Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
Environment and Communications Legislation Committee
09/04/2019
Estimates
COMMUNICATIONS AND THE ARTS PORTFOLIO
Special Broadcasting Service Corporation

Special Broadcasting Service Corporation

[15:33]

CHAIR: Welcome back, Mr Taylor. Thanks for joining us, and your colleagues. Do you have an opening statement you want to make today?

Mr Taylor : Thank you, Chair. Yes, I do. Firstly, SBS welcomes the continuation of its funding announced as part of the federal budget early last week. This is recognition of SBS's relevance and the important role we play in Australia today. As we continue to navigate the changing face of modern Australia, a disrupted media environment and the shifting needs of audiences, funding certainty enables us to continue to deliver distinctive programs and services which make a valuable contribution to Australia's success as an inclusive, multicultural society. Our activities in 2019 continue to demonstrate our unique offering. A recent series we're particularly proud of and an example of SBS's distinctive approach to storytelling has been Australia In Colour, told through a collection of iconic archival footage brought to life in colour for the first time. This groundbreaking documentary reflects on our nation's character, its attitudes, its politics and the challenges we face in reconciling our Indigenous and multicultural past. We received an overwhelmingly positive response from audiences and stakeholders, and the series is the second-highest rated SBS program this year to date. I invite you to watch it on SBS On Demand if you haven't seen it already.

Our unrivalled multilingual services are invaluable for nearly five million Australians who speak a language other than English at home. Last month our Arabic language radio channel, SBS Arabic24, celebrated its third anniversary. We're proud that it continues to be Australia's leading Arabic service, providing important news and information for the many Arabic-speaking communities across radio and digital platforms.

SBS recognises the important role that diverse Australian stories can play in deepening understanding and respect amongst our communities. We're increasingly focused on this and have this year committed to making more SBS commissioned programs available with subtitles in more languages. The Chinese Collection and the Arabic Collection, launched earlier this year, feature a range of SBS dramas, documentaries and current affairs programs subtitled in Arabic and simplified Chinese available on SBS On Demand and promoted to these communities through our language services. Our intention is to increase this offering to audiences in the coming months.

Finally, as we head towards a federal election, SBS will be providing comprehensive coverage and dedicated programs across all platforms. Audiences come to SBS for trusted, independent and quality news and current affairs reporting, and our coverage will explore the issues, concerns and voices of our diverse communities. Across TV, radio and online we'll provide news, information and explainers in multiple languages, helping all Australians, including the 20 per cent or so who speak a language other than English, to understand policies and navigate the voting process. I look forward to your questions. Thank you.

Senator URQUHART: Thank you very much. Mr Taylor, could you outline how SBS uses its terrestrial free-to-air platform and how it uses its free-on-demand platform when it comes to providing television content to Australians.

Mr Taylor : Certainly, Senator. We have a number of free-to-air channels which provide a range of services. We reach approximately 13 million Australians every month with our linear television channels. We have SBS One, which is our main channel, which provides a diverse array of CALD and LOTE content. We have SBS Viceland, which aims to serve our charter content to a slightly younger audience, the National Indigenous Television service, which is proudly by and for Indigenous Australians, and SBS Food, which celebrates culture through cuisine. SBS On Demand is a streaming service which has a great many subscribers. Some six million Australians are registered to consume our digital products, of which SBS On Demand is the principal product. It serves a large array of content; more than 5,000 hours of content. Interestingly, 75 per cent of the dramas on SBS On Demand are in a language other than English. We think it is a unique proposition in the Australian media landscape, and we're proud of our linear and our digital services.

Senator URQUHART: Thank you. Can you tell me what your ratings data tell you about how Australians are consuming screen content across those SBS platforms?

