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Karl Schembri
The PBS restructuring has left the station unable to produce its own programmes and with no alternative but to outsource productions, a confidential report drawn up by PriceWater houseCoopers (PWC) states.
Seen by MaltaToday, the audit firm’s report presented to the PBS board last February advises that the public broadcasting service’s programme schedule “should be market driven” although it acknowledges “the ethical incompatibility in some instances between selling advertising and producing current affairs programmes.”
The report also states that the PBS technology is “becoming outdated”, the “TV picture quality is poor when compared to local and foreign” stations, and that “PBS lacks basic equipment and facilities that one would expect to find within a TV and broadcasting station.”
Called “Revenue maximisation of the programme schedule” and presented to the PBS board last February, the report states that production houses producing programmes for PBS are capitalising on the PBS policy to outsource its programmes.
“In reality it (PBS) does not have the facility to produce its own programmes and has no alternative but to source local programmes from the relatively limited pool of local ‘talent’ available on selling/sharing airtime with producers,” the report states.
Proof of this is the amount of airtime dedicated to core public service programmes, supposedly the raison d’être of PBS. Only 27 per cent of such programmes were broadcast between May and December 2004, as opposed to commercial broadcasting which stood at 42 per cent.
At the same time, the station is suffering from advertising competition with the same companies producing its programmes, the report states.
“The local advertising market is in a state of ‘disarray’ given the intense competition between the three main local TV stations as well as, and possibly more importantly between the stations and their own producers/suppliers who often compete head-to-head with their ‘principal station’ in selling airtime … Selling of airtime to producers has brought about a situation whereby there is now a direct competition for selling advertising between PBS, advertising agents and production houses. This is only creating confusion in the market place and aggravating matters further.”
PBS lacks a “formalised marketing plan that sets out clearly the strategic vision for PBS over the years,” the report adds. “As a consequence many initiatives are being undertaken in an uncoordinated and haphazard manner.”
On the other hand, producers interviewed by PWC complained that for certain types of programmes the buying of airtime was not an option and instead PBS adopted a “take it or leave it” approach.
“Producers felt that these contractual conditions were limiting their creative abilities since most of their time was being spent trying to sell advertising for their programmes. Furthermore it was strongly felt that when selling airtime, PBS was engaging in unfair competition by offering discounted packages to clients that producers could not possibly match.”
The audit firm advises the PBS board to cut all sports programmes but one, including scrapping the UEFA Champions League which is costing Lm70,000 per year and generating only Lm14,000 in advertising revenue.
The league is currently “the single largest programming loss incurred by PBS,” according to the report. “Assuming that management cannot exit this contract – even at a cost – and that it cannot negotiate to reduce the advertising restrictions during the game (as on Mediaset stations), nor can it sub-contract the programme – PBS should consider not transmitting the games at all.”
Remarking that TV advertising in Malta has contracted by around 5 per cent per annum in the last three years, the report says that while PBS has a leading audience share of just under 50 per cent among national stations, it only manages to attract around Lm1.2 million, under 40 per cent of the advertising revenue spent on TV.
“Inversely, however, although Net TV has less than 20% of audience share it appears to be attracting about Lm1 million from the TV advertising pie representing a 30% slice. Clearly, therefore PBS seems to be losing out on about Lm400,000 annually to Net TV.”
Meanwhile, in a letter sent by Where’s Everybody? in reply to a story based on the same PWC report, the company insists that the fixed costs related to its two programmes, Xarabank and Bondiplus, “do not relate to the actual fixed costs incurred by particular programmes”.
To the contrary, PWC in its report said the budgeted loss between the various programmes was based on the fixed costs allocated according to transmission hours.
“From the current main programming, losses are budgeted on Xarabank, Bondiplus and Monday Drama – other major programmes all show a budgeted profit,” the report says.
Where’s Everybody? programmes Xarabank and Bondiplus top the list of the heftiest productions on PBS, together costing the station Lm294,000 for the 2005 winter schedule.
According to the report, the programmes had a fixed cost of Lm48,000 and Lm41,000 respectively for the public broadcasting company, which left the station with a Lm13,000 and Lm23,000 loss respectively, although they were also the two most programmes to generate net revenue at Lm245,000 and Lm102,000 respectively.
On the other hand, Dejjem Tieghek Becky and Tista’ Tkun Int are expected to leave the highest profits for PBS at Lm62,000 and Lm19,000 respectively.
kschembri@mediatoday.com.mt
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