openDemocracyUK

Ofcom reports: it's back to 1998 for public service broadcasting

Ofcom's latest review has shown public service broadcasting to be in a state of decline; falling revenues have resulted in a collapse of first-run orginal content produced by the commercial broadcasters, while steadily increasing spending at the BBC has done nothing to prevent a decline in such programming as a proportion of revenue, now at the same level as its terrestrial television rivals.
David Elstein
15 July 2010

Ofcom’s latest report on public service broadcasting confirms last year’s gloomy trend. The public service broadcasters' channels – ITV, Channel 4, five and eight BBC services – reduced their spending on network programming yet again in 2009, by 7% year-on-year in real terms (that is, in 2009 prices). Even putting aside the massive drop in five’s spending, of 27% in a single year, the other channels reduced their spending by 6%, with BBC1 leading the way, at 8%. Over the four years 2005-9, combined spending has declined from £3.252bn to £2.788bn, which Ofcom calculates as a 14% drop - actually, 14.27%

The peak in network programme spending came in 2004, with the 11 channels collectively investing £3.364bn in 2009 prices. 2009’s level of £2.788bn is barely ahead of 1998’s total of £2.709bn – when there were just 5 PSB channels. At our symposium, Sylvia Harvey asked what had happened to the missing £500m – which we can now see is actually £576m that the public service broadcasters' channels have chopped from their spending in just five years. Ofcom theorizes that more is being spent on distribution and infrastructure, or that improved technology allows programmes to be made more cheaply: but has no figures to support such speculation.

The Ofcom report confirms that in virtually every category of content supply that might be described as public service broadcasting there has been double digit decline in spending since 2005. Where hours of supply have increased, whilst total spending has declined, this has led to a major fall in hourly budgets – for instance, nearly 30% in current affairs. Nations and regions programming spend has fallen 32%, with ITV halving its budgets and the BBC reducing by 18%: another crisis much cited at our symposium.

Ofcom’s figures show that spending on first-run origination – as opposed to repeats and acquisitions – has declined even faster than total network programme spending: 16% down in four years. Here, the commercial sector, 20% down, cut faster than the BBC, at 13% down. But Ofcom for the first time points its finger accusingly at the BBC for its failure to invest in public service broadcasting. It reveals that the commercial sector has suffered a 34% real terms decline in revenues since 2005, whilst the BBC has enjoyed a 2% real terms increase.

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Tellingly, Ofcom has created a graph showing how the commercial sector has increased the percentage of its revenue it spends on first-run origination from 37% in 2005 to 56% now: at the same time as the BBC’s equivalent percentage has dropped from 65% to that same 56% figure. This is a devastating commentary on the BBC’s Annual Report and Accounts, and the response to them from the BBC Trust, with their disappointing re-issue of un-ambitious targets for the proportion of the licence fee to be spent on content.

Of course, Ofcom has its own agenda, but it has normally avoided making direct criticisms of the BBC, which was almost completely excluded from its regulatory purview at the very time that Ofcom was given responsibility for reporting on PSB. Perhaps Ofcom is just expressing, by implication, its frustration at monitoring a rapidly deteriorating position it has so little power to correct. These figures leave as many questions to be answered by the BBC Trust as by BBC management: and re-inforce the call for an urgent and wide-ranging inquiry into public service broadcastng, as well as into BBC governance.

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