Mr Taylor : Yes, certainly. If we think about our share, which is the measure of our share of total linear consumption, it's approximately eight per cent. That has been increasing over the last few years, and we're very pleased about that. At the same time, you'd note that many Australians are engaging ever more with digital services. What we're seeing with our linear proposition, not unlike many of the propositions, is that, given Australia's aging population, the age of the linear consumers is increasing, while the slightly younger audiences, particularly the 25 to 54 demographic, are moving to digital platforms. What's gratifying for us, as a network, is that the rate of growth of our consumption on digital platforms is at a rate that is off-setting the decline on our linear platforms. So in terms of being a public broadcaster, ensuring that we remain relevant to all Australians, we're very happy with the way we're navigating that transition from linear to digital services, providing a valuable and good linear proposition to the 90 to 95 per cent of audiences who still consume us in that way, and providing a very compelling offer in the emerging digital landscape.

Senator URQUHART: Are some kinds of content better suited to different platforms? For example, does Australian drama content get a better run on the On Demand platform?

Mr Taylor : What we find with On Demand is that it gives audiences more opportunities to come back and consume content. The SBS schedule is made up of many, many wonderful things. It's a relatively fragmented schedule. You'll note that SBS is not exposed to things like reality TV, which sits in a commercial free-to-air schedule for a long period of time.

Senator URQUHART: Thank heavens, Mr Taylor. That's all I can say.

Mr Taylor : I would not make any comment on that. All I would say is that that is not part of our content mix.

Senator URQUHART: I can.

Mr Taylor : We tend to have a larger variety of smaller programs. Therefore, things like Drama allow audiences in an on-demand context to find a program and perhaps watch the additional episodes they might have missed.

Senator URQUHART: What about children's content? What platform is that better suited to, from what you've found?

Mr Taylor : I think youth content, children's content, is very, very easily and well consumed on digital platforms, if my kids are any benchmark. They are very au fait with how to use an iPad, and kids tend to like to watch episodes multiple times. The amount of children's content that SBS has tends to work well on demand. We've got some fantastic children's content—in particular, Little J and Big Cuz, which is an NITV production, which is an animation for Indigenous and non-Indigenous children. It won a Logie award last year, which we are proud of. That is a piece of content that has done well in the on-demand environment.

Senator URQUHART: So, in your view, will the on-demand platform be of increasing importance in the provision of content?

Mr Taylor : Absolutely. We are intentionally platform agnostic as an organisation and we are here to serve all Australians, in keeping with our charter and our act. We want to make sure that content is available in the place that they wish to consume it. Therefore, we imagine that the growth of digital platforms will continue at pace, and we need to be there with a strong, compelling proposition.

Senator URQUHART: Just thinking about the Australian and children's screen content review, how important is it that changes to the policy and regulatory framework consider free on-demand platforms like the SBS On Demand service?

Mr Taylor : Our position on that has been that, to the extent that we were able to do more Australian content, we would love to do so. By budget necessity, much of our content is acquired. There's nothing wrong with acquired content—all of our service exists in service of the charter—but, as an Australian public broadcaster serving Australian multicultural communities, our capacity to make those stories for Australian audiences by Australian audiences, we think, is to our betterment.

Senator URQUHART: I want to turn to some questions around hate speech, particularly in response to the Christchurch terrorist attack. Is SBS subject to the ACMA's investigation?

Mr Taylor : Yes, we are.

Senator URQUHART: Can you tell me what the programs and services are that are subject to that investigation?

Mr Taylor : News programs produced by us or broadcast in English were the subject of that inquiry.

Senator URQUHART: Does SBS have a way of moderating content posted by third parties on its online platforms? For example, if a member of the public posts potential defamatory material on an SBS platform, is it removed?

Mr Taylor : Senator, we don't accept comments on our own platforms, but we do post stories to third-party social media platforms—for example, Facebook. We do engage in moderation of those sites—principally, Facebook. Twitter does not provide moderation functionality, but Facebook does provide some limited functionality to allow moderation.

Senator URQUHART: How do you do that moderation?

