24 Annual Report 2004–05 for any child 25 Annual Report 2004–05

Meeting Mixy | Royal Easter Show The ABC continues to be ’s most successful and comprehensive broadcaster of children’s programs. Characters such as the popular star of TV and online, the pink rabbit Mixy; the internationally acclaimed Bananas in Pyjamas and the iconic program Play School, have become an integral part of the lives of Australia’s children.

Each week, ABC Television carries around 38 hours of ABC Kids programming designed to interest and excite children about their world. These hours are increased in school holidays. On weekdays, ABC2 carries children’s programs at times they are not screening on ABC Television, so that 13 hours of trusted ABC children’s programming are available to Australian families each day.

The relationship with young viewers is extended through ABC online with the unique children’s gateways —The Playground for youngsters up to eight years of age and RollerCoaster for those between eight and 14 years.

The ABC’s link with young is maintained through schools programs for primary and secondary students, including , and ABC Online’s Education Resources site—a gateway designed for use by schools.

hello big ted i enjoy watching playschool and i especially love the bears Hugo. by email 26 Annual Report 2004–05

ABC Audiences Average Weekly Radio Reach—Five City Source: Nielsen Media Research

Audience Trends 2004–05 ABC NewsRadio The environment in which the ABC 2003–04 operates is constantly changing. Audiences 2002–03 increasingly have control over what, when, ABC Classic FM 2001–02 where and how they consume media. The 2000–01 choice of content and the devices through which that content is broadcast or captured are also increasing rapidly. In this environment of change, the vast majority of Australians continue to turn to ABC Local Radio the ABC: an estimated 75% of Australians use the ABC’s broadcast services each 0.0 0.5 1.0 1.5 2.0 2.5 Millions week.1 The traditional media of ABC Radio and Television continue to attract and retain large audiences, while the new media Aggregate ABC Radio Audience Share (%) Source: Nielsen Media Research forms—ABC Online, the ABC’s second channel, ABC2, and 2004–05 initiatives such as podcasting and audio Sydney 2003–04 streaming—are providing audiences with 2002–03 access to a wide range of content that is 2001–02 available at different times and are enabling audiences to self-schedule their media 2000–01 consumption. The ABC’s strength in the traditional media and positioning at the Newcastle leading edge of developments in content

delivery and new media forms mean that the Corporation serves both a mass Darwin audience and masses of audiences. 0 1020304050 % Radio Strong competition in the radio market provides audiences with a wide range of choice across many radio genres. The radio of television or online, viewed or visited—a market continues to fragment. Between service over a given time frame) of radio has June 2003 and June 2005, an additional 30 remained at 95% for more than a decade radio licenses were issued in Australia,2 and the level of listening among different increasing competition for audiences in age groups has generally been steady metropolitan and regional areas. The during this period.3 average weekly reach (the total number of people who have listened to—or in the case Another feature of the radio market has been the emergence of new means of 1 Newspoll analysis based on overlap patterns of usage of ABC services from Newspoll telephone survey, plus reach delivery that take the traditional medium data for TV, Radio and Online. Analysis based on Australians of radio into the leading edge of new aged 18 and over, June 2005. 2 Australian Broadcasting Authority, June 2005. 3 Nielsen Media Research Radio Ratings 1995–2005. 27 Annual Report 2004–05

ABC Radio Regional Reach and Share, 2004–05 (%) Source: Nielsen Media Research

All ABC Local ABC Radio News Radio Radio Classic FM National Radio Share Reach Share Reach Share Reach Share Reach Share Reach Share Reach Orange (NSW) 26.2 41 13.3 24 5.7 13 2.5 6 3.7 11 — — (NSW) 19.4 36 9.4 21 4.4 11 1.3 3 1.0 3 — — Lismore (NSW) 36.6 47 20.4 24 7.7 18 3.0 7 4.2 12 — — (NSW) 39.3 53 25.5 36 8.7 17 1.0 4 1.7 9 — — Mt Gambier (SA) 32.3 41 20.8 25 4.2 11 1.3 4 0.7 3 — — Toowoomba (Qld) 27.1 34 13.1 20 3.9 7 4.5 7 3.0 6 — — Albany (WA) 53.5 68 23.1 34 12.4 24 3.6 12 8.0 20 — — (WA) 46.9 58 31.5 37 4.3 11 1.3 5 2.4 8 — — Bunbury (WA) 41.4 54 16.2 26 14.4 24 1.7 5 4.4 9 — — Launceston (Tas) 42.0 49 23.1 26 5.7 16 3.5 7 5.8 12 1.7 6

media. These developments are detailed increased to 8.7% from 7.9%. 891 ABC in the New Media and Digital Services Adelaide’s reach was up by 13% to 205 000 section, below. and share increased to 11.1% from 9.9%. Reach for 720 ABC Perth rose by 9% to In this highly-fragmented environment, ABC 288 000 and share increased to 11.5% Radio continued to perform strongly. Overall from 10.8%. five-city average weekly reach increased by 0.8% on 2003–04, to the numerically highest triple j’s five-city average weekly reach annual average recorded: 3 766 000, or decreased by 6% on 2003–04 to 1 092 000 34% of the five-city metropolitan population and share decreased from 4.7% to 4.4%. aged 10 years or over.4 ABC Radio's overall This decline is due to the continuing five-city share (the percentage of the radio fragmentation of the youth media market, listening or television viewing audience driven by new technologies and entrants. tuned to a particular service) in 2004–05 Work is continuing to minimise the decline. was 20.4%, a 0.7 point decrease on the (This result does not reflect use of triple j 2003–04 result of 21.1%. Increases were services on other platforms, including recorded in Adelaide and Perth, while online and mobile technologies.) Brisbane remained steady. ABC Classic FM’s five-city weekly reach ABC Local Radio’s average weekly increased by 2% to 690 000, while share reach was up 4% on 2003–04, to a record remained steady at 2.5%. Following the 2 198 000 and share increased to 10.2%, highs recorded in 2003–04, Radio National’s an 0.2 share point increase on the 2003–04 overall five-city weekly reach was down by result of 10.0%. Weekly reach for 702 ABC 5% to 661 000 and share decreased from Sydney increased by 2% to 671 000 and 2.3% in 2003–04 to 2.0%. An extensive share was steady at 9.1%. While 774 ABC research project exploring listener attitudes Melbourne’s reach increased slightly by and expectations of the network commenced 0.4% to 758 000, share decreased to 11.2% in mid-2005. from 11.6%. 612 ABC Brisbane’s reach increased by 8% to 276 000 and share 4 All five-city radio data is drawn from Nielsen Media Research. The five cities surveyed are Adelaide, Brisbane, Melbourne, Perth and Sydney. 28 Annual Report 2004–05

ABC Audiences (Continued)

ABC NewsRadio’s weekly reach increased The ABC has commissioned further by 1% to 642 000 and share remained steady radio surveys in regional Australia for at 1.5%, compared with 1.6% in 2003–04. the coming twelve months.

ABC Radio's reach and share increased in Local Content on ABC Radio both Newcastle and Canberra in 2004–05. Local content is a very important part of ABC In Newcastle, ABC Radio's reach increased Local Radio programming for audiences in by 12% to 147 000 and share increased from regional Australia. Earlier research among 19.1% in 2003–04 to 20.8%. In Canberra, regional audiences indicated a strong ABC Radio's reach increased by 2% to demand for local content during breakfast 186 000 and share increased from 42.4% time radio.7 Quantitative audience research in 2003–04 to 44.1%. in 2004–05 illustrated the popularity of the local weekday Breakfast program among Radio surveys were also conducted in Hobart audiences. For example, in Broken Hill and Darwin in 2004–05. ABC Radio's average and Geraldton, ABC Local Radio breakfast weekly reach in Hobart was 90 000 and share programs achieved audience shares of was 36.8%. In Darwin, ABC Radio's reach 42%; in Orange, Bunbury, Lismore, Hobart was 52 000 and share was 32.1% (no radio and Toowoomba the Local Radio breakfast surveys were conducted in Hobart and programs achieved audience shares ranging Darwin in 2003–04). from 22% to 29%; while Mt Gambier, Albany and Launceston audience shares were above On a nine-city basis, ABC Radio, on 30%. Similar levels of audience were an average week, reached an estimated recorded for the local weekend Breakfast 4.241 million Australians in 2004–05.5 programs, with 52% of the Saturday Breakfast listening audience in both Broken A total of radio surveys were conducted Hill and Geraldton tuning to Local Radio. in regional areas in 2004–05.6 The ABC Saturday Breakfast also recorded strong participated in surveys in 2004–05 in audience share results in Orange, Lismore Toowoomba and Wollongong. ABC Local and Toowoomba of around 30% and of over Radio achieved a share of 13.1%, and 9.4% 40% in Albany and Mt Gambier. respectively in these two markets. Focused Radio Audience Research The ABC also commissioned surveys in During 2004–05, four major research eight regional areas (no commercial stations projects were undertaken on behalf of ABC chose to participate in these surveys). ABC Radio. Three projects were commissioned Local Radio achieved a share of 13.3% in for ABC Local Radio and one for ABC Orange, 16.2% in Bunbury, 20.4% in Lismore, Classic FM. 20.8% in Mt Gambier, 23.1% in both Albany and Launceston, 25.5% in Broken Hill and During October and November 2004, 31.5% in Geraldton. qualitative research was undertaken 5 Nielsen Media Research radio ratings surveys 2004–05. on behalf of ABC Local Radio among its The nine cities surveyed in metropolitan ratings surveys listeners who use and do not use the are Adelaide, Brisbane, Canberra, Darwin, Hobart, Melbourne, Newcastle, Perth and Sydney. accompanying Local Radio websites. 6 All surveys conducted by Nielsen Media Research. 7 Qualitative research undertaken in 11 regional areas in 2001–02: Mackay, , Mt Isa, Tamworth, Lismore, Wodonga, , Geraldton, Bunbury, Renmark and Alice Springs. 29 Annual Report 2004–05

