ABC plays it cool as the competition slowly heats up

While North American public broadcasters struggle under the onslaught of new children's channels, in Australia, where they've always prided themselves on doing things a bit differently, it's a whole other world....
November 1, 1998

While North American public broadcasters struggle under the onslaught of new children’s channels, in Australia, where they’ve always prided themselves on doing things a bit differently, it’s a whole other world.

Despite the arrival of Disney Channel, Nickelodeon, Fox Kids and Cartoon Network during the last three years, the publicly funded Australian Broadcasting Corporation (ABC) isn’t too worried about losing audience share.

Virginia Lumsden, the ABC’s acting commissioning editor for children’s TV, is confident the ABC will continue to dominate the young children’s programming market in Australia, as it has done for decades. She points out that when it comes to quantity, the ABC beats out the private broadcasters with a whopping 1,700 hours of kids programming per year, and she isn’t phased by the new pay TV cable channels either. ‘They’re only in 10% of the homes, so they haven’t had a great impact yet,’ she explains, noting that as Australia’s national broadcaster, the ABC reaches just about everyone.

Jenny Buckland, general manager of the Australian Children’s Television Foundation, agrees that the new channels haven’t made an impact, and notes that the ABC has not changed its strategy since the new channels started. As far as she’s concerned, the newcomers ‘don’t represent an immediate threat.’

Tim Brooke-Hunt, marketing director for Yoram Gross-Village Roadshow (which produces the Australian classic Blinky Bill for the ABC), backs this up too, but he stresses that the broadcaster doesn’t have a monopoly on children’s programming in Australia either. This is mainly due to the five hours per week of government-approved children’s programming, including 32 hours a year of first-run children’s drama, the private broadcasters are legally required to air.

‘The ABC has always been out there competing, it has just done better,’ says Brooke-Hunt. ‘Why has it done better? Because it has scheduled more consistently in terms of having blocks of time that are kid-safe, it has committed more to children in terms of putting its own money into its own productions, and it has generally made children’s programming central to its business.’

A comparison of audience share figures among Australia’s networks bears this out. AC Nielsen data gathered by the ABC’s research department show that the ABC’s audience share in the under-17 age set steadily increased between 1994 and 1998. More specifically, the ABC’s share of viewers ages zero to four in 1997-98 jumped to 29%-the highest share of all five networks-from 25.3% in 1994-95. For viewers ages five to 12, the share jumped from 16.1% to 19.1%, and for those ages 13 to 17, from 6.3% to 8.2% over the same time period.

These shares are all the more impressive when you consider the government funding cuts of about AUS$70 million (US$42 million) the ABC has endured over the last three years. This is a significant amount to slash from an overall budget that hovered at around AUS$720 million (US$427 million) during the 1996-97 fiscal year, and it hit the children’s AUS$10-million (US$6 million) budget for production, acquisitions and operating costs quite hard. Luckily, the blow was somewhat softened because the massive reorganization at the ABC resulting from the cuts has freed up an ABC money-maker-ABC Enterprises-to make more money.

ABC Enterprises produces ABC videos, books, spoken-word tapes, music recordings and runs ABC Retail, a chain of 28 stores and 109 franchised outlets stocked with ABC products. Revenue from the shops makes up 53% of the total revenue for the division and consumer publishing (which includes licensing) brings in the rest. Current gross revenue is more than AUS$70 million (US$42 million) per year, and with 1997-98 revenue up 54% from 1994-95, licensing manager Merryl Mills says that ABC Enterprises has seen remarkable growth, since the restructuring allowed it more resources to acquire licensing rights to ABC shows.

As 70% of its licensed merchandise is linked to children’s programming, ABC Enterprises owes a lot to children’s TV, and it has started to even the score over the last 15 months by pitching in to help pay for new shows. This help is much appreciated because Mills says the profits from ABC Enterprises are handed over to the ABC board to be doled out to various departments through their annual budgets-budgets not necessarily linked to how much each department contributed to merchandising in the first place.

Much of the recent growth of ABC Enterprises can be attributed to head of licensing and recently appointed manager of ABC for Kids, Grahame Grassby. He is charged with acquiring the ancillary rights for programming, as well as marketing both merchandise and programming in a synergistic way under the ABC for Kids brand. It has been his mission to get the Australian public to immediately think of the ABC when they think of preschool programming, and he has overseen such coups as convincing Children’s Television Workshop to make its single exception to Random House’s worldwide Sesame Street book deal in Australia, awarding the local rights to the ABC instead.

ABC Enterprises does more than pull in much-needed cash though-it pulls in quality producers too. The opportunity to collect significant royalties from the sales of character-based merchandise, plus the ABC’s habit of repeating shows in various time slots make the ABC very appealing. ‘Any children’s producer, if they’ve got half a brain, will always have the sense to acknowledge that, while you may not get the same fee, you will probably make up the difference and develop a longer-term brand through the involvement of ABC Enterprises,’ says Brooke-Hunt.

Lumsden agrees that since the ABC offers about 10% to 20% less for a government-approved Australian children’s series than the private broadcasters, it’s nice to have ABC Enterprises drawing in quality shows. But for her, licensing opportunities are secondary. ‘I don’t go for things because they’ve got a great merchandise arm,’ says Lumsden. ‘I go for things because they are a good product, they are a story well told, they’re inventive, they’re creative, and I feel they’re appropriate to our audience.’

So far, the ABC’s general approach seems to be working, but that doesn’t mean the new channels are being completely ignored. Lumsden says she is in constant contact with programming director Donna Andrews at Nickelodeon, and both parties try to arrange their programming schedule to accommodate each other.

In a way, Brooke-Hunt says the new channels may actually help the ABC because they could offer more co-venture opportunities to a network still hurting from the funding cuts. In fact, the ABC and Nickelodeon Australia have recently become co-investors with Yoram Gross to produce a new animated series called Old Tom, a 26 x 30-minute series is about a one-eyed, flea-ridden, orange tomcat sponging off a suburban matron. Lumsden is satisfied with the partnership so far, and says there is the possibility of further co-ventures between the ABC and Nickelodeon U.S. in the future.

For now, the ABC is maintaining a friendly relationship with the new specialty channels, but that may change if it becomes a direct competitor. Digital broadcasting is coming to Australia, and if everything goes in the public broadcaster’s favor when the new channels are assigned, Lumsden says there is ‘every possibility’ that the ABC will be launching a specialty kids channel of its own.

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