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Environment and Communications References Committee
11/04/2018
Australian content on broadcast, radio and streaming services

ANDERSON, Mr David, Director, Entertainment and Specialist, Australian Broadcasting Corporation

Committee met at 11:19

CHAIR ( Senator Hanson-Young ): I declare open this public hearing of the Senate Environment and Communications References Committee in relation to its inquiry into the economic and cultural value of Australian content on broadcast, radio and streaming services. This is a public hearing and a Hansard transcript of the proceedings is being made.

Before the committee starts taking evidence, I remind all witnesses that, in giving evidence to the committee, they are protected by parliamentary privilege. It is unlawful for anyone to threaten or disadvantage a witness on account of evidence given to a committee, and such action may be treated by the Senate as a contempt. It is also a contempt to give false or misleading evidence to a committee. The committee does prefer all evidence to be given in public but, under the Senate's resolutions, witnesses have the right to request to be heard in private session. It is important that witnesses give the committee notice if they intend to provide evidence in camera. In addition, if the committee has a reason to believe that evidence about to be given may reflect adversely on a person, the committee may also direct that the evidence be heard in a private session.

If a witness objects to answering a question, the witness should state the ground upon which the objection is taken, and the committee will determine whether it will insist on an answer having regard to the ground on which it is claimed. If the committee determines to insist on an answer, a witness may request that the answer be given in camera. Such a request may, of course, also be made at any other time. On behalf of the committee, I would like to thank all those who have made submissions and sent representatives here today for their cooperation in this inquiry.

I welcome Mr David Anderson from the ABC. Information on parliamentary privilege and protection of witnesses and evidence has been provided to you. The committee has your submission, and I invite you to make a brief opening statement, and then we'll go to questions.

Mr Anderson : Thank you for the opportunity to appear here today before the Senate inquiry into Australian content on broadcast, radio and streaming services. The ABC is unrivalled in its commitment to Australian content across television, radio and digital. The ABC's charter, enshrined in legislation, requires us to broadcast programs that contribute to a sense of national identity, inform and entertain, and reflect the cultural diversity of the Australian community. Australian storytelling is central to the ABC's purpose and its strategic goal: to be the source of Australian conversations, culture and stories.

The increasingly globalised market has only served to highlight the value and importance of such content. In a world of abundant digital media, distinctive and accessible Australian content plays a crucial role in connecting audiences with stories and voices that represent their lives and experiences. Access to original Australian content is arguably even more important for younger audiences as they seek to understand and navigate the world around them. Through the telling of Australian stories, we can better understand ourselves, each other and the communities in which we live. They help us develop shared understanding of our individual and collective challenges and celebrate our differences.

ABC programs are synonymous with Australian life and have resonated with audiences across generations, and we continue to inform, educate and entertain the Australian public. The ABC's rich heritage as the trusted source of news and investigative current affairs programs has long held people and organisations to account. Rural and regional content connects and reflects Australian life beyond the big cities to the benefit of all Australians.

Integral to the creation of high-quality diverse Australian content, unlike all broadcasters, the ABC is evolving to meet audiences' needs and expectations in the digital age as audiences' behaviour and expectations change. ABC iview, which was launched a decade ago, attracts more than 50 million plays per month and is the leading Australian streaming service. The ABC has also taken a leading role in creating and commissioning digital first content aimed at audiences who have moved away from traditional broadcasting. This content plays an important role in fostering the next generation of creatives through partnerships with the independent production sector and institutions like the Australian Film, Television and Radio School.

The addition of new global players to Australia, such as Netflix, is impacting on the financial stability of the domestic market. Without some form of policy intervention, whether through subsidies, incentives or regulation, commercial investment in Australian content will diminish significantly. The current quota system is imperfect, but abolishing this system will see a significant diminution in the quality of Australian content. Similarly, any proposed application of commercial quotas to the ABC would impinge on the corporation's independence and ability to respond to evolving audience behaviours and expectations.