The research, which was conducted in During May and June 2005, qualitative three distinctly different locations— research was undertaken for ABC Classic Melbourne, Darwin and Tamworth—was FM in Sydney, Melbourne and Adelaide. undertaken to: gain a better understanding The research explored audience attitudes of why people use the websites; evaluate and responses to classical music and the whether the content is meeting user needs; content and style of the network. The and identify opportunities for audience research took the form of workshop growth. This research was used to discussion groups, primarily among inform content and style development potential listeners, and focused on for the websites. identifying further opportunities for ABC Classic FM to attract new listeners In October 2004, 1233 ABC Newcastle and develop new program content. commissioned quantitative research to explore the radio listening habits of people Internet Delivery of Radio Services aged 40 years and over in the Newcastle, The expansion of new media has provided Hunter Valley, Port Stephens and Lake traditional media forms with the opportunity Macquarie areas. The research focused to expand their distribution channels. on levels of satisfaction among listeners This is best exemplified by the growth in to radio generally and to ABC Local Radio the number of ABC Radio services available during the key Breakfast and Drive sessions. online and the growing audiences for ABC The research has been used by Local Radio online services. Radio to continue to refine and enhance these programs. In 2004–05, three of the top ten ABC Online websites were those for domestic ABC In February 2004, ABC Local Radio Radio services: ABC Local Radio reached commissioned a longitudinal study of the an average of 293 000 users each month, mood and frame of mind of the Local Radio Radio National reached an average of listener. The research was designed to 130 000 users and triple j reached an provide insights into how listeners feel average of 129 000 users.8 Some of this about around them and the place activity was driven by podcasting (MP3 of media—specifically radio and Local audio files) and audio streaming. Radio. The research included interactive discussions on the Internet among a wide By June 2005, the triple j, Radio National, cross-sectional sample of Local Radio Local Radio, dig and News and Current listeners from disparate parts of Australia. Affairs websites offered MP3 audio files of programs or program segments for These discussions provided insights into download. Average weekly accesses to audience attitudes and responses to MP3 file downloads grew from around various events—be they local, national or 3 300 in January 2005, when podcast files international—and how those events were were available only on the triple j and dig handled and interpreted by the media and websites, to 93 100 in June 2005.9 specifically by Local Radio. The findings from this research have been used extensively To collect audience feedback and measure by ABC Local Radio in metropolitan and ongoing audience demand for podcasting, regional areas to inform and develop ABC Radio National conducted a podcasting program content to meet listeners’ trial in May 2005. More than 3 000 people needs at different times of the day. 8 Nielsen//Netratings July 2004–June 2005. 9 ABC Server statistics. 30 Annual Report 2004–05

ABC Television Reach (Four Weekly) ABC Audiences Source: OzTAM Television Ratings and Regional TAM (Continued) Sydney registered to take part in the trial, and in Melbourne the follow-up survey of 1 500 participants, Brisbane 98% said they would continue to use the Adelaide service to download ABC Radio National

Metropolitan Perth audio files. Providing audiences with 5 City Metro control over the time at which they listen Southern NSW to content has proven to be popular, Northern NSW with 51% of respondents indicating they downloaded programs that they did not usually listen to on air.10 Regional Regional All Since the late 1990s, the ABC has provided 0 102030405060708090100 online audio streams of its Radio services. % 2003–04 2004–05 ABC Radio has made an increasing quantity of content available as audio-on-demand and ABC Television Share 2004–05 6am–midnight as the amount of content has increased, Source: OZTAM Television Ratings and Regional TAM so too has demand. The level of activity, 2003–04 measured by average weekly accesses, Sydney attributed to audio streaming in 2001–02 Melbourne 2004–05 was 155 000. Activity had doubled to an Brisbane average of 329 000 accesses per week Adelaide

in 2004–05.11 Metropolitan Perth 5 City Metro Digital Radio Trials Southern NSW During 2004–05, digital radio trials Northern NSW continued in Sydney and Melbourne. The Victoria Queensland current trials are being conducted by Digital Regional Radio Broadcasting Australia (a consortium Tasmania of Commercial Radio Australia, the ABC and Regional All SBS) and Broadcast Australia respectively. 0 5 10 15 20 25 % The Sydney trials include seven commercial broadcasters, the ABC and SBS. The ABC Television Share 2004–05 6pm–midnight Melbourne trials include the ABC, SBS, Source: OZTAM Television Ratings and Regional TAM community broadcasters, Sport 927 and Sydney 2003–04

World Audio (an off-band AM broadcaster). Melbourne 2004–05 The ABC has broadcast its dig music service Brisbane and ABC Classic FM in both cities, as Adelaide

well as ABC NewsRadio in Melbourne. Metropolitan Perth Program-associated data (PAD) has been a 5 City Metro feature of both trials, supplementing audio Southern NSW content with text-based information such Northern NSW as artist and track details. Research from Victoria audience panels established in both cities Queensland Regional Tasmania 10 ABC Research, conducted on ABC Online May–June 2005. 11 ABC Server Statistics, 2001–2005. Regional All 12 Colmar Brunton Research for Sydney trial and 0 5 10 15 20 25 30 Millward Brown Research for Melbourne trial, 2004-05. % 31 Annual Report 2004–05

ABC Television Household Share, Remote Regions, 2004–05 (%)

Region Survey Dates 6am–midnight 6pm–midnight Darwin 18 July–7 August 2004 23.3 25.5 /Mt Gambier 25 July–7 August 2004 16.8 16.6 Remote Central and Eastern 18–31 July 2004 32.9 36.0 Port Pirie/Broken Hill 18–31 July 2004 13.9 15.3 Regional WA 25 July–7 August 2004 21.8 22.8 6–19 March 2005 20.4 20.5

Note: as the frequency of surveys and dates vary from year to year, comparative data is not available. Source: Nielsen Media Research

to assess functionality, capability and levels was 17.2%, compared with 17.3% in of interest in this new media, indicated high 2003–04.16 In the regional television levels of enthusiasm for the service.12 markets that are measured electronically (regional Queensland, Northern and Television Southern NSW, regional Victoria and The television market has been characterised Tasmania), the free-to-air prime-time by strong competition from free-to-air household share for ABC Television was broadcasters and subscription television. at an all-time high of 18.4%, compared The digitisation of subscription television with 18.3% in 2003–04.17 All-day has meant that the channel choice available (6am–midnight) free-to-air household to viewers choosing to pay for television share for ABC Television in regional has grown dramatically from around 50 in markets was 17.9%, compared with 2002 to more than 130 audio and visual 18.3% in 2003–04.18 channels in 2005.13 Broadcast television also faces competition for audiences from Television audiences in the more remote outside the medium, with video, DVD and parts of Australia are measured by diary, electronic game usage prevalent among all rather than electronically. In 2004–05, age groups. Analysis shows particularly the ABC participated in diary surveys high usage of these forms among young of television audiences in Darwin, audiences under 13 years of age.14 Riverland/Mount Gambier, Remote Central and Eastern Australia, Port Pirie/Broken In this competitive environment, ABC Hill and Regional . In Television has achieved strong results these areas, the number of free-to-air in 2004–05. The free-to-air prime-time television stations available to audiences household share for ABC Television in varies and the ABC share of viewing the metropolitan markets of Sydney, reflects these differences. For example, Melbourne, Brisbane, Adelaide and ABC Television’s prime-time household Perth was 17.9%, compared with 17.8% share in the Remote Central and Eastern in 2003–04.15 All-day (6am–midnight) Australia survey was 36%, while in the free-to-air household share for ABC Riverland/Mount Gambier survey area Television in the metropolitan markets prime-time household share was 16.6%.

