ABC shop closures make business sense: but where will its digital strategy lead?

While the ABC’s announcement of a “phased exit” from its portfolio of 50 ABC Shop properties is an unfortunate outcome for the 300 or so employees, it’s an unsurprising strategic business move.

While some were blaming the loss of $254 million government funding over the next three years - including more vocal ABC supporters complaining on Twitter about the “killing” of their ABC - the move should be seen as an extension of the ABC’s digital strategy that aligns with the shift in media consumer habits.

Shifting consumer shopping habits away from bricks and mortar shops and the structural move to digital consumption has created a downturn in CD, DVD and book sales for ABC Commercial which has been a drag on revenue - its most recent commercial contribution to the ABC net revenue was a lowly $1.5 million.

Also, there is no legislative requirement for the ABC to operate in this market, which brings into question the public service media’s role of universality. This refers to the ABC’s ability to provide its Australian audience with access to goods or services, regardless of their economic or geographic circumstances.

The ABC will maintain an ABC online retail space, ABC Shop and are working with major retailers to ensure their products are still available for purchase across the country.

The ABC’s digital strategy

In terms of its editorial content, there has been a steady ABC progression to operate in digital spaces from its early online ABC communities and forums. Two examples of the ABC incorporating the audience into the production process include the now defunct project ABC Pool, and its continuing sister project ABC Open.

The ABC’s flagship of digital audience participation remains with its weekly news and current affairs program Q&A that incorporates audience discussion and engagement with current affairs. The ABC also provides news and services across digital platforms such as The Drum and ABC News 24 amongst others.

Recently, the ABC has experimented with content as digital only through its scripted television comedy series Fresh Blood, which delivered content while continuing to build storytelling capacity amongst emerging Australian comedy talent.

The Chairman of the ABC Board of Directors, James Spigelman said in the 2013-16 Strategic Plan “Audiences are making individual decisions on what they want to consume, when and on what devices”.

This comment indicates the ABC’s commitment to a future digital strategy that not only uses technology for content production and consumption, but also for how it distributes material objects. For ABC Commercial, this means the media organisation are providing enabling technologies for its audience to consume content where and when they want, while saving on the expense of 50 national retail spaces.

Further, one recommendation from last year’s efficiency review suggests the Australian public should pay to stream their ABC content to compensate for declining media sales.

However the success of iView is in part because it is free to access and shores up the claim the ABC plays a distinctive innovation role, where its R&D is shared with the media sector more broadly. Should the Australian public have to pay for the ABC’s innovation, its distinctive innovation rate would significantly decrease.

Debunking claims against non-universality

As with most changes to the ABC, the announced closures elicited a negative public reaction. Changes like these are often seen as an attack on Australian society.

However, these sorts of services are simply moving to an online environment: one that is available to all Australians regardless of their location and economic circumstances. Beyond the digital strategy argument, there is no requirement for the ABC to operate in the retail space as part of its legislated public service remit, or the ABC Charter. It has most likely always been an “above and beyond” gesture from Aunty.

This concept of “universality” is the core public service media value that retail servicing could belong to, which is defined as an ABC that is “available to all Australians regardless of geographic or economic circumstances, and present on all delivery platforms”.

In the recent Australian Communication and Media Authority (ACMA) Communications report, it notes that 92% of Australians used the internet in the six months to May 2014. In the three months to June 2014, 62% of Australians made an online purchase, and of those making purchases, 44% made an entertainment and leisure purchase in the four weeks to June 2014.

This data indicates the shifting approach of Australians towards their media consumption habits, and the increasing penetration rates of the internet for Australian citizens.

So while the ABC will continue to cop flak for its decision to close the ABC retail stores, this move aligns the corporation with consumer trends, the ABC’s broader digital strategy, and is a forward thinking strategic move to provide universal ABC services beyond its production and procurement of content alone.

Jonathon Hutchinson does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond the academic appointment above.