The ABC is great: we should privatise it

Bookmark and Share Ideas & Liberty | James Paterson
The Drum 15th September, 2010

The debate about whether or not the ABC should be privatised generally follows a predictable course. The ABC's critics typically list its failings, including allegations of bias, and argue that taxpayers should not be required to foot the bill. On the other hand, friends of the ABC usually argue that it provides an essential public service that justifies the expense of public money. Christopher Joye's piece for The Drum yesterday more or less stuck to those talking points.

But I don't think that is the right test. The true test of whether a government-run organisation should be privatised is whether that service could be wholly or at least partly delivered by the private sector.

That's not to overlook claims of ABC bias, and flaws in the ABC's coverage of some contentious issues. In my view, the ABC's coverage of Middle East conflicts often leaves a lot to be desired, and allegations that the ABC tilts to the left too often ring true. It's just that I don't think this should be the deciding factor supporting privatisation.

Although I'm a conservative, I don't hate the ABC. As someone interested in current affairs, I am a regular ABC viewer. The ABC's current affairs line up, including ABC News, the 7.30 Report, Lateline, Q&A, Four Corners, Insiders and Australian Story all generally provide high quality reporting and analysis. Many of ABC's radio programs, in particular its nationally syndicated AM and PM programs, feature interesting interviews, intelligent discussion and thoughtful commentary.

And that's partly why the ABC could be commercially viable if privatised. There is genuine community demand for current affairs reporting, political discussion and analysis. The rapid rise to popularity of Q&A demonstrates this, as does the ABC's consistently strong television ratings.

A brief visit to the website of Australia's television ratings agency, OzTam, bears this out. Across its four channels, the ABC is within striking distance of the third-largest commercial station, Channel Ten, and more than doubles the ratings of its publicly funded sister, SBS. To be sure, the ABC does not frequently challenge Channels 9 or 7 for overall ratings, but its programs do frequently feature in the top 10 nationally. ABC1's Spicks and Specks, as well as the Gruen Transfer, typically rate well in excess of 1 million viewers, and have recently been watched by almost 1.5 million Australians. That easily rivals mass market reality shows like Channel 7's X-factor and Dancing With The Stars.

ABC Radio also generates healthy audiences nationally, commanding listeners that rival the largest commercial operators, even in competitive markets like Melbourne and Sydney. Recent surveys by Neilsen demonstrate this - in Sydney, ABC702 ranks 3rd overall, and in Melbourne ABC774 is 2nd.

ABC Online too, is reaching massive audiences. Just this month, the ABC announced that its iPhone app had been downloaded 1 million times, and that its online audience was growing at a rapid rate. The Q&A program is one of the only Australian shows that routinely graces the worldwide Twitter trending topics list. In fact, on some episodes, individual panellists' names feature as trending topics. ABC Managing Director Mark Scott says that some episodes generate more than 35,000 tweets.

But it's not just the numbers of eyeballs and ears the ABC attracts, but the type of people that tune in that matters. Although it's not easy to source data on the breakdown of ABC audiences, it is commonly believed that the ABC has a high proportion of high-income, highly-educated viewers, simply by virtue of the type of audience its content appeals to.

What should be clear from all of this is that a privatised ABC is a potentially viable commercial operation. Advertisers would love to access the ABC's lucrative, highly engaged, loyal audience. SBS, which accepts advertising whilst still receiving government funding, already generates approximately 25 per cent of its operating revenue from commercial sources and does so with a much smaller audience than the ABC.

The ABC's retail arm - ABC Shops and ABC Centres - already operates as a healthy and viable commercial operation, generating more than $18 million in profits in the 2008-09 financial year. These outlets sell books, DVDs and CDs - much of it ABC content, but also content that is not produced by the ABC.

The most common response to suggestions that the ABC be privatised is that commercial providers would never invest in the kind of quality current affairs programming the ABC features. Critics point to the dearth of investigative journalism or political reporting on the major commercial networks as evidence of this.

But these commercial networks do not operate in a vacuum. They compete with the ABC, and up against a publicly funded broadcaster with no profit-motive, they would be mad to try to compete with the ABC in its key areas of strength, specifically public affairs coverage and analysis.

The limited number of television licenses provided by the government also discourages investment in niche products like current affairs, because to generate the most profits in a market with only five major broadcasters, commercial stations must pitch to the widest possible audience. But this is already being remedied with the advent of digital television, allowing networks to appeal to niche audiences. There is no reason to think that a dedicated, privately-funded, current affairs channel would not do well in this environment.

Other criticisms include that with commercial investment comes commercial interests, and that the ABC could not maintain editorial independence in this environment. That argument takes a pretty dim view of ABC's journalists and assumes that they would suddenly lose their integrity and start actively pushing the financial interests of their owners.

More serious is the concern that the ABC's services for rural and regional Australia would not be commercially viable. That is probably right. But as was the case when Telstra was privatised, the government could legislate minimum service obligations for the ABC that included its current offerings to regional communities.

Privatisation of the ABC should not lead to a diminishing of the quality of its services. As a commercially viable entity, there is little public policy justification for retaining the ABC in public hands. The challenge rests with supporters of the ABC who simultaneously hold the position that the ABC provides fantastic services, but should never be privatised. If the ABC's service is as fantastic as they claim, it should thrive after privatisation.

This article originally appeared on The Drum on 15/9/10 and can be accessed at