#audience

BBC to move to a subscription model?

It seems there is a push to scrap the mandatory BBC license and replace it with a subscription model like many in the private sector.

We last wrote about the BBC back in March 2018 when comparing it to our own ABC. We said,

On a global basis, the BBC generates GBP 4.954bn and employs 21,431 staff. 22.7% of those revenues are spent on salaries. Average salaries have grown 17% since 2007/8. The average income per employee at the BBC is now GBP236,852 (A$428,000) thanks to the generous mandatory licensing fees. Average salaries at the Beeb are now GBP 55,651 ($A100,728).

Since then the BBC notes the following in its annual report for 2018/19.

Revenue has tailed off to £4.89bn with staff numbers swelling to 22,401.

21.4 m pay the full license fee of £150.50, down 203,000 on the previous year.

Vy way of comparison, Netflix in the UK charges £8.99/mth (£107.88) for the standard package to £11.99/mth (£143.88) for the full Ultra HD experience. There are a whole host of other services from Sky, Virgin, Vodafone etc who are bundling mobile phone and home internet with TV.

An interesting tidbit reveals that one can sign up to a ‘monochrome’ BBC service for 1/3rd the current £150.50 subscription fee. 5,000 currently do. 4.6m over 75s pay nothing.

As ever, the BBC pushes supreme confidence in its delivery of media content. 91% of adult Brits consume it in TV, radio or written form according to Ipsos polling.

Sadly, 52% of UK adults think the BBC is effective at providing news and current affairs that is impartial. Half. 10 years ago, it was 57%.

Only 61% of parents think the Beeb is good for assisting children and teenagers with learning. It scored 65% for adults in this category. Both down on the year.

In terms of platform, BBC TV scored more or less flat on the previous year in terms of quality (72% -> 72%) and distinctiveness (68% -> 69%) but fell sharply for BBC Radio (81% -> 75%) & (77% -> 73%) and BBC Online (74% -> 69%) & (70% -> 64%) respectively.

The length of time Brits spend watching BBC TV fell from 8hrs and 16secs to 7:36 per week. People listening to BBC Radio fell from 10:03 to 9:33 per week. Usage of BBC Online by adults increased from 75% to 77% per week.

In a nutshell, people are watching and listening less to the BBC, view it increasingly as biased, question its offering and seemingly don’t want to pay for it.

Living off a never-ending taxpayer teat breeds complacency. A move to a subscription model would soon reveal how ‘in demand’ the ‘high-quality’ content services actually are. If the BBC truly possesses such a huge belief in its abilities to deliver, it should have absolutely no concerns to let the private market pay for its services.

Just like the ABC in Australia, BBC ratings keep falling and audience trust continues to wane. Ita Buttrose must be watching developments in the UK with a keen eye. Time for the ABC to be forced down a similar road of self-funding, driven by “true” market demand for services instead of junk like Q+A, ABC Kids programmes preaching white privilege or indigenous programs that play-act defecating on white people.

Put simply, the world has changed. There is no need to pay $1bn to the ABC and $400m to the SBS for services that almost anyone with a phone and an internet connection can consume from the source. That is right. We can stream German radio to our hotel room on our American business trip should we wish. We don’t need the government to divert tax dollars to provide services that exist at source in abundance. There is almost nothing at the ABC that can’t be consumed at The Guardian or Channel 10.

Hollywoke. Oscars audience plunges to lowest ever

When Joaquin Phoenix lamented, “We feel entitled to artificially inseminate a cow and steal her baby, even though her cries of anguish are unmistakable. Then we take her milk that’s intended for her calf and we put it in our coffee and our cereal,” Hollywood hit peak woke. At the Golden Globes, he thought telling us he would be wearing only one tuxedo for the entire awards season while eating vegan would be a hit with mainstream Americans to highlight doing his bit for the planet. At the BAFTAs, Phoenix ran the “systemic racism” line. Yet he didn’t hand his gong to a person of colour that he believed was deserving of the award.

Hypocrisy sadly doesn’t resonate very well with mainstream Americans.

Essentially the Oscars has become a light-hearted entertainment version of the Democratic primary debates. The policy platform was all in there – speeches about feminism, gender equality, LGBTQI, climate change, healthcare and living with less. Basically, every “woke” politically correct subject got a mention, delivered by the very people who have zero place lecturing the rest of the world, as Ricky Gervais told them.

