Senator LUDLAM-I have some questions on general funding and then I would like to come back to the local production issue. The additional funding is certainly welcome. I want to go to the issue of base triennial funding. We have spoken a bit today about the funding for new initiatives which have been foreshadowed for a while. If you take out capital and transmission, what degree of the existing base funding of the ABC has been increased or otherwise?

Senator Conroy-Unlike the previous government, all of this money is to the base funding.

Senator LUDLAM-It is for new initiatives that did not exist 24 hours ago.

Senator Conroy-The previous government tagged projects individually and said, ‘We'll only fund you for that project.'

Senator LUDLAM-I missed the opportunity to question previous ministers.

Senator Conroy-We did not do that. The ABC put forward a suite of measures it was interested in then. In difficult economic circumstances we have provided funding into the base. Future indexation and so on is actually on the new higher figure.

Senator LUDLAM-Can you see what I am getting at? We will come back to the children's channel, the
local drama and the online stuff in a moment. I would like to go to the existing operations of the ABC.

Mr Pendleton-There is indexation money. We have received a funding increase to fund our existing
activities and that is in the indexation number that rolls through in the budget figures.

Senator LUDLAM-What is the rate of the indexation? How is that benchmarked?

Mr Pendleton-It is just a WACC, weighted average cost of six. On our ongoing base it was about 13.9. That is not including the indexation that comes through the national interest initiative activities. But against the base it is 13.9.

Senator MINCHIN-I am interested in what Senator Conroy said. In the budget papers you refer
separately to base funding, and the base funding is 2.1 over the three years. There is no provision in that because it was already in the forward estimates and that is regarded as base funding. As a separate item there is this additional funding of $150 million. It says that funding requirements from 2012-13 will be determined in the context of the next triennial funding agreement. You are saying that as a matter of policy decision that is now in the base?

Senator Conroy-It is rolled into the base funding going into the future.

Senator BIRMINGHAM-In 2012-13 it is not 2.1, it is closer to 2.2.

Senator Conroy-When the next triennium comes up it will be a percentage of the higher figure.

Senator MINCHIN-The base will be $725.8 million plus the $65 million. That will be the base in the last year of this triennium.

Senator Conroy-Yes.

Senator LUDLAM-Also, there are substantial new initiatives that have been announced. The point I am trying to make is the KPMG report that was released or leaked in November 2006 stated that the ABC needed in their numbers nearly an additional $126 million after indexation just to sustain the current outputs. That was before we were talking about the children's channel and the new initiatives that have been announced. I appreciate it was a tough budget, but is the ABC still stretched just in terms of providing the kind of services that you have been providing to date?

Mr Scott-There are a number of answers to that. One of the things that I have said to the ABC staff is that we get given a lot of money from government and we do a lot with it. We put a substantial bid before the government and we were very pleased in this difficult climate that we received the funding that we did. Not for one moment does that take away from our responsibility to ensure that we are spending all the money that we spend wisely. We will continue to look for ways to improve the way we work, improve the way we operate, make programming choices, live within the means that we are given, and also try to make that budget go further. I am not saying for a moment that we are on easy street operationally with this new funding. We have been given new funding. There are commitments that we have made on things that we can do. We continue to try and drive the operational efficiency and effectiveness of the organisation. We are very pleased with the outcome that we received in these difficult circumstances.

Senator LUDLAM-Apart from indexation, was there any funding for maintenance of existing services or has the new funding essentially been earmarked for the new initiatives that were announced in the budget?

Mr Scott-The funding will go towards the initiatives that were outlined in the budget. Of course, that does provide some relief to your existing operations in that, for example, if you are commissioning more Australian drama there is less content you need to acquire, so there will be some relief that comes through the way this is constructed. But, in the main, overwhelmingly this funding is for new undertakings the ABC will be making in the next three years.

Senator LUDLAM-Perhaps we can return to some of the issues that Senator Wortley was pursuing
before. According to the minister's release on budget night, increased funding means the ABC will be able to produce about 90 hours of drama programs a year. You could make the point that the funding that has been provided is not enough to produce all 90 hours; some of that would surely need to be outsourced?