16 OzTAM five-city free-to-air television ratings data, 13 Business Overview, (http://www.foxtel.com.au). July 2003–June 2004 and July 2004–June 2005. 14 OzTAM unpublished analysis of non-broadcast uses of 17 Regional TAM free-to-air television ratings data, television April/May 2004. July 2003–June 2004 and July 2004–June 2005. 15 OzTAM five-city free-to-air television ratings data, 18 Regional TAM free-to-air television ratings data, July 2003–June 2004 and July 2004–June 2005. July 2003–June 2004 and July 2004–June 2005. 32 Annual Report 2004–05

ABC Audiences (Continued)

In terms of program highlights in 2004–05, using customised data analysis tools; the 51 programs attracted metropolitan use of qualitative tracking tools to monitor audiences of over one million; the same audience attitudes to program genres number as 2003–04. Of these, 14 were and new programs, and trends in viewer Australian, including programs such as preferences; and a syndicated media and Kath and Kim, Enough Rope with Andrew consumer database to inform program Denton, Outback House, The New Inventors marketing and promotional activity. and My Favourite Book.19 ABC2 The reach of all television (free-to-air ABC2, the ABC’s second digital television and subscription) has been declining. For channel, began transmission on 7 March example, in 2002 the average weekly reach 2005 as a complementary service to the of all television was 92.1% of the population. main ABC television channel. In the six months to June 2005, this figure was 89.1% of the population. In that same Presently, there is no standard audience period, the reach of free-to-air television measurement system for digital multi- also declined from 91.2% to 87.5%.20 channels, with only limited data available Factors contributing to these declines in the from the digital subscription television reach of all television include those noted homes in the OzTAM and Regional TAM earlier, such as the use of DVDs, videos ratings panels. In its first quarter of service, and electronic games, as well as new the average daily reach of ABC2, from media forms, which are explored below. within digital subscription television homes, was estimated to be 92 000 viewers, which The average weekly reach of ABC roughly equates to 5% of digital subscription Television mirrors the small declines in television homes watching ABC2 on a daily reach generally recorded over time by basis.23 Audience estimates for ABC2 were free-to-air networks. In the metropolitan also collected via a national telephone markets, the average weekly reach of ABC survey conducted among Australian adults Television was 8.8 million viewers or 64.2% aged 18 and over. The survey found that of the population in 2004–05, compared 12% of Australian adults claimed to have with 65.7% in 2003–04.21 In the regional watched ABC2.24 markets, the average weekly reach of ABC Television in 2004–05 was 3.9 million Emerging television technologies viewers or 62.6% of the population, Trials of two new media forms, DVB-H compared with 65.1% in 2003–04.22 (Digital Video Broadcasting-Handheld) and , commenced in Sydney in 2005. In response to this competitive environment, The ABC is participating in the DVB-H trial ABC Television continued to draw on a range with other content providers, Broadcast of quantitative and qualitative research Australia and Telstra. DVB-H technology to inform programming, scheduling and enables audiences to view television and marketing strategies. This included detailed video content via a mobile phone. ABC2 analysis of television ratings databases

19 OzTAM five-city free-to-air television ratings data, 22 Regional TAM free-to-air television ratings data, July 2003–June 2004 and July 2004–June 2005. July 2003–June 2004 and July 2004–June 2005. 20 OzTAM five-city free-to-air television ratings data, 23 OzTAM and Regional TAM data from subscription 2002 to June 2005. television homes, 6 March–4 June 2005. 21 OzTAM five-city free-to-air television ratings data, 24 Newspoll, Awareness and Usage of ABC July 2003–June 2004 and July 2004–June 2005. services, June 2005. 33 Annual Report 2004–05

ABC Online’s Audience Reach by Month July 2004 – June 2005 2 000 000 Source: Nielsen//NetRatings; Home and Work Panel 18

1 800 000 16

1 600 000 14 1 400 000 12 1 200 000 10 1 000 000 8 800 000

Audience Reach Audience 6

600 000 Reach % Audience

400 000 4 2 Audience Reach 200 000 (Unique Audience) 0 0 Audience Reach % ry July April May June March August October Februa September NovemberDecember January 2005

2 000 000 ABC Online Audience Retention (month-on-month) 1 800 000 July 2004 – June 2005

1 600 000 Source: Nielsen//NetRatings

1 400 000

1 200 000 Retained audience New audience 1 000 000 43.1% 47.6% 41.6% Retention rate (%) 42.4% 43.7% 41.5% 800 000 42.1% 39.6% 38.3% 35.5% 41.4% 42.6% Unique Audience 600 000

400 000

200 000

0

Jul-Aug Jun-Jul Aug-Sep Sep-Oct Oct-Nov Nov-Dec Dec-Jan Jan-Feb Feb-Mar Mar-Apr Apr-May May-Jun

ABC Online’s Monthly accesses 2000–2005 (June) Source: ABC Server Statistics

100

90

80

70

60

50

40

30 Monthly accesses - Millions accesses Monthly 20

10

0 Jul Jul Jul Jul Jul Sep Sep Sep Sep Sep Nov Nov Nov Mar Nov Mar May Mar Nov May May Mar Mar Mar May May May Jan-01 Jan-03 Jan-00 Jan-02 Jan-04 Jan-05 34 Annual Report 2004–05

ABC Audiences (Continued)

will be part of this trial and audience they offer is diminishing. This convergence research will commence later in 2005. of platforms means that audiences can, for The ABC is participating in the first full example, watch ABC Television and video datacasting service on free-to-air digital content on ABC Online via a broadband television in Australia. Datacasting allows connection, listen to ABC Radio via ABC for the broadcasting of text, audio and Online and watch ABC2 via a mobile phone. video content via the digital television The convergence of media forms and the spectrum. The trial will initially feature continuing growth in range and volume of six information services from a range digital devices underpins the breadth and of content providers. The ABC will be depth of content available to audiences. providing a news, sport and weather service. Research into the utility, value Market trends indicate a rapid rise in and audience needs will commence uptake of digital devices. In 2003, 24 000 later in 2005. MP3 devices were sold in Australia. In 2004, sales topped 441 000, and in the first six Since 2002, ABC New Media and Digital months of 2005, sales have already out- Services has been involved in a study of stripped the previous year, with 567 000 how interactivity can enhance children’s units sold. Digital set-top box sales have television. The research is being undertaken also increased in the period from 114 000 by the Interactive Television Research in 2003, 225 000 in 2004 to 166 000 in the Institute (iTRI) at Murdoch University and first six months of 2005. The sales volume includes industry partners Nickelodeon, of digital television sets in the six months the Australia, TVNZ and the to June 2005 was 6 400, already more than West Australian Department of Education. the annual sales volumes recorded in the The first two years of the project involved past two years—5 900 digital sets in 2003 development of interactive prototypes and and 4 600 in 2004.25 initial testing with children in a usability lab at iTRI. During 2004–05, a ‘mobile Estimates from FOXTEL indicate that 70% lounge room’ built by iTRI visited more than of its more than one million subscribers 20 schools and 480 children participated in are receiving digital services.26 All of a quantitative research study into the viability AUSTAR’s more than 500 000 subscribers and utility of interactive television. In the are digital, and an estimated 80% of these coming months, research will continue into have newer digital services enabling the social context of interactive television. audiences to receive free-to-air digital The project is due for completion by multichannels.27 Digital subscription early 2006. television enables audiences to interact with some content—selecting camera New Media and Digital Services angles, sending and receiving emails and the Digital broadcasting delivers audiences ability to source more detailed information. high-speed audio and visual content on a Digital has also variety of platforms—television, radio and enabled the use of personal video recorders online. In the digital age, the distinction (PVRs) and DVD recorders to digitally capture between platforms and the different services and store content. Although accurate data

25 GfK Marketing Australia, 2003–June 2005. 26 FOXTEL, July 2005. 27 AUSTAR, estimates July 2005. 35 Annual Report 2004–05

on the penetration levels of these devices broadband-specific content available to are not yet available, the commoditisation audiences. ABC Online has a high reach of these technologies is a further example among Australian home broadband users, of the increasing control audiences have with 32% of all Australian home broadband over their consumption of content. users visiting ABC Online at least once each quarter.31 In response to these developments, ABC New Media and Digital Services greatly Qualitative audience research has been expanded the breadth and depth of content an important ingredient for the continuing available to audiences. In 2004–05, the ABC development and refinement of ABC Online. website, ABC Online grew to over 1.7 million In late 2004 focus group research was pages of content, reaching an average of conducted to inform the redesign of the 1.4 million Australian Internet users each ABC RollerCoaster website. The website is month who access, in total, approximately aimed at 8–14 year olds and the objective 80 million pages of content. of the research was to gather information on usage of the site and how it could be The number of Australians visiting ABC enhanced in terms of design, usability and Online continues to grow at a rate greater content. The research provided a wealth than the growth in use of the Internet. of information and ideas which informed the More than 14% of all Australians who used look and feel of the new RollerCoaster site. the Internet on a monthly basis, visited ABC Online. Over the six-month period from Considerable audience research was January to June 2005, ABC Online’s audience undertaken in the first half of 2005 to grew to 4.1 million, with a reach of 35.3% inform the redesign of the ABC Online among Australian Internet users.28 ABC home page. This research included focus Online remained one of the most popular group discussions among regular, occasional websites in Australia, ranking 8th in June and potential ABC website users. The aim 2005 by Nielsen//NetRatings, compared of the research was to test new design with 11th in June 2004. ideas for the home page ensuring audiences’ quick and easy navigation to the wide range While Internet use in Australia has continued of content on ABC Online. to increase, the major shift among audiences has been the number of people converting News and Current Affairs to broadband connections. At the end of News and Current Affairs audience figures June 2005, 59% of Australian home Internet have grown or remained steady, with key users had broadband.29 Broadband access programs attracting strong audiences changes the way audiences use the Internet: across platforms in 2004–05. broadband users spend twice as much time online and visit twice as many Internet sites On ABC Television, the weekday 7pm as narrowband Internet users.30 Broadband News had a five-city average audience of facilitates the use of rich media content, 1.1 million, up 2% on 2003–04, and one including video and audio online, and New in four episodes had at least 1.2 million Media and Digital Services’ business strategy viewers. The 7.30 Report had a five-city has focused on increasing the range of average audience of 919 000 and Stateline

28 Nielsen//Netratings,Home and Work Panel data January–June 2005. 29 Nielsen//Netratings, June 2005. 30 Nielsen//Netratings, Internet and Technology Report, 2004–05. 31 Nielsen//NetRatings, June 2005. 36 Annual Report 2004–05

ABC Audiences Newspoll conducted similar surveys in (Continued) 1998, 1999, 2002, 2003 and 2004. The 2005 research was conducted by telephone 834 000, an increase of 5%. Australian between 20 and 28 June 2005 and drew Story’s average audience remained upon a national sample of 1 900 people steady at 1.1 million.32 aged 14 years and over.

