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Change or die: the future of the BBC

The BBC is one of Britain's great institutions. But, like all other public broadcasters, it faces threats from the internet, the government, and the modern television system. How can it best overcome these challenges, adapt, and survive? 

Greg Dyke
15 May 2012

This is an edited version of the keynote speech given by Greg Dyke to the European Broadcasting Union in Copenhagen on 27 April 2012.

Good afternoon, and could I start by saying I am very pleased to be at your conference today to talk about public broadcasting, because I suspect we are at an important moment in its evolution in many places around the world.

My position is this. I believe that for political, economic and technological reasons, public broadcasters are looking at the future and questioning what their role will be, and that is what I will be addressing today. 

But first let me start by explaining who I am. As you know I am British, I started off life as a newspaper journalist and moved into television at the age of 30. I have had a varied career in that although I am best known as the former Director General of the BBC, I spent most of my time in the industry in commercial television, working for profit and loss companies.

I started as a reporter at London Weekend Television, and in the next 15 years worked at a range of commercial television companies as a reporter, producer, programme editor, Director of Programmes, and finally I became Chief Executive back at the company where I started at LWT - only for the company to be taken over in a hostile takeover bid three years later.

I then spent five years building one of Britain’s biggest independent production companies. Today that company is called Freemantle, is owned by the Bertelsmann Group and is the producer of the likes of The X Factor, American Idol, and the “Got Talent” series, as well as entertainment shows right around the world.

And then I left to join the BBC and in my four years in charge we set up four new digital television channels, five new digital radio channels, invented Freeview which transformed digital television distribution in the UK, expanded our on-line services, moved into interactive television, and developed the iPlayer, which is an internet television catch-up service.

We also turned BBC One into the most popular television channel in Britain for the first time in more than 40 years, and it still is today.

Of course in my time as Director General I was closely involved in EBU matters and regularly met with those running the public broadcasters in the other four biggest EBU countries – Germany, France, Spain and Italy. Naturally we pretended that it was fraternal love and respect which brought us together, but in truth most of our time was spent arguing about who paid what for sports rights.

My lasting memory is from when Mr Berlusconi had just become Prime Minister of Italy for, I think, the second time. I remember his appointee at [Italian public broadcaster] RAI coming to a meeting and explaining that RAI would no longer be paying its traditional share of EBU sports rights because it no longer had any competition – which I took to mean that Mr Berlusconi now controlled all the big television players in Italy, therefore competition for rights was a thing of the past in Italy.

I also remember the head of the public broadcaster in France announcing that he didn’t care how much he paid as his contribution for EBU sports rights so long as he paid less than the British.

And I remember the man from Spain being regularly called by the Spanish Minister for Broadcasting who was, without doubt, trying to influence editorial policy. I remember thinking ‘thank God we don’t face that level of political interference at the BBC’ – which is ironic given what happened next.

Because, sadly, my time at the BBC ended prematurely following an enormous argument between the BBC and the Labour government of the day. The row was over a broadcast on one of our early morning radio programmes in which we reported a source from the intelligence services accusing the government of “sexing up” the case for the Iraq war, something which today nobody in Britain doubts happened – no-one other than the former Prime Minister Tony Blair that is.

So in my time I ran two large broadcasting companies – one totally funded by advertising and the other by the licence fee – and built Britain’s largest independent production company.

When I left the BBC I did what so many government ministers do when they leave their job – I announced that I wanted to spend more time with my family. Unfortunately what I discovered was that my family didn’t want to spend a lot more time with me, so instead I had to find some new roles.

These days I am Chairman of both the British Film Institute and the biggest commercial theatre company in Europe, ATG; I am also Chancellor of the University of York, and Chairman of a Division One football club in England. So I do some things for money, some for public good, and am involved in football, which carries neither advantage – in that it costs me money and only benefits overpaid footballers.

My involvement in television is limited these days, but having talked with the organisers of today’s conference I think I was invited here today to talk about public broadcasting in general, about what we did in my years in charge of the BBC, and about how I think public broadcasters need to react to the changing world.

Now, my starting position is that it is a time of rapid change for broadcasting and the media in general and, as a result, it’s a particularly difficult time for public service broadcasters. In fact it is not clear to me that public broadcasters will flourish in the future in the way they have in the past.

