UKHamlet's Blog

BBC Broadcasting House - turned into apartments for the wealthy?

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.

Let’s assume it manages to take between a third and half of it – this isn’t unreasonable – the BBC has a TV audience share of about 38%. What would that mean?

Well, it would mean huge staff cuts for a start – thousands of people put out of work. Currently the BBC employs about 30,000 people. If its revenue were cut by two thirds, you would expect most of them to go. Naturally, there would be a cull of the “talent” which accounts for £230 million of the BBC’s wage bill, which means most of the programs would be hosted by unfamiliar faces, but I dare say we could put up with that.

The real problem would lie in the disappearance of those people who make the programs: the directors, camera operators, engineers, creative talent. Two things would happen to this group of employees: firstly, most of them would be made redundant, probably about 10 to 15,000 staff: people with families, homes, mortgages – their lives and careers destroyed for the sake of 40p a day. They would not find new jobs in the commercial sector, because they would be making cuts too – more of that later.

The second thing that would happen is those that were left would be expected to do more of their own administration, because the administration would suffer huge cuts too. This would mean they would have less time to devote to doing what they do best, making programs, so the output would suffer.

So, massive cuts in staff, thousands out of work and ITV having to do the same because one third to one half of its income would be pouring into the BBCs coffers. The mirror image would happen to the ITV companies – they would lose staff, programming would suffer and their whole viability would be on the line because there are very few companies that can suffer a permanent drop in their income of a third to a half, let alone ones that are on the verge of insolvency anyway. We could be looking at a TV Armageddon. The BBC and ITV companies would be lucky to survive as standalone companies and would more than likely have to merge. This means less choice, fewer channels, and lower quality programs. More importantly, it means that the companies would no longer have to fear the media. If they are paying for the output, then they would expect a degree of compliance. It might not be stated out loud, but it would happen. It already does.

Then there is Sky. Already, the last remaining satellite broadcaster, it would have carte blanche to ramp up its prices to the consumer. Remember, this is an organisation that uses ANY excuse to charge you more.

Currently, I pay little short of £70 per month for my Sky package. So, roughly the equivalent of six times the BBC. The average Sky package is nearly 400% the cost of the BBC licence, although to be fair you only get about three times as much rubbish on their channels. Their revenues will get hit as the BBC takes some of their advertising income. That can only mean one thing – they will increase their rates. It is bound to happen and all the assurances and blandishments of the government will not change that. If Sky have one third of their advertising revenues picked off by the BBC, they will cut channels and increase their fees. It would only take a 17.5% increase in the fees they charge me to equal the cost of the BBC licence fee and a 20 to 25% increase would be on the cards.

As a test, I chose three times through today to check the quality of the programs on my Sky package: lunchtime, early evening and middle evening (peak). There was nothing I wanted to watch on ANY of the SKY channels and nothing that remotely interested me on ANY of the ITV channels. The only programs being broadcast at any of these times that I wanted to watch were on the BBC. Okay, I’ll concede that is incredibly subjective – but how often does it happen to you? How often do you hop from channel to channel, looking for something that’s half way interesting? Yeah, I thought so.

So, if you want to get rid of the BBC licence, you will get in return:

• Fewer programs
• Few channels
• Lower quality programs
• Thousands of lives destroyed
• Higher costs to you through fees to Sky
• Less choice
• Greater interference in programming from advertisers

Now, the Internet generation, those who download their pirated American TV programs, or those who are happy watching forty-five second clips on YouTube, may not worry about this, but there are millions of people who WILL be affected. Independent broadcasting will become a thing of the past. The BBC is a beacon, it is an organisation that upholds the truth and will not be bullied by the government of the day – well not often anyway. The BBC provides quality programming of a kind that commercial TV, Radio and Internet cannot and will not supply, because it is incompatible with their paradigm.

So, if you want to pay more for less: go ahead – get rid of the licence fee. Just remember when they tell you it is for the best, they told you this when they privatised British Gas, this was the promise when the Building Societies became banks, it was “in your interests” they said when the water companies were sold off, they told you British Telecom would be better in a privatised, commercial world. They lied, and they are still lying.