1. The impact of advertising on the SBS.

There have been major changes to the SBS since the introduction of advertising, but they have not happened overnight. We can chart developments at the SBS since strictly limited advertising was introduced in 1992-3.

• 1992
  SBS Managing Director Brian Johns moves programs in languages other than English (LOTE) out of prime time as advertising is about to start. [i] Subsequent chief executives maintain the practice of English language domination of prime time, with LOTE programs broadcast either in the mornings, afternoons, or late at night, when many people would be at work, asleep, or otherwise occupied.
• March 2003
  SBS management is involved in a dispute with its own journalists over the introduction of advertising into news programs, which had previously been exempt. MEAA NSW secretary says 40 journalists had written to management claiming that sponsorship of news and current affairs programs compromised editorial integrity and could result in reporters being disciplined or fired for airing unfavourable stories about advertisers. [ii]
• November 2003
  More key staff to leave. “Since the arrival in January of former Television New Zealand (TVNZ) executive Shaun Brown as the head of television, there has been a succession of changes on and off screen at the Special Broadcasting Service. At first they seemed incremental. But over the past few months, long-established people and programs have been removed or relocated, new line-ups have been launched and pivotal programs reshaped. Since August 2002, the head of television has left, the chief programmer has resigned and the head of internal production has been told his job no longer exists”. [iii]
• December 2003
  The Federation of Ethnic Communities Council says that SBS has lost its way. FECCA Chairman Abd Malak claims “The only people who like SBS TV now are the cappuccino crowd – well-educated, middle-class people, it’s mainly sex and soccer, I think” He added that his organisation was “very close to giving up on SBS TV…..In the last three or four years they have separated themselves from ethnic communities. They don’t come to our functions or religious festivals”
  The dismissive, not to say insulting, response from SBS Managing Director Nigel Milan was “We're not going to cover the clog dancing from Brisbane Town Hall.” [iv]
• January 2004.
  The Age’s media writer Ross Warneke comments on the banishment of non-English programs from prime time. “The bulk of its ‘ethnic content’ these days is its morning news marathon, with hour after hour of foreign language news services relayed from everywhere from Manila to Madrid”. [v]
• May 2004
  Staff become disenchanted. The Age’s Debi Enker writes that SBS staff fear “that the search for a broader audience is leading to the acquisition and commissioning of programs that are ‘safer and blander’, that SBS will become ‘a poor man's version of a commercial network rather than providing a challenging alternative’. The harshest critics fear SBS will end up looking like a second-rate cable-TV station, running reality TV shows and English-language drama series that the free-to-air channels have rejected as either being too limited in their appeal or too provocative.” [vi]
• June 2004
  SBS joins with commercial broadcasters to oppose the tightening of restrictions on tobacco advertising through the insidious practice of product placement. [vii]
• October 2004
  SBS joins with the existing commercial stations to restrict competition and to argue against the granting of an additional free to air TV licence. The reason – more competition would impact on their advertising income. [viii]
• November 2004
  Veteran SBS film critic Margaret Pomeranz, who together with co-host David Stratton deserted SBS for the ABC comments:
  ”I think that the current management has a much more commercial bent than any previous management. They seem to be after the young female demographic, and I worry about this, because this is a demographic already catered to in excess on the commercial television stations. SBS was meant to broaden the scope of television in this country, extend what was already available, or that was always my vision of it. And I think it was the vision of a lot of people there as well. We were so little we didn’t rate very well, although during the ‘90s under Peter Cavanagh, our ratings increased at really a remarkable rate. And for all of this new direction towards a more commercial bent, young female demographic, SBS is appealing to less viewers than it did before.” [ix]
• June 2005
  George Zangalis, President of the National Ethnic and Multicultural Broadcasters Council, and a former member of the SBS board, issues a media release criticizing the direction of SBS TV. He says, “The SBS was established as a multicultural broadcaster, but has been moving away from its original charter. Programming in community languages has shrunk, while English programming has grown. Advertising has increased and become increasingly strident. Rather than focusing on different cultures, the SBS seems to be moving towards mainstream sports like cricket and now AFL. There is plenty of this type of programming on the ABC and the three commercial channels.” [x]

• August 2005.
  When first introduced, advertising on SBS is limited to five minutes per hour, and is not permitted to interrupt programs. It can only be used to top and tail programs. There are media reports that the SBS Board wants these restrictions lifted, and Managing Director Nigel Milan commissions a confidential survey on possible audience reactions to program interruptions. [xi]  The experience of the early history of advertising in the US is relevant here.
•  February 2006.
  