Of course, in one guise or another most will still be broadcasting in twenty years time, but the danger is they will be very different, be much smaller, and have less impact than their former selves. I believe there is a real prospect that we could be seeing the gradual decline of public broadcasting right across the world unless the broadcasters themselves do something about it, which includes changing quite significantly.

I have divided my analysis into three basic areas – political, technological and economic; but of course the three are inter-connected.

*****

So let’s start with the political. In my experience most governments get into office supporting the concept of public service broadcasting and public service broadcasters.

But it is also true that whatever the political persuasion of the government – left or right – the relationship between that government and public service broadcaster inevitably declines during their period in power. I have often asked myself why this happens and my conclusion is a pretty obvious one – broadcasters and governments play different roles in society.

This is best summed up in a book written by a woman called Grace Wyndham Goldie, a former Head of Current Affairs at the BBC who, in that role, had many clashes with the government of the day as far back as the 1950s and 1960s. I thought she summed up the inevitably difficult relationship between public broadcasters and governments when she wrote:

“Nowhere more than in broadcasting is the price of freedom eternal vigilance; resistance to political pressures has to be constant and continuous. But it must be realised that such pressures are inevitable, for the aims of political parties and those of broadcasting organisations are not the same.”

In other words, one of the most important roles of a public service broadcaster is to be independent of government, to ask difficult questions of it, and not to be bullied by the government of the day, whichever political party is in power.

By and large I believe the general public understands this role, which is why in most polls the public are likely to trust the public broadcaster more than they trust the government of the day.

If I go back to my departure from the BBC over the issue of reporting the Iraq War and its aftermath, public trust in the government plummeted when I left in a lot of publicity, but public trust in the BBC never wavered – and of course that is why the longer a government is in power the more it resents the public broadcaster. In modern democracies the people trust public broadcasters in a way they seldom trust politicians.

Now in my experience governments are more hostile to, and resentful of, public broadcasters than their commercial counterparts. 

Why is that? I suspect it’s partly because commercial broadcasters are less likely to confront the government of the day, but mainly because governments seem to believe they own the public broadcasters in a way they don’t own their commercial counterparts, and are therefore more entitled to influence them.

And of course as we get more commercial broadcasters, as regulation covering them becomes less stringent, as they become more interested in profit and less interested in questioning government, it means, in turn, they become less politically important. 

Now I believe the future of public broadcasting today is under greater threat from politicians and the political process than in the past. Why?

Well I think this can be explained by understanding the technological changes that are arriving daily, the commercial competition this is encouraging, and the pressure the free marketeers in both the media and politics are putting on governments to deregulate the whole system. Let me explain via the example of what has happened in Britain.

When I first worked in television in the late 1970s there were still only three channels in Britain – two run by the BBC and totally paid for by the licence fee, and one advertiser funded channel, ITV, where I worked, which was also required to have the values of a public service broadcaster.

Throughout its history – until relatively recently – a regional company won its franchise to broadcast on ITV by the standard of its public service programmes – news, current affairs, expensive drama, documentaries, children’s programmes, regional programmes – NOT by its ability to win Saturday nights with popular entertainment programmes, or win in the ratings battle generally, even though you needed ratings to bring in advertising.

Now all that was only possible because ITV was for many years the monopoly seller of television advertising, was immensely profitable, and was using the valuable spectrum allocated to it by a regulator. Interestingly none of those three are true today.

When a second advertiser-funded channel arrived in Britain, in the shape of Channel Four, it was – and still is – a public service, not-for-profit channel run by a Public Trust.

So we had two public broadcasters in ITV and Channel Four which were funded totally by advertising, and then we have the BBC channels which are only funded by a licence fee.

But in Britain the world I’ve described began to change with the arrival of competition, the arrival of satellite and cable television and then, in particular, the arrival of the digital revolution.