The ABC typically meets or exceeds the commercial broadcasting quota targets across television and radio. Similarly, any proposed application of commercial quotas to the ABC would impinge on the corporation's independence and ability to respond to evolving audience behaviours and expectations. The ABC typically meets or exceeds the commercial broadcasting quota targets across television and radio. Ultimately, however, the ABC's significant investment in Australian content is not driven by quotas but by the availability of funding.

This financial year we increased our investment in Australian content by over $30 million, year on year. The creation and distribution of Australian content and the strong and vibrant production centre are fundamental to our national identity and our shared cultural heritage. Continued and sustained government support, including a well funded public broadcaster, is essential to maintaining that Australian content, including children's drama and factual content. It's the very essence of what we do at the ABC, and our aspirations for the future are to continue to be the leading and independent source of Australian conversations, stories and culture.

CHAIR: Thank you, Mr Anderson. I'll go first to opposition senators for questions.

Senator URQUHART: Mr Anderson, I don't know whether you've had an opportunity to look at the submission that was put forward by SBS.

Mr Anderson : I have.

Senator URQUHART: That contains a number of recommendations. Could you give us your take on those recommendations that have been put forward? Do you agree or disagree? Could you expand on them? There are about seven altogether.

Mr Anderson : Summarised on which page, Senator?

Senator URQUHART: The first recommendation is on page 9. It talks about a fully funded Australian content quota for SBS's main channel to deliver more SBS charter aligned content to the community and support the Australian screen industry.

Mr Anderson : In commenting on the SBS submission, I agree in the investment in Australian content. I think that's similar to the ABC's submission on how important that is into the future. To me it looks like SBS is putting forward an agreement to a quota in return for additional funding. It's entirely up to SBS to do so. As per my opening statement, I do not believe that quotas will look after Australian content into the future. Apart from infringing on the ABC's independence, a quota will reduce the ability to follow the best stories. I think it reduces the ability to maintain high-quality Australian content. If you're focused on a quota and you're not focused on the content itself, what it's doing, your investment in telling those stories and the Australian people, and you're worried about volume, I think that's the wrong focus. In the ABC's submission, you'll see that we do not agree on the application of quotas, certainly to the ABC. Rather, we're finding efficiencies and we're investing more in Australian content. Volumes of Australian content per genre will fluctuate over time, from year to year, depending on the strength of the story and cash flows, but we have that commitment and we have that commitment without quotas.

Senator URQUHART: In your submission, you include some international examples of content funding—places like the EU, Canada, New Zealand and the UK. You make some strong remarks around the 2017 media reforms. There are some arguments for the need for increased funding and you're against specific quotas, which you've just outlined. Can you talk a little bit more about the international examples of content funding? Also in your opening statement, you talked about policy intervention being required. Can you expand on what your view of that would be?

Mr Anderson : Certainly, Senator. They go hand-in-hand. You can look to other markets for specific examples of where policy frameworks are already different. They're different for different reasons. There are different funding environments. We can learn a lot from somewhere in the EU where they've imposed quotas on, say, SVOD suppliers, as to the effect that's had in that particular market. That's what some of those references are heading towards. When it comes to Australia, it is a complicated policy framework. We have a different funding environment here, certainly when it comes to public broadcasting. I'd say as an overarching comment that I don't think we can be reductionist about the reform we put in place. I don't think it's quite as simple as lifting quotas here and increasing the offset there. More thought needs to go into it and it goes to the type of Australian content that needs to be produced rather than ending up with a subsidy that goes to something that's already happening. If the purpose is to invest in the Australian public through Australian content being created, those incentives need to be there for the creation of content that would otherwise appear to diminish over time based on, if I talk about the sector itself, the ability to run advertorials against content.

If I look to commercial free-to-airs, there's a heavy reliance on live-event television through reality TV, through international formats, whether they're being produced locally or it sits there with sports and sport rights and the like. When I look at drama in this country, drama audiences are down 20 per cent year on year for long-form drama. When I say drama, I mean scripted content that includes drama and narrative comedy, because they're of equal effort to make and of equal cost. I think that those cost pressures are going up; they're not going down.

