Answers to Senate Estimates Questions on Notice - Supplementary Estimates Hearings October 2010
Broadband, Communications and the Digital Economy Portfolio
Special Broadcasting Service Corporation
Question No: 30
Topic: Advertising and sponsorship
Senator Ludlam asked:
Can you disaggregate the advertising and sponsorship breakdown? For example, can you tell us the forecast figures for revenue from television-only advertising for those forward estimates? Can you provide for the four years in the forward estimates, a disaggregation of where you think your ad revenues are going to come from? Specifically I am looking for the TV, as you have just given us, but any more detail you can provide as to where you think it might come from. In retrospect, when you look back at projections how accurate have your forecasts of future ad revenues been in the past? Are these reasonably reliable estimates? What are your television revenues for the in-program advertising?
Can you also provide, looking back over the last three years, the percentage of advertising revenue. Can you give us that number for television revenues for 2007-08 and 2008-09 (broken down by commercial activity: television, radio, online et cetera)? Are you able to give us a percentage of your advertising revenues for the last financial year that
accrue directly from sports broadcasting?
(a) Forecast revenue from advertising and sponsorship as at October 2010 is set out in the table. These figures are slightly different from those provided in the Corporate Plan 2010-13 as the budget figures have been revised since its publication.
2010-11(000) 2011-12 (000) 2012-13 (000) 2013-14*(000) 2014-15 (000)
Television 55,828 59,288 62,590 87,330 71,482
Online 3,000 3,407 3,839 4,243 4,349
In Language 5,619 6,056 6,467 6,996 7,171
Content Sales** 6,480 7,440 8,228 8,568 8,875
Subscription TV** 13,768 14,253 14,855 15,488 15,876
Total 84,695 90,444 95,979 122,625 107,753
* FIFA World Cup year.
** The Corporate Plan 2010-13 included content sales and subscription television revenue in the
advertising and sponsorship category.
(b) As above.
(c) Forecasts of future advertising and sponsorship revenues as set out in the previous Corporate Plan (2007-08 to 2009-10) have been accurate within a range of -6% to 8%.
SBS provides best available current estimates when it forecasts future advertising and sponsorship revenue. SBS has recently reduced the 2010-11 television advertising revenue by $2m in response to the impact of the new commercial free-to-air digital multi-channels. As with most estimates those for the more current years should be more reliable than the estimates for future years.
(d) SBS estimates that if it had not changed its advertising model to include in-program breaks, revenue for television advertising and sponsorship would be approximately $20m for 2010-11. SBS's total television advertising and sponsorship revenue is estimated to be $56m for 2010-11. As such, it is estimated that the previous advertising model would have produced a $36m shortfall against current projections.
(e) Advertising and sponsorship revenue by category.
2007-08 (000) 2008-09 (000) 2009-10* (000)
Television 46,288 52,461 72,348
Online 1,347 1,828 2,045
Radio 2,186 2,379 2,574
* FIFA World Cup year.
(f) Sports revenue varies greatly from year to year depending on the events for which SBS has the broadcast rights. For example, in 2009-10 SBS received $17m for the World Cup and $5.7m for the 2009 Ashes and One Day International series, all of which went to cover the costs of acquiring and producing the coverage of each event. Including those events, the proportion was 34.7%. Excluding those events, standard sports revenue was 4.6%.