements of paragraph (I) or (4).

(8)   If a minister concludes that a statement under paragraph (3) should more appropriately be made by the head of an agency, by reason of the independence of that agency from ministerial direction or control, the minister shall inform the committee of that conclusion and the reason for that conclusion, and shall refer the matter to the head of the agency, who shall then be required to provide a statement in accordance with paragraph (3).

(Extract, Senate Standing Orders, pp 124-125)

The committee will begin proceedings with the examination of the Broadband Communications and the Digital Economy portfolio, commencing with the Special Broadcasting Service, SBS. It will then follow the order as set out in the program. I welcome Senator the Hon. Stephen Conroy, Minster for Broadband, Communications and the Digital Economy, and later I will welcome departmental secretary, Mr Harris, and portfolio officers. Minister, did you wish to make any opening statement?

Senator Conroy —No opening statement from me, thank you.

CHAIR —We will commence with officers of the Special Broadcasting Service. Mr Brown, do you have an opening statement?

Mr Brown —I do have an opening statement. I thought it would be appropriate to make a few comments today about developments, issues and some challenges facing SBS and some successes as well. The first point I make is perhaps an overarching one that SBS is becoming an even more relevant and an even more important part of the media landscape. That is obviously because Australia is becoming increasingly culturally diverse but also I suggest it is becoming more relevant because access to foreign sources of media through either satellite or the internet means that some groups, some communities, are no longer engaging with Australian media services. This I believe is posing a significant risk to social cohesion. Research that we have been involved in recently would indicate that communities such as the Hindi and Arabic speaking communities are sourcing their media extensively from that which is provided from their home countries rather than from accessing Australian media. In particular, research that we have done with regard to the Hindi community showed that at times of stress when the attacks on Indian students were being reported, that kind of retreat to the media emanating from India became even more pronounced. Many of the communications that related to that series of events that were in the Australian media were not reaching those particular communities. Our research shows that SBS is regarded as a notable exception in regards to its balanced approach and its willingness to report on those issues in a fair and balanced manner.

SBS responds to the challenges it faces in delivering its charter in two distinct ways. Let me deal with the first, which is providing services for specific language communities, those multilingual services that reach out and connect with distinct ethnic communities. In that regard, we have recently updated 68 in-language websites so that basic information at this stage, but likely to expand, is available in-language on the SBS2 website. We have also launched SBS2 a year ago with a focus on programming in LOTE, Languages Other Than English. We expect further increases to come. We have been conducting consultations, as I said earlier, with senior members of a number of ethnic communities.

As a result, we are now working on some initiatives to satisfy community demand for linguistically and culturally relevant services across all platforms, both for the largest language groups—the top 10 language groups in Australia comprise about 60 per cent of those communities that are speaking languages other than English—and for the very small groups who have high need. This second group may be recently arrived refugees, traumatised communities or communities who would struggle to qualify for time on SBS on size alone but, on the basis of need, certainly need to be considered. We are doing that so that those communities can participate effectively in the Australian media. We hope to pilot some of those initiatives in the next financial year.

Our other distinct activity is to reach out to all Australians and reflect Australia’s multicultural society to contribute to cohesiveness and inclusiveness. Our programs that do that, that seek to reach out to the broader community, have been receiving critical acclaim lately. At the recent Logies, four of the nine peer-reviewed, peer-awarded Logies went to SBS. That is a record haul for SBS; Most Outstanding Drama Series, both Outstanding Actors in the male and female categories and Most Outstanding Factual Program all received Logies. We received a gold medal for East West 101 for the best mini-series at the New York Festivals International Television and Film Awards and a Silver Hugo for the best mini-series for The Circuit at the Chicago International Film Festival. These are powerful stories that tell the real story of multicultural Australia and that only SBS is choosing to do.

Further background, of course, is that the media environment is changing rapidly. SBS has to change with it so that it can continue to deliver its charter across all platforms. We need to find a way to offset the hits to our commercial revenue that have occurred firstly as a consequence of the global financial crisis and secondly because of the explosion of multichannels from commercial broadcasters which has doubled the amount of commercial inventory in the market and is having an impact on the revenue that SBS can derive.

