ABC’s Olympics snub is a sign of things to come

The ABC’s decision not to bid for the non-commercial broadcast rights for the 2020 summer Olympics shows two significant trends that are shaping Australian media. 

Most of the attention has been around what it tells us about the continued creaking of the ABC floorboards under the heavy tread of financial pressure, warning of the risk of collapse. But it’s also a signal of the likely future of free-to-air sports, radio and television.

The ABC says the radio broadcast would have cost about $1 million to set up and service the broadcast facilities required in Tokyo. The broadcaster is historically reluctant to stop doing what it’s always done. So the fact they couldn’t find the money for a service they’ve provided since 1952 demonstrates how hard the government’s cuts are biting. 

More seriously it shows how little flexibility the ABC has in its budget. It shows what insiders have been saying: there is virtually no discretionary money for one-off expenditures.

With the inevitable navel gazing that controversial programming brings, ABC director of regional and local Judith Whelan told the ABC’s Virginia Trioli: “The vast majority of that cost is the staging of the commentary. We have to set up a separate broadcast centre in the host city and staff that with commentators, producers, technicians.” The ABC would also have to set up and service a dedicated digital broadcast station.

It’s likely the ABC will have already eaten into much of what discretionary dollars it has with the outstanding job it has done in covering this week’s fires and acting as the emergency broadcaster. Watch for a similar event later in the financial year that the ABC will lack the resources to cover.

Like just about every decision by ABC management to manoeuvre through the cost cuts imposed by Canberra, this decision has been grasped by culture warriors to attack the ABC with their own list of programming they’d prefer to see axed.

And as always, there’s plenty of hyperventilating to bully the ABC into changing its mind (and as with last week’s Q&A imbroglio, the ABC buckling is always a short-odds bet). But as the ABC staff have been saying since 2013, the broadcaster can only manage its funding cuts by doing less, particularly if it wants to do more in under-served markets. 

It makes sense for one of the things discarded to be radio sport broadcasting, which has an increasingly ageing and niche market — particularly for one-off events like the Olympics.

Live sport has been central to free-to-air broadcasting. It’s the one product that has largely sustained audiences. On television, although linear audiences have dropped by about a third over the past decade, live sport has held the line.

But the evidence increasingly suggests that audiences are shifting their sports consumption to streaming and social media — slowly at first, but expect that to soon speed up.

News Corp reports in its latest quarterly numbers that its Kayo sports streaming service had 430,000 subscribers at September 30, offsetting the continued decline in subscriptions for its core Foxtel product. Optus Sports (which streams the English Premier League) reports 700,000 subscribers.  

Last week, Nine’s Roy Masters reported that an internal NRL audit had suggested that the sports’ digital arm was expected to be worth almost $1 billion within two years, based on revenues from direct advertising, sponsorship, sales and broadcast. That’ll be a media organisation worth more than Seven West Media.

This week, British sportspromedia.com reported a study that found more live sport is now being watched on smart phones and connected devices than on television (many people would, of course, do both) and that 60% view sport either through “over-the-top” streaming services or premium social media.

Of course, there remain audiences who rely on radio broadcasting for sport. But when people can carry all the sport they want in their pocket, it’s hard to justify the ABC spending a million dollars it doesn’t have for what is now a relatively bespoke demand.