News Corp's bid for BSkyB is a threat to British cultural expression

News Corp's bid for full ownership of BSkyB not only threatens the plurality of news provision in the UK. The expansion of Murdoch's empire would further distort the cultural environment in Britain, by increasing the dominance of American, second-hand content over domestic production
Holly Aylett
27 April 2011

In the broadcasting and media sector, it has taken years of policy, regulation and investment to achieve the diversity of expression and creative vitality for which the UK is internationally recognised. Yet all this will be put in jeopardy if the Secretary of State for Culture, Media and Sport, Jeremy Hunt, allows News Corporation’s bid for outright ownership of BSkyB in a decision expected to take place this week.

The bid raises the issue of media plurality under Section 357 of the 2003 Communications Act. This allows the Secretary of State to intervene in order to protect legitimate interests, including the public interest,  and in particular “ the plurality of persons with media enterprises”. It is estimated that News Corporation currently controls 37% of the newspaper market and since BSkyB is the largest broadcaster in this country, with a turnover of £5.9 billion against the BBC’s £4.8billion, its takeover by News Corps will create a media group of unprecedented power. Just the scale of BSkyB alone has been enough to lead some commentators to urge Government to accept concessions thus deterring the company from moving its domicile and stock market listing out of this country, risking job losses, and millions in corporation tax.

What is remarkable is that the case for pluralism is being argued both by government and informed commentators such as David Elstein, former Head of Programming at BSkyB, strictly in terms of media share and editorial independence in the provision of news services. This follows on from the limitations of Ofcom’s report which states that only reach, consumption of news and the importance attached by consumers to different sources of news, will be taken into consideration. From this limited point of view, the concessions offered by News Corps– the sale of Sky News (a loss leader for the News Corps empire) and the guaranteed financing of the service for the next ten years – might appear reasonable. In fact this narrow focus on news fails absolutely to engage with what is critically at stake - access to the diversity of cultural expression in this country.

BSkyB is the UK’s fourth largest Internet Service Provider (ISP), so its takeover by News Corporation will allow vertical integration in a media and telecoms company, and at a time when the government is under pressure, by the telecom companies, to suspend net neutrality. Up to now we have enjoyed relatively free access to content on the internet. ISPs are not allowed to act as content gatekeepers by using such practices as filtering websites, slowing download delivery of targeted competitors, or carving off bandwidth for their own services. But this could all change, and BSkyB will be influential in that change if it comes about. 

Then there is the issue of diversity of content. In financial terms, BSkyB is also the UK’s largest broadcaster. Yet its contribution to locally produced, original production is negligible. With the slight offering of Sky Arts and a few gestures towards mainstream drama, BSkB trades largely on second hand content, and most of this comes from America. This is part of a clear strategy to dominate the subscription market, recently extended through the launch of Sky Atlantic, home to US imports including Broadwalk Empire, Treme and Mad Men (recently snatched from BBC viewers in a price war with BSkyB).  As the Telegraph has pointed out, Sky’s proposition to viewers is clear: “if you want to watch the best and boldest US drama you will have to shell out for a Sky subscription and tune in to Sky Atlantic".

We would be reluctant to endorse the dominance of American material in our schools and universities, so why do we accept this lack of diversity on our screens? This is not an argument against American content but an argument for the audience’s right of access to the widest range of films and programming, including from the UK. From the start, broadcasting aimed to build dialogue across the UK through productions which reflect our history, tell our stories, and explore our experiences, experimenting with form and in a local voice. Today, in the context of a global environment, it is equally important to allow access to other people’s stories and ways of seeing, to build tolerance and understanding in our communities.

Insofar as this currently exists it is thanks to the political will to regulate for public service interests in a multi-channel environment. However, the situation is not sustainable without further action. Ofcom’s report on the communications market in 2008 reveals that 90% of original content in the UK is being produced by the BBC and other commercially funded public service providers – the regulated sector. This means when investment in programmes is already shrinking, two thirds of our audiovisual ecology, and the most profitable two thirds of which BSkyB is a large part, is making an investment of less than 10% in the whole spectrum of production, instead preferring to recycle second hand content, largely as indicated from the United States.  The economic advantage is obvious. The costs of producing this foreign programming have already been amortised, so acquisition is cheap, a fraction of that of domestically-produced programming. Consequently cable, satellite and video-on-demand channels enjoy a substantial, and unfair, competitive advantage over the public service broadcaster, and BSkyB is no exception.

One way of redressing this market imbalance would be to legislate for a financial contribution from the huge profits of the telecoms and on-line providers. In 2007, the total revenue of UK broadcasting – all TV including pay-TV, plus radio – was £12.4 billion. The revenue of consumer telecoms and the internet was £27 billion, more than twice as much of the whole of broadcasting put together: and this gap widens every year. BSkyB alone is expecting to increase its turnover by £1billion by 2012. Yet this country is one of only five European countries dogmatically unwilling to impose levies to support locally produced, independent programmes, and to defend the public interest. Instead, the telecoms profits continue to underwrite their enormous lobbying power to the point that they are currently challenging the legitimacy of the Government’s Digital Economy Act.

If BSkyB is not to become a huge distorting influence in our cultural environment, Jeremy Hunt will have to demonstrate his will to challenge this trend. He might invoke the aims of UNESCO’s Convention for the Diversity of Cultural Expressions, 2005, which Britain signed up to in 2007. He could draw on the models and experience of other  OECD countries, where investment in domestic production affords broadcasters the opportunity to develop lucrative rights libraries such as the successful model of CanalPlus and StudioCanal in France. But there is little evidence that the Minister is sympathetic to such strategies. Rather, he is impressed by the exploits of Rupert Murdoch’s empire in mastering new technologies, and now perhaps, in awe of the litigious and ruthless methods he is prepared to use in order to achieve his goals.  Jeremy Hunt says that “nothing is more precious to me than the free and independent press for which this country is famous the world over”. But his actions fail to engage with the impact of technology on the culture he purports to be defending. Or perhaps, in protecting News Corps from the more rigorous, independent scrutiny of Ofcom, he is influenced by this government’s distrust of  independent monitoring organisations, and the feeling he once admitted that “media policy was being set more by Ofcom than by the Secretary of State for Culture, Media and Sport”.

British culture needs to be defended, and promoted. If this Government allows the News Corporation bid to go ahead it will have sacrificed public interest to the economic logic of the liberal market and limited the number of independent voices which will be heard in this country.

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