Celebrities, coming off the highs of the second-lowest audience total ever recorded in 2019 (after a 12% bump on 2018 which was 40% down on the prior 5 years), must have hoped that the 2020 Oscars ceremony would recover with more of the same social justice. Sadly 2020 was watched by the smallest audience ever.

23.6 million viewers watched (-20% or 6 million down). Among the 18-49 demographic, the audience plunged 31% vs 2019.

Joaquin Phoenix closed his speech by saying,

I have been a scoundrel all my life, I’ve been selfish. I’ve been cruel at times, hard to work with, and I’m grateful that so many of you in this room have given me a second chance.

FNF Media would prefer Hollywood gave Phoenix a third chance to revert to type. Because this act isn’t fooling anyone.

Your ABC – shocking inefficiency created by demotivated staff

While it might seem like another beat up on the ABC, we need to take a long hard look at how it operates. How is it TVNZ can operate as a self funded government entity which collects a currency adjusted 1/4 the ABC’s revenue on 1/8th staff? How many people actually understand their ABC?

Salary increases and budget increases have a 90.34% R-squared correlation meaning that budget increases tend to lead to paying higher salaries.

While some may talk about “good” content, sadly ABC’s ratings have slid considerably for over a decade in regional and metro areas. TVNZ’s have risen. So hard core left has the ABC shifted that it has created a narrower audience. The MD openly stated that if Australians wanted to protect the ABC they shouldn’t vote LNP. So much for respecting its charter which bans political bias.

TVNZ must cater to the free market for advertising dollars therefore content must meet the audience needs. It’s simple. ABC should follow suit.

Throwing more money at the ABC has not solved ratings problems. One guesses that diverting more tax dollars at kids programs that disparage white privilege, comedy shows that openly call conservative politicians “c*nts” during by-elections and producers that allows indigenous comedians to defecate on a white woman probably has a very narrow audience. Content IS the problem.

Look at The Guardian as case in point of journalism that fails to address market needs. It is free and in recent years gone cap in hand for donations because its user base aren’t prepared to stump up cash to support it. Do we need a public broadcaster to subsidize views of the left? The Guardian is simply competing in the “same” area as the ABC. ABC starves The Guardian of oxygen because we as taxpayers fully fund it. The ABC crowds out left leaning media.

Look no further than CNN. It has doubled, even trebled down on its unhinged bias. The ratings have plummeted. Fox on the other hand has risen. Whether one likes the content of Fox is irrelevant. Advertisers go there because the reach is self evident.

Moan all you want about Murdoch. His users pay and the ratings are up. Don’t shoot him if his product sells. Try self reflection. The Sydney Morning Herald tried to tell users its product was worth subscribing to. Unfortunately it ignored slumping readership and ended up being acquired by Nine Network. If you don’t cater to your audience, they won’t support you.

Staff levels at the ABC have never been higher. Ratings never been lower. Lifting the budget hasn’t caused any change. Cutting dollars will cause much needed restructuring. It is like feeding a dying patient with more morphine hoping to numb the pain. Unfortunately the body grows resistance to that. ABC staff feel this.

In the 2018 annual report, the ABC staff survey revealed engagement is at 46%, 6% below the previous survey. This puts in the bottom quartile of all ANZ businesses. #Reform desperately needed.

ABC staff complained that management doesn’t do enough to get rid of under-performers. Another clear signal that state-sponsored mediocrity is tolerated.

The culture of the organization won’t be turned around by management unless it is given a reality check of being rapidly withdrawn from the taxpayer teat. That way the c.70% of staff dedicated to content can finally listen to what the broader public want to consume rather than the echo chamber they live in. By the way, those who love the ABC needn’t worry. The limited number of good programs will stay if the audiences demand them. The unhinged radical left programming can be cut with little loss to anyone with a modicum of intelligence.

Your ABC vs Jacinda’s TVNZ

If you want to look at why the ABC doesn’t need more money, look at the staff costs to income ratio. Despite plateauing between 2008 & 2011 it quickly exploded. It now sits at 46% of income generated. That is $524mn on staff costs per year and rising. 4,939 staff grace the ABC. Revenue per employee is $232,000. A decade ago it was $232,700. Is that what the management target for hiring? Give the ABC $2bn and presumably it will have employment costs of $1bn.

