Advertisers are celebrating the government's plans for the BBC

The BBC White Paper advances commercial interests to expand advertiser-supported media at the expense of the public’s wish for ad-free public broadcasting. 

Jonathan Hardy
15 May 2016

“The BBC does not duplicate the sponsored content and native advertising increasingly embraced by publishers” Image: Andrew Matthews / PA Wire/Press Association Images. All rights reserved

Distinctiveness is the keyword running through the BBC White Paper but to understand the proposals we need another word: advertising. We can speculate on the driving motivations, from grandstanding free-market ideologising to petty political point-scoring, but one explanation stands out: the White Paper delivers to those commercial media and advertising interests wanting to get more of us to switch from BBC services to services that carry advertisements. 

It does not deliver everything the advocates of immediate dissolution of the BBC want, of course, but it accepts and advances the commercial case to cut competition for audiences in lucrative markets. The majority commercial view is that the BBC is a tolerable if not advantageous presence, as long as they can enjoy the greatest commercial opportunities that the political system can deliver from BBC reform. 

They have their best chance for years in John Whittingdale, a free-market, Thatcherite disciple whose emollience has barely concealed his desire to shrink the size and scope of the BBC. Some vaulting ambition has been reined in as a result of internal Government calculation influenced by overwhelming public support for the BBC and that justifies a toast to impressive collective action. Yet, the proposals, as Des Freedman outlines, will cause major damage, however much some of the incendiaries are buried across a path laid down for the Corporation over the next decade. 

The BBC is charged with being distinctive. That slippery term can serve an expansive as well as shrunken BBC, support popular shows and services, and so the intended chill-factor is adaptable to warmer settings. However, it is less the mood-music than the disciplinary apparatus being constructed around it that we need attend to. The National Audit Office will become the BBC’s financial auditor with powers to influence how far the new Board delivers stricter value for money tests, feeding into Ofcom which will have stronger powers to do the same via market impact assessments and apply a beefed-up sanctions regime. Granting Ofcom these powers without changing its remit and ethos is a serious threat not just to the BBC but to the public service ecology altogether.  

Ofcom was created to promote competition in commercial communications. Since 2004 it has overseen the relaxation of public service requirements on the commercial PSBs, allowing ITV to reduce output across news, regional and children’s programmes. It will now oversee the relationship between the BBC and the market. Its track record suggests it will be far more receptive than the BBC Trust to pressures from the commercial sector for the BBC to curtail its activities. Whereas the Trust was charged with considering the ‘market impact’ of new ventures, Ofcom can investigate and affect any part of the BBCs activities ’including where minor changes have over time combined to have notable impact, with proportionate powers to sanction.' In other words, if Ofcom believes the BBC prevents competitors from making profits it has powers to step in.

We should heed the warnings from insiders. ITV political editor Robert Peston fears ‘a high probability that the BBC's activities will be much more severely circumscribed by an Ofcom highly sensitive to the impact of the BBC on the likes of ITV and Sky.’ We’ve already seen a rise of US-style litigation as media companies use regulation to fight proxy-wars for market territory. We can expect that to increase. Ofcom will be both weaponized by the charter and pressurized by corporate lobbies and lawyers. That does not mean the outcomes are entirely predictable. Ofcom’s public interest remit delivers some openness, but these measures amount to a seriously unbalanced tilt towards commercial interests. They also mark a further retreat from using regulation to secure public service outcomes. Instead of requiring ITV to invest more of its 800m profits in public service media, the White Paper lands a new beachhead: licence fee funding for ITV.

The Government proposes to use ‘unspent’ licence fee income to create a contestable fund of £20m to which ITV, C4 and C5 can bid for public service content. While the amount is small this opens up a new model of top-slicing. It will be reviewed in three years, with the option to expand the scheme considerably over the licence fee period. In addition, while the BBC licence fee settlement itself is safe-ish, the BBC is charged to introduce subscription pay-services, with a five-year interim review that allows further Government leverage.

Altogether, the White Paper sets out an Ofcom regulated regime based on measuring BBC output against government-guided ‘content requirements’ and stringent commercial impact assessments. These slow-release measures direct a path to the kind of vision outlined by the Peacock Committee for Thatcher in the 1980s: residual funding for content that markets will not provide, over which large commercial companies and weaker non-profits compete, giving way to subscription-only access. 

There are many other proposals here that need to be examined and challenged. The unitary board should only go ahead with trusted independent appointments, greater diversity in its make-up and staff representation. The threat to production and jobs from opening up all BBC content except news-related needs far more noisy discussion across a wider coalition of interests. For instance, the crucial agenda for greater ethnic and social diversity on- and off-screen needs committed funding but also the training, access schemes and salaried jobs that a strong in-house production capacity can provide. The provisions for local journalism get the problem right but the solutions wrong, in particular granting licence fee resources to commercial players without reciprocal public service obligations and oversight.

Yet the single greatest threat is also the most tangible: creating mechanisms designed to shift audiences from the BBC to advertisers. The 80 per cent share of Green Paper responses in favour of the BBC barely impacted on the narrative knitted by Whittingdale’s team, that the BBC’s market share is a problem that needs fixing. ITV targeted BBC primetime shows and UKTV’s market share. Radiocentre, the commercial radio lobby, called for the break up the BBC’s share arguing ‘Radio 1’s audience got older, Radio 2’s share of the younger demographic grew, attracting away from the commercial sector the much sought after (in advertising terms) 25-44 year olds.’ The Guardian decried the BBC encroaching into magazine content and ‘soft news’ as ‘duplicating content already produced by the commercial sector, which is critical to enabling commercial brands such as the Guardian to attract advertising and sponsorship to their digital propositions.’

What all these players, and the Government, studiously discount is the value of the ad-free media space the BBC provides for users. The BBC does not duplicate the sponsored content and native advertising increasingly embraced by publishers, including The Guardian. Whittingdale presents the ‘market’ as a place beyond reproach requiring the obverse of the regulatory scrutiny piled on public service. Yet, as media and marketing merge across commercial communications the justification for public service media space only grows. Amid the urgent matters to fix in the next few weeks we need to continue to probe whether it is in the public interest for commercial companies to realise the £80-£115m a year in revenues that a ‘distinctive’ BBC might allow if that diminishes qualitatively distinctive, popular, ad-free and independent services on the BBC.

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