We must find a way to resource new and emerging platforms so that SBS remains a vital part of that expanded landscape. In particular that relates to online and SBS2. We must effectively use these new platforms to connect to all Australians and those Australians of particular language communities.

We would agree with our minister, who indicated in a speech at SPAA last year that the time is right for a review of convergence as it affects the media and communications sector. You may have read today of the announcement of Google TV over the weekend, which really is an indication that convergence is here. An holistic view of the changes in the sector and the future structure, regulation and funding would seem to be appropriate. SBS’s long-term funding needs to be viewed through that prism.

Let me conclude on the positive note that the excitement is building at SBS ahead of the FIFA World Cup in South Africa. We will show all games live and exclusive on TV, have all games on radio with commentary in 13 languages and have games live or on-demand with the option of accessing either English or other languages. Fifteen games will be shown in 3D and we are grateful to the minister for making an exception to the antisiphoning list so that we can show all these games live, particularly when it applies to games which are occurring simultaneously and which now can be shown on SBS1 and SBS2 at the same time. Thank you.

CHAIR —Thank you very much, Mr Brown.

Senator CORMANN —According to the budget papers, SBS will get $3 million in additional funding next year, including an equity injection of $5.58 million. The budget papers also state that SBS will fully exploit commercial opportunities such as advertising and cut costs by increasing efficiencies through outsourcing and investing in a fully digital newsroom. Can you please explain for us how this strategy will affect programming at SBS?

Mr Brown —Are we are talking about efficiencies?

Senator CORMANN —The efficiencies, the advertising and cutting costs by increasing efficiencies through outsourcing and investing in a fully digital newsroom.

Mr Brown —There are two discrete parts to that. The first is to take the best possible advantage of our commercial licence, as granted under our legislation. We continue to do that. But, as I said in my opening comments, that is under some considerable pressure from the tail end of the global financial crisis and because there are now a number of multichannels operated by the commercial broadcasters, which has released a lot of additional inventory into the market. That is certainly impacting SBS’s ability to raise commercial revenue, but we will continue to work hard to do that. I do not believe that has any effect on our programming.

The second part is the need to seek out and find efficiencies within the organisation so that we can continue to provide the very programming services you are talking about. That is a journey that never ends and one that we have been engaged in for as long as I have been at SBS. In part that relates to improvements and changes in technology. The one you quoted there about the digital newsroom is a process whereby newsroom content and news content from the field is gathered and stored on servers rather than on tape and therefore is capable of being handled effectively at a desktop level for editing rather than having a number of tapes being ferried around the place.

Senator CORMANN —Is there going to be more advertising, for example, during your programs now? Is there going to be an increase in the amount of advertising in SBS programs?

Senator Conroy —There is a legislative limit.

Mr Brown —There is a legislative limit of five minutes per hour. That is in the act.

Senator CORMANN —So there is no proposition for that to be changed?

Senator Conroy —No.

Mr Brown —SBS has not sought that change. We simply try to derive the best value we can from the available five minutes.

Senator CORMANN —Where it says we will fully exploit commercial opportunities such as advertising, presumably you are already reaching that limit now.

Mr Brown —It is not relating specifically to minutage; it is relating to having the best possible system so that we can drive the best value for that minutage.

Senator CORMANN —When you say we will exploit commercial opportunities such as advertising, there is not going to be any change in the amount, is what you are saying?

Mr Brown —Absolutely. It is not possible to have any change in the amount.

Senator Conroy —There is a legislative limit.

Senator CORMANN —It is always important to clarify what is meant by things that are said in your budget, Minister. Will there be job losses and, if so, how many?

Mr Brown —SBS every year has a number of redundancies. I think last year there were five as a consequence probably of technology change. This coming financial year we do expect more because of further technology changes, some of which have been flagged both to staff and unions for a considerable period of time. We have a high level of station automation now just being completed.

Senator CORMANN —How many roughly?

Mr Brown —I could not put a number on it. One particular area that we are looking at is subtitling and that is mid-review at the moment.

Senator CORMANN —It is good that you mention subtitling because there have already been some job losses announced in your subtitling unit, have there not?

Mr Brown —Not specifically. What I said at a meeting of subtitlers last Wednesday was that a review of subtitling conducted by Deloittes had been completed. I shared with them the results of that review and the recommendations of Deloittes, and told them that while management was not accepting all of the recommendations there would be a reduction in the staff numbers.

