Increases to prime-time advertising on SBS have been slammed by the commercial network as creating a fourth commercial network by stealth, but media buyers tell Crikey SBS doesn’t compete directly with the commercial networks anyway.

Prompting the fury of the TV networks is the long-mooted plan, confirmed by Communications Minister Malcolm Turnbull yesterday, to allow SBS to average out its five minutes per hour of advertising over the whole day, provided it doesn’t air more than 10 minutes an hour. This is a change from the current advertising rules, which allow SBS to air a maximum of five minutes per hour, and would allow SBS to air more ads in prime time while fewer ads during periods of low advertiser demand.

The changed advertising rule, if passed by Parliament, would allow SBS to recoup an estimated $20 million to $30 million from the $53.7 million over five years the government cut from its budget yesterday. SBS managing director Michael Ebeid welcomed the change, saying it would allow the organisation to invest in more Australian content. “In an environment where public broadcasting is under pressure and SBS is operating in a highly competitive media market, the ability to generate more of our own revenue helps us to secure the future sustainability of the organisation,” he said in a statement.

But the $20 million to $30 million a year sweetener to the SBS budget is, according to competitors, undercooking the profits about to flow SBS’ way. Free TV Australia (which represents the commercial networks) predicted the change would rob the commercial networks $40 million a year in revenues. In fiery comments, the chief of the embattled Ten Network said the changes amounted to creating “a fourth commercial network by stealth”. Nine’s David Gyngell described the change as “hugely damaging” to free-to-air television. “If they want to do it they should be reducing license fees.”

In comments made earlier this week, Ebeid said the $200 million figure over five years was entirely overstating the matter. And it seems media buyers — the people who actually decide where to place advertising — agree with him.

Mat Baxter, the chief executive of UM Australia, told Crikey this morning the reaction from the commercial TV sector was extreme. “Could SBS sell more advertising? Yes. Is it going to significantly detract from commercial TV revenues? No … It’s an overreaction. Really, it’ll all balance out just fine.” Paul Brooks, Carat’s national head of partnerships and investments, also played down the impact on the commercial networks. “There is a potential for some money to move from the free-to-air networks to SBS. But the numbers that have been quoted are inflammatory — it won’t be to that degree.”

Brooks even doubts SBS’ $20 million to $30 million estimation of potential revenues from the change. “It’s probably on the high side,” he said. “Over three to five years they might hit that target, but I’d be surprised if they get more than $10 million to $15 million in extra advertising in the first year.”

The reason SBS is unlikely to significantly dampen the fortunes of the commercial networks is partly its audience share. It gets around 5% of the metropolitan audience and currently, around 3% of the total TV ad spend, Fusion Strategy’s Steve Allen says. But, he adds, the ad revenues of the major TV networks are under pressure, so it’s no wonder they’ve reacted as they have. And it’s even less surprising Channel Ten  has reacted the most fiercely — it’s in the greatest danger from any further loss in revenue.

But the rise of internet advertising through YouTube and the like, and the movement to advertisers self-publishing, are far greater threats to commercial TV fortunes.

SBS is also hamstrung in a way the commercial networks aren’t when it comes to adding ads, Allen says. If it adds to many commercial breaks, it’s far more vulnerable to a viewer backlash. And currently, as Ebeid has publicly stated, advertisers on SBS like the fact that the network isn’t full of ads — it gives each ad greater reach.

This isn’t to suggest SBS can’t make more money from the change. There are plenty of advertisers keen to get their ads on the network. Its audience is wealthy, and niche. “If I was a food marketer, the Thursday night food line-up on SBS wouldn’t have escaped by attention,” Allen said.

SBS also provides marketers a way to reach linguistically and culturally diverse audiences largely underrepresented in their current ad options, Baxter says. In this way, ads spend on SBS is likely to be a portion of targeted advertising as part of a larger marketing budget. “SBS plays a niche role within the broader media mix for advertisers,” he said. “The type of advertiser who is spending big dollars on Seven, Nine or Ten isn’t the type who’ll lift their dollars and drop them into SBS. The demographics are just so different. But you can use SBS as a specialist supplement to your core programming strategies. You don’t buy a commercial network or SBS — you buy them together.”

In this sense, the SBS ad changes are good news for Australian advertisers, Baxter adds. “One in four Australian households speak a first language other than English. But that grouping is entirely underrepresented in Australian advertising. The SBS ad increase will allow more advertisers to reach that audience.”

Correction: An earlier version of this article referred to UM’s CEO as Max Baxter. His first name is Mat. The article above has been fixed.