On ABC Radio, the 7.45am News on Overall Value of the ABC Local Radio achieved a five-city average Across the community at large, the 2005 weekly reach of just over one million results show beliefs and opinions about the listeners, a 3% increase on the previous ABC are generally consistent with those year. AM on both Radio National and Local expressed in the 2004 survey. Nine-in-ten Radio continued to attract a combined (90%) Australians continue to believe the average weekly reach of more than ABC provides a valuable service to the 1.1 million listeners.33 community, and half (47%) believe it provides a ‘very valuable’ service. The combined ABC News and Current Affairs online sites recorded 4.2 million Comparing the results with those recorded average weekly accesses, an increase of in the 2004 survey, the only change in 28% over 2003–04.34 The average monthly results was an increase in the number reach of the ABC News Online website of people in country and regional areas from within Australia was 333 000, an who believe the ABC and its services are increase of 4% on 2003–04.35 valuable to the community (up from 88% to 92%). Looking over the past two years, A large qualitative research study of the there has been a decline in the number of ABC 7pm News bulletin was undertaken females who rate the ABC and its services in mid-2005. The research was conducted as very valuable (down from 50% to 44%) in Sydney, Melbourne, Brisbane and Perth, and among heavy ABC users describing and the regional centres of Bathurst, the ABC this way (down from 62% to 57%). and Bendigo. Participants in The ABC is conducting further analysis of the research ranged in age from 25 to 70 these results to better understand the and included regular and less frequent year-on-year changes. ABC News viewers. The findings from the research will be used to inform the Notwithstanding these decreases, the structure and flow of the 7pm bulletins. proportion of people within these segments who believe the ABC and its services are ABC Appreciation Survey 2005 valuable is still very high (around 90%). In 2005, the ABC commissioned Newspoll to conduct the sixth ABC Appreciation Television Survey. These surveys provide an overview Results for ABC Television in the 2005 of community attitudes about the ABC, and survey showed some improvements. The allow the Corporation to assess the value vast majority of Australians (80%) continue placed on its services by the Australian public to believe the quality of programming on and the delivery of its Charter obligations. ABC Television is very or quite good, and three-quarters (74% up from 69% in 2004)

32 OzTAM, five city data July 2003–June 2004 and July 2004–June 2005. 33 Nielsen Media Research, metro five-city radio surveys, July 2003–June 2004 and July 2004–June 2005. 34 ABC Server Statistics. 35 Nielsen//NetRatings, July 2003–June 2004 and July 2004–June 2005. 37 Annual Report 2004–05

Overall Value of the ABC believe that ABC Television does a ‘good job’ 100 91 89 89 90 in terms of the number of shows it provides 88 86 they personally like to watch. As found in 80 previous years, community perceptions about ABC Television are far more positive than 60 perceptions about commercial television. 49 50 48 47 44 41 Demographic results of note include: 40 Total an increase in the number of males who Valuable believe the quality of programming on ABC 20 Very Television is good (up from 73% to 80% and Valuable very good (up from 16% to 20%); an increase Statistically significant in the number of teenagers aged 14–17 0 1998 1999 2002 2003 2004 2005 describing ABC Television in this way (up from 70% to 81% and very good up from 8% to 18%) and improvements on this same % Television—Quality of Programming dimension among Australians resident in 100 80 80 75 75 78 79 77 the five largest capital cities (up from 76% to Good 80%) and in country and regional Australia 60 41 40 43 41 40 (up from 77% to 82%). In terms of ABC 40 38 23 22 20 20 18 20 20 Television doing a good job providing 4 5 5 5 6 7 0 programs that people like to watch, 2 3 2 2 1 2 12 11 9 8 9 10 20 19 18 18 improvements were recorded among 24 21 21 40 males (good job—up from 67% to 74%), 53 50 51 53 60 54 56 teenagers aged 14–17 (good job—up from 80 Commercial TV Poor ABC 51% to 71%) and light ABC viewers (good 100 job—up from 68% to 75%) since 2004.36 The 1998 1999 2002 2003 2004 2005 1998 1999 2002 2003 2004 2005

ABC notes that the improvement recorded Very Poor Very Good Statistically significant change among 14–17-year-olds is a result of a Quite Poor Quite Good combination of program strategies, including the introduction of the new locally-produced Blue Water High, which achieves an audience % Radio—Quality of Programming share of almost 40% among those aged 100 80 37 Good 63 13–17, and the Wednesday evening 61 60 60 58 59 60 prime-time schedule, which has attracted 55 58 53 55 55 58 40 and retained younger audiences. 19 21 22 22 20 17 20 14 12 13 10 12 13 0 1 2 1 2 2 2 7 6 7 8 6 8 Radio 20 12 12 12 1312 13 29 29 29 The majority of Australians (63%) 40 31 30 30 believe the ABC provides good quality 60 radio programming. Similarly, six-in-ten 80

Poor ABC Commercial Radio (59%) Australians believe ABC Radio does 100 2004 1998 1999 2002 2003 2004 2005 a ‘good job’ in terms of the amount of 1998 1999 2002 2003 2005 programming it provides to which they Very Poor Very Good Statistically significant change personally like to listen. Quite Poor Quite Good

36 For this study, a light ABC Television viewer is defined as someone who claims to watch ABC Television for All of the graphs above are based on a total sample aged 14 years less than six hours per week. and over. ‘Don’t Know’ responses are not displayed Source: 37 OzTAM, five-city metropolitan data. Newspoll 2005 ABC Appreciation Survey 38 Annual Report 2004–05

ABC Website—Quality of Content ABC Program Does a Good Job of Being Balanced and Even-Handed * In previous surveys (1999–2004), the question was asked in relation to Based on those aged 14 years and over who ever watch/listen to the ‘quality of information’ % respective program. Source: Newspoll 2005 ABC Appreciation Survey Based on those aged 14 years and 100 over who ever visit the ABC 95 94 94 93 91 91 website Source: Newspoll 2005 89 89 89 90 90 87 88 86 88 ABC Appreciation Survey 85 80 100 92 90 89 87 89 83 60 80 50 43 47 43 45 44 44 42 41 40 41 40 39 41 41 60 38 37

40 38 20 34 34 32 34 29

20 0 2004 2005 2002 2003 2002 2003 2004 2005 2002 2003 2004 2002 2003 2004 2005 0 2005 1998 1999 2002 2003 2004 2005 ABC 7pm The 7.30 AM/PM The World Very Good Total Good News Report Today

Statistically significant Total Good Job Very Good Job Statistically significant change

There is a greater similarity in beliefs corresponds to rising competition and niche about ABC Radio and commercial radio than specialisation in the youth radio market. between ABC Television and commercial television. This similarity is borne of the In terms of the amount of programming more diverse and fragmented radio market people like to listen to on ABC Radio, results in which ABC Radio operates. It is noted were generally similar to the previous year. that commercial radio tends to attract a higher level of criticism than ABC Radio. Online Almost one-in-four Australians (23%) claim Patterns of change in attitudes to ABC to have ever accessed the ABC website. Radio are mixed. Over the past few years there has been an increase in the number Nine-out-of-ten (89%) ABC Online users of people who say ABC Radio is doing a say the quality of the site’s content is good good job providing quality programming and a similar number (93%) say the site (up from 59% in 2002 to 63%). This appears does a ‘good job’ in terms of the amount of to have been driven primarily by people aged content it provides on things they use it for. 25–34 and 50 years and over. However, among people aged 18–24 there has been The 2005 survey included a new series a decline in this dimension over the past of questions about the value and usage of couple of years (55% in 2005 down from ABC Online. Eight-in-ten (79%) ABC Online 67% in 2003). The ABC notes that this users believe the website adds to the value 39 Annual Report 2004–05