New, more commercially aggressive players emerged – like Rupert Murdoch – who were ideologically opposed to regulation, opposed to public broadcasting, and who disliked and resented the power of the BBC in particular. Murdoch saw the BBC as the enemy and, until very recently, he had a great deal of political influence which he used ruthlessly to further his ambitions, and dent those of public broadcasters. In fact I’m pretty certain one of the reasons I was appointed to run the BBC was that I was seen as someone who would stand up to Murdoch and do all I could to stop Murdoch’s operation, Sky, dominating the digital world, which is exactly what I tried to do – with a degree of success.

But of course when the public were offered a wider choice of television, when they were offered more channels, they voted with their feet, and the share of viewing of the traditional public service channels was gradually eroded.

*****

Now one of the lessons of this whole technological experience for public broadcasters is that it’s essential they have within the organisation the understanding and skills to stay ahead in the technological game.

The reason the BBC has managed to survive better than some other public broadcasters in Europe – up until now at least – is that it was early into the internet, early into pay television on the Sky platform, early into digital terrestrial television with Freeview, early into the iPlayer, and will be early into internet television. In other words, it has tried to understand what technical change is coming and be part of it. But of course that costs money.

The same was not true of the two advertiser funded public broadcasters in Britain. Both ITV and Channel Four were too late into pay television and very slow into the internet.

It doesn’t work to just shut your eyes and hope the world won’t change, which is what they both did. If anything, technological change is now speeding up, and public broadcasters have to keep up with it.

Many public broadcasters struggle with this, partly because they are disproportionately bureaucratic, process driven and slow, but also because it often takes a long time for them to get the political and regulatory permission to change. In Britain that has become a particular problem today.

When I was at the BBC we invented and got Freeview onto the market in a few months. Under the new BBC regulatory system, the BBC Trust, which was brought in since I left, you’d be lucky to do it in a few years. The process of change has become much more bureaucratic, more process-driven, and as a result much slower, at a time when, if anything, it needs to move faster. That is not good for public broadcasting.

And of course one other effect of the changing technological world is that the young are moving elsewhere, and the public broadcasters in many countries are increasingly becoming the preserve of the older viewer and listener, which is okay for the time being, at least for those funded by a licence fee – not for those funded by advertising.

Will the next generation of older viewers and listeners, or the one after that, be so loyal to traditional broadcasters? I doubt it.

*****

Finally I’d like to turn to what all of this is doing to the economics of broadcasting. In the advertising world it is clear that more spectrum, more channels, and more delivery systems means the available advertising is increasingly fragmented. I am very doubtful whether advertising will sustain the number of channels we are creating in country after country.

The big losers in this are the advertiser-funded public broadcasters with their declining shares and older audiences who are less attractive to advertisers.

In Britain, ITV’s advertising revenue is significantly less today than it was in the late 1990s. What this means is that programme budgets are cut and the money spent on traditional public service programmes is a fraction of what it once was on ITV. We all know producing public service programmes is expensive.

Because it is a company owned by its shareholders, who are impatient with the share price, the profit motive is more important to ITV today than at any time in its history. In these circumstances I can’t see how ITV will be a public broadcaster in Britain for much longer.

Of course, if governments truly believed in public broadcasting, they should be increasing licence fees for the other public broadcasters, so that there is more money available for public broadcasting, to offset what is happening in the advertiser-funded world.

But I know me saying that is politically naïve. Europe is an economic mess, real living standards are falling, there is very little growth and public expenditure is being cut everywhere. In these circumstances no politician is going to support increasing television licence fees – quite the opposite, especially when those involved in owning and running  commercial television are demanding cuts to the licence fee.

In Britain the government has frozen the BBC licence fee for the next six years at a time when inflation has been running at an annual rate of more than 5%, and remember the BBC has no other significant source of income. If inflation carries on at the current rate the BBC’s spending power will decline by something close to 40% over the six year period. To deal with this the BBC is already planning to cut spending over the next couple of years by 20%.

Now some of that can be achieved by cutting traditional bureaucracy, by using new cheaper technology, by having fewer staff and a smaller management and by a more innovative approach to programme making; but in the end it will mean reducing what, as a public service broadcaster, the BBC has traditionally been able to offer its viewers and listeners.

So my argument is that advertiser funded broadcasters are seeing their income threatened by fragmentation and technological change whilst public broadcasters are seeing, at best, their licence fees frozen and possibly reduced because of a combination of macroeconomic difficulties, particularly in Europe, and ideological changes amongst politicians.