Mr Scott-Even in our bid we never envisaged that that would all be internal production. The ABC has not been doing drama 100 per cent internally now for quite a while. That just makes good sense on two counts. Firstly, we can leverage our money by doing it with the independent production sector, and it is not only the money they bring but also the money that comes in for other government agencies. Screen Australia does not fund 100 per cent ABC internal productions. Nor do we get money from state funding bodies in the main around that. It allows us to leverage our money.
The other thing it allows us to do is work with the very best of Australia's creative community. All of those dramas we have done in recent times have been done in co-production. Some of the most popular programming we have done in recent years, from Andrew Denton with Enough Rope and The Gruen Transfer-

Senator Conroy-The Chaser.

Mr Scott-The Chaser, one of the minister's favourites; Chris Lilley with Summer Heights High-this is
all working with the independent production sector. We always view this money as money that we would be able to seed in the independent production sector, provide employment out there, have good leverage on this money and work with the best of Australia's creative community. We are very pleased with that outcome.

Senator LUDLAM-When you talk about leveraging or seeding, are you able to estimate for us both for
the adult drama side and children's programming what proportion of the programming you would anticipate you would be outsourcing and what proportion would be produced in-house?

Mr Scott-It does not work like that. I think ‘outsourcing' is the wrong word. We work in co-production.
Typically, the ABC commissions the work, we exercise editorial control or editorial standards that need to be adhered to, and, depending on the program, we will often have an ongoing relationship with that program as it is being made. Finally, we will receive the opportunity to broadcast and deliver it. It is not as though one part of it is outsourced and another part is not. We work in partnership with the independent production sector to deliver. There are different models. There will be other models where you are just putting money in a broader production that is coming together, possibly co-productions with international partners and the like. But it is not as though an element is outsourced and another is-

Senator LUDLAM-But in your internal budgeting process at some stage you will have to estimate the
proportion of money or funds contracted to external providers.

Mr Scott-That is true. We can give you a breakdown of our track record on leverage: how much money the ABC is putting in to create certain productions. We have detail around that.

Senator LUDLAM-I would appreciate that, perhaps even just for the last financial year. Would you
estimate that that sort of proportion or model is what you will be pursuing?

Mr Scott-Yes.

Senator LUDLAM-Is there any ABC programming currently-and do you foresee this in the future-
that is produced with after sales broadcast on commercial TV in mind?

Mr Scott-As to after sale broadcast and commercial TV, some of our programs have ended up on
subscription television. In fact, many times on a sleepy afternoon when you look through subscription television you can see the glories of the ABC's past on broadcast there. Often these deals come together with a sense of, yes, we will be providing money for that first window but people will be looking to where they will recoup the other investment.

Senator LUDLAM-How important is that in your thinking for a first run on the ABC channel-that is,
the value of that further down the track for commercial production?

Mr Scott-Let me put it this way. Hardly any of these programs that we are putting money into would be created unless the ABC was putting in the money. We are putting in the vast amount of money to make them happen. Without us they are not happening. But, because other people like the independent producers are putting in money, they will be looking to put together deals for the subsequent use of that content, the airing after the ABC has done it. You will find that sometimes that helps make the deal happen, but the real driver as far as the ABC is concerned is that first window of opportunity for our audiences-free of charge, free-to-air Australian audiences.

Senator LUDLAM-Are there any restrictions on particular studios or commercial operators that can
produce programming for the ABC?

Mr Scott-What do you mean?

Senator LUDLAM-Are there any producers or commercial producers that you do not or cannot work
with?

Mr Scott-Speaking broadly, in working with the independent production sector we are looking at the
quality of their ideas, their track record and their ability to deliver to the editorial standards that the ABC insists on. I am not aware of people who would have been excluded from that. I am not aware of any examples that you draw from.

Senator Conroy-Are you trying to suggest cooperating with the major networks in a joint venture? Is that the point you are trying to get to?

Senator LUDLAM-If you worked with Fox Studios, for example. Are there any projects or proposals
afoot?

