The BBC may soon be unable to compete

The requirement for output to be “distinctive”, coupled with the growth of media consortia, could force the BBC out of the game.

Mike Flood Page
13 May 2016
BBC New Broadcasting House

BBC New Broadcasting House

The culture minister John Whittingdale may not have succeeded in giving himself the ability to re-schedule the BBC’s programming to save ITV from the perils of competition in prime time. However, the government’s White Paper does redefine the Corporation’s mission as something more than the holy trinity ‘Educate, Inform, Entertain’. The BBC now has a new remit: “To act in the public interest, serving all audiences with impartial, high-quality and distinctive media content and services that inform, educate and entertain”.

In fact, the term “distinctive” is liberally sprinkled throughout the document. Lying behind this of course is the idea that the BBC should opt out of popular programming, and confine itself instead to providing programming and content to make good market failure. The White Paper is explicit on this point, referring to concerns about the BBC’s distinctiveness and “the market impact of its more mainstream services” and setting a framework which will allow the Corporation to “focus its creative energy on high quality distinctive content that differentiates it from the rest of the media market”.

It was precisely this trap that led Lord Reith to include “entertain” in the original framing of the BBC’s remit. From the earliest days he understood that improving talks from leading thinkers of the day needed to be leavened with a dash of light entertainment, in the form of music hall and variety acts, if the BBC was to enjoy the support of the Great British Public.

At first blush it is being used as another way to relieve ITV of the pressure of having to compete in prime time. If the BBC’s output is distinctively different in other words, it won’t be able to compete. Far from ceding the right to schedule popular programmes like Strictly Come Dancing in the graveyard slot, Whittingdale appears to have smuggled the idea in again by the back door.

“Distinctive” has been used before. As a term of art it has form.

We need only cast our minds back to 2003 and the failure of BBC Jam, the BBC’s ambitious £150 million digital education project.  On that occasion the BBC had imposed upon it a requirement for BBC Jam content to be both “distinctive and complementary” to that of the commercial online education publishing sector. The publicly stated aim was to prevent the BBC from stifling private sector innovation in an emergent market in online education. This was the result of intense lobbying by a consortium of commercial interests including the Guardian and Pearsons. 

As a former BBC Trust official told me as part of research I conducted, this was the “Achilles heel” of the project because it wasn’t amenable to a clear and agreed definition. The commercial opposition could cry foul, no matter what efforts the BBC took to abide by the distinctiveness rule. The predictable result was the one sought by the commercial sector: BBC Jam was closed ignominiously and at great expense to the licence-fee payer, while the commercial sector breathed a collective sigh of relief, and freed from the spur of competition from the BBC, far from providing innovative digital educational content went back to doing what it had always done, which is provide documents and a few quizzes and games online.

So how does the White Paper define distinctiveness, and how can we expect distinctiveness to be used by the BBC’s competitors when it next launches a new Saturday evening or prime time schedule?

Long story short, the White Paper defines distinctiveness as meaning that “each and every BBC service” on TV, radio and online should be “substantially different” to those from “other providers…both in prime time and overall, in terms of: -

 - the mix of different genres, programmes and content;

 - the quality of output;

 - the amount of original UK programming;

 - the level of risk-taking, innovation, challenge and creative ambition;

 - and the range of audiences it serves.” 

And the BBC's competitors? They would be less than human if from time to time they were not tempted to pick up this handy stick and beat the BBC soundly with it. If for instance, to take one random example, ITV felt just a teeny bit threatened by competition from the BBC anywhere in the schedule, this definition gives it all the ammunition it needs. (Hands up: this example is far from random, it’s the very substance of ITV’s submission to the BBC Charter Review).

However, this anti-competitive manoeuvre is only a prelude to a more serious battle. There is a far greater threat to the BBC’s ability to deliver landmark entertainment and drama (and that of all terrestrial channels, including ITV) which has barely received a mention in the current debate.

Already across Europe, as fans are aware, public sector broadcasters including the BBC and Channel 4 are all but out of the major league sport game. Apart from a few (and getting fewer) protected events, they can no longer compete with the new global behemoths emerging from a wave of major consolidation in the industry. These include Sky, which last reported a turnover of £11.2 billion, which is more than double the most optimistic estimates for the BBC’s revenue. Since the £4.9bn acquisition of Sky Italia and Sky Deutschland, Sky Europe has a combined audience of 20 million paying customers. Then there’s Liberty Global, which owns Virgin media in the UK, with a market capitalisation of around £25 billion.  BT meanwhile has an annual turnover of some £18 billion, and recently stumped up £738m for the right to transmit just thirty-eight premier league football games.

Blockbuster drama and top flight entertainment are beginning to follow. Don’t expect to see the next War and Peace on the BBC, they won’t be able to compete with the likes of Netflix, Amazon Prime and Sky Europe. Indeed, it’s already begun to happen. The BBC is believed to have been outbid for Peter Morgan’s new drama The Crown starring Helen Mirren once more as Queen Elizabeth by a Netflix offer of £100m; while Amazon snapped up the former Top Gear team for a rumoured £160 million, a sum the BBC could not have bettered, even if had they not fallen out with Jeremy Clarkson.

So the combination of a new “distinctiveness” requirement in the short run and industry consolidation over the long-term may well achieve what Whittingdale could not, but by other means.  In fact, the threat to Strictly Come Dancing may have simply been a distraction technique.

This is still a White Paper and there is still political manoeuvring to come, but the BBC has reason to be wary of the introduction of a “distinctiveness” criterion into its mission statement, and of the mega-consortia whose buying power far outmatches its own. If no action is taken, the BBC may find itself transformed into something distinctively less appealing than today’s creative powerhouse. And that may make it less likely in time to enjoy the widespread and passionate public support which has played such an important role in bolstering its position throughout the current Charter negotiations.

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