I think a solution to, say, reduce the cost of producing long form is, frankly, absurd. If you are going to be relevant to, and have an impact on, Australian audiences you need to ensure that you're on a level playing field. A lot of that will mean that you have to invest more in those genres and not less. If you're a commercial free-to-air network, I can see the issue when it comes to having a sustainable business model. If you can't sell something against drama, it's difficult to justify why you're making drama. You want to encourage the Australian production and, in doing so, those business incentives need to be there, particularly for those that are built on a revenue model.

When it comes to the ABC, we are investing more in drama, and I'm happy to go through my opening statement—about an extra $30 million that we're spending in content across the board. That excludes news and current affairs. It's in addition to what we're doing for regional Australia—through regional and local. It is an investment that we are making for the purpose of telling Australian stories and for the importance of having an Australian voice in media and to reflect the diversity of our country. We're okay if the audience comes to us through an on-demand platform. Whereas a commercial free-to-air network is looking to monetise on an overnight and not necessarily getting their revenue stream through what is catch-up or on demand, the ABC will look at audience engagement through the prism of both broadcast and how well something goes, say, on iview. What we see is down on broadcast those audiences are up on iview, such that nine out of 10 titles in any one month on iview are Australian titles.

Senator URQUHART: How does the ABC manage the challenge of the high costs associated with producing Australian drama? You just talked about $30 million in content. How do you manage that in a budget that seems to be shrinking?

Senator KENEALLY: Well, it is shrinking.

Senator URQUHART: It is shrinking, yes.

Mr Anderson : It is. As far as the ABC budget goes, we've found efficiencies over the last two years, in addition to the efficiencies that we've found over time.

Senator URQUHART: For how long can you go on finding efficiencies?

Mr Anderson : There is a natural cap to that. There's only so far that we can go, and we think we've reached that cap, frankly. It is always a struggle to make sure that you are putting as much money into Australian content as possible. When it comes to drama production, we have a policy framework here and we have a drama model where the ABC will pay a licence fee that is set by Screen Australia. It is a nominal licence fee which is effectively for a package of rights, which is a portion of what the production budget would be. Production budgets would normally have sat at around a million dollars an hour. And we're seeing production budgets come through the door that are closer to $2 million and, in some cases, exceed $2 million an hour. The way that these will work is you've either got contributors that are coming from both domestically—you've got state and territory funding bodies; you've got Screen Australia, which is a federal funding body; you've got the offset coming from the ATO; and then you've got a distributor somewhere. Some of those distributors are known to us and have been there for some time. Some distributors are new, and they are SVOD players that will come in and invest for the rest of the world, where we will take territory that is Australia.

Senator URQUHART: Are the tax offsets and incentives available for film and television projects adequate to support the film and television production industries in Australia?

Mr Anderson : My observation would be that they're not. If you've got 40 per cent for film and you've got 20 per cent for television and it's all content and it's all screen and you're trying to get to Australian audiences, to me, it's reasonably obvious that you would look to elevate the offset. But that's not for me to determine. I think that is part of a complex policy framework. My counsel would be that that comes with the right other incentives. At the moment, the incentives that sit out there sit with quotas. I think there needs to be a balance between supply and demand. Just increasing the supply of money doesn't necessarily mean that there will be demand for the right content.

Senator DUNIAM: Just on that: what does an entity like the ABC do to address the demand issue? Is there anything that can be done?

Mr Anderson : The demand of Australian content in the industry?

Senator DUNIAM: Yes.