The SBS confirms the complaint made by George Zangalis, President of the Ethnic Broadcasters Council, in June 2005, that SBS advertising has                 increased and become increasingly strident. SBS's director of commercial affairs, Richard Finlayson says that the broadcaster has reviewed “the type     of ads it will and will not accept. In the past SBS has been reluctant to carry some ads, such as hard-hitting, in-your-face retails ads. That’s changing”     [xii]

• 2007
  The SBS  is only permitted to run advertisements in "natural breaks".  The SBS had legal advice that this meant after one program finished and before the start of the next program.  However the SBS sought legal advice from another lawyer which said that advertisements could be placed in the middle of programs where there was a transition.  For example, in a news bulletin after a report on one subject had finished and before the next report had begun.  Using this interpretation the SBS could interrupt a half hour news program as many as ten thirty second advertisements.
  

2. How corporate underwriting changed to sponsorship and then became full blown advertising – the U.S. experience.

Sometimes “sponsorship” or “corporate underwriting” is raised as a more palatable alternative to brash and hard-sell advertisements. What is wrong, it has been asked, about “The Macquarie Bank Einstein Factor” – a simple announcement at the front of the program that it is supported by the Macquarie Bank?

There are three things that concern Friends of the ABC, and many listeners and viewers, about advertising:

First there is the concern that advertising will distort programming priorities.

Second there is the concern that managers and program makers will be wary of airing any criticism of important advertisers – it can act as an unseen form of censorship.

Third is the irritation factor – advertisements are often unduly loud, repetitive, and disruptive of the program’s flow.

Simple corporate underwriting of the “Macquarie Bank Einstein Factor” kind would be less susceptible to the third concern, but is in no way exempt from the first two concerns. Moreover such corporate underwriting would attract only a fraction of the income that “real advertising” would bring, thus defeating part of the purpose.

An account of how corporate underwriting gradually transformed into sponsorship and then into full blown advertising in the United States is relevant here.

Advertising first appeared on the SBS in 1992-3, and its effect has indeed been gradual. However the same was true about advertising in the United States, where it took some ten years to make its real impact felt. When it started, in the 1920s, it was genteel and low key, but by the 1930s it was crass, loud and aggressive.

Advertising was not the main support for radio in its early days in the US. David Sarnoff, of RCA for example, advocated a tax on radio receivers, as a way of supporting broadcasting. Some stations were funded by colleges and universities. Others received support from philanthropists. However advertising grew steadily, if slowly at first.

Initially it was very discreet. Prices were never mentioned. The mention of personal items, like toothpaste, mouth wash or underclothes was taboo. Companies attached their names to entertainers, like the Ipana Troubadours, the Browning-King Orchestra and the Goodrich Silvertown Orchestra. There was no mention that Ipana made toothpaste, Browning King made overalls and Goodrich made tires, let alone any suggestion that listeners should buy these products. A strict ban on the mention of prices and store locations remained. The broadcasting lobby group, The National Association of Broadcasters, proposed that sponsorship announcements be banned from prime time listening, on the basis that it was family listening time.

All this changed with the 1929 crash.  CBS, one of the major networks was in trouble.  George Washington Hill, President of American Tobacco, came to the rescue.  Cremo cigars were suffering from rumours that they were made with spit.  He needed to counter the rumours, and was prepared to pay.  CBS capitulated, and in between tunes from the Cremo Military Band an announcer shouted: “There is no spit in Cremo.”  NBC soon followed suit, sponsorship became advertising, and aggressive. [xiii]

International experience has clearly shown that advertising impacts on the program priorities of public service broadcasters. [xiv] Despite the fact that advertising accounts for only 15% of SBS income, its impact has by now become clear.

Darce Cassidy, February 2006, Revised September 2007