Cirrus@Austlit

COMMERCIAL TELEVISION

The origins of commercial television in Australia lie mainly in the evolution of the dual system of national and privately owned radio broadcasting between the two World Wars.

When radio expanded dramatically in the 1930s, it was provided by the government-run ABC and a series of advertiser-supported private stations licensed by the government. The Australian government began considering the introduction of television in the late 1920s, but rejected its introduction until after World War II. In 1949, the Chifley Labor government decided to introduce television as a state-run service managed by the ABC, but lost office before this decision could be implemented. The subsequent Menzies Coalition government gave television a low priority, but in 1953 it decided it would be introduced as a dual system after a Royal Commission. Television broadcasting commenced on 16 September 1956.

The first commercial services were licensed by the Australian Broadcasting Control Board (ABCB) in Sydney and Melbourne to consortia mainly made up of established newspaper, radio and electronic equipment manufacturers. Experience in a related field of entertainment was a key criterion. The dominant media groupings at the time were the Herald and Weekly Times (HSV7, Melbourne), the Fairfax family (ATN7, Sydney) and the Packer family (TCN9, Sydney). The government had decided it could afford to build the studios and transmitters for the ABC, but not for the commercial stations, so these interests invested heavily in the establishment of televisions. While the ABC looked to the BBC as its model, the first commercial stations looked to the United States. They paid attention to television stations in US cities of equivalent size to Sydney and Melbourne. The first commercial broadcasters were pleasantly surprised at how quickly television took off and the strong demand for advertising. They were all making a profit by 1959. In 1960, the Federation of Australian Commercial Television Stations (now Free TV Australia) was formed.

Government policy was to introduce television gradually to Australia. In 1959, two stations started in each of Brisbane and Adelaide and one in Perth. Despite the ABCB trying to license stations drawn from local interests, the Brisbane and Adelaide stations went to companies associated with the Sydney and Melbourne licensees—except for ADS7 in Adelaide, which went to a young Rupert Murdoch.

A brief tussle occurred over how to bring television to regional Australia. The Sydney and Melbourne stations wanted country television to be a relay of city television, so that each centre could have two commercial television services. This did not eventuate, as the government decided it wanted country services to be independent and owned by local interests. As a result, between 1960 and 1965, commercial television services commenced in eastern regional Australia, with further regional services commencing up until 1988, when television commenced in Alice Springs.

Commercial television is financed almost exclusively by advertising. The stations rent time to advertisers so they can broadcast commercials and the stations charge for that time, based on a notional audience. A market was thus created in which, over time, broadcasters found more and more sophisticated ways to dynamically price the stock of time they had available to extract the maximum possible from advertisers. They were aided by regulations designed to restrict advertising time to protect viewers, but which also meant that demand for advertising almost always exceeded supply.

In order for this market to operate efficiently, there needs to be a stable convention between the broadcaster and the advertisers as to how this notional audience is calculated. From the beginning this convention has been that a representative sample of the potential audience will be surveyed as to what they watched and a statistical calculation then made as to the likely total audience. Methods of undertaking this research have changed with time, from door-to-door surveys, to diaries, to the current people meter method, in which sets in use and people watching are monitored electronically. The broadcasters have always exerted a high degree control over the measurement system, paying for the bulk of the survey costs and determining when the surveys were conducted. This has caused friction between the broadcasters and advertisers from time to time, particularly before the start of the people meter. OzTAM, the current data provider, is a joint venture of the commercial and national broadcasters.

By the mid-1960s, demand for advertising time was high and so were station profits. Pressure began to mount for a third commercial station in the capital cities to introduce more competition. Accordingly, the ABCB licensed new stations in Sydney, Melbourne, Brisbane, Perth and Adelaide, which commenced in 1965. The increased competition between stations drove up the cost of programming and dampened increases in advertising rates, meaning the new stations struggled until the early 1970s, when the phenomenal success of Number 96 caused a turnaround in fortunes for the 0-10 Network.

The first commercial broadcasters intended to be both program producers and aggregators of programming sourced from elsewhere. They not only built transmitters, but state of the art studios in which to produce local programs. They were determined they would retain control over their own programming and not cede it to advertisers, as had happened in commercial radio where a number of popular programs had been made by advertising agencies and sold to the stations. Initially local programming had to be live, until videotape recording and intercity coaxial cables became available in the early 1960s.

The introduction of commercial television also coincided with a shift in the nature of US television programming, away from live programming beamed from New York network centres to filmed programming made in Hollywood and sold to the networks or syndicated to independent stations. This meant a large amount of US programming was imported for screening on Australian television, and proved to be very popular. Concern about this led the government from 1960 to start regulating for minimum levels of Australian content on commercial television.