Senator CORMANN —How many people are in that unit at the moment? Is it 60? Is that right?

Mr Brown —More like 50 I think really. Subtitling covers a number of functions including subtitling, closed captioning work, re-narration work, some technical and management functions and some subtitling editing functions.

Senator CORMANN —Over the last two years, have there been any changes to the number of programs that are subtitled? Are there now foreign language programs that are broadcast without subtitling?

Mr Brown —There has always been what we call WorldWatch, the morning schedule of news programs, which have never been subtitled. But apart from that we do not carry any programs without subtitles.

Senator CORMANN —Has there been any increase in the number of programs—

Mr Brown —There has been an increase in the number of programs for subtitling and there will be a further increase—

Senator CORMANN —Which will be without subtitles?

Mr Brown —No, there are no programs without subtitling outside of news and current affairs.

Senator CORMANN —Is a proposition that at least 10 staff from the SBS television subtitling unit will be made redundant? You would refute that, would you? No such decision has been made, has it?

Mr Brown —No, maybe if I just complete my original answer.

Senator CORMANN —Okay.

Mr Brown —On Wednesday when I addressed the staff I did flag that there will be a reduction in staff numbers of more than ten in their unit and that we will be talking with them to determine which languages were affected. Further, we would be going through the consultative process that our certified agreement requires of us. The reason for those redundancies firstly is that the act requires us to operate SBS in the most efficient manner possible. When we carry out an external review and it points out that we have surplus capacity for the number of subtitle programs that are required then obviously SBS is obliged to address that. It is a complex area in which a number of factors are in play. Firstly, technology has changed and consequently there are more efficient ways of subtitling and there are further technology changes due in SBS. Secondly, we anticipate on SBS2 in particular an increased level of subtitling that comes with the program from overseas. The quality of those subtitles has improved markedly. Broadcasters like the BBC are making use of those subtitles. It is appropriate for us at least to explore that opportunity. Thirdly, because we only carry subtitling in-house for certain languages, the match between those languages that we have capacity for and those language programs that we want to put to air is never going to be perfect. Obviously that gap is opening up because more of our content now needs to come from Asian based sources rather than the traditional Eurocentric approach that SBS obviously had.

Senator CORMANN —You used to have 60 staff in your subtitling unit. It is now around about 50 and you expect more than 10 redundancies. Presumably those less than 50 that will remain will not be across all languages? Are you prioritising the languages that you now consider to be redundant? Which ones are the first languages to be dropped off a subtitling list?

Mr Brown —I cannot answer that because we are yet to make that final decision. I would re-emphasise the point that we do not carry in-house the capacity to service all the languages that we currently do anyhow.

Senator CORMANN —You have not yet made a decision as to which languages would be the first to be removed from your subtitling unit?

Mr Brown —That is correct. We are in mid-process.

Senator CORMANN —On what basis will you make that decision? What will guide you?

Mr Brown —On an assessment done by the management of subtitling, on the match—

Senator CORMANN —What are going to be the criteria? I am sure that management will make the decision but what will be the criteria by which you—

Mr Brown —I am trying to distinguish between the Deloittes work, which has now been completed and has certain recommendations it, and the management response, which requires them to assess more closely the fit between languages and the likely demand for those languages across SBS1 and SBS2. For instance, strictly speaking we do not carry in-house the capacity or a dedicated subtitler for Mandarin. We have some capacity there because one of our chief subtitlers does Mandarin.

Senator MINCHIN —There might be one available after the election.

Mr Brown —Clearly there is a disconnect in the range of languages that we currently have and the range of programs that we are going to require to put to air and should be putting to air now and in the future.

Senator CORMANN —The number of channels has increased. When you were a single TV channel, you had 60 staff doing your subtitling work. Even though there is broader coverage now, you can do it with significantly less people. Is what you are telling us?

Mr Brown —No—significantly fewer fixed resource people.

Senator CORMANN —Without impacting the amount of subtitling that is done.