Mr Anderson : We work with what are industry bodies with regard to the value that we see in producing Australian content. We work very closely with SPA and with other industry representation, and we look to try and help work through solutions as much as we possibly can. I know whenever Michelle Guthrie is speaking, when the chairman is speaking, when Louise Higgins is speaking, we are talking the relevant and value content that we provide the Australian people. Beyond that, it's an encouragement that others do the same. I think talking up the value of the independent production sector, which actually serves all networks, is an important thing to do. Unless demand is staying high for the stability and sustainability of that sector—and the talent pool that sits out there; the wonderful people that we have that make all of these programs—then, if demand decreases, the industry will shrink. So we do talk up the value of having a vibrant industry: one that is bringing through and fosters new talent, one that doesn't force people to go overseas to pursue a career, and one where they can actually stay here. There's only so much that the ABC can do to participate as part of that.

Senator DUNIAM: I'm not suggesting that the ABC should single-handedly turn that around! You did talk about a 20 per cent reduction in, what, popular—

Mr Anderson : In drama. If I look at drama audiences, which are different to other markets in the rest of the world—

CHAIR: Can I clarify: you're talking across the board, so commercial and—

Mr Anderson : Yes, across the board. It's the same for the ABC as it is for the commercial free-to-airs, that drama—

Senator DUNIAM: Over what period of time has that 20 per cent decrease occurred?

Mr Anderson : We've noticed that in the last 12 to 24 months.

Senator DUNIAM: Is that consistent with overseas trends?

Mr Anderson : No, it's not. In big markets overseas the broadcast schedule is still very important, and drama is really the pillar that sits in that schedule. We are noticing—or I do, anyway!—that viewer behaviour in this country is down on what is long-form drama. That is really picked up in on-demand.

CHAIR: Can you describe for us what long-form drama is versus, I guess, not-long-form drama?

Senator DUNIAM: Whatever the opposite is!

Mr Anderson : I would refer to long-form drama as a series, like Harrow. For comedy, it would be Rosehaven. You naturally see a softening of those audiences. When I look at the commercial networks—

CHAIR: As in they don't start on episode 1 and follow all the way through, week in and week out?

Mr Anderson : It's a struggle to get them there for episode 1, frankly. When you look at viewer habits within Australia, there is a propensity towards live-event television, which is either reality or sport. For our audiences to then pick up those stories says they still have an affinity for it—they haven't walked away from it; they're there for on-demand. So you see on-demand lifting while the original broadcast is actually softening. For us, that's success. We're not looking to monetise it. As long as we're engaging as many Australians as possible through our content, then, for us, we're doing our jobs. But I can see that, for a commercial free-to-air network, that is then difficult to monetise.

CHAIR: So you're saying there isn't a lack of appetite; it's just that they're watching it in different places?

Mr Anderson : Their behaviours are changing. They are engaging with this content at a time that suits them, because that is what is available. It's very important, as audiences shift towards on-demand, that, one, we have great products and services—and we do across television and radio, but they continually need to keep pace with audience expectations—and, two, that there's great Australian content that sits on the other side of it.

Senator DUNIAM: I only have one more question. With regard to entering overseas markets, does the ABC do any work with overseas markets in terms of Australian productions being sold to an affiliate or a partner or a similar organisation overseas?

Mr Anderson : Yes, there are different deals. There are deals where you have a co-commission with a broadcaster that sits overseas—we might have one, say, with the BBC. It depends where you get in. It goes all the way from acquisition—just the finished product—to a pre-sale or an enhanced acquisition where you're involved early on in something that they're doing that you want to bring to your audience. There might be something we commission here, that might be for an Australian audience, for which there is international investment to take it around the world. There are many different varieties of those screen finance plans that come in, usually presented by an independent producer—so it's not necessarily the ABC seeking this. It's coming in to us and it's something that we're part of, and always with a view of what is going to be the best content across the range of what we've got for Australian audiences.

Senator DUNIAM: Thank you.

CHAIR: I just wanted to pick up on this tension about audiences moving and behaviour changing. Do you have any figures of the demographic breakdowns of audiences—obviously, you'd only have them for the ABC? I'd be really interested to know whether you have mapped. And do you have figures to show the gender, economic status and education levels of people who are moving from watching drama on a television broadcast to the catch-up and on-demand services?