Broadcasters produced local studio-based programs themselves, such as news, current affairs, variety and talk shows, or did outside broadcasts of sporting events. However, they also started to use independent program packagers who delivered finished programs. Reg Grundy and Hector Crawford were among the first packagers, and their enterprises formed the start of an independent television production sector that expanded dramatically in the 1970s and 1980s, particularly as locally produced drama found larger audiences.

The resurgence of the local feature film sector developed the creative infrastructure, and allowed a larger range of producers to take advantage of the popularity of mini-series and made-for-television movies in the 1980s. Underpinned by content regulation, government investment in production and the increasing demand for programming as pay television expanded in the United States and Europe, Grundy and Crawford, as well as new companies like Southern Star Entertainment and Beyond International, found they could produce television for both the domestic and international markets.

Also in the 1970s, Kerry Packer revolutionised the presentation of news and current affairs as well as sport on commercial television, demonstrating how they could attract large audiences and dramatically increase advertising revenue. Commercial television and major sporting codes became increasingly enmeshed as sports broadcasting rights helped to pay for the cost of making previously amateur sports into professional businesses.

Although the United States went to colour in 1954, the Australian transmission standard was the European PAL system, so Australia needed to wait until a PAL colour system was developed in the 1960s. Even so, the government remained cautious: colour did not start until March 1975. The transition to colour was one of the fastest in the world. Penetration reached 60 per cent in two years, and almost 80 per cent by 1979. It also led to a jump in homes using television that flowed through to increases in advertising revenue for broadcasters.

The first satellite broadcast into Australia was a two-hour program beamed live from Expo ’67 in Montreal in June 1967, but the most significant use of satellites was the live broadcast of the first moon walk on 21 June 1969. An international network of satellites was being built that greatly facilitated communication and the distribution of television between nations. In 1973, under Labor Postmaster-General Lionel Bowen, the government began to consider the introduction of a domestic satellite for Australia, but it was not until 1986 that the first national satellite was launched. The impact of satellite broadcasting was profound. More than ever before, it allowed audiences to be bound together in both time and space, highlighting one of the great strengths of television: its ability to aggregate a large national audience for a live event. It also put in place the technology that allowed for the biggest restructure of commercial television since its commencement.

The satellite made it possible for the Hawke Labor government to consider how it could extend television services to the whole of Australia, and how people in regional Australia could get access to the same level of services as those living in capital cities. At the same time, the government also considered changing the ownership rules from the two-station rule that had applied since the commencement of television. The satellite was used to introduce direct broadcast television services to remote Australia. Then, to equalise city and country television, the government decided on the aggregation of regional licence areas so that the majority of the population had access to three commercial television services. Finally, in 1986, it introduced a prohibition against cross-media ownership while freeing up commercial television ownership by abolishing the two-station rule in favour of the 75 per cent national audience reach rule.

Two things happened as result of these policies. First, the power of the Sydney and Melbourne stations was reinforced as they became the centre of national networks and gained power over regional television programming and access to some of their revenue streams. Aggregation was initially an economic disaster for regional television, which took at least five years to adjust and required the government to grant rebates on licence fees to assist with the transition. Second, the ownership changes coincided with the height of the 1980s asset price bubble that had already attracted some highly geared entrepreneurs like Christopher Skase, Alan Bond and Robert Holmes à Court into the television business.

The stockmarket crash of 1987, a bidding war over foreign programming that inflated the cost of that programming and the overvalued nature of the assets in commercial television sent the sector into the red as the banks foreclosed on their debts. Kerry Packer, who had sold out to Bond for a vastly inflated price, bought back into the Nine Network at a discount. The other two networks were run by their bankers for two years until their debts were recovered and they returned to profit in the early 1990s.

On 1 January 2001, commercial television commenced the latest technology conversion with the start of the transition to digital terrestrial television. The method of its introduction was controversial, depending on HDTV as the driver of take-up, along with the gift of additional spectrum during the transition period. The original analogue switch-off date of 2008 proved unworkable, and in 2006 a new date of 2013 was set. The national and the commercial broadcasters were also allowed to provide additional channels as a means of driving conversion.

As the debt crisis was resolved, the government introduced a major reform of broadcasting law (Broadcasting Services Act 1992) that included an end to publicly contested licence renewals for commercial television and more self-regulation in program content, except for Australian content and children’s television. Further relaxation of ownership rules was being contemplated by the Abbott Coalition government in 2013–14.

While the transition to digital television increasingly transformed production up to the present time, the government closely supervised the transition to digital terrestrial broadcasting. Each commercial channel now provides three additional channels of programming. In late 2013, the last analogue signal was switched off.

In the 21st century, commercial television faces increased competition for eyeballs from pay television, internet television, and other forms of screen entertainment, but while its future may be uncertain for the moment, it remains a viable medium for the aggregation of audiences sufficiently large to attract advertisers.

REFs: S. Hall, Supertoy (1976); N. Herd, Networking (2012).

NICK HERD