Mr Taylor : We have staff that are responsible for moderation. In relation to the tragic Christchurch incident, we had to bring on an additional 13 staff to work a roster over the weekend following the incident. The capacity provided to us by Facebook, in particular, allows us to filter on particular words.

Senator URQUHART: On words?

Mr Taylor : On individual words. That effectively creates a pre-moderated list of comments that you can then go in and manually work through. The challenge of course is that a word in one context is fine and a word in a different context is not fine. We have the capacity to pre-filter and then we have two mechanisms available to us, to hide comments posted that, in our view, represent hate speech or to delete the comment entirely. The challenge with deletion is that the person who posted the comment is notified and that often brings back an ever-more aggressive response.

Senator URQUHART: What policies or editorial standard apply to guide SBS in this work?

Mr Taylor : We have our codes and our editorial policy, and we make sure that all our moderators are trained in both, such that they can form an informed view about when comment represents free speech and when it has moved into the realm of hate speech.

Senator URQUHART: What material is then monitored for moderation?

Mr Taylor : We monitor our Facebook pages, principally; that is the place where we get most of our comments. We monitor other platforms as well, but, as I mentioned earlier, our capacity to moderate is relatively limited in that regard. But, in relation to Facebook, we monitor our SBS Australia page and our SBS news page.

Senator URQUHART: Is hate speech monitored?

Mr Taylor : Yes. When we monitor our sites we're monitoring and looking for defamatory comments and, in particular, comments that incite hatred or violence or that are derogatory about another individual, and we pay fairly close attention to that. It's important for us. Clearly, many—in fact, most—Australians receive their news through social media platforms. We want to make sure that our audiences coming to SBS and our pages hosted on third-party sites are able to consume that news in a safe environment—yes, to engage in and see the debate around individual stories, but to do whatever we can to prevent them being exposed to hate speech.

Senator URQUHART: Did you notice a spike in comments that needed to be moderated in the wake of the Christchurch terrorist attack?

Mr Taylor : Yes.

Senator URQUHART: To what extent?

Mr Taylor : To a very large extent. We would normally have had in the order of three or so people working across the weekend. We had 13 staff on over that period of time. We had to enlist people from across the organisation to support. There was a disturbing spike in commentary of that nature.

Senator URQUHART: Do you have a view on what the Christchurch terrorist attack says about the need for SBS in Australia?

Mr Taylor : As a service that is built upon the purpose of creating and contributing to a more inclusive society, I think that we feel that, in moments following an incident like Christchurch, we have a real capacity to engage with communities, to tell stories of communities, to help the healing process, to really debate and discuss the underlying causes of these sorts of horrific incidences in our society. So I think that, whilst these incidences are utterly tragic and best avoided, what we seek to do is, in the space behind those instances, to come in and try and assist with better understanding, more respect for one another, better understanding of one another. I think it absolutely amplifies the importance of SBS.

Senator URQUHART: Mr Taylor, how much has SBS spent on responding to the efficiency review and competitive neutrality inquiry?

Mr Taylor : I think we've provided the details on the competitive neutrality response previously, and our participation cost $282,000. I don't have information on the efficiency review, but I would be happy to take that on notice.

Senator URQUHART: Thank you. On 5 March, 2019, there was an article in The Sydney Morning Herald by Jennifer Duke and Fergus Hunter about the efficiency review. It was entitled 'ABC and SBS to defend core content'. The article states:

The ABC and SBS are gearing up to defend their programming in light of a new review that has suggested some content is not "core" to the charter responsibilities of the public broadcasters.

Does the SBS charter contain or include any notion about core content?

Mr Taylor : No, Senator, the SBS charter does not.

Senator URQUHART: Did SBS provide the efficiency review with any information to suggest the SBS uses the notion of core content?

Mr Taylor : No.

Senator URQUHART: Does the efficiency review provide the SBS with any useful guidance?

Mr Taylor : I think we received the review in early March. It was provided to us under embargo and on a confidential basis so that I and the SBS board could review it and discuss it. We've yet to do so; we're doing so at our next available board meeting in April.