Mr Anderson : We have a number of different sets of data that we get through different platforms, on surveys, at different times. I will say this: for anyone shifting from broadcast to on-demand, this is not necessarily a youth phenomenon; this is across all demographics. I will say that when I look at broadcast reach and the way that broadcast reach is falling year on year, there is acceleration there. It did start with the middle demographics that sit anywhere between 18 and 50. But you also see reduction in reach in older Australians, in 50-plus and 65-plus, as it is easier to access content on-demand. I'm talking about just broadcast reach.

Overall viewing of TV and video has never been higher; it's just that the consumption method is shifting, and shifting away from broadcast. There are differences in there. There are differences of what is the market of people that you're reaching at any one particular point in time. You see reported in a number of different industry reviews that come out with information that, generally, when it hits 9.00 or 9.30, people are moving off towards an on-demand service and away from a broadcast service. There are times of the day, as I look across both radio and television, that are either stronger or weaker, depending on people's habits.

CHAIR: The various NBN retailers will tell you that too, because that's when their systems go slow, at 9 pm—everyone switches on at the same time! Could I ask you about the behaviour changes that you've seen in relation to kids' television in particular? We've talked about drama a bit, but could you talk specifically about kids' TV?

Mr Anderson : Kids' TV is, of course, incredibly interesting. For ABC KIDS content, we look at engagement via broadcasts and engagement via on-demand. I can say, as a parent that doesn't always feel like a five-star parent, sometimes putting a child in front of an on-demand service with auto roll-on-next-episode can be helpful to get things done! But there are still viewing opportunities with family that exist on broadcast that still work quite well. If you look at ABC ME and the range of ages that goes right up to 16, you start to look at different consumption methods. There is an age group there that almost entirely consumes video through on-demand, and it's important to us that the same percentage of Australian content that we have on ABC ME that's available on broadcast is also available on our on-demand platform. The other thing that we're doing, for instance, over the school holidays—noting, for those upper age groups, the propensity to binge—is running a marathon of a particular program that goes all day and that is available for on-demand.

CHAIR: Which is easier to match, of course, on an on-demand service than changing an entire television schedule.

Mr Anderson : Yes, of course. I am being quite generalist in my response there, but that is one way we are actually trying to address the shift in behaviour as children age.

CHAIR: How important does the ABC consider Australian-made kids' television and kids' content? I would argue that most of us in this place would recognise that you guys lead the way when it comes to kids' content. Is that something that you've just got sewn up so it's now, 'We own kids' television and that's enough'?

Mr Anderson : No, not at all. It is something we're very proud of. We have a range of children's content across the board. It's a fantastic team led by Michael Carrington and they think very deeply about content, particularly from the perspective of the child. We seek to reflect the diversity of Australia through the content that we produce and we are very proud of what we do. Part of the additional investment we've had this financial year—

CHAIR: This is the $30 million?

Mr Anderson : has gone to children's entertainment as well, which sort of demonstrates our investment.

CHAIR: Could you give me a figure—or take it on notice—as to the breakdown of that?

Mr Anderson : Sure. I do have the figure. It's estimated at the moment because, of course, we're still going through the financial year. It's estimated that we'll spend year-on-year—I'll give it to you on notice—approximately $33 million more. Children's, factual and drama are part of that additional spend.

CHAIR: Do you think the commercial broadcasters have a role in screening Australian-made kids' television?

Mr Anderson : I think they do. I think they do, but I can sympathise; it's difficult for them to monetise, considering they have to monetise all of their content. Generally, yes.

CHAIR: The argument being put to us through the various submissions and, obviously, through the ACMA review—what's been made public—is that they think it's too expensive and they prefer to get away with at least the kids' quotas. You've said you don't support quotas. What would be the impact, from your perspective, of the quotas required to ensure the commercial broadcasters invest in and screen kids' television? What would be the impact?

