A monster threatens UK broadcasting? It's Sky, not the BBC

By focusing on pruning the BBC, the media commentariat are losing sight of a greater danger to broadcasting in the UK, Sky.
Justin Lewis
16 April 2010

Most discussions about the state of British broadcasting focus on the BBC. The BBC is too big, we hear. It’s a broadcasting behemoth that kills competition. And yet the BBC is smaller than Sky. Its annual revenue is lower, and it costs audiences considerably less (the licence fee is cheaper than Sky’s most basic package, and four times cheaper if you want to watch Sky’s sports channels). And while the BBC is a British institution, Sky is part of a huge media empire with extensive holdings worldwide.

Of course, like the Tardis in the BBC flagship Dr Who, Sky can look smaller than it is. It has a much smaller television audience than the BBC, unlike the BBC it runs none of the most popular radio stations, and it provides nothing to compare with the BBC’s online offerings. It makes far fewer new programmes than the BBC – especially at the quality end - and relies heavily on repeats and cheap imports. To complain about the BBC’s dominance is to beg the question: how is the BBC able to achieve so much more than Sky by charging so much less? And without showing a single commercial?

In short, the BBC is more conspicuous than Sky because, by any reckoning, it offers much better value for money. Rather than trying to rein back the BBC – which is the dominant issue amongst the media commentariat – we should be asking a very different set of questions. First, why is our dominant commercial provider such poor value for money? Second, is Sky good for British broadcasting?

There is no doubt that Sky’s position in the commercial sector actively discourages competition. There are few companies big enough to break its stranglehold over sports rights. Its ownership of one of the main viewing platforms gives it a significant competitive advantage. And its other media holdings provide it with cross-promotional opportunities that are well beyond the scope of smaller media companies.

So why is Sky spared from scrutiny, while so much is heaped upon our most successful broadcaster? The answer is straightforwardly political. The BBC fears government, since it depends upon government for its licence fee settlement. Attacking the BBC is good politics – the risk averse BBC is more likely to capitulate than fight back. And its public position means that it airs criticism of itself almost to the point of self-flagellation. A commercial company would never countenance such open self-critical debate.

With Sky, the boot is on the other foot. The government fears Murdoch’s media empire: its ownership of four leading national newspapers gives it political clout. To question Murdoch is a political risk, with both Labour and the Conservatives competing to court his favours.  As a private company it has no obligation – or inclination – to be self-critical, while it is free to attack the BBC at every opportunity. And when it comes to bashing the BBC, other commercial players – who would dearly love some of the BBC’s audience – will join in.

This political context distorts public debate about broadcasting policy. The BBC is regularly interrogated, while Sky gets a free ride. Some would say that this is fair enough: the BBC’s public funding makes it subject to criticism in a way that Sky is not. But this is flimsy logic: the business world in general is regulated in the public interest. British broadcasting has a long and distinguished record of obliging commercial companies to do more than simply make money. In short, we can, and should, hold commercial broadcasters to account. That’s why Sky News is required to be impartial while Fox – in the more lightly regulated US – is not.

This is not to say that Sky doesn’t do some things well. But it should also be much more accountable. There are all sorts of questions that we should be asking of it - not least why it costs so much and provides so little. The sheer scale of its media holdings - in the UK alone - is alarming, both because of the market power it brings and because the media so important to our democracy. And while the BBC is structurally committed to political impartiality, most of Murdoch’s news outlets are emphatically not. Even though the overwhelming majority of the British public want broadcast news to remain impartial, it is no secret that Murdoch would like to turn Sky News into Fox News.

Those running sport have done very well out of Sky – who have paid over the market rate for sports rights to promote Sky’s brand – but the benefits for sport fans is much more questionable. Sky has pushed up the price for watching sport, taking major sporting events away from viewers who are not prepared to pay the high price of its sports packages. And the fact that media income has outstripped gate receipts has driven a wedge between fans and teams.

For all the talk of the BBC’s largesse, if we compare it to Sky we would be forced to conclude that in broadcasting, the public sector simply delivers more than the private sector. And it achieves excellence that may simply be beyond the scope of commercial players. Would the private sector be capable of producing a website to match the BBC’s? The US experience would suggest not.

We know what the BBC brings to the quality and range of British broadcasting: it’s time we started asking tough questions about what its main commercial rival is doing to earn its privileged place in our media firmament.

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