Sky looks to Asia

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    Leave hardworking ABC to make our presence felt in Asia

    June 09, 2005
    STORM clouds are gathering over one of the unsung success stories of the Australian media as the ABC prepares to fight off advances on its Asia Pacific satellite service. At issue is what Australia’s major commercial television interests see as a pot of gold – an English language pipeline into the billion-strong Chinese market.

    Sky News Australia, owned by Kerry Packer’s Nine, Kerry Stokes’s Seven and Rupert Murdoch’s UK-based BSkyB, is eyeing off the $18.5 million-a-year government-funded Asia Pacific service, and pushing for tenders to be re-opened so it can bid against the ABC, promising to do more for less.

    It’s shaping up as a David and Goliath battle pitting political intrigue against success and common sense. In my view it would be a travesty, very much against the national interest, if the ABC were to be stripped of the service.

    The saga of Australia’s outreach to its neighbouring countries has been long and tortured. It began as Australian Television International, established by the ABC under David Hill, with seed money of $6 million provided by the Keating government in 1993.

    By 1996 ATVI was costing $4 million a year, and the ABC sold the service to Stokes. He thought he could make money out of it, but quickly came to realise this was a forlorn hope.

    He cut costs to the bone by running repeats of soaps and children’s programs, and eventually just switched the service off in March 2001.

    This left a bad taste in everybody’s mouth, especially the diplomats of the Department of Foreign Affairs and Trade who were appalled by Stokes’s cheapskate service and lack of interest in the benefits a window-to-the-world service could bring Australia, in terms of regional relations, cultural understanding and trade.

    DFAT proposed that it would fund a new service, suggesting $10 to $15 million a year should do the trick. At the time the ABC was going through the turmoil of the dying days of the Shier era, and decided not to bid for the contract.

    After Shier left, one of the first issues to find its way on to acting managing director Russell Balding’s desk was a request from DFAT that the ABC submit a tender. It did, and a deal valued at $90 million over five years was consummated. The agreement provided for a further five-year option period.

    DFAT must either exercise that option by August this year, or call for new tenders.

    In December last year Sky News Australia became interested and began lobbying for a new tender process.

    It wants to produce an Australian news channel for the Asia Pacific region, and says it is no stretch for it to do so at a very reasonable fee. After all, in its digital world, it produces eight simultaneous feeds for Australia, and a separate service for New Zealand. One more feed would be easy.

    But there is more to it than that. Doing business in Asia can be a tricky thing, and ABC AP initially found it a hard slog. The AP service is not a single direct-to-home transmission stream – it is a pay TV channel distributed in 39 countries on a total of 155 platforms.

    While it is free to the host distributor, it has required a patient selling process.

    The switch-off of the old Seven service without so much as an apology, explanation or thankyou left a bad taste in the mouth of many in the region. Advances from the ABC about its new service were initially treated with suspicion and frequent rejection.

    But gradually, after about 18 months, AP began to pick up momentum, fuelled by its independence and its credibility, and its programming which pushed English language education to the fore. By word of mouth, and its catchcry of “from the region, for the region”, it has won respect and become one of the fastest growing services in the world, and a showcase for Australian product and values.

    Audiences today are measured at 630,000 viewers a month – up 76 per cent in a year – and its associated online services attract 200,000 visitors a week – about half being for English education.

    In Korea, an English-teaching school has been built around the service. The arrival of Sky threatens to bring this undone. News channels of the kind foreshadowed by Sky are a dime a dozen in the region. None have the kind of audience AP has attracted.

    Balding, as the ABC’s general manager, was loath to buy into this looming row during recent Senate Estimates hearings in Canberra because he believes even a debate about re-opening of tenders would send negative signals to AP’s distribution partners. After painstaking years of building trust he fears the uncertainty of a new tender process will damage the brand.

    This may be a trifle alarmist. It may also be true that there are attractive commercial opportunities to build on AP’s signals into the Chinese English education market, but if that’s the case those benefits should go to the ones who have done the hard yards in building the business from scratch.

    The government would do us all a favour if it promptly picked up the ABC AP option for a further five years.


    I hope to God that the ABC retains ABC AP. Sky News Australia can not even cover Australia properly let alone the world’s most populus nation!

    THe ABC has dozens of bureaus in Asia, Sky have 3… Canberra, Sydney and Melbourne.

    They have about 10 of their own reporters, who are reliant on telephones, not cameras.

    Sky rely on Nine and Seven – niether of which have a bureau in Asia.

    Stupid, very stupid move for this to happen…

    #25251 Reply


    Leave hardworking ABC to make our presence felt in Asia

    I have to agree there.

    #25252 Reply

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    I have conflicting views about this on one hand I think it should stay with the ABC on the other with that money SKY could greatly improve it service to Asia and Aust.

    #25253 Reply


    It could, but I think the ABC have the infrastructure now and the experience so it’ll be cheaper in the long run to stay with them.

    When you look at Sky News Australia, you shudder…
    Heavy reliance on the Seven and Nine Networks, and their “reporters” have a telephone that is it. It is cheap and no frills!

    #25254 Reply

    Forum Member

    Agree Totally, but all I’m saying is SNA with that money they could buy cameras instead of phones (Never understood why they dont use those ‘3’ video mobiles). Your right when I look at SNA I shudder the set is down right dodgy, The audio on some stories is discusting and sometimes it doesnt work at all! That money that the government can offer for a Asia Pacific service could go along way to provide new beuros, reporters, cameras, better equpment etc. (but would management buy these?) it could also go a long way to cement SNA as a leader in Australian news and help sub tv subscriptions. But then the ABC is aus’ national broadcaster and has already cemented itself as big news source like nine.

    #25255 Reply


    ABC would do a better job than a News Corporation/Foxtel and APL asset, without a doubt. Rupert and the two Kerries may be able to revolutionize American cable news, world cricket and southern hemisphere rugby union respectively, but I’m more likely to trust ABC for providing a balanced Asia news service.

    It could, but I think the ABC have the infrastructure now and the experience so it’ll be cheaper in the long run to stay with them.

    BTW, BCL, part of the New Zealand Ministry of Broadcasting, builds and maintains part of the broadcasting infastructure for the ABC in rural parts of Victoria. But that isn’t as ironic as the fact that Telstra (50% owned by the Australian Govt.) is the only real competitor to the telecommunications monopoly of New Zealand’s largest company, Telecom.

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