Mr Brown —There are significantly fewer fixed resourced people. We will still make use of subtitlers from overseas. We will make use of freelance staff coming in. We already have extensive services on that basis using our equipment for those languages we do not have on staff. We will consider using other suppliers of subtitle services as well. I can say with confidence that later this year we will be putting more subtitled content to air than ever in the history of SBS. We are really only talking about the means of securing that.

Senator CORMANN —Those more than 10 people that are going to be sacked—what are they doing at present?

Mr Brown —At present they are doing some closed captioning work, which is not efficient use of them—and they would say that as well. These are trained, highly qualified, very capable subtitlers. They are recognised worldwide for the quality of their work. To have them doing closed caption work is neither in the productive interests of SBS, nor in the personal interests of the subtitler.

Senator CORMANN —I am conscious of time, so I will just move along. SBS and Bruce Meagher, Director of Strategy and Communication, made a submission to the committee in relation to the inquiry into the provisions of the Broadcasting Legislation Amendment (Digital Television) Bill 2010. I note from your submission—and I know that Senator Fisher will ask some questions in relation to this as well—that there are 44 locations around Australia where SBS is transmitted by analog terrestrial self-help transmitters but where there are no plans to upgrade such facilities to digital. A staggering 19 of those locations are from the great state of Western Australia. That is nearly half.

Senator FISHER —And two from regional South Australia, Senator Minchin.

Senator CORMANN —Is it true that, whenever this occurs, after analog transmissions are switched off, your viewers in those locations will need to install direct-to-home satellite reception facilities in order to watch SBS TV, while being required to have digital terrestrial reception systems and facilities to watch the companion commercial TV services?

Mr Meagher —We are in discussions with the government at the moment about that range of services. We are concerned that that is potentially an outcome, that, whereas there may be analog reception today, there might not be digital reception. Those things have not been resolved. The government has agreed to upgrade, I think, seven sites. Two of those sites, Senator Fisher, are in South Australia.

Senator FISHER —That is right.

Senator CORMANN —Have you got a list of those seven sites?

Mr Meagher —I could certainly provide it to you on notice. I do not have it with me today.

Senator CORMANN —Are any of them in Western Australia?

Mr Meagher —Again, I would have to check that.

Senator CORMANN —Are the discussions that you are having with the government around funding or around other matters?

Mr Meagher —They are around funding and then of course the arrangements. The thing about the self-help sites is that there is a necessity to think both about the funding mechanism and also about relationships with local councils and communities and the like. Working out the optimum arrangement for those sites is something that we are—

Senator CORMANN —I am quite stunned about some of the towns that are on that list. Bridgetown, Pemberton and Kojonup are hardly remote locations. They might seem remote for people in Sydney, but in Western Australia these are big towns in our south-west. Even Dampier is on the list, which is a fast-growing area with—

Mr Brown —We have flagged this as an issue and I think the department has recognised this. What we are seeing is those issues being progressively addressed in line with the analog switch-off. The first focus has gone to rural South Australia because that is due for switch-off by December. We have not had a response to the other requests. We would expect to have a response as that progressively happens.

Senator CORMANN —But it is not a very satisfactory consumer proposition from your viewers’ point of view, is it?

Mr Brown —That is our position, that we would like to be on the same basis as the other broadcasters terrestrially delivered in those areas where—

Senator CORMANN —Minister, did you hear the conversation that just took place in relation to SBS not being available in 19 towns across Western Australia after the digital switch-over? Apparently SBS is in discussions with the government around some more funding. Is the government entertaining additional funding for SBS to address this?

Senator Conroy —We entertain a lot of discussions with the SBS but I do not propose to canvass them here.

Senator CORMANN —You think it is okay that there are 19 towns across Western Australia, including Bridgetown, Dampier, Pemberton, Kojonup, Morawa—hardly remote towns—which will no longer have access to SBS?

Mr Brown —They would have access to SBS on the satellite solution.

Senator CORMANN —As long as they go to the direct-to-home satellite reception facilities, yes.

Mr Brown —The difference is whether or not they are required to receive it by satellite or whether or not, in common with the other service, it will be terrestrially delivered.

Senator Conroy —The thing you need to get your head around, Senator Cormann, is that there is a change in delivery mechanism.

