Is free-to-air television really free?

Free-to-air (FTA) television channels, as the name suggests, are commonly described as free. Viewers do not pay for programs in the same way moviegoers pay to watch at the cinemas.

However, these television channels still cost a lot of money to operate and their owners in many cases want to make profits as well. To do this, the channels use various indirect ways to charge viewers for watching.

Commercial channels

Commercially owned television channels raise money largely through advertising and sponsorships. Companies pay a great deal of money to advertise to large viewing audiences. The task of the channels is to provide programs interesting to these large audiences so they can charge more for advertising.

To judge audience sizes, Australian television channels are surveyed and rated many times a year to gauge how many viewers watch each program. This information is used to set advertising prices. Rating information is freely available online from the survey agency, OZTAM .

Public channels

Public, or government-owned, television channels are also called public broadcasters. They can find it harder to raise the funds they need to cover their costs, compared to commercial channels.

These channels often have obligations to deliver certain kinds of content. They may also be required to broadcast programs for groups in the community that will not attract large audiences. For example, SBS is required to broadcast programming for small ethnic groups. This programming does not attract a large advertising price.

Many public broadcasters are also not allowed to carry commercial advertisements, or are limited in the number they can broadcast. The ABC is not allowed to broadcast commercial advertising and SBS is only allowed five minutes of advertising each hour (commercial channels broadcast around 16 minutes each hour).

Some countries pay for the costs of public broadcasting by charging a regular license fee for every television. This is used in the United Kingdom where it costs around $270 Australian dollars a year for a colour television license. The funds raised are used to pay for the BBC , the country’s public broadcaster.

Others are funded through taxes. In Australia, the Commonwealth Government owns the ABC and SBS. Most of their cost is covered by taxes paid by Australians. It is estimated that it costs under ten cents a day per Australian to operate the ABC.

This image is a 1937 photograph of the
Australian Broadcasting Commission building in Perth.

When the Australian Broadcasting Commission (ABC) was set up in 1932, license fees were used to fund its broadcasts. Later in 1956 when the ABC (now Australian Broadcasting Corporation) began television transmissions, television license fees were introduced along with radio licenses.

However in 1974, the Australian Labor Party under Prime Minister Gough Whitlam abolished all license fees. Today, the ABC and Special Broadcasting Service (SBS) are funded by government grants (made up of tax payments and other elements), up to an estimated $800 million a year.