Mr Scott-I do not think so. I can come back to you on notice on that, but I suspect that independent
producers may subsequently have made on sales of ABC content to eventually appear on subscription television just as the ABC has purchased on occasion programs that have appeared on subscription television and put them on free-to-air. I am happy to correct this on notice, but I am not aware of any, say, co-productions or joint ventures that are taking place between the ABC and subscription television at this point.

Senator LUDLAM-If there is any change to that it would be helpful to know about it. Coming back to
where I was before with the indexing and so on, at this stage are you able to identify any particular services or programs that you will need to cut? Are there any job losses in the wings, apart from the indexing?

Mr Scott-No, we have not gone down that road. We have processes that are already well underway
around improving our efficiency and effectiveness. We have not reviewed any of that in the light of the budget outcome. The focus of our budget outcome has been around delivery of our undertakings, particularly around getting the children's channel to air this year, to start the investment that is required to crank up the drama work, and to do work on the broadband hubs.

Senator Conroy-I see they have finally decided after the next series to axe The Chaser.

Mr Scott-I read about that with interest. I suspect they will be with us for a while yet.

Senator LUDLAM-My apologies if I missed this earlier, but you have said that in 2009 we will not see
any first-run drama as a result of these initiatives because of the lead time.

Mr Scott-You will see first-run drama, but it will not be specific to these initiatives because of the lead
time, yes.

Senator LUDLAM-For the second and the third years, are you able to estimate how many hours before you get up to your-

Mr Scott-Can I come back to you on notice on that? We are still working through that. In a way it is about how we finally decide to go. Telemovies are that much more expensive than miniseries, which are that much more expensive than long run drama, so it will finally come down to the funding mix that we create. We are still working that through now that we have the concrete budget figures delivered for us.

Senator LUDLAM-Not having a background in this industry, in terms of the definition of ‘drama', do
you call the cheaper end of the market-lifestyle shows, reality programs and that kind of thing-drama for these purposes?

Mr Scott-That is not how we are qualifying ‘drama'. There is some debate in commercial television
around that, but that is not how we are viewing it.

Senator LUDLAM-That is not a conversation at the ABC?

Mr Scott-No.

CHAIR-We will resume. Senator Ludlam has the call.

Senator LUDLAM-Thank you, Chair. I have some questions in relation to the ABC and SBS review that occurred up to the end of last year. I am not sure whether to direct them to the minister or to Mr Scott, so I will just see where we go.

Mr Scott-That is the public broadcasting review, which is in the budget papers.

Senator LUDLAM-Obviously public submissions were sought. When is a public report on the outcome
of that review likely to occur? It was called ABC and SBS: towards a digital future.

Mr Scott-We have a copy here.

Senator Conroy-We issued it with the budget papers.

Senator LUDLAM-Yes.

Senator Conroy-I am a bit confused. Is there supposed to be something else?

Senator LUDLAM-No, not that I am aware of. Was that conducted as a result of consultations being
undertaken late last year? I am seeking a sense of how the public consultation guided your thinking on the issues you were consulting on.

Senator Conroy-We considered all of the submissions and these were our thoughts around the budget.

Senator LUDLAM-Is there a specific summary of the response to the submissions?

Senator Conroy-This is our response to the submissions. Did we do a summary of them within it? No,
but we published them.

Senator LUDLAM-So the submissions are live on your website. Is that all we will see by way of a
response?

Senator Conroy-I think they are publicly available. I will just double-check that.

Senator LUDLAM-As long as we are talking about the same thing.

Senator Conroy-I thought we had published them. You have caught me by surprise. I thought we did.

Senator LUDLAM-As long as we are talking about the same thing. Is that the ABC and SBS report?

Senator Conroy-Yes. Would you like a copy?

Senator LUDLAM-Yes, I would like one right now if that is possible. I will just double-check and make
sure that we are talking about the same thing.

Senator Conroy-I will see whether we can get more copies brought up, but Senator Ludlam is the only
one who needs a copy right at this moment.