Senator CORMANN —Understood, but SBS just told us that they thought the situation was unsatisfactory, that they are in discussions with the government—

Senator Conroy —Clearly you do not understand—

Senator CORMANN —I am keen to know from you whether the government is planning to do anything about it.

Senator Conroy —Clearly you are struggling to keep up with the change that the government has made.

Senator CORMANN —Given that you were not in the room, you are clearly struggling to listen to what is going on.

CHAIR —Senator Cormann, can I just ask you to get to the question and answer—

Senator Conroy —I am admiring a man who is, on his first day in his portfolio responsibilities, demonstrating such faith in his own ability.

Senator FISHER —You might wish you were on your first day, Minister.

CHAIR —Order, Senators!

Senator Conroy —If Senator Cormann would let me finish, he would get an understanding that we are actually introducing a satellite system, called VAST, and that we have funded the conversion of the SBS sites in the first switch-over areas. We are introducing a satellite system which will deliver all of the terrestrial services, including local news. That is exactly what residents in Western Australia and other remote parts of Australia—

Senator CORMANN —So Western Australia is remote, is it? I guess from Melbourne it looks remote, yes.

Senator Conroy —I guess if you interrupt before a sentence is finished you can have any fun you want. The towns you were quoting are not Perth. The point that you need to come to terms with is that there is a new satellite service providing all of the services, including all of the SBS services. If somebody is in a situation where their self-help tower is not being upgraded to digital, they will then receive the signal from the satellite. It is a very simple proposition. In a few weeks time in Mildura, when the satellite services goes live, you will see exactly what is being described and then maybe you will have a better understanding. Many people are not yet fully across this, so it is perfectly reasonable for you not to be.

Senator CORMANN —It sounds to me as if SBS was not fully across it, because they shared my concern.

Senator Conroy —No. SBS are fully aware of the satellite service that is being proposed.

Senator CORMANN —So are you now saying—

Senator Conroy —Just in case you were really worried, Western Australia is not switching off until 2013.

Senator CORMANN —Yes, described as remote too.

Senator FISHER —But South Australia is switching off before then. I just want to confirm that as far as SBS is concerned, those two South Australian sites are in the process of being looked after; is that right?

Mr Meagher —That is right.

Mr Brown —Of the 44 sites that we originally flagged as saying our preference would be for a terrestrial service, in common with the other broadcasters, since that submission, seven have now been addressed by government and there will be now a terrestrial service.

Senator CORMANN —But you cannot tell us which ones?

Mr Brown —That is in tandem with the analog switch-off. As I understand it, the department is looking at these as they progressively come. Western Australia is some way away. The priority right now is South Australia, and those have been addressed.

Senator FISHER —In respect of the two South Australian ones, who is footing the bill?

Mr Brown —The government.

Mr Meagher —The government.

Senator FISHER —Thank you.

Senator MINCHIN —Can I just ask about funding of this digital switch-over. The budget measures under Digital Television Switchover Regional Blackspot Solution refer to a provision for SBS for the switch-over but it says that it is not for publication as contracts with satellite service providers are commercial-in-confidence, which is understandable. But, in the PBS, you referred to your revenues for 2010-11 as including $5.003 million funding for Digital Television Switchover Regional Blackspot Solution. Is that an inadvertent revelation of the not-for-publication figure or is that something entirely different?

Mr Brown —Possibly inadvertent. We will take that on notice.

Senator MINCHIN —I would like to know whether that $5 million is the figure that is not for publication. If that is in error, could that be clarified?

Mr Brown —We will look at that.

Senator MINCHIN —I was surprised to see it there. Thank you for that.

Senator CORMANN —To conclude, in the second part of your submission there are also 45 locations around Australia, four of which are in Western Australia, where SBS is not transmitted at all terrestrially but where ABC and companion commercial TV services will be available in digital terrestrial form. Is it true that in those locations, in order to watch SBS TV and the companion commercial terrestrial digital services, viewers will need to install the direct-to-home satellite reception facilities while still being required to have digital terrestrial reception systems and facilities to watch those companion commercial terrestrial digital services?

Mr Meagher —I believe so, although, to be clear, those are areas which have never received any SBS service, analog or digital.

Senator CORMANN —Which includes a town like Kalbarri—

Senator Conroy —Which never received a signal before under your government.

