ABC shrinks its Great Ideas

The Australian - - FRONT PAGE - THE DI­ARY with Stephen Brook

Fund­ing dif­fi­cul­ties have forced the ABC to put on hold the sec­ond stage of man­ag­ing di­rec­tor Michelle Guthrie’s sig­na­ture pol­icy, the $50 mil­lion Great Ideas Grant.

The Grand Ideas Grant was launched with much fan­fare last year as an ad­di­tional fund­ing pool con­testable by staff. But the sec­ond fund­ing round, seek­ing pitches from ABC staff, has been de­layed un­til next year, The Aus­tralian has learnt.

In July last year, the ABC said nine GIG projects would move for­ward, but only four have launched: ABC Kids Lis­ten, an au­dio ser­vice aimed at young chil­dren and their fam­i­lies; Retro­fo­cus, which fea­tures con­tent from the ABC ar­chives; ABC Life, a life­style con­tent web­site; and Un­ravel, a true crime ver­ti­cal that in­cludes the Blood on the Tracks pod­cast.

Three oth­ers GIG projects were at pi­lot stage, two were un­der de­vel­op­ment and an­other was at proof-of-con­cept stage, the ABC said.

“GIG is one of a num­ber of pro­cesses used by the ABC to fund con­tent,” an ABC spokes­woman said. “The ABC is fo­cused on de­liv­er­ing the first round of GIG pro- jects and as a re­sult, the next round of GIG fund­ing has been de­ferred to 2019.

“GIG is part of the ABC Con­tent Fund an­nounced in March 2017. At the time of launch it was an­tic­i­pated that the Con­tent Fund would rise to $50m per an­num as quickly as pos­si­ble. How­ever, bud­get pres­sures mean that the ABC reg­u­larly re­views its ac­tiv­i­ties.”

The con­tent fund was an­nounced with much fan­fare by Ms Guthrie as a prime jus­ti­fi­ca­tion for ax­ing 200 man­age­ment and su­per­vi­sor po­si­tions and stream­lin­ing ABC di­vi­sions from 14 to eight.

The money saved was to be poured into con­tent projects. About $20m was ear­marked for the first year, and the GIG was meant to in­crease to a $50m fund each year. Also, the ABC spent $15m, mainly in re­gional ar­eas, on 80 new staff and $3.6m on equip­ment for re­gional teams.

Ad­di­tion­ally, The Aus­tralian has learnt that the ABC man­age­ment and board were left red­faced over the 2016-17 annual ac­counts when it was dis­cov­ered that there was an un­ex­pected $50m hole in the bud­get.

Three non-cash line items in the bud­get were queried by the au­di­tors and caused con­ster­na­tion at the board level.

The gov­ern­ment is gen­er­ally for­giv­ing of bud­get over­runs for port­fo­lio en­ti­ties if it de­ter­mines the cir­cum­stances were un­fore­seen, but if it de­cides the losses were avoid­able, as it might with one of the bud­get line items, the De­part­ment of Fi­nance can write to the ABC sug­gest­ing re­me­dial ac­tion.

The three items were non-cash items and did not af­fect the op­er­at­ing bud­get, one source said.

An ABC spokes­woman said: “The usual and proper au­dit pro- cess was fol­lowed and the ac­counts have been signed off by in­de­pen­dent au­di­tors. The fi­nan­cial state­ments will be fully dis­closed in the annual re­port. There has not been an ac­count­ing er­ror.”

The ABC annual re­port, which is tabled in par­lia­ment, is gen­er­ally re­leased in Oc­to­ber.

The annual ac­counts is­sue is sep­a­rate to the fund­ing is­sues sur­round­ing the Grant Ideas Grant.

Staff were asked to vote on projects and a panel fea­tur­ing man­agers and ex­ec­u­tives chose the suc­cess­ful pitches in July last year.

But sev­eral projects have proved con­tro­ver­sial and been at­tacked by com­mer­cial me­dia ri­vals who say the ABC is abus­ing its gov­ern­ment fund­ing to harm com­mer­cial ri­vals. Such ac­cu­sa­tions are the sub­ject of a gov­ern­ment in­quiry into com­mer­cial neu­tral­ity, which closed its con­sul­ta­tion pe­riod in June.

ABC Life was crit­i­cised for its multi-mil­lion-dol­lar bud­get and for repli­cat­ing recipes and re­la­tion­ships ad­vice found in women’s mag­a­zines and on web­sites such as Ma­maMia.

He­len McCabe, Nine’s di­rec­tor of dig­i­tal con­tent who launched the 9 Honey life­style web­site, said the de­ci­sion to di­vert re­sources from news­gath­er­ing was “a lit­tle bit baf­fling and a bit dis­ap­point­ing”. Fair­fax Me­dia and Jun­kee Me­dia said ABC Life was not needed.

ABC Kids Lis­ten, an au­dio ser­vice aimed a work­ing fam­i­lies, was at­tacked in a sting­ing sub­mis­sion to the com­pet­i­tive neu­tral­ity panel from com­mer­cial chil­dren’s au­dio ser­vice Kin­der­ling.

Kin­der­ling man­ag­ing di­rec­tor Evan Kal­dor said the com­pany’s meet­ings with the ABC and the launch of ABC Kids Lis­ten was a “trou­bling prece­dent”.

“A start-up de­cides to test the mar­ket for a new me­dia space. The pub­lic broad­caster watches. The start-up proves the ex­is­tence of an au­di­ence or the de­mand for a new pro­gram­ming for­mat,” he said.

Kin­der­ling said the ABC could give any new project a small in­no­va­tion bud­get, but mask the true cost of its con­tent and mar­ket­ing bud­gets, due to its ex­ten­sive re­sources.

“The pub­lic broad­caster adopts the same or sim­i­lar for­mat and en­ters at scale sup­ported by a deep li­brary of con­tent and a sub­stan­tial mar­ket­ing ma­chine,” it said.

“The pub­lic broad­caster has tremen­dous lat­i­tude based on the ab­sence of an im­per­a­tive for a com­mer­cial re­turn. The ABC wins the space and takes all the au­di­ence.

“Kin­der­ling asks — is this the type of com­pe­ti­tion the panel be­lieves is in the pub­lic in­ter­est?”

This year Ms Guthrie faces gov­ern­ment-led re­views into ef­fi­ciency and com­pet­i­tive neu­tral­ity, and in next year’s fed­eral bud­get the gov­ern­ment will set the ABC’s tri­en­nial fund­ing, in­clud­ing an in­dex­a­tion freeze of $83.7m.

Guthrie

McCabe

Evan Kal­dor

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