and relevance that the ABC has for them. The number of Australians who believe the results also point to the website contributing ABC is ‘efficient and well managed’ (up to the consumption of other ABC content in from 64% to 70%). a variety of ways. For example, 40% of the site’s users claim to have seen something Going back further in time, compared with on the site that prompted them to either 2003 there has been a statistically significant watch ABC Television or listen to ABC Radio. improvement in the belief that the ABC does a ‘good job’ on broadcasting programs Many ABC Online users also claim to have that are different from those provided by consumed ABC Television, video or Radio commercial media (up from 87% to 91%). content directly through the website. For There has also been a gradual increase example in the past three months: 37% in the number of Australians who believe of the site’s users claim to have read a the ABC does a good job at being balanced transcript of an ABC Television or ABC and even handed and this improvement is Radio program on the website; about 20% statistically significant when compared with say they have listened to ABC Radio content the results from 1999 (up from 78% to 82%). through the website; about 20% say they have watched some type of ABC video News and Current Affairs Content content; and 13% claim to have downloaded The survey explored community ABC Radio content as an MP3 or podcast. perceptions about the amount of coverage given by the ABC to specific Coverage of Country news and current affairs issues. News and Information Community perceptions about coverage Consistent with the previous two surveys, of country news and information continue on nearly all issues a majority of ABC users to be far more favourable for the ABC feel the amount of coverage is ‘about right’.38 than for commercial media. This remains Year-on-year, the only statistically apparent both among people in capital significant changes were small increases cities and people in country/regional areas. in the number who feel there is: not enough The vast majority of Australians (79%) coverage of international affairs, industrial believe the ABC does a good job covering relations issues, education issues and sports country/regional issues, compared with news; too much coverage of accidents and 46% for commercial media. disasters; and the right amount of coverage of crime and issues affecting youth. Other Specific Charter Obligations As found in previous years, the majority of Australians also believe the ABC is doing ‘a good job’ in meeting various other charter obligations covered by the research. Compared with the 2004 results, there have been two statistically significant positive changes: one on the dimension of doing ‘a good job’ on broadcasting programs that ‘reflect the cultural diversity of the Australian community’ (up from 78% to 82%); and a significant increase in the 38 For this study, an ABC user is defined as someone who claims to use ABC Television, Radio or Online as a source of news and current affairs at least once a fortnight. 40 Annual Report 2004–05 in any community

I listen to triple j all the time and I had no idea it was ABC Brisbane Male 25 41 Annual Report 2004–05

triple j One Night Stand concert | Ayr, Queensland triple j, Australia’s only national youth radio network, is more than just a broadcaster. It takes live music to the community—in cities and rural Australia. This year the northern Queensland town of Ayr won the One Night Stand competition after 4 000 of the town’s 8 500 residents signed a petition supporting a live concert in their town. On the big night, the town’s population swelled to 10 000 as fans flocked in from surrounding areas, eager to be part of the audience for nationally-acclaimed topline bands—and one of their own.

triple j’s role in the lives of young Australians is just part of the ABC’s total involvement in being a vital part in the communities they serve wherever they might be. ABC Local Radio in particular provides a focal point in the everyday lives of Australians, whether it be supporting and playing a special part in local celebrations and festivals or providing vital information in times of emergency or encouraging and organising volunteer work to help the needy. The ABC through all its platforms connects people within communities and connects communities to each other. 42 Annual Report 2004–05 ABC Services

In achieving its vision the ABC delivers International Broadcasting comprehensive programs and services • Radio Australia, an international radio which reflect the interests and aspirations service broadcasting by short wave, of diverse Australian communities. satellite and rebroadcast arrangements to Asia and the Pacific Services • ABC Asia Pacific, an international ABC Radio television and online service broadcasting • Four national radio networks via satellite and rebroadcast arrangements comprising Radio National, ABC Classic to Asia and the Pacific FM, triple j, and ABC NewsRadio (on the Parliamentary and News Network) Transmission • dig, digJAZZ and digCOUNTRY—three The ABC transmits its programs via: music-based services available via • 959 terrestrial transmitters around the Internet. dig and digJAZZ are also Australia for services, available via digital television and including Self Help and Broadcasting FOXTEL and AUSTAR Digital for Remote Aboriginal Communities • Nine metropolitan radio stations Scheme (BRACS) facilities in capital cities and Newcastle, • 964 terrestrial transmitters around Australia for analog radio services, • 51 regional radio studios throughout including Self Help and BRACS Australia • 137 terrestrial transmitters around Australia for digital ABC Television services, which include the radio services • National analog television service dig and digJAZZ • Digital television with analog simulcast • a digital satellite service to remote from 137 transmitters around Australia homesteads and communities within • Local television in each state and territory Australia carrying ABC analog television, Radio National, ABC Classic FM and ABC New Media and Digital Services triple j, nine different regional radio • ABC Online, serving more than services (two each for the Northern 1.7 million pages of web content Territory, Queensland and Western • ABC2, the ABC’s second free-to-air Australia, one each for New South digital television channel Wales, and Victoria), • Content and services on emerging and ABC NewsRadio and Parliamentary platforms including broadband, SMS, broadcasts on the Parliamentary podcasting, mobile services for 3G and News Network phone and other wireless devices, • ABC Television retransmission on various and interactive television subscription television platforms, including FOXTEL, TV, AUSTAR, Transact and ABC Enterprises • 40 ABC Shops • ABC Asia Pacific transmitted on the • 79 ABC Centres throughout Australia PanAmSat 2 and PanAmSat 8 satellites, • ABC Shop Online and via rebroadcasts in countries across • Customer Delivery Service Asia and the Pacific (fax, telephone and mail orders) 43 Annual Report 2004–05

• Radio Australia services via shortwave Pacific. Radio Australia operates its own transmission from Brandon in Queensland, 24-hour FM relay network in English in Victoria, Darwin, Singapore, which is available in Dili (106.5), Honiara Taiwan and the United Arab Emirates; (107), Nadi (92.6), Phnom Penh (101.5), and the PanAmSat 2 and PanAmSat 8 Port Moresby (101.9), Port Vila (103) satellites in association with ABC Asia and Suva (92.6).

ABC Broadcasting Coverage Proportion of the population able to receive transmissions from ABC broadcasting services

Australia NSW/ACT Vic Qld WA SA Tas NT Analog Television 98.19% 99.22% 98.83% 97.35% 97.01% 98.51% 95.94% 78.84% Digital Television 95.82% 96.65% 98.65% 94.31% 93.18% 95.28% 89.89% 72.86% (includes dig and digJAZZ) Local Radio 99.34% 99.69% 99.78% 99.50% 98.77% 99.63% 98.43% 80.93% Radio National 98.51% 99.12% 99.46% 97.88% 96.38% 99.54% 99.14% 79.60% ABC Classic FM 95.66% 97.49% 97.96% 94.31% 89.68% 95.04% 95.67% 67.18% triple j 95.19% 97.10% 97.92% 93.20% 88.82% 94.77% 95.67% 67.18% ABC NewsRadio 78.23% 79.70% 82.54% 65.16% 76.50% 91.07% 94.86% 53.37% Domestic Shortwave 0.97% 0.00% 0.00% 0.00% 0.00% 0.19% 0.00% 86.45%

Note: Population was derived from Australian Bureau of Statistics (ABS) 2001 Census data.

Moscow London

New York Jerusalem Washington Amman Beijing Tokyo New Delhi Bangkok

Jakarta Port Moresby

Johannesburg Auckland

ABC international bureaux and correspondents 44 Annual Report 2004–05 Corporate Governance

The ABC’s Governance systems and practices In September 2004, Directors adopted a reflect the particular requirements of the Board Protocol to replace the Directors’ Australian Broadcasting Act 1983 (ABC Handbook/Code of Practice. The Protocol Act) as well as the broader performance sets out the responsibilities, rights and expectations of modern public sector expectations of Board Directors. organisations. The Act provides for both the editorial and administrative independence Directors are required to provide of the ABC, thereby investing the Board with a declaration of interests upon their considerable discretion. In acknowledgement appointment. This is updated on a regular of that independence, the ABC accepts the basis. At each meeting, Directors are asked obligation to meet very high standards of if they wish to declare a material personal public accountability. interest in any items on the agenda.

Corporate objectives, strategies and The Australian National Audit Office’s 1999 performance expectations derive explicitly publication, Principles and Better Practices: from the Act, especially section 6, the ABC Corporate Governance in Commonwealth Charter, and section 8, duties of the Board Authorities and Companies, provided the (see page 222). This linkage is demonstrated Board with a template for monitoring and in the Corporate Plan Performance evaluating its performance. It applied this Summary (page 13). as a checklist for self-evaluation in areas of strategy setting, financial operating and ABC Board reporting, and audit and risk functions. Directors of the Corporation are each appointed for a term of up to five years. Comparison with previous years, At 30 June 2005, two Board vacancies particularly in relation to the basis for remained open, following the scheduled Board appointments and assessment of departure of Deputy Chairman, Professor Board skills, is necessarily limited, due Judith Sloan, and Mr Ross McLean in to the two vacancies. Overall, however, February. These vacancies did not impede Directors concluded the Board’s performance the ability of the Board to fulfil its had improved since 2001 when they first governance obligations. However the undertook the self-evaluation. Board did not retain the full breadth of expertise available at the same time Thorough induction processes are in last year—specifically in the area of place for new Board members and online financial management. training is available through provision of the Directors’ Manual and Corporate The Board held ten meetings during Governance in Australia modules. Other 2004–05. Details of the six Board professional development for Directors Committees and Board members’ continues to be provided on a attendances at meetings are provided case-by-case basis. in Appendix 4 (page 178). 45 Annual Report 2004–05