Senator CORMANN —and which includes Nannup. You are the government, Minister, and you are going through this significant—

Senator Conroy —And we are providing all channels to every single Australian, something your government never did.

Senator CORMANN —Are you having discussions with the government around all of this?

Senator Conroy —Every single Australian.

Senator CORMANN —Are you having discussions with the government around those 45 towns as well?

Senator Conroy —I am glad you have recently discovered those 45 towns.; they were all receiving nothing under your previous government.

Senator CORMANN —They are part of this—

Senator FISHER —Given that we are now going digital, are you having discussions with the government about expanding SBS’s footprint in the conversion to digital?

Senator Conroy —I guess you would understand that a satellite covers the entire landmass of Australia, so the entire landmass of Australia is now going to receive the SBS footprint.

Senator CORMANN —So the answer is no then? Just say no, Minister. Why don’t you just say no?

Senator Conroy —The answer is that all SBS channels will be available on a satellite to every Australian, across the entire landmass of Australia. That is what a satellite does. It is a remarkable invention. They have been around a few years.

Senator CORMANN —Who is going to carry the cost of installing those satellites, those direct-to-home satellite reception facilities?

Senator Conroy —The dish.

Senator CORMANN —Who is going to carry that cost?  It is going to be the viewer themselves, isn’t it?

Senator Conroy —You will probably need to get a little bit more information before you can actually ask that question, but I will happily take that on notice to attempt to give you an answer. I am not sure you have actually supplied—

Senator CORMANN —So you cannot answer it?

Senator Conroy —I am not sure you have supplied enough information in your question.

Senator CORMANN —Who funds the installation of the direct-to-home satellite reception facilities?

Senator Conroy —It depends whether they are receiving the existing satellite service from Imparja or not. As I said, it will depend on the situation, which you have not explained. You have asked a blanket question. I am happy to take that on notice and see if we can get some more information from you that will allow us to assist in answering that question,.

Senator CORMANN —Helpful as always, Minister. I am conscious of the time.

CHAIR —Senator Cormann, some of the questions you have might better be directed at the department rather than SBS. Have you finished?

Senator CORMANN —Yes.

Senator WORTLEY —Mr Brown, thank you for your opening statement. I was particularly pleased to hear the minister recently announce on SBS’s World Game program the additional live broadcast of the World Cup, as I am sure many soccer fans in Australia are. How is it that you are going to be able to broadcast every game live?

Mr Brown —The majority of the games will be shown live on SBS1 where there is one game taking place at a time. On eight occasions there are two games which have the same start time in South Africa. The options really were to play one of them live and the other delayed or to seek the approval of the minister to waive some of the anti-syphoning restrictions with regard to those eight games so that one game could be shown live on SBS1 and the other game showed live on SBS2. The proviso was that both those games would then be immediately replayed on the opposite channel. For instance, a viewer who did not have digital capacity and therefore was not receiving SBS2 would in no way miss out on their entitlement as they would still see that game replayed on SBS1 immediately after the live game.

Senator WORTLEY —That was going to be my next question regarding digital television but you have answered that. What coverage is planned in online services?

Mr Brown —We will be making available all of the games for on-demand at any time. We will be live streaming some of it but not all games, as it is quite an expensive undertaking for us to live stream everything. We will be putting together about a 15-minute highlight program on each match because obviously some online consumers do not have the time to go through an entire game but still want to experience it. When you select a match in either full form or in a highlight short form, you will be able to listen to the commentary in either English or up to 13 other languages. For instance, if you are a Portuguese speaker, then you can listen to the Portuguese commentary if that is your preference.

Senator WORTLEY —Is the programming for the games up on the web already?

Mr Brown —The schedule is up on the web, I believe. It should be; if it is not I will find out but it should be on the web.

Senator WORTLEY —You were also talking about 3D, which is something very new. I have been reading quite a bit about it and I know a lot of people are quite keen to get the 3D television especially after the recent Avatar movie that was on. Can you tell us a bit about 3D and SBS and the World Cup?

