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The real world of public service

About the author
Peter Ibbotson is a media consultant and former deputy programming director of the BBC.
The debate between Andrew Graham and David Elstein is timely and lively. It covers issues which will be increasingly prominent in coming years under the dual pressures of technology and market economics. That said, polarised debates have a tendency to cling to fixed ideological and logical positions, rather than explore the more messy and complex realities of the practical world.

Graham’s stout defence of public service broadcasting underestimates the ability of commercial broadcasters to meet new public tastes. If there had been no ITV, and BBC had maintained its monopoly of television broadcasting in Britain, it is highly unlikely that we would now enjoy the current range of programmes. ITV drove the BBC share of audience down to just 27% between 1955 and 1957. The BBC responded to the brash newcomer within a short time with a better class of popular comedy and popular drama. Competition worked, and continues to work.

The big issue for the BBC now is whether it can (or should) provide programming of all types, and on all new platforms. We do not have a British Publishing Corporation to supply publicly funded papers and magazines: do we need the BBC to be a leading Internet publisher? Do we need the BBC to provide another television service aimed at the 16-34 age group (BBC-3), when this sector is already well-supplied. Given, pace Gavyn Davies, the ultimately finite funding of the Licence Fee, what should be the BBC’s priorities? What weight should be given to the effect of market distortion in approving any new BBC service? This is by no means a comprehensive list of the questions the Corporation now faces in a multi-channel, multi-platform world.

With regard to the Elstein argument, my problem is with the proposition that the market hasn’t been allowed to function properly because of the dominance of the public service broadcasters and their over-generous funding. In truth there is as yet no prospect of a real producer-consumer market in broadcasting. Most commercial broadcasting is still funded by advertising. Broadcasters sell to advertisers the airtime between the programmes.

The value of that airtime is created largely by the bulk (and in some measure by the ‘quality’) of the viewing audiences which are available during the advertistment breaks. The business therefore depends primarily on satisfying advertisers, and only secondarily of satisfying viewers. Commercial broadcasters with shareholders are duty bound to maximise the value of their inventory of airtime. The result is plain: advertising-funded commercial television is very good at producing quality popular entertainment and drama, attracting very large audiences. It is much less good at producing other kinds of television which inherently attract smaller audiences. Why should it, if that is not the way to secure optimum income?

The problem is that although we are all content to be part of the 10m+ audiences for the most popular programmes we all, in all socio-economic groups, have more eclectic tastes. The Top Twenty programmes account for just 10.7% of total viewing. We all chose to watch hundreds of smaller audiences programmes each week.

The crucial difference between commercial and public service broadcasting is that the former is always under pressure to maximise audiences and revenue, whilst the latter have the editorial freedom and responsibility to cross-subsidise, in the case of Channel 4 using income from high audience programmes to pay for programmes like Channel 4 News which ‘loses’ money and in pure commercial terms is a non-starter.

Whatever the ideological debate, I see no problem in the continuation of a dual system of public service and commercial broadcasting. Indeed, it would be absurd to take to its logical conclusion the proposition that the end of spectrum scarcity means the evaporation of any practical rationale for broadcasters who are not totally commercial. Broadcasting is not like print. The cost of entry is huge; the ongoing costs of production and retention of rights and talent are huge. The tendency is to amalgamations and mergers, on a global scale. Diversity there may be on the Internet, but mainstream television services will remain a game for the very few. Of the 125 channels monitored by BARB, 111 have a share of less that 0.5%.

In Health, Education and Defence, we are careful not to leave everything to the market: long term planning imperatives, and the need to cross subsidise between different demands, make total market solutions unattractive. Public demand for an Army to fight a war would certainly come too late for that demand to be met effectively and successfully. Waiting for public demand for programmes that the commercial market had failed to deliver would equally come too late to design the structures and assemble the skills to deliver them.

In these circumstances it seems a pragmatic solution to maintain an effective ‘public service’ sector. The radical alternative of winding down the BBC and Channel 4, replacing them by a Public Service Broadcasting Commission is politically, culturally and economically unappetising. Among its many defects:

  • It would be bureaucratic;
  • It would be too closely dependent on Government for income;
  • It could only define what the commercial market had not delivered post facto;
  • It would be feeble competition for commercial broadcasters (which for them would be an attraction);
  • It would become (like PBS in the States) a ghetto service.

None of this is to defend the status quo as beyond criticism. Clearly, one of the central problems is to define the appropriate range of services the BBC should deliver. In terms of programme genres and quality it must offer good value to all in return for the compulsory licence fee. In terms of new technology, it must be able to follow the public on to new platforms. But at the same time it has two other tests:

  • It must be demonstrably and transparently efficient, in the absence of the normal disciplines of a listed company;
  • And it must not be allowed to use the power of its brand, its secure income, and its peerless opportunities for cross-promotion to distort the market for competitors without benefit of public subsidy.

These are demanding issues, but not I think insuperable. They are part of the practical business of regulating mixed markets. While it is attractive to toy with the idea of broadcasting left to a free market regulated only by general laws on obscenity, defamation etc, it is clear (not least from the nearest model, the US) that this cannot with certainty maintain the diversity of output that the viewing public manifestly enjoys.

It is possible to envisage that when most television is paid for by subscription – sometime after the fast receding date of analogue switch-off – an environment of direct producer-consumer relationships will allow us more effectively to express our viewing preferences, and to ensure that the commercial broadcasting market is not crudely distorted to in favour of particular genres. Perhaps, but not with certainty. For the present, I see no way in which the current, flawed, market can properly deliver the totality of consumer interests. We are left with a system which is neither neat nor intellectually satisfying, and one which poses urgent legislative and regulatory questions. But that’s the real world.


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