The ABC should be slashed. But not like that.

The Industry Minister stands up to make his announcement:

The federal government is going to set up a car making company, and give cars away for free!

This would be a highly controversial policy. Consumers would be pretty excited, car-makers would be furious, and economists would probably mutter darkly. It doesn’t seem like a good idea.

But there is another struggling industry where the government supports a competitor that gives away product for free.


As Fairfax and Crikey and all the rest struggle mightily against falling revenues, the ABC and SBS continue to send reporters to news conferences, run documentaries, and blast pop music across the radio spectrum.

This is also controversial, but mainly among News Limited journalists. They’ve cried wolf on government policy so many times they have lost all credibility. But that obscures the few times they ‘re right, including now.

There are important economic differences between cars and news. Unlike cars, News has positive externalities and economies of scale. Both of these mean that news may be under-delivered by the market.

But notice I say news. I do not argue media in general has positive externalities.

There are heaps of things the ABC does that should stop, immediately. If it continues, it wastes its own money, (i.e. our money) and also hurts the profitability to other media outlets.

When the ABC broadcasts the Socceroos match versus Japan, as it did on Tuesday night, that’s not so different to Channel 7 broadcasting the AFL. There is no market failure here to correct. The ABC ought not touch it.

If we look at this evening’s prime time, we can see that the ABC is pumping out a range of programs, including some for which there is no justification and others for which there is a burning burning need.

ABC schedule


If I had to rank the top five programs on the list, that the ABC should be investing more and more in, I’d nominate

  1. 7.30. Because democracy demands our society be examined and our politicians be held to account, and the market is more interested in entertainment.
  2. ABC news. Because we need to know what’s going on in the world in order to understand it, and the free-market stations are more about pleasing us than informing us.
  3. Fireman Sam. Developmentally appropriate kids programming without huge commercial tie-ins is always going to be a market shortfall.
  4. Catalyst. Science programming on the free-to-airs consists primarily of cheetahs running down niboks and tearing at their flesh. Nice to have, but not all the time.
  5. Lateline. You need all the opportunities you can get to grill politicians in front of an audience.

If I had to rank the bottom five:

  1. The Tonight Show starring Jimmy Fallon. This show is so excellent. Just yesterday I watched Fallon impersonate Bono. It was incredible. Dude has TALENT.  Not a market failure.
  2. Peep show. How funny is David Mitchell? I laugh til my head falls off when I watch this. Not a market failure.
  3. The Drum. Is there  a shortage of opinion on TV and radio and the internet? Holy Mother of God, No! Not a market failure.
  4. QI. Is Stephen Fry the most popular man in the world? Probably. Not a market failure.
  5. Upper Middle Bogan. The commercial stations have very little comedy except Hamish and Andy, but the ABC tries to more than make up for it, with The Moodys, Chris Lilley, The Chaser, Micallef, Please Like Me, It’s a Date, and Soulmates. Whew. Probably, they are more than meeting demand.

Is some of this just cheaply bought-filler? Maybe. But ABC 3 shows us there is something cheaper than filler. And that’s closing down for the night. The ABC should consider doing this.

Now, if it is done strategically, buying a popular program to run into something worthy could boost the ratings of the worthy show. For example, Spicks and Specks is hilarious and fun and very popular. But what follows it is not four corners, it’s the Tonight Show with Jimmy Fallon.

The ABC should probably trim down the wildly expansive website and chuck out a bunch of radio stations too. Do we need Double J? It is my favourite station, incidentally, but I don’t ask the government to provide me with the hit songs of my youth. I could get a Pandora or a Spotify account instead. Ditto for Classic FM.

What the ABC should do is slice away all it sports coverage, a lot of its light entertainment, a bunch of music stations and do as much more hard news as it can. It is not important to fill three TV stations, dozens of radio stations and a really enormous website, if you’re filling it with fluff. I

It’s important to turn over the stones that the free market will leave untouched. The NSW ICAC shows there are huge numbers of extremely illegal and controversial things happening every single day. Good reporters could hunt these issues down before it’s too late.

The money that the ABC would save should be spent like this

  • Give Leigh Sales an hour to fill every night.
  • Give Lateline another four reporters.
  • Put Four Corners on two nights a week.
  • Resource Media Watch properly.

So I’m all for slashing the ABC where it treads on commercial toes unnecessarily, but only in order to build it up where those commercial toes fear to tread.

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Thomas the Think Engine is the blog of a trained economist. It comes to you from Melbourne Australia.

4 thoughts on “The ABC should be slashed. But not like that.”

  1. You are wrong. Shows like Peep show and even Top Gear run on ABC and SBS because the commercial stations don’t want to run them. A brutally honest assessment of TV production would acknowledge that 99% of commercial TV is mind-damaging drivel that makes people fat and stupid.

    Liked by 1 person

  2. I agree with Michael. Even the biggest detractors of the ABC (looking at you Chris MItchell) watch Aunty regularly. TTTE makes an (IMO false) assumption that there’s no market failure in commercial television which is not supported by the evidence of the ABC’s popularity.


    1. Now I think about it, there is a market failure in commercial TV. It doesn’t conform to perfectly competitive market standards because there is not free entry and exit. Government grants licenses to the spectrum.
      But I suspect that should be solved by coming up with a good way to put more channels on air. Not by having the ABC broadcast BBC shows that appeal to bloggers and their ken.
      There is a certain point at which the ABC has gone too far towards seeking ratings. I guess my argument is it might already have passed that point.


  3. It’s your economists a priori, article of faith (it needs emphasising with a tautology) that markets can and should be created to solve everything – if only the guvmint would get it’s greasy corrupt hands out of their – what legitimacy do they have against the democracy of the market?? If there ever was a simple example of market failure it is TV media and we now have enough evidence – years of it to show that commercial TV is regularly plumbing new depths. Don’t be afraid to take the relativity blinkers off and admit that shows about where to find off menu junk food in LA and shows like Inkmasters are not aberrations but logical conclusions. Example two is ABC RN


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