Senator URQUHART: Is there anything you would like to say about the efficiency of the SBS? How efficient are you?

Mr Taylor : At the risk of marking my own homework, I think we've long held the case—

Senator URQUHART: I'm happy for you to mark your homework.

Mr Taylor : We've long held the case that we are a very, very efficient organisation which has undergone a very aggressive modernisation program with an incredibly engaged and committed staff base, and an organisation that has pivoted to digital at a rate I think impressive for an organisation of our size and scale. We're reaching more Australians than ever before and we've done that because we've been doing everything we can to free up money from activities which we thought we could improve and putting that money into more Australian content and more digital capability.

Senator URQUHART: Minister, what funding is there for SBS in the budget this year?

Senator Fifield: There is SBS's base funding, and we've also outlined in the budget some additional funding, which I'm happy for Mr Mrdak to take you through, or I'm sure Mr Taylor would be very happy to.

Mr Taylor : I'm happy to do it. We've received an additional $29.6 million over the forward period, against two measures in addition to the base funding the minister mentioned. One was the return for the coming three years of the ad legislation money, removed as part of a process that was ultimately withdrawn, to allow SBS to secure more commercial advertising. The legislation is not being pursued anymore; therefore, the money has been returned. And there was another measure which was an amount which was related to funding adequacy, which was to be a terminating measure at the end of this financial year, which has been continued for the three years as well. Those two measures amount to $29.6 million over the coming years.

Senator URQUHART: Minister, did the government replace the funding it cut as part of the government's attempt to allow SBS to increase its advertising during prime time?

Senator Fifield: Yes.

Senator URQUHART: Can you expand on what occurred around the cut and the replacement of that funding?

Senator Fifield: Going many budgets back, there was a saving taken in anticipation of the passage of legislation which would give SBS greater advertising flexibility. That legislation was not proceeded with because it did not have prospects of passage. Given that, the government was keen to provide certainty to SBS, so on a number of occasions that funding has been replaced.

Senator URQUHART: Minister, does the government's replacement of those funds mean that you've finally accepted the Australian public does not want to see more advertising during prime time on SBS?

Senator Fifield: Not wanting to relitigate the legislation which won't be proceeded with, it wasn't seeking to increase the number of minutes of advertising on SBS overall. It was seeking to give SBS some additional flexibility as to when they might be.

Senator URQUHART: Mr Taylor, what does SBS estimate the total advertising revenue will be for this financial year?

Mr Taylor : Our total commercial revenue, which includes advertising, would be in the order of $120 million.

Senator URQUHART: Is that the total advertising revenue?

Mr Taylor : No, advertising is a subset of that. I'm happy to take on notice the breakdown.

Senator URQUHART: You haven't got that there?

Mr Taylor : I don't believe so, no.

Senator URQUHART: Do you know whether it will be an increase or a decrease on last year or about the same?

Mr Taylor : I think it will be about the same—possibly a slight increase, but about the same. I note, Senator, that this was a World Cup year, which happens once every four years, so therefore we have a little bit more advertising associated with that.

Senator URQUHART: If SBS television and radio advertising remained capped at five minutes per hour, but ads were only positioned before and after programs and not in free-to-air and on-demand services, would the total advertising revenue to SBS be reduced?

Mr Taylor : Yes, significantly.

Senator URQUHART: By how much?

Mr Taylor : Significantly. I'm happy to take it on notice.

Senator URQUHART: What would 'significantly' be—in the order of?

Mr Taylor : In the order of 30 per cent, probably. It would have a material impact.

Senator URQUHART: Does the SBS board impose a set of KPIs on the managing director in relation to advertising revenue?

Mr Taylor : We have a budget which makes assumptions about own-source revenue and government appropriation. We're a hybrid organisation, so we have an obligation to achieve our budgeted outcomes.

Senator URQUHART: Are they linked to KPIs?

