The Government’s review of the BBC’s funding and purpose has ruffled a lot of feathers and predictably prompted accusations that this is the latest sign of the Conservatives being beholden to big business – or for those on the left of British politics, “Murdoch” – and willing to shut down the BBC at their request.
The problem with this knee-jerk response is that much of it is ill-informed and fails to understand how the broadcasting and media sectors work.
A lot of the programmes audiences think of as being BBC shows are in fact made by outside production companies which own all the intellectual property and distribution rights to them – though they may license or exploit the second of these through the BBC’s commercial division, BBC Worldwide.
These production companies often used to be small ventures set up by former ITV and BBC producers who took advantage of the BBC’s obligation to buy some shows, and Channel 4’s obligation to buy all of its shows, from outside makers and set up their own companies.
These companies know that the Licence Fee and the BBC play a big part in their own commercial success.
When they carried out their most recent investigation into the BBC’s future, MPs on the House of Commons Culture Committee were warned that budget pressures at the corporation risked damaging the quality of content which audiences get to see.
One witness told the Committee: “From our experience it is fair to say that cost cutting or salami slicing of BBC drama budgets over several years sees them starting to be uncompetitive both domestically and internationally.
“This is particularly pertinent when producing to a 59’ non-commercial hour, desirable for audiences but 25% more than commercial delivery. Any further reduction could create a two-tiered commissioning market impacting competition and in turn the quality and diversity of output emerging from the UK.”
The committee were also told that many shows seen by BBC Two audiences “would not have been green lit by any other channel” and that “the BBC should maintain its ability to adequately fund the widest range of British dramas serving the diverse needs of the British audience.”
The same witness also spoke of the importance of fairly routine shows such as “EastEnders, Doctors, Casualty and Holby City” which they said not only entertained audiences but served as “an essential training ground for new talent and technicians to enter the market and learn their craft.
“Since ITV stopped producing The Bill and Channel 4, Brookside, these BBC series are vital in providing the bedrock of training and development for the next generation of great British storytellers.”
Everything I’ve quoted above came not from a BBC executive but from the Chief Operating Officer at Kudos, the makers of Spooks, Humans and Broadchurch, and part of a production group 50% owned by 21st Century Fox. Or, if you’re an ardent leftie, “Murdoch”.
Shed Media, makers of New Tricks, Waterloo Road and Who Do You Think You Are? and a part of the Warner Bros. TV and film empire, told the committee that: “the BBC holds a key and essential role within the TV landscape, for viewers in the domestic and international marketplace and within the creative industry.
“Many of the most successful television exports were initiated on the BBC and many successful UK production companies hold the BBC key to their achievements.
“As such we are supporters of the BBC and the license fee, removing or reducing the licensee fee could have negative impacts for the broadcasting sector in the UK – and for UK creative industries globally.”
Shed’s submission is clear that, rather than scale back the BBC’s output or focus it on ‘worthy’ shows which might reduce competition with other UK broadcasters, the corporation should continue to make and commission shows which can be sold abroad.
It said: “As we see it the BBC doesn’t currently fully fund many of the programmes it commissions from external producers at the outset. Across nearly all the genres and channels external production companies – such as Shed Media Group – are contributing towards the total programme budget for BBC productions.
“The BBC allows the production company to recoup this deficit from international sales of the finished programmes or via international sales of the format, however there is no guarantee that the production company will recoup the money that they have invested into the programme.
“In particular it is very likely that a deficit will not be fully recouped on titles which have a limited international appeal or where the deficit is very large.
“Therefore there may be less incentive to pitch or produce programming that cannot be easily sold into the international marketplace to the BBC. This include children’s programming, small run dramas, and productions with significant amounts of archive footage, but may also include more mainstream formats and brand – since there is not necessarily a correlation between critical reception, audience viewing figures and international sales or format potential.
“The BBC’s ongoing ability to fully fund programming is therefore particularly vital to ensure that a variety of production companies large and small continue to pitch and produce all types of programming into the BBC.”
Many of these sentiments are shared by the entire independent production sector which, across all genres of programming, received more than £500m from the BBC in 2012. This sum, which was £70m more than in the previous year, will continue to grow as the BBC increases the number of shows it buys in from outside firms.
And according to trade association PACT which represents the sector: “BBC Commissions are important for independent producers as they account for 33% of all UK commissions, making the BBC the biggest buyer of content made by independent producers in the UK.”
So the idea that ‘big business’ uniformly wants the BBC scaled back or refocused into a wall-to-wall broadcaster of dry, informative programming which is never allowed to seek high viewing figures is simply wrong.
Even ITV – the chief beneficiary of any such move – says the BBC “must deliver services that appeal to licence fee payers,” though it adds output should include “services and programme genres that the market will not deliver, as well as delivering all its services in a way that is distinctive from offerings provided by the market.”
That has to be right – the BBC should be a space where programmes which are commercially unviable get made and new ideas tested alongside shows which will appeal to large audiences.
What the BBC’s commercial rivals want is not a pared back competitor but one which competes through innovation rather than simply looking for copycat formats such as The Voice which duplicates what’s already available on other channels.
Channel 4 and ITV say competition through innovation and bold commissioning has the effect of boosting the quality of their own output as they seek to match audiences expectations often set by the BBC. And both, in case you were wondering, think this is a good thing.
So what about Sky? What does the company many of the BBC’s most ardent supporters believe is behind the review really think should happen to the corporation?
David Wheeldon, Sky’s Director of Public Policy and Public Affairs, told MPs: “the BBC does fulfil an important role in the creative industries, and we recognise that.