Senator MINCHIN-I have a copy. Do you want another copy?

Senator Conroy-No. They were distributed on budget night.

Senator LUDLAM-I will check up on that in a moment. I want to jump to something that was reported, I think, on Media Watch a little while ago. I believe that it was called Quality Assurance Project 8, and it was to assess the work of current affairs interviewers Kerry O'Brien and Tony Jones in particular. Are you aware of what that refers to?

Mr Scott-I can speak to that. As part of our quality assurance work at the ABC, we undertake a number of different elements, and one of those is programming reviews that are undertaken in the divisions. That is where they review, critique and assess the content of a program, according to our editorial policies and standards. That happens all the time. We also do a number of what we describe as ‘quality assurance reviews'. That is where we take a slice of content and review it in the light of our editorial guidelines, so we develop a methodology. Often that work is done by independent reviewers outside of the ABC. If you look on our online site, I think you will find six of those reports. We have a number of others in the field at the moment. Media Watch did refer to one report. What we do not do is provide ongoing commentary and detail about these as they are taking place. I did not do that to Media Watch and I have not done it anywhere else. But, yes, we will review programs or aspects of programming-how we cover certain issues and deliver certain styles of journalism-and that is underway.

Senator LUDLAM-Does this relate to the sorts of matters that Senator Abetz was raising before, for
example?

Mr Scott-Yes. For example, looking back at the ones that are online at the moment, you will see a review that was done last year on how we treated the debate and coverage of water issues in Australia. Sometimes you might take a program and review it and sometimes you might look at how the ABC is dealing with a swathe of content related to a single issue across a number of its different platforms. There are a variety of different methodologies. We are developing some new methodologies here. We are in consultation with international media organisations, such as the BBC, the CBC and a number of the American newspapers, all who are very interested in the methodologies that we have developed and are keen to take advantage of some of that work. This is an ongoing process and it is a complement to the internal program reviews that are undertaken.

Senator LUDLAM-These are discrete reviews that occur from time to time.

Mr Scott-Yes, that is right.

Senator LUDLAM-Was it correctly reported that project 8, in particular, was just looking into the work
of those two reporters?

Mr Scott-What we have not done is provided ongoing commentary and I am keen not to go into too much detail on that. Suffice it to say that long-form interviewing is a very important part of the work that we do, particularly long-form live interviewing. I think it is appropriate for us to take an independent look at that in order to assess our performance over time. I also think that there are benefits to have some elements of peer review, where we can, so that people understand the pressures of doing live interviews and the like. People who have done it and who understand it might be in a good position to provide us with some insights. As was reported, the two reviewers that we engaged internationally to do this work were no longer available, so we are reviewing it now. But we will do a review into long-form interviewing.

Senator LUDLAM-So effectively they have withdrawn.

Mr Scott-Yes, as has been correctly reported.

Senator LUDLAM-Is that particular review being conducted in camera and will those results be made
public in the same way as-

Mr Scott-I expect that we are still learning as we go on this. We have put six reports up on our online site now. I would expect that most reports we do will be publicly available, although there might be some reasons why they would not be. However, at the moment the ones that have been to the board are now up online, and there are six of those.

Senator LUDLAM-So, if that is eight, presumably there is another one afoot somewhere that has not yet been-

Mr Scott-Yes, there are others in the field at the moment. They have been delivered to me, and when they have been delivered to the board we will be in a position to talk about them publicly. It is an audit process. I do not see that as being that different from the internal financial audits that we do. We have our own rules and regulations that govern how our divisions operate and spend their money; we have an internal audit function that comes and gives a snapshot on that; and from time to time we also go externally to get a review on things. It is all to do with healthy quality assurance. But we do not talk about our internal financial processes while they are underway and we are not going to talk about our internal editorial quality review processes while they are underway.

Senator LUDLAM-At a high level, can you tell us what the review topic of No. 7 is?

Mr Scott-I am not in a position to give you details on that at the moment. But there are details that we look at that are to do with accuracy and impartiality and, when that material is available, we will let you know.