Channel 9 must fight hard for every advertising penny but still manages a 29.1% staff cost to revenue ratio. $380m in staff costs on $1.3bn revenue. 3,310 employees converts to $392,750 revenue per staff member.

Sevenwest Media raked in $1.62bn in revenue on staff costs of $395mn or 24%. Same cutthroat world of earning a living instead of expecting one. Seven West has 4,528 staff meaning it generates $357,800 in revenue per employee.

Maybe ABC should channel the New Zealand state broadcaster, TVNZ. It gets $310m of its $318m purse from advertising. It’s staff costs excluding capitalizing into programs is $72m which converts to 23% staff cost/revenues. They do with 642 FT employees. Revenue/employee is $495,000. It paid a dividend back to the government of $3.7m. i.e. it is a revenue generating asset.

In 2007, TVNZ had $339m in revenue. It employed 1,023 people. Therefore revenue per employee was $331,380. So in a decade, TVNZ efficiency improved almost 50%. A 6% cut to revenue on 63% of the staff.

Instead of the long term ratings slide at the ABC across metro and regional Australia, TVNZ’s figures keep improving. Last year, TVNZ had a 43.2% all day audience up 1.3%.

Comparing 2017/18 and 2015/16 at the ABC we see that TV audience reach for metro fell from 55.2% to 49.7% and regional slumped from 60.3% to 54.0%. If we go back to 2007/8 the figures were 60.1% and 62.4% respectively. For the 2017/18 period, the ABC targets 50% reach. Hardly a stretch.

Maybe ScoMo should consider that the ABC compete and become self funding? The New Zealanders aren’t just better than us in rugby union but also in media.

Fair facts about Fairfax

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Freedom of the press. A beautiful thing. By all means, the 177-yo Sydney Morning Hearld (SMH) executed full autonomy over what it published. In the end, the public didn’t buy it. For the staff to seek the union to block the Nine Network’s takeover of Fairfax Media smacks of the identical numb-skulled action that has brought them to this predicament. If the paper decided to listen to what the audience wanted to read (the mood) as opposed to telling them they “don’t get it” it might have retained its independence. Take a look at the pictograph above – 20 anti Trump articles in one day. Overkill?

Last year the SMH had to take two massive rounds of lay-offs inside of 12 months because the product wasn’t reaching. The SMH staff took a vote to strike because their evil overlords put profit ahead of people. Welcome to the free market. When one journalist at the SMH became a scab (because he admitted the paper’s journalism was the  problem) he was vilified by his fellow workers. Instead of opening their minds that they maybe the root cause, they protested. Finger on the pulse?

It certainly makes a strong case for how the diminishing readership base (i.e. the free market) viewed the content. Not very highly. It is why The Guardian now asks its readers for charity so it can stay alive? Could it be that media jobs don’t exist to serve the journalists needs but that of their audience? The Fairfax scribes might reflect on the fact that the taxpayer funded ABC – which produces identical product – was not the friendly ally it believed it was but the mortal enemy who ended it. As an audience, if we’re not offered a differentiated product where the same content  is free to consume, who would pay for the one that costs?

Yet the sale of Fairfax was obvious. Digging a bit deeper into the stats of the ABC reveals its biased left leaning journalism has dwindling popularity. Comparing 2016/17 and 2015/16 it is clear that TV audience reach for metro fell from 55.2% to 52.5% and regional slumped from 60.3% to 57.3%. If we go back to 2007/8 the figures were 60.1% and 62.4% respectively. For the 2017/18 period, the ABC targets a 50% reach. Good to see taxpayer dollars openly championed with enhanced levels of mediocrity. Yet the ABC screams for more funding.

Throwing more money won’t fix the problems. The ABC’s wage bill is 50% of revenue while its multicultural sister station SBS runs on 31% of revenue for salaries. Why hasn’t the ABC got superior economies of scale? On a global basis, the UK’s BBC spends 22.7% of its revenues on salaries. How can Nine Network survive on advertising revenues? Could it be audience numbers allow advertisers to make rational decisions to tap them?

Criticise Rupert Murdoch’s The Australian for right wing media bias but at the very least he serves a market who is willing to pay for the content. Simple. It is no difference overseas. Fox has more viewers than MSNBC and CNN combined. Don’t belt Fox viewers for following “Faux News” but question what is it about their offering that they’re missing? At what point do the likes of Fairfax or Time Warner realize the problem lies within.

In Fairfax’s case we have the answer – market forces.