June 2004

In praise of a mixed broadcasting sector (and of the (BBC) licence fee).

In praise of a mixed broadcasting sector (and of the (BBC) licence fee).

As we have been drawing up our weekly recommendations of radio programmes that we firstly felt worth listening to and secondly were available for people in different places and time zones we have become increasingly appreciative of public service broadcasters, funded in the main by licence fees although some also take advertisements.

In particular we have found the resources offered to the world by the BBC so valuable that we thought it fair to skew this comment greatly towards the Corporation's output and values.

We've become increasingly aware through our news reports of the degree to which many commercial broadcasters will go to play down the benefits of such broadcasters, frequently to degrees that if not actually dishonest are certainly misleading and even more frequently without in any way declaring a vested financial interest in weakening a competitor.

Sometimes the attacks are blunt - an attack on the concept of a licence fee, for example, and we feel experience of the BBC and other broadcasters shows the value of this - and sometimes they are more indirect - a call, for example, to keep public broadcasters out of areas where the commercial broadcasters have their main audiences: For TV this is often in the area of soaps and game shows whilst for radio - where commercial radio has tended to concentrate on a narrow range of music, talk, news, and sport - they often attack on pop music channels, which the commercial broadcasters claim are unnecessarily broadcast by public stations since they meet the demand themselves.

In all cases that we've seen there hasn't been a single disinterested comment; the arguments are all ones for changes that remove or reduce competition and, although they may be claim to be arguing in the public interest we can't accept that the public interest is identical to that of commerce.

We predicate our main argument here on a comparison between the UK where there is a strong licence-funded broadcaster, the BBC, with the US, where public broadcasting is comparatively weak and would suggest that in the long-term the benefits of the British system outweigh its disadvantages.

The benefits from commercial radio for the public broadcasters.

Before developing our argument, we would accept that benefit has accrued to the BBC from the presence of a commercial sector and suggest that the main benefit is that its competition has sharpened up the public broadcasters and made it more responsive to its audience: we would contend that the in the reverse direction the existence of public service broadcasting also sharpens up its commercial competition.

Unfortunately, that's about it. We don't accept the argument that commercial broadcasting is "free": it isn't! The supposed free lunch is bought at the price of the commercials, of themselves there to increase spending not just to divert it from one brand to another and, more importantly, in terms of the emphasis of the programming to maximize profit rather than provide a diversity of services, and also in terms of a mentality that in our view can frequently neglect many elements of life that can reasonably be considered as important as consumption of goods or services.

We would also content that in the same way that there is an undeniable argument in principle against the idea of compulsion through requiring a licence for reception equipment there is similarly an argument in principle concerning the changes to society, from which nobody can escape, if commercial values and pressures are allowed unbridled sway.
The real questions to be asked therefore are whether on balance the public would be better served without publicly funded broadcasters and if not - as we strongly contend - whether other options are preferable to the licence fee.

The value of a diversity of services.

One of the real benefits in our view from a dual system is the diversity of services it brings. In terms of genuine choice we would argue that the mixed system provides significantly greater diversity if properly structured than either a public-only or private-only system.

Looking at the situation in terms of radio in the UK compared to the US, where commercial dominates and public radio is becoming more and more primarily a news-talk medium, we think the balance here is clearly in favour of the UK.
True in the average English city you don't have the same number of themed music stations as in the US although as digital radio has expanded so has this particular aspect of choice. But on the other hand a quick dip into BBC radio schedules any day will show a vast range of programming that just has no real equivalent in the US and that were it to be allowed to die would never be created by the commercial sector.
Just consider the range of drama, story readings, radio comedy, long documentaries, current affairs, news, sort and talk on British radio with the choice listed in the US including both commercial and public stations.

And what of other areas? When US broadcasting began there was an emphasis on localism but as consolidation has put more and more of US media into fewer hands this has decreased and stations have become increasingly subject to the rule of corporate headquarters.
Interestingly enough in the UK where the BBC was set up as a national broadcaster but its commercial competitors following the US example were set up on a local basis the trend has been for the commercial sector to become less local under the consolidation that has taken place so far whilst the BBC has, in reaction to the commercial sector, added local services.

Also interesting is the fact that in the UK radio listening - and listeners to a degree get a free ride since there is now no separate radio licence so all the funding comes from the TV income - has been increasing whereas that in the US has declined.
The reason for this in our opinion is a combination of a greater real choice, lower advertising load for the commercial sector, and the beneficial - for the audience anyway - effects of an environment where each sector is fairly strong and evenly matched and the regulatory regime prohibits format changes without a process to justify this.

The relation between services, funding and regulation.

In our view the combination of real competition, licence-fee funding that guarantees the strength of the BBC, and a commercial sector where the license issued is to be a particular kind of broadcaster and not just a commodity that can be sold at the maximum price has combined to deliver a particularly rich service to the UK. Significantly changing any of these elements could equally badly affect the balance and the whole environment.

Certainly the licence fee could be replaced by funding out of general taxation but human beings being what they are and politicians what they are this, in our view, is a certain recipe for both more interference and lower funding as politicians find other projects to which funds could be put.

Even worse we feel is to partly fund by advertising, thus diluting the emphasis on public service and skewing priorities towards commercial activities, something that dominates most other areas of life. Nor do we think the US system of a comparatively meagre public subsidy combined with "underwriting" gives public broadcasting the same strength.

We conclude that for the BBC the combination of licence funding and a public service remit that is regularly reexamined gives it a strength that it would not be possible to match under other systems.

Among the wider implications of this is that profits may not be as high in the commercial sector as they would have been without strong public competition but we feel the public benefits from the British environment in which the commercial sector, facing the combination of strong competition and a radio licence system that means they operate on the basis of particular format promises given to win the licence.

Add in a policy of automatic renewal of profitable analogue licences where a service is being provided on a local digital multiplex [where there is not a renewal is subject to competitive pressures should another organization wish to propose an alternative service] and there has been a pressure for innovation that in our view has been to the benefit of all.

We just don't think a sound argument can be made that the balance would be better for the audience under an American-style system: In fact, although it would cost shareholders in current radio companies a significant one-time hit in values we think the US audience would benefit were licence renewals there not automatic but subject to competition at least every decade from newcomers.

The main conclusion we come to, however, is that the world, not just Britain, has such a cultural asset in public service broadcasting and particularly the BBC that commercial attempts to weaken the sector should be fought tooth and nail: In the end it would be a much poorer world that did not have them than commercial broadcasting rather than vice versa.

What you think? Please E-mail your comments.

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