Senator LUDLAM-The last one that I am interested in for the moment-again, this is a bit of a change of tack-is an advertisement, which I think I have a copy of here somewhere, about Play School. This one is for Play School live in concert at various registered clubs around New South Wales. For how long has that sort of thing been going on?

Mr Scott-For many years.

Senator Conroy-What are the dates?

Mr Scott-It is a licensing deal that happens under ABC Commercial. The ABC has been involved in
licensing events or holding events like this for many years now.

Senator LUDLAM-In these sorts of clubs?

Mr Scott-I am not sure about the venues.

Senator LUDLAM-The venue in particular that I am interested in-

Mr Scott-Which venue is that?

Senator LUDLAM-I am interested not so much in the individual venues but that this is occurring in
registered clubs, at least throughout New South Wales and presumably in other states as well. The main revenue base for these clubs, as I am sure you are aware, is poker machines. I just wonder about the implications of a tie-in that is trying to attract-

Senator Conroy-I understand that you cannot have kids in and around poker machines. I am sure that there is not a lot of revenue being generated by the five-year-olds.

Senator LUDLAM-That is not what I am suggesting.

Mr Scott-I am sure that this would be in a hall or auditorium type area that would be separate from where alcohol is served and consumed and from where poker machines might be in operation. But I can come back to you with more detail on that.

Senator LUDLAM-That would be good. I will frame up some more specific questions that might help
you to provide us with some of that information. The company-I presume it is a company-Kids Promotions is listed as an associate.

Mr Scott-Yes.

Senator LUDLAM-Can you tell us now or find out and come back to us with who owns that company-

Mr Scott-I will find out, yes.

Senator LUDLAM-and provide us with some details as to the contractual arrangements between Play
School concerts, the ABC and Kids Promotions?

Mr Scott-Yes.

Senator LUDLAM-Also, please let us know how long Kids Promotions has held that contract, if indeed
this is a long-serving arrangement. Do the registered clubs pay the ABC directly for the concerts or do they come through Kids Promotions?

Mr Scott-I will get the detail on that.

Senator LUDLAM-Is the ABC logo used in the promotional material and the signage for kids' free
concerts at all these registered clubs; so to what degree is the ABC branding these events? Maybe you can tell us this off the top of your head, as we have the budget papers in front of us: what revenue is derived for the ABC from this tie-in?

Mr Scott-I can tell you broadly that our commercial businesses in their entirety-our shops, centres,
books, CDs, DVDs and events-bring back to the ABC in a given year a net dividend payment, in a sense, of somewhere between $15 million to $20 million. There are higher revenue numbers, but that is the dividend; that is the profit that it delivers back to us. That compares with the allocation for ABC operations, both for us and for the distribution of our content, of around $850 million. So it is somewhere around two to three per cent, and that is fairly consistent year in and year out.

Senator LUDLAM-But even that is quite a high-level figure. So that is not just Play School; that is all the commercial type-

Mr Scott-No; that is 40 shops, 80 centres, books, CDs, DVDs and the like.

Senator LUDLAM-So it is going to be a smaller fraction of two per cent. Could you, on notice, come
back to us with a breakdown of what that is for?

Mr Scott-Yes, we will see what we can do for you in that way.

Senator LUDLAM-Do you have concerns about the commercial exploitation of Play School as a
drawcard for gambling outlets?

Mr Scott-It has never been framed in that way to me and I would like to get my head across the detail that you have outlined there. Play School is a loved and trusted provider of wonderful children's entertainment. Of course, content is created off the back of Play School in the form of books, DVDs, CDs and toys. That has been the case for a long time. We are very, very careful in our decision making around that and we are very, very protective of Play School as a brand, as an entity and as an association with the ABC for more than 40 years. So I can look into that specific detail. Even without looking at it, I would draw a distinction between a Play School concert and the location of the hall in which it is being held. Let us just look at the specific details of this one.

Senator LUDLAM-Yes, I would appreciate that-and whether any concerns have been raised internally
within the ABC about the potential impact on the brand and on kids and parents, using that as a drawcard to get people into licensed, gambling premises.

