London Business School: David Currie, outgoing Ofcom (UK broadcast/digital regulator) chairman.
Ofcom publishing 20 page summary of contributions on phase 1 review of PSB. Wide range of mutually exclusive positions.
Wide recognition of role market now plays. Imported digital content too. Public purpose can be met by imports in history, science, drama etc. UK origination not an end in itself, but a means to an end — delivery of public purposes.
Market provision may be such that market failure arguments have been superseded by ‘citizenship’ arguments.
1) In content provision evidence is that market has reached a plateau. Not because of crowding out by PSBs. Channel and audience fragmentation militates against the market provision.
2) Role of a strong BBC is cornerstone of PSB. Universal agreement. You don’t strengthen PSB by weakening BBC. PVT successful and market impact successful. But use of BBC assets would not fill gap for commercial PSBs.
3) More content reaches PSB standards — issue is discoverability. Idea of BBC and C4N as partners for other providers of PSB content is an interesting suggestion.
a) Plurality. To confuse diversity and plurality is like confusing share and reach. Plurality is valuable in itself. Question is how far the market can deliver PSB plurality without intervention. Audiences less concerned about religious TV plurality. C4 has been more successful than BBC in reaching ethnic groups and young.
Public intervention problematic, use existing public providers e.g. BBC. Few takers for BBC only PSB model. Evolution can be extinction without sustainability.
Clear-sighted debate about where plurality necessary and how best it can be delivered.
Universality. Sky arguments have a point under old market failure justification. Not under new citizenship arguments. Securing reach and impact important for future PSB delivery.
Innovative one-off dramas have become increasingly rare. Michael Grade says lift all regulation so we can give the public good programmes. Value of PSB drops rapidly, for ITV will drop well before 2014. ITV relationship with nations will change. Political wishful thinking won’t change this.
People say we are letting ITV off. Current downturn only accentuating pressures.
C4 can do more thru self-help but likely to run into trouble soon. C4 shouldn’t settle for managed decline in its public purposes. BBC do have a point that institutional model can deliver better than commercial model.
We may need mixed approach — long term approach may be too inflexible.
One funding option is digital switchover surplus. £800m not within BBC baseline. Govt and Parliament can reduce 2013 switchover cash and:
- give it back (e.g. lower licence fee)
- give it to BBC
- give it to other PSB content.
Using switchover surplus for anything other than BBC is based on thin survey evidence. Not everyone understands what the BBC licence fee actually funds.
Ofcom wants wider debate than this.
Conclude: revolution in AV content delivery. Broadband, Mobile etc.
Title: British Broadcasting: What Will Our Children Inherit?
Ofcom report terrific. Arguably nothing that Britain did better in 20C than broadcasting. If we get this wrong, we won’t be able to reconstruct it. (me: English Heritage approach to media.)
PSB system needs adaptation, as TV advertising is mature market, primarily push/brand-building advertising but it is not falling off a cliff (print classified “pull” advertising is falling off a cliff, hitting local newspapers). Pretty close to saturation on multi-channel, so decline of main channels probably slowing.
Agree with Sky that much multi-channel meets PSB, but little is UK produced.
1) Evolution (BBC/C4 plus some ITV/Five PSB)
2) BBC/C4 plus limited competitive funding
3) Broad competitive funding
If you don’t believe in institutions (economists think they matter more, e.g. collapse of Soviet Union) and beleive in digital future you will favour 3 — Barwise favours 1. Telcos favour 3, consumer behaviour types more evolution oriented.
Don’t give up on PSBs.
1) Strong, well-funded BBC.
2) Enough funding for C4 to compete against BBC (indirect not “top-slicing”)
3) Do a deal with ITV and Five to continue UK PSB production
4) Supplement with competitive funding (not thru Arts Council approach — creative content hard to manage)
How to fund it?
More generous licence fee settlement needed (!)
Despite anti-BBC propaganda, licence fee complaints are non-barking dog
Importance of BBC in people’s live is massive, cost is trivial
Use regulatory assets, including spectrum
Real problem is ideological/political
1) Widespread market fundamentalism — pure market worse for consumers as well as citizens because cost per hour of BBC is so low.