The effectiveness of the Board The Corporate Plan includes three levels depends considerably on the operation of performance measurement. of its committees, the work of which is shared as equitably as possible. The first level measures the effectiveness or outcome of ABC services in providing Throughout the year, Board members benefit to the Australian community. There served on the following committees: are eight such performance measures, two Audit and Risk Committee, for each of the four Corporate Objectives. Executive Remuneration Committee, These measures and the ABC’s performance Advisory Council Committee, against them in 2004–05 is set out in the Code of Practice Committee (ad hoc) and Corporate Plan Summary (page 13). Editorial Policies Committee. The second level measures how well ABC Editorial Policies is the principal the ABC delivers its output across Radio, document of direction and guidance for Television and New Media and Digital all ABC program production and media Services. These performance measures services. Under section 8 of the ABC Act, the encompass seven key result areas relating Board exercises specific responsibilities to programs and services, audience reach reflected in the Editorial Policies. These by media platform and network, innovation include a duty to ensure the independence and efficiency. The ABC’s performance and integrity of the Corporation, that news against them is set out in Performance and information is accurate and impartial Against ABC Corporate Plan 2004–07 according to the recognised standards of (page 108). objective journalism, and to develop codes of practice relating to programming matters. The third level of evaluation relates to the actions and performance targets set for The Board’s Editorial Policies Committee each of 15 strategic priorities. For reporting began a review of the 2002 Editorial Policies, purposes, these targets are assessed as and provided initial input to management ‘Achieved’, ‘On Track’ or ‘Not Achieved’ on matters to be examined. against agreed performance criteria. The ABC’s 2004–05 performance against these Corporate Planning targets is set out in Performance Against The ABC’s Corporate Plan 2004–07 ABC Corporate Plan 2004–07 (page 112). came into effect in July 2004. Its strategic priorities reflect the Corporation’s continuing Twice yearly, the Board receives work to position itself for the inevitable performance reports from management transformation of Australia’s media against the Corporate Plan. It also receives environment. During development of the timely information about significant or Plan, the Board held a special planning unexpected developments through reports event to consider a range of industry or presentations made to meetings analysis and recommendations, which throughout the year. included presentations from management as well as two international media industry specialists. 46 Annual Report 2004–05

Corporate Governance (Continued) Management Structure Governance Reporting In August 2004, the ABC restructured Monthly Governance Reports to the Board executive management to achieve improved from individual Directors affirm that Divisions strategic focus around four broad streams have adhered to all governance requirements of activity: content and channel management, (including legislative obligations) and/or strategic positioning, operational support identify breaches and issues of concern. and revenue-generating enterprises. Divisional Directors in charge of media output or program areas are required The new Executive comprises the specifically to address adherence to Managing Director and the Directors Editorial Policies, including matters of of Radio, Television, New Media and independence, accuracy and impartiality. Digital Services, News and Current Affairs, Strategy and Communications (formerly ANAO Review of Digital Corporate Affairs), and a new Chief Operating Broadcasting Conversion Officer position. The Director of Enterprises On 15 February 2005, the Auditor-General is not a member of the Executive but reports provided the Parliament with the Australian to the Managing Director (corporate liaison National Audit Office (ANAO) performance on business activities is achieved through audit report Management of the Conversion a separate Enterprises Executive). to Digital (Audit Report No.27 2004–05), which examined the efficiency and The Chief Operating Officer functions as effectiveness of the conversion from analog the ABC’s Chief Financial Officer and is to digital broadcasting by the national responsible for the operational efficiency broadcasters. The report made no of support Divisions. The Directors of recommendation in relation to the ABC. Technology and Distribution, Production Resources, Human Resources and Business The ABC welcomed the ANAO’s finding Services report directly to the Chief that the Corporation had efficiently Operating Officer. undertaken one of the largest and most complex capital equipment projects in its The Corporate Affairs Division was renamed history. The audit report acknowledged that Strategy and Communications to reflect a the ABC had: integrated digital conversion sharpened focus on strategic positioning, with other business planning; met legislated business development, brand management, timeframes without any interruptions to and governance and performance issues service; increased the quality and timeliness across the Corporation. The State and of its broadcast material; improved the Territory Directors report to the Director efficiency of content production; delivered of Strategy and Communications. to technology users the functionality they expected; avoided ‘equipment excesses’; ABC Development Division was disbanded and applied ‘better practice’ procurement and its staff and functions absorbed into disciplines. The auditors also drew attention other Divisions. to certain deficiencies in high-level project management, at an early stage of digital 47 Annual Report 2004–05

conversion, which the ABC rectified of the ABC, governed by separate boards well before the commencement of and with separate sources of funding. Many the ANAO audit. interested parties, including the ABC, made submissions to this review. The Strong In return for the Government’s capital committee published its report, A New contribution of about $90 million, the ABC Era: Orchestras Review Report 2005, delivered a digital conversion program on 14 March 2005. throughout Australia to a total value of about $225 million. It did so at a time The Report recommended that the of considerable fluidity in the digital ABC’s symphony orchestra companies be technology environment, purchasing reconstituted as public companies limited necessary equipment from overseas by guarantee. It also recommended that suppliers when the Australian currency the orchestras find alternative sources of experienced a depreciation of around 30% supply for the services currently provided in relation to the US dollar. by Symphony Australia. If implemented, the review’s recommendations will see Subsidiaries the divestment of all seven of the ABC’s At 30 June 2005, nine companies were orchestra subsidiary companies. wholly-owned subsidiaries of the ABC, including the six State symphony orchestras ABC Editorial Policies and Symphony Australia. and Code of Practice The ABC Editorial Policies and the Code of Each subsidiary company is governed by Practice include comprehensive information an independent Board of Directors, develops and advice for staff regarding standards a Corporate Plan and a Business Plan, required for the production and presentation maintains governance procedures in of all programming and content. This accordance with relevant legislation, includes particular reference to those and reports with its own Annual Report. program standards embodied in legislation, especially the ABC Act. Information about transactions between the ABC and each subsidiary is available In 2004, the Board examined the issue at Note 20 (Related Party Disclosures) in of political and other labels being used in the Financial Statements in this report programs to describe groups and individuals. (page 167), and are included in the ABC This review involved wide consultation with consolidated Financial Statements of staff. It resulted in an addition to Editorial the Corporation. Policies, from 23 March 2005, stating that, as a general rule, the ABC does not label In May 2004, the Federal Government groups or individuals. The ABC prefers clear, commissioned Mr James Strong to chair thorough reporting, rather than the use of a review of the effectiveness and efficiency labels to describe groups or individuals. of orchestral services in Australia. Seven orchestral companies around Australia In June 2005, the Corporation commenced operated as wholly owned subsidiaries its periodic review of Editorial Policies. A revised edition will be published in 2005–06. 48 Annual Report 2004–05

Corporate Governance (Continued)

Complaints Management increase on the previous year) and 114 536 All complaints received by the ABC, such calls to switchboards in state and territory as concerns about factual inaccuracy, lack capitals and particular ABC programs and of balance, bias or inappropriate content, are services (a 4% increase).1 referred to ABC Audience and Consumer Affairs. This unit is independent of ABC Key concerns reflected in the audience program areas and investigates all written contacts this year were the decision to cease complaints referring to possible breaches of production of George Negus Tonight, which the ABC’s Editorial Policies, Code of Practice generated 4 217 written and telephone or Charter. The unit also coordinates complaints; the departure of Clive Robertson responses to a range of programming from ABC Classic FM Breakfast which and policy enquiries. resulted in 1 196 complaints; and 772 complaints about the decision to move In 2004–05, the ABC received almost 170 production of Gardening Australia from 000 audience contacts—a 5% increase Hobart to Melbourne. The ABC also received compared with the previous year. This total 526 contacts welcoming the introduction of included 55 175 letters and emails (a 7% the new digital channel, ABC2, in March 2005,

1 Combined audience contacts received by Audience and Consumer Affairs, News and Current Affairs and the Reception Advice Line (phone, letter and email).

Table 1 Summary of contacts received Contact type Email/Letter Phone Total Number % Number % Complaint 17 415 31.6 25 347 22.1 42 762 Appreciation 6 080 11.0 10 299 9.0 16 379 Other* 31 680 57.4 78 890 68.9 110 570 Grand Total 55 175 100.0 114 536 100.0 169 711 * Other includes suggestions, requests for information, scheduling and transmission enquiries and general comments.

Table 2 Subject matter of contacts received Subject Email/Letter Phone Total % Total % Total 2004–05 2003–04 Requests for information, programs, product availability, other matters 29 173 68 923 98 096 57.8 51.7 Complaints about program standards and scheduling 14 042 18 560 32 602 19.2 23.6 Radio and television transmission enquiries and complaints 2 892 14 419 17 311 10.2 9.7 Appreciation of programs and presenters 6 080 10 299 16 379 9.7 12.4 Complaints of factual inaccuracy 1 037 830 1 867 1.1 0.9 Party political bias 877 803 1 680 1.0 0.7 Bias (other than party political)* 632 389 1 021 0.6 0.7 Lack of balance 442 313 755 0.4 0.3 Grand Total 55 175 114 536 169 711 100.0 100.0 * Includes claims of bias on such issues as sport and religion. 49 Annual Report 2004–05

including many requests and suggestions Timeliness for particular programs. As outlined in the ABC Editorial Policies, the ABC endeavours to respond to all audience The ABC’s coverage of the 2004 Federal contacts within 28 days. Between 1 July 2004 Election campaign resulted in 1 378 audience and 30 June 2005, ABC Audience and contacts, of which 993 were complaints. This Consumer Affairs responded directly to contrasts with the 2001 Federal Election 23 159 audience contacts. Of these, 18 610 when 1 542 complaints were received. (80%) received responses within 28 days.