Mr Scott-Yes, I understand the question.

Senator Conroy-I would happily take my daughter to the Canberra Labour Club to watch an ABC Play
School concert.

Senator LUDLAM-Thank you for that contribution, Minister. I would appreciate it, if you are able to
come back with those details.

Mr Scott-Yes.

Senator LUDLAM-That will do for me for the moment, Chair. I will come back to you later.

Senator LUDLAM-I have some questions that are a follow-up to a discussion that we had in February
regarding the ABC's commercial partnership with Harper Collins. You provided answers to those questions, I think, in mid-April.

Mr Scott-Yes, that is right.

Senator LUDLAM-That was on the 15th. In one of the answers that you gave on notice on 15 April, you stated:

"The revenues generated from the agreement will be returned to the Corporation-"

the corporation being the ABC.

Mr Scott-Yes.

Senator LUDLAM-Can you tell us how Harper Collins earns income from that venture?

Mr Scott-I will have to come back with that detail. Some of that will be commercial-in-confidence.

Senator LUDLAM-Some of it will. I will just give you a general sense of what I am after. Is Harper
Collins paid a flat fee or a percentage? Is it the same for each title? Do you have a standing agreement or is it negotiated case by case? Does it relate to the number of books that are sold? Information about those sorts of issues was not really given in the answers.

Mr Scott-Let me come back to you with more detail on that.

Senator LUDLAM-That would be great. Do you have a sense of what each of those things is?

Mr Scott-Yes.

Senator LUDLAM-The information that was provided was pretty sketchy. Going to how the editorial
decision making occurs, you mentioned when we spoke that that still lies with the ABC.

Mr Scott-That is right. It has full editorial control over all titles and content.

Senator LUDLAM-Can you tell us on what that editorial decision making is based? For example, will
books with the ABC imprint be required to have a connection with ABC radio, television or online content?

Mr Scott-It has not always been the case that there has been a connection back, but I think we have a sense of the kind of programming that we focus on and the kinds of issues that we cover. So, if there is a good correlation of that or a good fit to that, we will put books out. At times, under ABC Books, we put out 150 books a year. Spotless, our big seller, like some others, was clearly linked back to local radio where Shannon Lush was first identified as a talent in these matters. Not all of our books will have that kind of link, but it is a decision-making process around the areas of interest to our audience and the kinds of things that our programming focuses on and a decision is made. One of the advantages of having Harper Collins as a partner in this is that there may well be books that they are interested in us publishing under the ABC imprint. If we decide that it is not a good fit for us, they have other opportunities to publish that either under Harper Collins or under other labels that they run. So there is some flexibility under this agreement.

Senator LUDLAM-I think we established last time that the projects can be initiated from either direction.

Mr Scott-Yes.

Senator LUDLAM-How often are you knocking back proposals that they-

Mr Scott-I would have to come back to you on that detail. Really, Harper Collins only assumed
operational control of ABC Books on 1 May, so it is pretty early on.

Senator LUDLAM-That is not that long, so we might pick that up a little later. Are the publications that
come out under this imprint required to adhere to the editorial policies that govern all the other media?

Mr Scott-The editorial policies do not pertain specifically to books and publishing as an output area, but there are editorial standards and guidelines; we exercise editorial control over those books.

Senator LUDLAM-How are those requirements interpreted for consistency? Who looks after that?

Mr Scott-The leaders of our ABC Books division. We have an executive who is responsible for our books and our magazines. Magazines operate similarly in partnership with a number of different publishers in a similar kind of model to books; she is responsible finally for that editorial decision making.

Senator LUDLAM-Are books just Harper Collins, or are there a number of publishers that you use with
books?

Mr Scott-No; books are just Harper Collins.

Senator LUDLAM-With magazines it is still quite diverse?

Mr Scott-Yes. There are, I think, three partners. Limelight, Universal and News are involved as our
partners in magazines.

Senator LUDLAM-Just to make sure that I am clear about what you have just said: the same people are responsible for that-

Mr Scott-I am saying that the same executive in ABC Commercial is responsible for books and
magazines; therefore, it is responsible for the decision making over both.