2) BBC Trust PWC report says more successful the BBC the more competitors object — and success breeds complaints (e.g. Jonathan Ross salary).
3) Main competitor owns Sun and has access to PM.
4) Politicians don’t watch TV.
5) Hype and confusion about the internet.
1) Make the pure-market counterfactual explicit. What does getting rid of the BBC mean?
2) Public value vs. market impact.
3) Don’t get paranoid about Murdoch.
4) Get PSB on political radar.
5) More audience research.
How much intervention is necessary? Counterfactual is US system. Only competitors would be better off without BBC.
Me: Where is citizenship argument articulated?
DC: Doesn’t really answer question.
David Wheeldon (BSkyB): How do you quantify how much money you spend supporting ‘citizenship’ — it’s bollocks btw!
DC: Parliament debated it in Communications Act…for others to quantify.
PB: This problem is not unique to broadcasting — public service provision always difficult — defence, nurses etc. Researchable but not quantifiable.
Inst of TV, Scottish (sorry — missed name): State spectrum should go back to nations and regions not commercial operators. Missed opportunity of PSB.
DC: Local services are crucial. We do consider them. Very different ways to deliver them. Take nations very seriously, and delivery of citizenship issues there.
PB: Local issue on agenda in Conservative Party document.
Robin (Human Capital): Re: regulatory assets, will you look at auctioning spectrum?
DC: Looking closely at it, but won’t be sufficient. Fear that auction won’t deliver enough to sustain regional news etc., besides revenues go direct to Treasury.
PB: What revenue could you get from an auction? Telcos would win any auction.
DC: Oversimplification. We are putting spectrum into marketplace.
PB: You haven’t sold it all. Should you reserve more? Do you use some of the revenue to support PSB?
Helen Arnot (STV): What’s your counter argument to evolution leading to extinction?
PB: TV not going away. Digerati futurists wrong. TV still important in real world. Multi-channel (90% penetration) and PVR (20% penetration) are only real technological changes.
DC: PB misunderstood question. STV depends on network arrangements. There is a concern about that network delivery.
Nick Toon (C4): Explain ‘bottom-slicing.‘
PB: C4 could get money towards transmission, or a share of BBC Worldwide. Lots of indirect methods potentially available.
BBC person: Money goes to support content.
Ivor Gaber (VLV): What about radio? Knock-on effects of re-organizing TV?
DC: We are also doing work on future of radio and DAB platform. Pressures on commercial radio considerable.
IG: We must consider radio.
DC: If money was top-sliced you could see that impacting on BBC Radio as well as TV.
IG: Role of radio in citizenship crucial.
Matthew Ward: State aid and EU constraints?
DC: Not an expert, but do need to take account of them. My understanding is not a huge constraint, e.g. Italy.
Jocelyn Hay (VLV): Reinforce importance of BBC Radio, patronage and quantifying costs towards supporting citizenship.
PB: PWC is looking at that.
DC: Not easy.
Greg Childs (SaveKidsTV): Politicians prob won’t engage with PSB debate. Kids sector already ‘in PSB failure.’ Time running out.
DC: Publishing our response in September. May be some regulatory action we can take to help commercial PSBs.
Howard Litton (Nickelodeon): What investment are we talking about?
PB: Kids TV very cheap. Ofcom did well standing up to ad ban. Make the call case by case.
DC: Altho ad restrictions play a part, but decline longer term. Economics not great.
Geraint Talfan Davies (Inst. Welsh Affairs): Public value lost from nations and regions so case for prioritising it. Are you suggesting two-tier system? Where do regions fit in?
PB: Place high value on news. We still have Teachers TV, S4C, Gaelic TV, World Service. I didn’t invent hierarchy, it’s a reality. Very difficult to produce good TV for small bases, e.g. Austria, Denmark. So what are citizenship reasons.
DC: Crucial citizenship issues in nations, but ITV regions don’t make any sense.
Final point: Hybrid solution most likely. Ofcom won’t come up with one model. Decision for govt. We need to articulate possibilities for politicians to make well-informed decision.