Mr Brown —We will be broadcasting 15 of the 64 matches in 3D. Some of the games in South Africa are being shot in 3D as well as 2D so we will be bringing that signal back. We will be operating that on a separate channel so that it does not disrupt any of the existing SBS1, 2 or HD services. It will be a separate channel and we will publicise how you access that. It is being done in conjunction with Channel 9 and with our commercial partners Harvey Norman and Sony. Those 15 matches can be watched either live in 3D, but on that channel when there is not a live game on there will be replays of other games that have already been shown.

Senator WORTLEY —Have you sought any additional funding from the government to support the 3D broadcasts?

Mr Brown —The 3D broadcast is being supported commercially and does not require any further taxpayer investment.

Senator WORTLEY —What benefits will SBS receive as a result of the broadcast of the World Cup?  How do you plan to capitalise on it?

Mr Brown —The principal benefit is ensuring that all Australians get to see every game live without having to pay for it.

Senator WORTLEY —Even those that are on at 4.30 in the morning?

Mr Brown —Even if you miss it at 4.30 in the morning, you will know that at any time of the day you will be able to see 24-hour coverage of the World Cup. If you are not watching it live on SBS1 there will be a replay on SBS2. There will always be a choice between SBS1 and SBS2. Apart from those eight games there will always be a choice between watching our normal programming and watching a World Cup programming.

Senator WORTLEY —Good. Thank you.

Senator LUDLAM —Welcome back. I think you spoke in your opening comments—and I came in a little bit late—about the internal review that you are undertaking at the moment. Did that get a bit of a mention?

Mr Brown —No, it did not. I did not talk about the internal review. Do you mean the strategic review that management and board are currently carrying out?

Senator LUDLAM —I guess it is the same one. You mentioned it last time we were here on 8 February and I think you had only just started. I am just wondering if you can provide us with an update of where that is up to.

Mr Brown —I can tell you that the board and management had a two-day strategic session. We followed that up with a further session earlier this month and we have got more discussions planned for our board meeting in late June. The hope and expectation is that at the end of that we will have determined the strategic plan for SBS, which will lead to a corporate plan with the public document that we submit to government.

Senator LUDLAM —This strategic plan is internal but the corporate plan is submitted to government and to the parliament?

Mr Brown —That is correct.

Senator LUDLAM —When would that document finally be expected to arrive?

Mr Brown —Our hope is that it will be in July. Sign-off of this is obviously very much in the board’s hands—appropriately so. If it goes according to plan then we would expect the board to sign-off in late June and for the documentation articulation of this to come through in July and be submitted to the government and parliament some time early in the next financial year.

Senator LUDLAM —Last time I asked you a bit about the SBS equivalent of iView, of your online streaming service. Can you provide us with an update, particularly now ABC has begun captioning its iView service? I am just wondering whether SBS has similar intentions and how broad they are.

Mr Brown —I will take that on notice. I would make the point that while it is highly desirable and we recognise our obligations there, we have been unsuccessful in funding bids for captioning services now for about nine years of successive triennial funding bids. The funds for any expansion of captioning, particularly captioning that has to be specifically done anew, have to come from somewhere else. I will take on notice what our intentions specifically are with online.

Senator LUDLAM —I believe it was at the session of last October when the minister told us that the government was open to suggestions for amendments to the SBS budget before the conclusion of the current triennial period in 2012. Has that been one of your asks to the government over past funding rounds?

Mr Brown —I do not recall that as a specific request of government. Certainly I can recall two or three trienniums ago it was identified as a separate line item.

Senator LUDLAM —What can you tell us about traffic to the SBS website? How important is the streaming service becoming to you? Are there any numbers regarding how large your online audience is relative to your viewing population?

Mr Brown —A good question, and one that we are working on right now, is how do you develop a matrix of viewer and listener access to our services across an expanding range of platforms? There is a temptation to look at SBS and judge us by the number of metropolitan viewers of our services—those five city ratings that are trotted out. Of course we have far greater reach and penetration than that. Across regional Australia we have a bigger share than we do in metropolitan Australia and online there is a whole new audience, and on radio there is a significant audience as well. We currently are getting about a million unique browsers per month. That was a target that we hit in March, maintained through April and which we expect to do again in May. It rises significantly for special events, and it will rise very significantly during the World Cup and again during the Tour De France. Those are big drivers of traffic. Obviously we are as interested though in the more routine accessing of our services through our catch-up services, which is something in the region of about 80 per cent of our commission content.