Of the 42 762 complaints received, 2 701 Complaints Review Executive were claims of party political or other bias, The ABC’s Complaints Review Executive 755 alleged lack of balance and 1 867 were (CRE) provides an additional level of internal claims of factual inaccuracy. These complaints review for complainants. The CRE has related to a broad range of ABC programs broad scope to examine the broadcast in and services. question, the manner in which the complaint was originally dealt with by Audience and Upheld complaints Consumer Affairs, and to determine During 2004–05, 15 571 written complaints whether the ABC acted properly. The were finalised by Audience and Consumer CRE operates independently of both the Affairs, of which 494 (3.2%) were upheld. Audience and Consumer Affairs unit and program makers; and all CRE findings All upheld complaints are brought to are reported to the Board. the attention of the senior editorial staff responsible and corrective action is taken The CRE reviewed a total of 41 complaints, when appropriate. In 2004–05, actions of which 39 were referred for review by taken in response to upheld complaints Audience and Consumer Affairs, and two included written apologies to complainants; were assessed by the CRE in the first on-air corrections and apologies; counselling instance under Editorial Policy 12.4.6. or reprimanding of staff; adding consumer Of the referred complaints, five were advice warnings to future broadcasts; upheld in part or full, while both complaints removal of inappropriate content or assessed initially by the CRE were upheld. correction of material on ABC Online; The CRE also adjudicated on three disputes and reviews of and improvements to between Audience and Consumer Affairs procedures. All upheld complaints are and ABC Divisions over responses to reported in detail to the ABC Board. complaints. On two of the matters, the CRE found in favour of Audience and Consumer In January 2003, the ABC began publication Affairs, leading to the initial complaints of a quarterly Public Report on Audience being upheld, while on the third, the CRE Comments and Complaints, in order to found in favour of the Division and the increase transparency and accountability complaint was not upheld. A summary of of the ABC complaints process. The report the CRE’s findings is published quarterly provides summaries of audience contacts on the ABC website. and upheld program complaints finalised by ABC Audience and Consumer Affairs and the ABC’s Complaints Review Executive. It is published on the ABC website. 50 Annual Report 2004–05

Corporate Governance (Continued)

Independent Complaints In the period 1 July 2004 to 30 June 2005, Review Panel the ICRP received 17 requests to review Established by the ABC Board in 1991, complaints of which seven were accepted the Independent Complaints Review for review. The 10 requests not accepted Panel (ICRP) is an independent body which for review either did not constitute serious reviews complaints about ABC content at cases of factual inaccuracy, bias, lack of no cost to the complainant. Members of the balance or unfair treatment, or involved ICRP are appointed for their knowledge of, matters outside of the ICRP’s area of or experience in, journalistic ethics and responsibility. practice, media operations, program production, complaints handling or The ICRP partially upheld three complaints, other review processes. did not uphold two and is still investigating the remaining two matters. In May 2005, the ABC Board approved a number of reforms in relation to the Appendix 18 (page 189) provides details Independent Complaints Review Panel of matters reviewed by the ICRP and the (ICRP). These involved new appointment decisions of the Panel. and administrative procedures to strengthen the Panel’s role as an independent body Australian Broadcasting Authority and to make its administrative functions Until 30 June 2005, members of the public more efficient. The reforms took effect from who complained to the ABC about matters 1 June 2005 and included: nomination of covered by the Corporation’s Code of Practice potential Panel members by independent and who were dissatisfied with the ABC’s bodies; the addition of a term of review to response or the handling of their complaint include complaints alleging serious and could seek review from the Australian specific cases of factual inaccuracy; the Broadcasting Authority (ABA). From 1 July express extension of the Panel’s role to 2005, this role will be transferred to the include complaints made about material Australian Communications and Media published on ABC Online; and removal Authority. of the need for complainants to sign a waiver forgoing the right to pursue legal During 2004–05, the ABA finalised its remedies, prior to the ICRP accepting a investigations into 19 complaints about the complaint for review. ABC (the same number as in 2003–04). In 12 of these cases, the ABA’s investigation As of 1 June 2005, the members of the concluded that there had been no breach ICRP are the Hon. Michael Foster QC, of the ABC’s Code of Practice. The ABA Susan Brooks and Jane Singleton AM. concluded that the ABC had breached its Prior to 1 June 2005, the ICRP comprised Code of Practice on seven occasions, and Ted Thomas AO (Convenor), Margaret in each case was satisfied that the action Jones (Deputy Convenor), Professor the ABC had taken to remedy the situation Michael Chesterman, Bob Johnson was appropriate. and Stepan Kerkyasharian AM. 51 Annual Report 2004–05

On 1 March 2005, the ABA finalised an Transmission Failures extended investigation into complaints As the national broadcaster, the ABC is brought by a former Minister for expected by the Australian public to provide Communications, Information Technology continuous and uninterrupted radio and and the Arts about coverage of the war television services. This is particularly in Iraq by the AM radio current affairs important in light of the Corporation’s role program. The ABA investigated 43 alleged as an emergency broadcaster. In 2004–05, breaches of the ABC’s Code of Practice. It the ABC focused on minimising disruption found four breaches and concluded that, of its services throughout Australia. overall, AM was balanced. The ABA also suggested that the ABC consider more Following specific incidents relating to clearly differentiating between news and disruptions of power at transmitter sites current affairs in its Code of Practice, which owned and operated by Broadcast Australia, the Corporation undertook to consider the Managing Director led a series of during the next review of the Code. meetings with the management of Broadcast Australia. Broadcast Australia undertook to Emergency Broadcasting conduct a comprehensive audit of its ABC The ABC signed a Memorandum of transmission facilities with emergency Understanding with Emergency Management power generators. When completed, the Australia (EMA) in 2003 stating, in part, that audit will provide information for Broadcast the ABC would be ‘the primary mechanism Australia’s capital works program. for the dissemination of information to the Australian public during major disasters The Managing Directors of the ABC and and emergencies’. Broadcast Australia jointly wrote to relevant electricity distribution companies in all Following the signing of this states and territories. ABC Transmission national Memorandum of Understanding, Networks then initiated contact between the similar agreements have been signed or ABC State and Territory Directors and the partnerships put in place in every state power companies serving their respective and territory, other than New South Wales. jurisdictions. Discussions sought to establish In 2004–05, this included the ACT, Western agreed priorities for the restoration of mains Australia, Tasmania, South Australia, power to ABC studios and Broadcast Queensland and the . Australia transmitter sites. They also Negotiations were planned to commence identified options to improve the compatibility in New South Wales. of equipment settings to reduce the incidence of emergency generators being activated The importance of the ABC’s role in by momentary fluctuations or disruptions broadcast of bushfire information was to power supply. highlighted in the National Inquiry on Bushfire Mitigation and Management Risk Management conducted by the Council of Australian The ABC takes a Corporation-wide Governments (COAG), which included approach to implementing risk management. the recommendation that ‘each state In March 2003, the ABC Board was advised and territory formalise non-exclusive of the ABC’s top eleven risks in relation to agreements with the [ABC] as the official the operational controls in place to manage emergency broadcaster, providing an them. At the time, the majority of those assured standing arrangement.’ risks were assessed at being low-to-medium. 52 Annual Report 2004–05

Corporate Governance (Continued)

The two risks assessed as being medium- Further information is provided in to-high—Business Continuity Planning Appendix 12 (page 183). and Occupational Health and Safety (OH&S) —continue to have that status. The ABC’s Internal Audit Activities top risks will be reviewed again in 2005–06 Review of ABC Audit Processes in line with a three-year cycle. As part of the Board Audit and Risk Committee’s ongoing review of ABC audit During 2004–05, the following initiatives processes, it engaged KPMG to review the were implemented to help reduce risks internal audit processes and procedures. associated with OH&S and Business The review found that ABC Group Audit was Continuity Planning: well positioned within the ABC, efficient • The establishment of a National OH&S and appropriately staffed. It operated with Management Group and an OH&S a focused, risk-based approach towards improvement plan; the performance of internal audits. KPMG • The development and implementation found that the ABC’s approach to fraud of a risk awareness and online incident awareness was in line with current better reporting system, ABC WorkSafe; and practice. It also found that the ABC’s broad • The continuing development of an ABC anti-fraud programs and controls were Business Continuity Plan. above average when compared to similarly- sized organisations. In many cases, they The Comcover 2005 Risk Management approached better practice standards. Benchmarking Survey of 135 government and other organisations rated the ABC’s Internal Reviews risk management practices at the highest ABC Group Audit commenced a total of level of ‘continuously improving’. This places 51 scheduled reviews of the Corporation’s the ABC in the top 2% of Commonwealth activities during 2004–05. These included agencies. The ABC recorded improvement seven Information Technology audits and 44 in six categories, including Risk Management comprehensive compliance, operational and Frameworks, Insurance Risk Sharing, consulting reviews. In addition, 15 random Communication, Training and Awareness audits were conducted at ABC Shops and and Resources. Regional Radio Stations. These internal audit reviews examined internal controls The annual workers’ compensation premium, and compliance with ABC policies and payable for 2004–05, totalled $2 537 000. procedures, efficiency, effectiveness and This constituted a 28% increase on 2003–04, the value for money provided through attributable to an increase in average claim the activities concerned. costs since 2002–03. The ABC’s 2004–05 premium rate of 0.8% of its total salary Fraud Control and Awareness costs compares with a Commonwealth During the year, the ABC became involved average of 1.67% of salary costs. As a in a significant matter involving allegations result of lower claims costs than originally of fraud by an employee. This matter forecast, the ABC received a $392 000 remains the subject of legal proceedings. rebate from Comcare. 53 Annual Report 2004–05