Mr Taylor : We measure it, Senator.

Senator URQUHART: Are those KPIs linked to advertising revenue?

Mr Taylor : I think the KPIs are linked to total commercial revenue—the top-level KPIs.

Senator URQUHART: What are those KPIs?

Mr Taylor : We have a set of what I'd call director KPIs, which relate to me and my team. There's a great many of them. Do you want to just know about the commercial ones or—

Senator URQUHART: Tell me the ones that you measure.

Mr Taylor : We measure—

Senator URQUHART: Sorry; on the managing director in relation to advertising and commercial.

Mr Taylor : We have own-source revenue, which is the measure that I'm accountable for because that's—

Senator URQUHART: Unsourced revenue?

Mr Taylor : Own-sourced revenue. I think we call it core commercial revenue, if I'm correct. That is because it represents in any year 25 per cent to 30 per cent of our total funding. So it's important that, as we set out a year, we achieve the targets we said we would; otherwise, we'll have a gap in our finances.

Senator URQUHART: I want to go to some board appointments. Minister, are there any nonexecutive directors on the SBS board who did not come through the merit based recommendation process of the nomination panel?

Senator Fifield: Yes.

Senator URQUHART: Who's that person?

Senator Fifield: Professor Sally Walker came through the legislated process, which makes provision for the government to make appointments apart from the recommendations of the independent nomination panel.

Senator URQUHART: Does Professor Sally Walker have any current or past associations with the Liberal Party?

Senator Fifield: I'm not aware.

Senator URQUHART: On which date was Professor Walker appointed to the SBS board?

Senator Fifield: It was some time ago, so I'll need to phone a friend on that.

Senator URQUHART: Did you notify the parliament within 15 sitting days of her appointment?

Senator Fifield: Yes.

Senator URQUHART: So you can't remember the date?

Senator Fifield: There are 167 board positions in my portfolio, and I don't have total recall of the dates on which all of them were appointed.

Senator URQUHART: Before Professor Walker was appointed to the SBS board, was she a friend or acquaintance of yourself or then Prime Minister Turnbull?

Senator Fifield: I came into contact with her when she was the Vice-Chancellor of Deakin University, in my capacity as a senator for Victoria, where I, with then education minister, Minister Nelson, the then health minister, Minister Abbott and then Treasurer Costello, argued for funding for a regional medical school. That was how I came into contact with her—which, I should say, the government of the day did provide, and it's been a great success for the Geelong region.

Senator URQUHART: Can you tell me why Professor Walker was selected to be on the SBS board when she didn't even apply for the position?

Senator Fifield: As I think colleagues know, the legislation which was passed by our predecessors in government allows for the government of the day to make an appointment apart from names that come through the nomination panel process. In that circumstance, the minister is required to table a statement of reasons in the parliament within 15 sitting days, which occurred.

Senator URQUHART: How many people applied for the position that Professor Walker now holds and how many were short-listed by the nomination panel?

Senator Fifield: I'm almost certain that we would have to take that on notice, because that was a process which happened some time ago. So I think it would be unlikely that officers from the department would have that information on hand.

Senator URQUHART: What were the circumstances in which and when was Professor Walker first brought to your attention in consideration of a possible appointment to the SBS board?

Senator Fifield: I took a proposition to cabinet, and it was a decision of government that she be appointed to the board and that her name be recommended to the Governor-General in executive council.

Senator URQUHART: What was the government hoping to achieve by appointing Professor Walker to the board of directors, and what criteria have you used to assess if Professor Walker has met those expectations?

Senator Fifield: We used the criteria which were established by legislative instrument by the former Minister for Communications, which are still in effect.

Senator URQUHART: Thank you.

Senator Fifield: Chair, my colleagues in the department have just advised that Sally Walker was appointed on 23 February 2017.

Senator URQUHART: Thank you.

CHAIR: Thank you very much, SBS, for your time today.

Proceedings suspended from 16:00 to 16:15