No incentive for ABC, SBS to cut broadcast costs: efficiency review

The current transmission arrangements negotiated by the ABC and SBS with Broadcast Australia might well be economically inefficient. But making savings will be complicated.

Australia’s two public broadcasters have little incentive to aggressively negotiate their transmission service contracts with Broadcast Australia, the Lewis Review into the efficiency of SBS and the ABC has found.

Transmission arrangements were outside the strict terms of reference of the review, but the report — released by the Communications Department over the weekend — nonetheless notes the current arrangements do not work efficiently.

As Crikey has recently reported, the contract with monopoly provider Broadcast Australia is currently negotiated by ABC and SBS, but funded directly by the government. This means the government will pay as much or as little as the broadcasters negotiate, with them getting no extra money if they play hardball with Broadcast Australia:

“It may be preferable for the ABC and SBS to share in the benefits of savings in transmission costs rather than the current funding arrangement which requires any savings (from digital and certain analog transmission services) to be returned to budget. For example, if it proves possible to reduce transmission costs by 20%, it would be desirable for the national broadcasters to retain at least a portion of these savings.”

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