But there is another factor. Broadcasters aren’t alone in the media sector seeing their income threatened by changing technology. In fact the decline in advertising income in the newspaper industry is sharper than in broadcasting. Newspaper owners have never been supporters of public broadcasters, but they are now becoming more hostile as their economic base is threatened. And even though their sales are declining, newspaper owners still have significant political influence in most countries.

Why is this happening? Because many of them have woken up far too late to both the threat and opportunities offered by the internet, and fear that if the public broadcasters are on the internet in a big way it threatens the chance they have of building an economically successful online business themselves.

Because the BBC got into the internet very early, largely thanks to my predecessor, they got a significant first mover advantage in Britain, and are now at such a size that it is probably too late to stop them being a dominant player in the online world. But that’s not true in a lot of countries.

*****

So to summarise my analysis, these are challenging times. The combination of changing technologies, difficult economic times, a new breed of free market driven politicians, hostile and influential commercial competitors, and a declining, ageing audience means that public broadcasters across the world will have to rethink what they are, and what their role is.

The big question is: are they capable of doing this?

Because I was coming here today, I tried to list the things we did in the comparatively short time I was at the BBC which had an impact both in the short and longer terms but might also be relevant to the problems public broadcasters are facing today.

Firstly, and possibly most importantly, it’s vital that the organisation as a whole understands where it is going and what it is trying to achieve; and it’s equally important that all the staff buy into that. There’s no point in the management having a strategy if they can’t sell it to their own people, because the staff are your best ambassadors. Now there’s no doubt in my mind that that was my greatest success at the BBC. Let me explain.

The reason I get invited to talk about leadership at conferences around the UK is almost entirely down to the events of a single day; the day I was thrown out of the BBC.

On that day literally thousands of my staff right across the country took to the streets to protest. Others had a whip round and raised more than £12,000 to pay for a page advert in the Daily Telegraph. The unions organised a protest march, and in all I received more than 6,000 emails from my staff saying how sorry they were that I had left.

I’ll read just one:

“The only way I can come to terms with the extraordinary events of the last 48 hours is to pay testimony to the vision and energy you have brought to the BBC. Men and women, even journalists, cried today.”

Because I believe in balance I should also tell you that I received another which said “Fuck off Dyke I never liked you anyway”, but my staff didn’t put that in the bound copies of the emails which now fill my study at home.

Everyone I know who was running any sort of organisation on that day asked themselves one question. In the same situation, would my staff walk out for me?

Now when I joined the BBC I always knew that changing the attitude of the staff was going to be one of my hardest tasks. In fact, in my manifesto for the BBC job – and I was an outsider who’d never worked for the organisation before – I said that the biggest challenge facing a new Director General was to build an “inclusive culture”. So when I first joined I decided to find out about the BBC for myself, and took to the road.

Everywhere I went in the BBC in those early days I asked the same two questions of the management and the staff. First, what do we need to change to improve our service to the public? Secondly, what can I do to make your life better? You have to understand that I believe the two are directly related – if your staff are happy and enjoy the job, you’ll give a better service to the public.

Some of the suggestions I received were ridiculous, like wanting their total budget doubled, but most of them were small and practical and would cost peanuts to implement. In most cases we did this in my first few months in charge; it was an easy way of beginning to get some people onside.

Many of the staff I met as I wandered around the BBC felt unloved, unwanted and unnoticed and there were an awful lot of people working there – as in most big organisations – who thought that what they achieved they achieved in spite of the management, not in any way thanks to it.

So the biggest challenge we faced was how to get the staff onside, because in today’s world if you haven’t got your staff on your side, if you haven’t got the staff believing in you as a leader or leadership team (and I include the cynics amongst them, because there are always cynics), then you have no chance of becoming a dynamic and successful organisation.

Now once you grasp the simple human truth that organisations are at their best when everyone shares a common aim, there are a set of ideas which logically follow; a set of ideas that I’ve used as a basis for running organisations over many years. I haven’t got time to go through them all today, but if you are interested they are outlined in my book ‘Inside Story’.