Senator LUDLAM-One of the questions that you took on notice last time was what these arrangements would mean for staffing in ABC Books; the answer again was a little bit sketchy. How many staff did ABC Books have prior to the announcement of the Harper Collins contract? Perhaps you could give us some detail on their roles.

Mr Scott-I will have to check; I can come back to you with detail. Actually, more staff moved over to
Harper Collins than we may have first envisaged. Harper Collins are very pleased with the people that we had, but I will come back to you with the detail.

Senator LUDLAM-Do they now work for Harper Collins?

Mr Scott-Yes, they do.

Senator LUDLAM-Were they were working for ABC Books formerly?

Mr Scott-That is correct.

Senator LUDLAM-How many staff does ABC Books have now?

Mr Scott-I will have to check on that.

Senator LUDLAM-Rough numbers?

Mr Scott-I do not have that number off the top of my head.

Senator LUDLAM-Could you come back to us with that this afternoon?

Mr Scott-I will see who we can contact, but I should be able to come back to you fairly quickly with that.

Senator LUDLAM-I am after a rough before-and-after picture of how many there were before and who
has moved across to Harper Collins now.

Mr Scott-I will have to take that on notice; I am sorry.

Senator LUDLAM-I am specifically after how many editorial staff there are. What is the size of the unit that is making these decisions? Is it one person or is it 50?

Mr Scott-It is certainly not 50. It is a fairly small team. I think around a dozen people work in ABC
Books; it is a fairly small publishing unit.

Senator LUDLAM-I will not push you any further until you have had a chance to check those details.
Again, it is probably more useful for you to take this on notice: how many books have ABC Books
commissioned and how many books have ABC Books published in each of the three financial years leading up to this one?

Mr Scott-We will get that detail for you.

Senator LUDLAM-I would appreciate it, if you could. Also, it would be helpful if you would inform me
of any projections or estimates for how many you will be publishing from here on, under the new
arrangements.

Mr Scott-Yes.

Senator LUDLAM-Do you have any concerns or have concerns been raised with you that these sorts of
commercial partnerships entail an unfair advantage over other publishing companies who are trying to
compete with Harper Collins?

Mr Scott-No, I do not think so, really. I think with the books that Harper Collins are publishing separate from us, under their own name and their own imprint, they have no advantage at all. The only books that carry our brand are those we have been involved in editorial decision making on. I think it makes great sense though for the ABC to be in partnership around books, magazines, CDs and DVDs. This is a business model that I think has worked successfully for us.

We are fundamentally a broadcaster. We do radio and television and we are very active online. We are not a book publisher. That is a specialised business that needs detailed understanding around issues like commissioning, printing, distribution and marketing, which are not core capabilities of the ABC. It makes good sense for us to find an experienced book publisher who can be a strong partner for us and bring those capabilities and that expertise into the partnership at the same time that we can bring our insights about audiences into that partnership. Having that sort of partnership means a better business in the long term, more money coming back to us and reduced risk. It is a model that has worked successfully in the DVD, the CD and the magazine businesses for a period of time. Not only does it represent a good return for the taxpayer on their investment in ABC content but it also represents an ability for us to protect the ABC brand over time.

Senator LUDLAM-In the last conversation that we had, you said that the ABC had been given legal
advice that it is acceptable for the ABC to promote its own products on air.

Mr Scott-Yes, that is true.

Senator LUDLAM-Did you seek that advice specifically for products in which the contents were being
produced by a commercial party in these sorts of arrangements-

Mr Scott-Yes. If you look, you will see that now nearly all the product we are promoting on air is ABC
content that we are doing in partnership with someone. Yes, we have legally checked that and we have no difficulties with it.

Senator LUDLAM-Are you able to provide us with a copy of that advice, if it is available?

Mr Scott-I will see whether we can provide that.

Senator LUDLAM-Thank you. I have no further questions; thank you, Chair.

CHAIR-As there are no further questions, we thank the officers of the ABC very much for appearing
before the committee today