Programs like the Logie award winning East West 101 and The Circuit are available on catch-up for up to a month. Those are heavily accessed but I do not have specific numbers on each title. The point really is less about our success today than about laying the foundations for a fundamental change in media consumption in the future. Those were the points I was touching upon in my opening comments and the reference to Google TV. The fact that convergence is really here—or about to be here, very close to—would indicate that we have to be capable of making our services connect with audiences on whatever platform they choose.

Senator LUDLAM —I do not know that we are going to get another estimates round this year but I just wondered whether it would be possible to provide for us on notice some sense of audience share, the break-up between your online audience of people who are not browsing but actually watching one of your titles as opposed to those watching on TV. I think it would be interesting to get a sense of what proportion that is. Senator Cormann covered most of the questions that I had on subtitling but I missed whether you identified whether, over the course of an average week, the amount of subtitle content would be going up, down or staying the same?

Mr Brown —The amount of subtitle content will progressively increase. Already I would suggest that we carry more subtitle content than we ever have in the past because of our second channel. That second channel is currently running at about 70 per cent in languages other than English. That is a level that we would like to maintain. We have earmarked this channel for being demonstrably multilingual. Our intention is—within our resources, which are limited—to invest again in SBS2 next financial year so that there is more original content on that in LOTE. The level of subtitle content will steadily increase.

Senator LUDLAM —I will leave it there. Thank you, Chair.

Senator CORMANN —In terms of your decisions for redundancies will you be focusing on people or on languages? What is going to be driving your decisions as to who has got to go?

Mr Brown —There are two stages to that decision. Tomorrow we are due to meet and discuss identifying the specific languages. Obviously where a subtitle in a particular language is fully utilised—that is, capacity matches demand—then there is not any reason to look at that particular language group. Where there is a clear surplus of capacity over projected demand then that language will be looked at. The second step is to look at the individuals who work within that staffed language to determine which individuals may be made redundant.

Senator CORMANN —How many of your staff are only proficient in one language in terms of subtitling?

Mr Brown —I am not entirely sure of that, but the qualification of subtitler is a very high qualification. Subtitling is not translation; it is a complete understanding of nuance and humour and being able to convert that into an acceptable form in a very small space on screen. In the main I would have thought that people would have been working in one language but I will take it on notice if I can identify any others.

Senator MINCHIN —On that subject, Mr Brown, I thank you for your opening statement and particularly your revelation of your research on this issue of certain ethnic communities. You cited the Hindi community finding itself relying more on essentially external media rather than the Australian media for its information. Do you have that research in a form that is available either for publication or to this committee? You quite rightly point to the risks to social cohesion if this is a trend that develops to any great degree and I think it is quite important in the national interest, the point you make. Is it available?

Mr Brown —I can make it available. This is primarily focus group research with communities that we have identified. The Hindi community was specifically one of interest obviously because of the current stress it is enduring. I think it was earlier this year we launched for the first time a Hindi television news service from overseas, but we do not want that to become the sole contact point with the Hindi community. The phenomenon we were particularly noting there was that communities under stress will be inclined to circle the wagons and relate more within their community. One of the things that I found quite disturbing about that particular issue was that even information and responses about how government and police were responding to the allegations about attacks on students were not reaching the Hindi community because they were accessing tabloid television services from India which were not reporting those issues. The conclusion that we reach obviously is that this is an area where SBS has an increasingly important role to play.

Senator MINCHIN —I think that is right. If any of that research is available to the committee, I think it would be very valuable.

Senator FISHER —On notice, gentlemen, if you could provide the viewing audiences of essentially the 44 self-help sites that may or may not be on the first bit of the list. You know what I am talking about, but in particular those who are currently receiving SBS by analog and may or may not, depending on what happens, enjoy transition to digital. What is the SBS viewer audience in those areas, please?

Mr Brown —I doubt that it is possible to determine the actual SBS viewership per transmitter. What we could provide is the population that that transmitter covers.

Senator FISHER —Thank you, and that will give us the upper level.

CHAIR —Thank you. If there are no further questions for SBS, thank you very much for appearing before us today.

Mr Brown —Thank you.

[9.56 am]