As at 30 June 2005, the Fraud Control Annual Report Awards Plan 2003–05 was in the process of being The ABC’s Corporate Plan and Annual updated to ensure that the ABC continued Report constitute the two principal to satisfy the requirements of the governance documents through which Commonwealth Fraud Control Guidelines. the Board acquits its statutory obligations. This exercise also serves as a fraud awareness campaign across the Corporation. The 2003–04 Annual Report, like the preceding year’s report, received a Gold Fraud awareness continued to be highlighted Award in the 2005 Australasian Reporting within the ABC, with presentations to staff Awards. This recognised the ABC’s ‘overall across the Corporation during 2004–05. excellence in reporting’. The award citation described the ABC Annual Report as ‘well Further details of the ABC’s internal audit constructed, interesting and informative’ activities are in Appendix 5 (page 179). and noted that ‘outstanding areas included the corporate plan, corporate governance Environmentally and divisional reporting’. Sustainable Development The ABC continued to ensure its compliance International Benchmarking with the requirements of section 516A of In recent years, the ABC has continued to the Environment Protection and Biodiversity participate in a performance benchmarking Conservation Act 1999 (see Appendix 16, process as a member of an International page 186). Benchmarking Group of eight national public broadcasters. The Corporation Australian Equivalents is currently unable to provide updated of International Financial comparative information due to delays in Reporting Standards receiving some participants data by the The ABC is in the process of changing due dates. The resulting gaps in data have its accounting polices and financial temporarily affected the overall effectiveness reporting from current Australian and comparability of the benchmarks. Accounting Standards (AGAAP) to Correspondence with the majority of Australian Equivalents of International participants indicates a strong intention Financial Reporting Standards (AEIFRS). to remain involved in the process, as well The new standards will be applicable for as to review and refine the benchmarks and the financial year ending 30 June 2006. expand the group's membership. The ABC will continue to coordinate this initiative In preparation for the introduction of and is working on strategies to update AEIFRS, the ABC is required to make the benchmarks. specific disclosures in its 2004–05 financial statements. These disclosures appear in Note 2 of the Financial Statements (page 148). 54 Annual Report 2004–05 Financial Summary

Completion of Application of Funds Annual Financial Statements The chart ‘Split Actual Expenditure 2004–05’ The audit of the Corporation’s Annual broadly represents the ABC’s application Accounts was completed within a Government of funds by function for the 2004–05 timetable, in line with better practice. The financial year. Australian National Audit Office (ANAO) delivered an unqualified audit opinion The Year Ahead and the ABC’s Audit and Risk Committee Appropriation endorsed the signing of the financial The 2005–06 Federal Budget provided for statements on 28 July 2005. base funding to be maintained, and provided for the continuation of National Interest Financial Outcome 2004–05 Initiative Funding until the end of 2007–08. Consistent with previous years, the ABC The ABC’s comparative funding for the operated within its total sources of funds 2005–06 financial year is: and Government appropriations for the 2004–05 financial year. $m Total Appropriation Sources of Funds 2004–05 per Outcomes 1, 2 and 3 773.5 The ABC was appropriated $756.111m Less Analog Transmission Funding –80.2 in the May 2004 Federal Budget. In the Less Digital Transmission Funding –68.3 Commonwealth Budget Additional Estimates Total Comparative process in December 2004, the ABC was Appropriation Funds 625.0 provided additional Outcome 3 digital funding, bringing the total appropriation for 2004–05 to $757.532m. In addition Budget Strategy to funding for the ABC’s core activities, With no new external sources of ongoing Government appropriation for 2004–05 budget funds, the 2005–06 Budget Strategy included an additional $4.2m to the ABC’s is aimed at maintaining current activities. indexing funding base to assist in meeting the increasing costs of purchasing both The Corporation will consolidate its work in domestic and international programming. 2004–05 toward finalisation of an Integrated Capital Strategy focusing on developing The ABC also received some $201.712m responses to increasing pressure on the from other sources, including ABC Corporation’s capital budgets. Enterprises. Triennial Funding Submission The chart ‘ABC Source of Funds’ depicts The Corporation’s current funding triennium ABC’s budgeted funds for the various will end on 30 June 2006. A new Triennial categories against actual sources for Funding Submission, for the 2006–09 period, 2004–05 and its budgeted sources is due to be delivered to the Government for 2005–06. by October 2005 for consideration as part of the 2006 Federal Budget process. The Submission will again reflect the 55 Annual Report 2004–05

ABC’s corporate strategy since the 1990s, anticipating the inevitable transformation of Australia’s media environment as audiences respond to a growing choice of digital services. It will also address a number of significant operational and capital issues.

Two major projects are intended to inform the Triennial Funding process. The first is a Funding Adequacy and Efficiency Review to be commissioned by the Department of Split Actual Expenditure 2004–05 Communications, Information Technology and the Arts, in cooperation with the ABC and the Department of Finance and

Administration. The Review will provide Radio Broadcast advice as to the adequacy of the ABC’s (including News Other 17% and Current Affairs) funding to undertake its legislative (Charter) 18% New Media functions and the efficiency of the ABC’s use 2% of this funding. The second project is the es 8% Integrated Capital Strategy initiative being Support Servic Acquisitions undertaken by the ABC to evaluate its (including ABC2) Transmission 21% 6% requirements for property and technology infrastructure over the coming decade. Television Programs Produced (including News, Current Affairs Comparative Appropriation and Captioning) 28% The 2005–06 operational funds of $625m represents a decrease in real funding of $264.5m or 29.7% since 1985–86 as depicted in the chart ‘ABC Operational Appropriation’.

ABC Source of Funds Appropriation by Output 2005–06

Tra Digital Digital Analog

Transmission General nsmission Appropriation Government Funding New Media

Analog

Transmissions 8% 10% 2004–05 Budget 2% Digital Transmissions 2004–05 Actual Radio 28% Asia Pacific 2005–06 Budget Revenue

Enterprises Independent Revenue Television 51% Other Revenue

0 100 200 300 400 500 600 700 $ Millions 56 Annual Report 2004–05 Five Year Analysis

2005 2004 2003 2002 2001 ABC Operating $’000 $’000 $’000 $’000 $’000 Cost of Services 926 161 858 728 822 856 781 147 720 938 Operating Revenue 201 712 153 712 146 299 148 334 113 573 Net Cost of Services (a) 724 449 705 016 676 557 632 813 607 365 Revenue from Government 757 532 726 895 733 469 710 565 622 921

2005 2004 2003 2002 Recast ‘2001 Financial Position $’000 $’000 $’000 $’000 $’000 Current Assets 209 683 197 602 214 501 184 949 161 763 Non-Current Assets 816 191 824 884 744 564 694 941 653 796 Total Assets 1 025 874 1 022 486 959 065 879 890 815 559 Current Liabilities 115 635 125 672 209 282 178 751 126 334 Non-Current Liabilities 194 712 208 599 218 673 208 607 229 604 Total Liabilities 310 347 334 271 427 955 387 358 355 938 Total Equity 715 527 688 215 531 110 492 532 459 621

Ratios Current Ratio (b) 1.81 1.57 1.02 1.03 1.28 Equity (c) 70% 67% 55% 56% 56%

(a) Net cost of services is cost of services less operating revenue.

(b) Current assets divided by current liabilities.

(c) Equity as a percentage of total assets.

ABC Operational Appropriation Includes capital indexed at 2004–05 levels (December 2004 6 months CPI index); 29.7% reduction from 1985–86 to 2005–06.

$889 900

850

800

750

700

650 $625

600

550

500 90–91 00–01 02–03 93–94 92–93 87–88 03–04 94–95 95–96 97–98 98–99 99–00 05–06 85–86 01–02 96–97 04–05 86–87 88–89 89–90 91–92

Years 57 Annual Report 2004–05 ABC Divisional Structure

ABC BOARD

ABC Advisory Council Board Secretariat

Managing Director Russell Balding

Chief of Staff Gary Linnane

Director Director Director Strategy Director ABC Chief Operating Head of Radio Television and Communications Enterprises Officer Group Audit Sue Howard Sandra Levy Geoffrey Crawford Robyn Watts David Pendleton Aziz Dindar

Director Director State and Territory Director Director Production News New Media Directors Human Resources and Current and Digital WA and State and Resources David Cruttenden (a) Affairs Services Territory Directors’ Colin Palmer John Cameron Lynley Marshall Rep - Geoff Duncan Vic - Murray Green Qld - Chris Wordsworth Director Director Technology SA - Sandra Winter-Dewhirst Business and Distribution Head Chief Tas - Rob Batten Services Colin Knowles of Radio Executive NT - Mark Bowling Trevor Burgess Australia ABC Asia ACT - Elizabeth McGrath Jean-Gabriel Pacific Manguy Ian Carroll

Members of the ABC Executive

Note The Board Secretariat provides administrative support to the Board.