At the BBC we did a lot of things to try to change the culture of the organisation, to make it more friendly, less hierarchical, more open to ideas, more willing to try things and take risks. Most of all we wanted to empower the people who worked for us. But that meant they had to learn to trust us, the management.

We tried to do this through an enormous culture change programme called Making it Happen, in which we tried to involve all of our 25,000 staff. Again, read the book if you want to know what we actually did.

The real point of the programme was that the aim was to engage people’s emotions, not just their brains, because I believe culture change is an emotional experience, not an intellectual one.

I’ll give you one simple example of something we did. One of our major homes in London is the White City building in West London. It was only built in the late 80s, but it was a disgrace. It was a terrible, off the shelf design and looked like it had been built by an old eastern European communist state. Around the place it was called Ceausescu Towers, after the former communist leader of Romania.

Now I had never been in this building until I arrived at the BBC, but when I did I noticed that the only nice part of the building, the open atrium in the middle, was actually closed to the staff. In fact, to go into the atrium you had to wear a building site style hard hat.

I asked why couldn’t the staff use it and was told the magic words “health and safety”. I asked for an explanation of the health and safety problems. Some months later I was told staff couldn’t use it because there was no wheelchair ramp and it needed another exit for fire safety purposes. No-one could explain why people had been wearing hard hats for the last decade!

I arranged for the door and wheelchair ramp to be installed and opened up the atrium for the staff. On the opening day I wrote a piece in the staff magazine Ariel asking “how many equivalents are there around the BBC, things which we can’t do because someone, at some time, has told us it can’t be done?”

I also held a party that night for all the staff who worked in the building. As I wandered around many of them were excited and asked “does this mean we can go on the balconies now?” and “does it mean my office doesn’t have to be painted grey?” I found the man from property and told him about this. His answer was a classic. “Look what you’ve started now,” he told me.

The opening up of the White City atrium became an incredibly important story around the BBC. It symbolised what our cultural change programme was trying to do and helped convince people that things could be changed. It showed the staff that the Director General was on their side in attacking the mind-numbing negativity of much of the BBC bureaucracy.

What I can tell you is that within a year of launching Making it Happen, staff opinion started to change. All those results from the staff survey which convinced us we had to do something about the prevailing culture began to shift.

In one year the staff survey revealed that just 28% of people at the BBC felt valued by the organisation. It was one of the main reasons we launched Making it Happen. Two years later the figure stood at 58%. 

*****

So the first rule is that you have to get your staff on your side, or at least get them to the stage where they give you the benefit of the doubt. Without their support, changing an organisation is very difficult. And of course they are your best ambassadors to tell the world what you are doing, and why it’s a good idea.

The second conclusion I have reached is that in the world we now live in, public broadcasters have to be at the forefront of technical change, not lagging behind trying to catch up later. If you’ve got a fixed income this is difficult, but still essential: you have to find the money to try things, even if it means killing off things you’ve always done.

Which brings me on to the third conclusion: don’t be afraid of radical change, or of doing it quickly. Change is essential for public broadcasters in a rapidly changing world. And sometimes you have to do it despite concerted opposition from press and politicians.

A good example of this at the BBC was when we decided to make a radical move and do it quickly. The Daily Telegraph described the move as follows:

“This is a bad decision; for the BBC, for television in general, for the licence paying public, and for British political culture… In yielding to the forces of philistinism at the corporation Mr Dyke is clearly signalling his priorities. They are evidently very different from those of the BBC’s core viewers A philistine BBC is a supine BBC; a nation kept in ignorance is a nation easily led.”

That was the Daily Telegraph leader, and the Telegraph wasn’t alone. The media spokesmen for all three main political parties – including the Secretary of State – joined in the criticism of the BBC, as did some, but not all, of the other national newspapers.

According to them all we were “dumbing down” the BBC and the nation yet again. So what had we done? The answer is that we had announced that we planned to move our nightly television news on BBC One from nine o’clock, where it had been in the schedules for something like 50 years, to ten o’clock.  Hardly the end of the civilised world as we knew it, but you wouldn’t have known that from the reaction of politicians and the press.

As it turned out moving the news was the single best thing we did in my first couple of years at the BBC. We did stop the decline in the ratings for the BBC’s flagship news bulletin; they even went up a bit, and the freeing up of the schedule at nine o’clock was one of the major factors why BBC One overtook ITV as Britain’s most watched channel a year or so later.