Mr Anderson : There are a couple of things there. I don't support quotas being put on the ABC. To qualify my earlier statement, if you lift any quota on commercial television, I think there's an impact there on the independent production sector and an impact there as to how much Australian content is being produced. So when it comes to kids, if the decision through media reform is that commercial free-to-air networks don't have a quota for kids and it's entirely up to them to produce children's television or not, so be it. I can see a world where people look to the ABC to actually continue to do what we do with regard to children's content. We would operate within that framework. I think if we were to do any more children's content above what we're doing now—I think we're maxed out with regard to available funds that we have to put to it.

CHAIR: Can I just tease that out a bit? You're suggesting that if the quota were to go from commercial broadcasters they would drop kids' content?

Mr Anderson : I don't know about dropping it all together. I think they would probably reduce their levels of children's content, for sure. It's really for a commercial free-to-air broadcaster to answer the question. I'm not intimately familiar with their business model, but that would be my speculation.

CHAIR: And what would the flow-on effect of that be to the broader sector in terms of the creators and producers?

Mr Anderson : I think it's a supply and demand question, without looking at the figures that say how much demand comes from a commercial free-to-air broadcaster into the independent sector—SPA, presenting a bit later on, might be able to assess that a bit more for you. Definitely overall demand, I think, would go down unless the ABC was handed additional funds to go and produce more children's content than it's producing at the moment.

CHAIR: So you clarified and said you don't support quotas on the ABC. Does that mean that you support or oppose or are agnostic towards the current quotas on the commercial broadcasters as they exist?

Mr Anderson : I'm agnostic, in that—

CHAIR: I probably gave that one to you for free!

Mr Anderson : Thank you—again, whatever reform needs to happen, as I said in my statement, I think the system at the moment is imperfect. I think it's difficult as a sector to operate the way that it is, in that we do need a sophisticated solution to this. So, if there was an adjustment in quotas with an adjustment in business incentives to continue production demand in the sector, yes, I'd generally be supportive of that.

CHAIR: What do we do about independent streaming services—not demand and catch up, as are attached to other broadcasters, but Netflix, Stan and Amazon? What do we do to make sure they actually are investing in Australian content and they have a good library of Australian content that's readily available?

Mr Anderson : I think they will naturally want to invest in Australian content. Whether they're producing or whether they're acquiring—and, obviously, it will be a mixture of both—I think that, for the market that they operate in, a market such as ours, they will want Australian content. I don't have a position on whether or not Netflix should have a quota. I think they will look to partner with us. I don't think it's necessarily a sustainable model to be betting on. If there are any other policy reforms that are made, I don't think there should be assurances made that they'll always be here.

As a broadcaster, I see Netflix partnering, as they are, with Tidelands, going direct to producer, where they're making Australian content. It's not necessarily going to go to a broadcaster in Australia; it's going to go straight to Netflix. There's other content that you'll see that they'll partner. There's one coming up—Netflix with us. Pine Gap, which is one that I can think of, is an investment in an Australian content production through an Australian producer with Australian writers, and production will take place here. That wouldn't be made without a further international investment, and we'll be able to take that to Australian audiences without any editorial influence whatsoever. So I think they will want to be here and I think they will want to buy content and make content.

CHAIR: You did say that, in order to support and see an investment both culturally as well as financially—I'm imagining on local drama and then I imagine you put into that also kids' television—there needs to be some form of government intervention. You mentioned funding, subsidies and regulation. I just want to understand: is that specifically in relation to the public broadcasters or does that include the commercials and independent streaming services as well?

Mr Anderson : What I mean by policy reform with regard to what we have at the moment, I'm really speaking to Australian broadcasters in the independent sector more generally. So, while the ABC is actively investing behind Australian content and will do that without the need for quotas, it's on charter for us. It is something that we are—

CHAIR: You have other requirements.

Mr Anderson : compelled to do. When I look at the sector, I do have cause for concern about making sure that we can actually ensure that the independent sector can at least stay as big as it is right now without diminishing, because, when it diminishes, it affects everybody including the ABC with regard to a pool of talent to actually rely on and to partner with in order to produce what we produce. So, I speak of it in that regard, which is more holistically for the sector itself which has different influences on the ABC and SBS for that matter.

