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Why should the BBC pay its own way?

by Marrick on July 10, 2010

There’s an idea being floated in the ranks of power that the BBC should be made to pay its own way. The concept is that through its own endeavours, the BBC should fund its activities and perform as a commercial organisation would have to. I disagree and I’ll tell you why.

If the BBC had its 40p a day public funding removed, it would have to fight for revenues in the shrinking market of advertising, it would have to ramp up its commercial output, it would have to cut costs and it would have to change its output to meet the demands of a commerce. Not such a bad thing you might think. You would be wrong.

According the BBC’s 2008-2009 annual report its income is derived from the following sources:

  • £3493.8 million in licence fees
  • £775.9 million from commercial business
  • £294.6 million from government grants
  • £41.1 million from other sources such as overseas sales

Recently, it was reported that Internet Advertising had overtaken television advertising, with a record of £1.75 billion spent in the first six months of 2009. So, we’re talking about a comparable period. Extrapolating from that, making the assumption that advertising spend remains constant at this record level, we can assume that the Internet will generate £3.5 billion in advertising revenues in year. This is roughly the same as the cost of the licence fee and more than the total spend on television advertising. So, for the BBC to replace its licence fee with advertising, it would have to take ALL the advertising revenue from the ITV companies and then find some more.

4 thoughts on “Why should the BBC pay its own way?

  1. Fallingdown says:

    I’ve just cancelled my tv license and will shortly be getting rid of my TV. The BBC can go whistle, and here’s why:nnYou talk about advertising as if it drives the sector. Well it does to a very small extent, but you completely miss the point that Advertising is a respondant, Advertising on the web has overtaken the Advertising on TV because it is a bigger market, not because it created that market. A market for advertisers is created if the content is good enough. So the internet gets more advertisement because it gets more people.nnSo here’s the kicker, ITV’s advertising revenue is down because no one watches the damn channels, because it has crap programs. Not the other way around (Crap programs because of no advertising revenue, just look at the seventies or C4 for many wonderful zero budget tv shows – Blake’s 7 for example). If ITV put on shows people wanted to watch, it’s advertising revenue would grow.nnHBO in America gets huge Advertising Revenue because it has the best shows, such as Sopranos, Mad Men and Lost. The ones people want to watch. ITV has I’m a Celebrity get me out of here. nnNow if you look carefully, you will see that your argument is self defeating. If the BBC were opened up to the advertising revenue market, you yourself admit that it would fail to get the revenue in. This is because not enough people watch the BBC, yes a lot do, but they are losing viewers everyday through crap programming. Their current flagship sitcom is “My Family” for crying out loud. Why should they have free cash to produce such dross (Now in it’s 10th season or something like that!!. 10th!), when no American Network would have let it get past the pilot, when absolutely no one would pay cash for such a shitty tv program. And yet they carry on churning the stuff out. Have you seen the daytime schedule?nnAnd then they have the temerity to pay Jonathan Ross u00a36million, and for Mark Thomson (800k/year) to say that the public don’t care about their grossly overpaid managers. And yet still demand their license fee annual rise on the poor.nnTwenty years ago, I would have defended the BBC to the hilt. Today it’s bloated, nepotistic, narcissistic, arrogant, biased, irrelevant and plain old dumbed down. I haven’t watched British TV in nearly 5 years and having sat in a BBC bar not so long ago and listened to the catalog of errors from the so called “professionals”, including one guy who managed to delete the entire news computer directory minutes before a major news bulletin, I can safely say that it’s employees look on it as a free ride.nnI’m under no illusion that taking away the license fee would devastate the Beeb and I’m all for it. It needs halving in size at least, a new DG, preferably someone with a brain, a culling of talent and management, investment in writers (Which is what drove the American Network revival) and a damn good kicking in the marketplace, which should force it to get better in order to survive. A return to Reithian attitudes wouldn’t go amiss either.nnYour argument undermines itself. Your analysis is quite correct in saying that very few people would pay for the modern BBC if they weren’t forced to. I think that tells its own story.

    • UKHamlet says:

      To a certain extent, I agree. Particularly your comments about the BBC being bloated, narcissistic, arrogant etc. I’d argue strongly that it isn’t biased to the extent that the Fox News Channel is biased; it’s true the BBC defends the status quo, and is completely and utterly uncritical of the Royal Family, but its news programs are second to none on the planet for fairness, coverage and lack of bias. nnYou’re also partially wrong about programming driving advertising revenue. I know, because I buy advertising space. The advertising pot is finite. Resources ARE devoted to the best return, but it depends largely on the product being targeted. Most advertising works on the basis of getting huge coverage – throw a lot of mud at the wall and some will stick. That’s why X-Factor commands the largest advertising take. Of the top fifteen audiences ever, the first from 2010 was the X-Factor series finale on the 12th December, next is Eastenders “Live” on the 19th February. If the BBC were restricted to generating revenue from advertising, it would be driven by the need to produce wall to wall programming of this kind. nnTaking your argument about the Sopranos et al – I disagree they are quality drama, but that’s a personal perspective – they are entertainingly disposable in my view – but their audience take in the UK is miniscule. The British don’t like them and that’s the key to all this – the British perspective. Moreover, we’re talking about an entertainment industry in America that has budgets orders of magnitude greater than in the UK, because they have an audience four times larger with greater disposable incomes and they pay through the nose for their TV. Anyway, presenting a handful of the best American dramas as evidence of cultural richness is trite nonsense. If you had any experience of the reality of American TV, you would see that it is unending drivel. Nine of the top twenty America TV programs of all time are Superbowl games, with a further nine in the top forty. That’s nearly half the top forty programs in America taken up by a game no-one watches here. That’s the reality of American TV. Their top rated series are:nn1) Mashn2) Cheersn3) Seinfeldn4) Friendsn5) Magnum PIn6) The Tonight Shown7) The Cosby Shown8) All in the familyn9) Family Tiesn10) Home improvementnnWhere does the Sopranos come? Sixty-fifth. Three places below Falcon Crest. If we’re talking about televisual dreck, the Americans are the best bar none. It’s the rubbish that generates revenue – and if that’s what you want, then fine, make the BBC sell its soul to the advertisers, but there’s only so much to go around and ITV / Sky will suffer as well. We will end up with X-Factor, Britain’s got talent, Eastenders and Corrie dominating the airwaves – minority channels and programs will disappear. Remember we’re talking about a smaller cake being carved up in smaller chunks – it will be a charnel house. nnHere’s what you get for your licence fee:nnThe best nature programs on the planetnThe best news programming on the planetnThe best news and entertainment website on the planetnQuality drama that sells world wideniPlayernnIt’s fantastic value for money. Your entire argument is for reform of the BBC, not abolition of the licence.

  2. desbest says:

    I agree fully with with your blog post, and I also agree with someone else who said that the BBC is like the Mafia doing extortion off people, except that it’s legalised in the form of a tv license. I think it’s the lesser of 2 evils, be public and you pay for it, or go private and get less quality programming.nnWhat people are failing to understand, is that the BBC is a public service broadcaster (PSB), meaning that they have a legal duty to produce as well as broadcast programming that is useful to people. By that I mean programming that reaches every possible demographic, and programming topics for the purpose of the public’s viewing instead of the advertiser, (even though they don’t generate enough money).nnDo you want to know why ITV keeps showing reality tv shows? Do you want to know why they stopped producing children’s programming. Because in 2008, ITV didn’t make a profit. They were in minus figures of debt, millions of pounds of it. In 2008, ITV made the decision to stop producing children’s programmes because they don’t produce enough money. Ofcom tried to make ITV change its mind, but they couldn’t. Ofcom doesn’t want it to be, that only the BBC produces children’s shows, but there’s nothing they can do about it.nnDid you know that ITV, Channel 4 and Five are also PSB’s? That’s the reason why Channel 4 shows The Hoobs at a time slot that nobody will watch it. That’s why Channel 5 once showed Shake! NGA, and Milkshake for a good slot for hours long. Also, as a PSB, they have a duty to show all types of programming, such as religious programming (Songs of Praise). Also ITV is in a financial crisis, even today in 2011, so that’s why they keep showing reality tv, to make money.nnSky is not a PSB however, it has no obligatory duty to the public to create programming FOR the public INSTEAD of the advertiser. Most their shows are imported, and their only original programming was “Got To Dance, There’s Something About Miriam, Terry Pratchett, Derek Acorah, Brianiac, and Pineapple Dance Studios. They commissioned those shows, and Sky1 has been around for a long long time. The line up for all their years of broadcasting is pathetic. It doesn’t stretch far back.nnSo all the UK channels commission programming to some extent, but the only UK channels responsible for producing their own programming are the BBC and ITV. The BBC has an advantage over ITV, and it will always have the advantage. The BBC has an advantage that it can produce a public service broadcast without having to cancel a programme because it doesn’t make enough money. The BBC can broadcast programmes that don’t make enough money, that you enjoy anyway.nnWhat about BBC 1Xtra, and Asian Network? Do you think they would prosper if they went to a commercial private sector organisation? Do you think that those two stations would continue to play underground music, or do you think they would go the way of Kiss 100 in London, or be another The Box, Capital FM, and play mainstream stuff?nnWhat about the documentaries that the BBC makes? They don’t make any money really, but they’re critically acclaimed worldwide? What about Horizon and Panorama? What about their radio stations? What about Songs of Praise? What about See Hear? What about World Service? What about CBBC? What about BBC Three? What about BBC Four? nnWould they exist if the BBC went commercial, or would they be considered to expensive and not profitable to run? Think about that.

    • Thanks for your comprehensive comments. It’s always pleasing when someone takes the time to think about what they write and offer a sensible and constructive commentary. Your ideas have given me food for thought – and I may well steal them… errmmm expand upon them. Cheers ~ UKHamlet.

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