But the biggest impact of moving the news at two weeks’ notice was the message it sent to the whole of the BBC. It told everyone that we didn’t have to be a large and unwieldy organisation which analysed everything to death and couldn’t take a decision quickly. We could move fast when we wanted to.

The BBC I inherited would never have moved the news. There would have been at least a dozen policy papers on the issue, every possible ramification would have been considered at length – including the political opposition to us doing it – and nothing would have happened. Instead we thought it was a good idea and we just did it, and it was successful in that ratings for the news and for the schedule overall went up.

But consider the political risk we took. And this is why making change, taking risks, and real leadership is harder to deliver in the public sector than in the private sector.

In theory it should be easier to take risks and make changes in public sector organisations – you don’t go bust if the risk you take goes seriously wrong.

The reality is the opposite: publicly funded organisations are much more likely to be risk averse than profit and loss companies. Why? Largely because they are under much greater public scrutiny. The downsides of taking risks in a publicly funded organisation if it goes wrong are public criticism, even public humiliation. On the other hand, the upsides of taking risks are considerably fewer in public sector organisations than in profit and loss companies. There is no profit line to prove you were right.

As a result there is, I believe, a real danger that publicly funded organisations err on the side of conservatism and do not take the calculated risks they ought if they want to improve the services they deliver to the public. They fear public and press criticism if the decision turns out to be the wrong one, whereas the reward for taking the right decision is usually silence.

So my third conclusion is that public broadcasters have to be brave, and be prepared to change, even when everyone tells them they are wrong.

Fourth, one of the issues many public broadcasters face is that they are over-manned, have too many layers of management, and are generally seen as inefficient.

At the BBC the first question I asked on getting the job was: what proportion of our income is being spent on the overhead of the BBC? In other words, how much is spent on running the organisation, rather than making programmes or running channels.

The astonishing answer I got back was 26%, which I thought was much, much too high. So we set about reducing this and in four years we got it down to 14%. I suspect we should have done more and taken out even more layers. I don’t think it was impossible to get that number down to single figures.

The problem is that if you don’t attack the overhead, you are always accused of being too bureaucratic, having too much management and wasting money. And I’ve come to the conclusion over time is that there is never a steady state in terms of the size of the bureaucracy. My view is that if you aren’t constantly taking out overhead in any big organisation, but particularly in non-profit organisations, you are putting it on.

Now I linked that to the idea that as an organisation our responsibility was to spend as much money on programme-making as was possible. In fact I paraphrased Bill Clinton’s famous phrase when asked why he beat George Bush Senior: “It’s the economy, stupid”. So one of my mantras became “It’s the programmes, stupid”.

One other thing I also did was to tell the staff that too much time was being spent on running the organisation. I distributed 5,000 yellow cards, like the ones used by football referees, which had CUT THE CRAP written on them. I gave them to any member of staff and gave them permission to use them if the meeting they were in was just going on and on.

Of course that got a lot of national publicity, but that was partly my aim. I wanted the outside world, including the politicians, to understand we were taking on the bureaucratic nature of a large organisation.

*****

So that’s some of the things we did back then when actually there was still quite a lot of cash around. Today the position in most public broadcasters is more difficult, which means organisations and leaders have to be bolder, braver, and more willing to take risks. If you do the work with the staff they will come with you on the journey; not because they are afraid, but because they are enthused. 

I believe public broadcasting matters. The values of public broadcasting matter, and the impact public broadcasters have matters. I do fear that in 20 or 30 years time these could be lost if public broadcasters don’t fight back today. But when I say ‘fight back’ I don’t mean just try to defend the past. I mean taking on real change while defending a set of values.

Will they be able to do that? Possibly, as long as they are willing to innovate, are willing to move at speed, and take action to get their staff onside.

If these things happen then some elements of public broadcasting will survive, even on advertiser-funded channels. But it does mean public broadcasters have to change more, and faster, than many have been prepared or able to do in the past.

What they can’t do is just sit and wait, and lament the passing of an earlier age.

That way lies decline and fall. Time is of the essence.

 

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