Senator KENEALLY: I have a couple of questions. You mentioned that free-to-air events, reality television, and sport often help fill people's Australian quota contents. One bit of Australian content that the ABC used to show is women's sport.

Mr Anderson : Yes.

Senator KENEALLY: Basketball and soccer. Why did the ABC stop showing that?

Mr Anderson : That's a good question. I wasn't in charge at the time. My position is that, in reflecting Australia's culture and community, sport is essential, so we have at times looked to get back into the space of sport, and we've missed out on a couple of things for a couple of reasons. WNBL—

Senator KENEALLY: But the ABC specifically decided to cease showing women's sport on weekend afternoons.

Mr Anderson : Yes, it did. We were covering WNBL and we were covering netball.

Senator KENEALLY: You were also covering women's soccer.

Mr Anderson : W-League, yes. I really wanted W-League for this last season, but we couldn't make the schedule work with the FFA.

Senator KENEALLY: Was it due to funding considerations?

Mr Anderson : No. I have to be honest with you. In that deal that we've just missed out on for W-League, funding wasn't the issue. The issue was timing.

Senator KENEALLY: What about basketball?

Mr Anderson : Basketball recently has been due to funding issues. We were talking to the WNBL—

Senator KENEALLY: Was that after the 2014 budget cuts?

Mr Anderson : Certainly, in the figures that we've been supplying to estimates with regard to how budgets have reduced from 2012-13, budget cuts definitely have an effect on that, because I was around at the time. The budget cuts that we had were taken out of non-content areas, and that's normally where we would have found efficiencies to support content. So, when we had initiatives that we needed to invest in, particularly around digital, the money was taken from content at that particular point in time. So, due to the budget cuts, money moved, and we exited a number of things. Some of that at the time might have been attributed to moving out of women's sport.

Senator KENEALLY: These women's sports are now shown on Foxtel, which is only available to about a third of the population.

Mr Anderson : Yes.

Senator KENEALLY: And the federal government last year gave Foxtel—remind me, Senator Hanson—$30 million?

CHAIR: $30 million.

Senator KENEALLY: Senator Hanson-Young—excuse me.

CHAIR: That's OK.

Senator DUNIAM: It's an easy mistake to make. They're so similar!

CHAIR: I'm the one who likes the ABC.

Senator KENEALLY: Got it. Let me start over. These women's sports are now on Foxtel, which is only available to a third of the population. The federal government has given Foxtel $30 million. The submission we've had from SBS makes a recommendation that projects receiving direct government funding must have a free-to-air distribution window. Foxtel has argued that part of the reason they got this $30 million was to show women's sport. Its seems to me to be an interesting recommendation from SBS that, when commercial networks and specifically ones that are subscription and not available to the whole of the population receive government funding to broadcast something, that should have a free-to-air window. Does the ABC have a reflection upon that recommendation from the SBS?

Mr Anderson : I don't think that's an unreasonable recommendation. The idea that federal government funding goes towards something—I'm not familiar with what happened at the time, when the money was going from the Australian government to Foxtel, and if it was in support of those sporting codes or in support of Australians seeing women's sport or both, but—

Senator KENEALLY: Foxtel has made that argument themselves, most recently in this building about two weeks ago when they held a women's sport breakfast, that part of the reason they have $30 million is so that they can show women's sport.

Mr Anderson : In terms of your question: would I support government funding going into women's sport therefore having a free-to-air window on either ABC or SBS? Absolutely.

Senator KENEALLY: Thank you, Senator Hanson-Young.

CHAIR: Good question. You said you weren't sure, Mr Anderson, about the process. I suggest it was perhaps at the same time that the cuff links were handed back to the minister. We do have to move on to our next witness, but first I want to ask: why do ABC iview and SBS On Demand seem to be so popular? You're saying you're not losing audiences, and people are watching more content than ever before; they're just changing how they're doing it. Yet the commercial broadcasters are struggling to get people to adapt and be impassioned by their catch-up services. It seems to be a bit of a mismatch. What is the reason?