“I think within the debate about the scale and the scope of the BBC, I think we need to understand properly what alternative providers are able to provide and how the BBC can complement them. “
He added: “We don’t sit there and think, “What is the BBC doing that we can’t do?” BSkyB’s approach is always to look at the market, look at what is under-served and seek to serve it better or to serve it differently. That is the way we think.
“I don’t think we necessarily have a view on specifics about what the BBC should and should not be doing. In almost every area that the BBC is active, we are also competing with it. There will be instances where what the BBC does has an impact on what commercial providers like us can do and I suspect there will be instances where that is less evident.
“I think the most important thing is that there is a framework in place that is able to properly assess that and to understand what the impact is on the market and on the viewer.”
Like ITV and the BBC’s decision to ape the X-Factor with The Voice, Wheeldon said Sky had some issues with the way the BBC has in the past decided to give away similar content to what the pay-TV giant was seeking to monetise.
“It is undoubtedly the case that what the BBC does has an impact on commercial provision. For example, look at 24-hour news where Sky was the first company to launch a 24-hour news channel in the UK.
“The BBC then followed suit, and when the BBC does that and starts giving something away for free that you were previously charging for it makes the business model very difficult. That is just one example. There is no doubt that there are things that the BBC does that do have a direct impact.”
It’s not unreasonable for a company which has to persuade subscribers and advertisers to pay for its services to have concerns when a broadcaster with a guaranteed income duplicates existing services.
And yet, despite these annoyances and concerns, both ITV and Sky work in partnership with the BBC.
The two terrestrial broadcasters recently signed a joint-deal which will keep the Six Nations on free-to-air TV, an achievement ITV probably couldn’t have managed without the BBC chipping in towards the costs.
And Sky actually wants the BBC freer to work with pay-TV providers such as itself to shape services for its customers, rather than having to adopt a platform neutral approach.
Wheeldon told MPs: “I would argue that going forwards the opportunity for the BBC to work more closely with platform providers like ourselves, to better serve the licence fee payer, is one that they should grasp.
“For example, we would like to be able to distribute the BBC’s content more widely on our over-the-top services because, again, our customers are all licence fee payers and we would hope that we will be able to negotiate with the BBC to do that because it is a good way for them to serve their licence fee payers.”
And asked about Sky’s thoughts on having to bid against the BBC with its deep pockets, Wheeldon said this: “it is not totally straightforward of us bidding against the BBC. If you look at the Formula 1 deal, that was one where we came to an arrangement with the BBC, and I think helped them out in some way because they were finding that that was an expensive right to hold.
“I do think if we have one fundamental line in the sand it is that the BBC should not be buying US programming. It seems to us that the market whether they are free-to-air programmers or subscription channels—like the ones that we and [commercial broadcasters] operate—are more than capable of serving the market in that respect and I do find it odd.
“Much as I like watching six back-to-back episodes of American Dad and Family Guy on BBC Three, it always strikes me as a bit odd that it is there.”
And when asked if the BBC should move to a subscription model Wheeldon, after saying Sky has no position on how its rival should be funded, warned that if the broadcaster was shifted to a subscription “you would be challenging it to do things that, frankly, it is not currently equipped to do operating in that commercial environment.”
“Marketing, managing customer relationships and ongoing subscription relationships, managing customer churn—all things that I do not think the BBC has any experience of—putting it firmly into a commercial environment. You would unavoidably change the nature of the organisation.”
Even when invited to say the BBC was wasting £100m in overly high costs for collecting the Licence Fee, Wheeldon said the sum was “nothing compared to what they would likely have to spend on marketing in order to retain their subscribers.”
He added: “I don’t think you can get away from the fact that, once you introduce a commercial requirement into the organisation, you will change it fundamentally.
“Also, from our point of view, competing with the BBC, whether it is licence fee funded or whatever model, for us—and one of the reasons we have always been opposed to top slicing—is that understanding what the impact is on the market is much easier and better done when it is relatively clean, when you can see what the money is being spent on, and when you understand what the purposes of the organisation that is receiving that money are.
“The moment you start introducing hybrid models and spreading the money more thinly, for other purposes or to other organisation, frankly you lose that ability to understand what the overall impact is likely to be.”
And on the BBC sharing the Licence Fee with other broadcasters, potentially including Sky, he said: “I think there is a big danger to the top slicing, which is essentially what that is. That is, you lose that accountability, you lose that transparency and you lose the ability to understand what the impact on the market is.
“It potentially leads to much worse public outcomes, because you are increasing the distortions right across the marketplace.
“It is much better to keep the funding in one place for one organisation to use that is governed in a transparent way and is accountable to its licence fee payers or whoever is funding it.”
These are far more thoughtful, moderate and less anti-BBC interventions and observations than most of the past week’s news coverage and discussion has even hinted at.
The truth is that the BBC’s commercial rivals and its suppliers believe it plays an important part in the UK’s wider media sector but they all want it to provide better quality and distinctive content, not ape existing services.
This isn’t hugely different from what it’s own regulator, the BBC Trust, has called for and says Licence Fee payers want: “The public expects a different, higher standard of content from the BBC. So, increasing the distinctiveness and quality of all its services is a particular priority for the Trust.”
We can’t yet be sure what the review will ultimately recommend – let alone which suggestions and reforms the Government takes forward, or even what they manage to get through Parliament.
But if they’re less than the total abolition of the BBC, the doom-laden noises many of the broadcaster’s well-paid stars and executives, plus its instinctive external supporters, have been making this week risk making even fairly dramatic and damaging changes seem moderate in comparison.
Instead of making up conspiracies between ministers and commercial rivals and waving shrouds that aren’t yet needed, the pro-BBC lobby would be better to highlight what’s actually been said and how even those who could potentially benefit from the BBC’s demise actually value its existence and what it brings to the UK.