Mr Anderson : That they can't monetise their on-demand platform?

CHAIR: They're arguing it's not working.

Mr Anderson : What I would argue or suggest that it is absolutely not easy to continue your services and—for the ABC anyway—to be of relevance and value to the Australian people via what you're doing with the content and broadcast as well as developing your on-demand platforms at the same time. There's additional investment and effort required in doing both of those things. You're not shifting investment from one area to another; you have to maintain your investment in what is most important in the creation of Australian content but at the same time find money to invest in the technology and the platform that exists for on-demand. It's not particularly easy. When you are effectively looking to have a service that competes with international giants that have one specific job to do when it comes to on-demand services, it is difficult to reach that level of quality of user experience.

The ABC launched iview nearly 10 years ago—it's nearly the 10-year anniversary—and, of course, it has built over time. We were out the door early with that and we're glad that we did. Clearly, it is the No. 2 on-demand platform in this country behind Netflix and the No. 1 Australian on-demand service. What happens is that technology has iterated over time, and so has iview with it. You have what we would call 'technical debt' that sits behind it that, any time you want to do something, you're dealing with iterations over time that are quite difficult to keep up with. Of course, you have to keep up with audience behaviour as well; ubiquitous technology makes it easy, but it is difficult to maintain both. All I can say is I can see the struggle if you're a commercial operator to keep up with those things.

CHAIR: I'll put this question to the commercial broadcasters—hopefully, they'll all agree to participate and come to a hearing later down the track. It seems to me if they're pouring all their money into reality television, which is often needing to be seen that night—because that's the way the model works—that in itself is a disincentive to put people onto a catch-up service. If they're putting all their eggs into that basket and not diversifying enough, surely that's part of the problem.

Mr Anderson : Maybe. If I was to look at Channel Nine, I think Nine now does a good job. When we talk about numbers declining, they're still big numbers that are turning up for Married At First Sight. They had an offering that sat alongside that which was different through on demand. I get a lot of people talking to me about Married At First Sight, which wasn't for me but, when I look at the numbers or the volume on demand and the volume that was sitting with broadcast, they certainly were hitting it out of the park with the numbers they wanted. For them, and for their revenue model, obviously that's good news. I do think that it is risky; you have some spectacular misses that happen out there in the market as well. My observation is they're getting better at their use of those services, and I think they see what I see and I think they will look to monetise that as fast as they possibly can.

CHAIR: My final question is in relation to radio and local content on radio. I know you would have probably come today prepared for more screen and iview, but I'd like a bit of an understanding about the ABC's position when it comes to, particularly, Australian music on the various ABC radio stations.

Mr Anderson : The ABC has a strong commitment to music across-the-board, and it extends across some of our radio networks—certainly Classic FM, triple j, Double J, triple j Unearthed, Jazz, Country and other music programs that we have on other radio services.

CHAIR: There has been some criticism that ABC Local and Radio National—those non-music-dominated stations—are playing less Australian music than they used to. If you've got some figures to dispute that, that'd be fantastic.

Mr Anderson : I'll take that on notice. I haven't got them to hand, other than that across the breadth of our services across music and some of the events we do, like One Night Stand and Unearthed competitions, we have an unwavering commitment that we are continually extending, and we're looking at how we can do more across music. When I listen to local radio, I hear a bit of music on that. I know that our music director that sits in the music team, Richard Kingsmill, is programming for music that does sit off of what was otherwise a music network. I know there is music there. To say whether it's going down or not, I'd have to get back to you.

CHAIR: If you could take that on notice, I'd be very interested. We've extended the time frame of the inquiry, so, once we've heard from some of the other players, we might have some other questions for you.

Mr Anderson : I'd be happy to.

CHAIR: Thank you.