As the BBC asks the public to respond to its plans to cut £670 million from its annual budget, we asked some leading industry voices to outline the BBC they think would serve Britain best.
Event recorded on 21 November 2011.
Journalist Steve Hewlett chaired the panel, which included:
Peter Bazalgette– Former Chief Creative Officer of Endemol, now a media consultant and digital media investor
Alex Connock– Co-founder of factual TV indie Ten Alps and founder of Manchester-based digital content producer Pretend.
Mark Damazer CBE– Master of St Peter’s College Oxford, former Controller of Radio 4 and 7 and various roles for BBC News.
Caroline Thomson– Chief Operating Officer of the BBC, responsible for the BBC's corporate and operational activities including: Policy & Strategy, Marketing, Communications, Legal and Editorial Policy.
Steve Hewlett:We’re here to talk about My BBC in Ten Years’ Time, otherwise known as DQF; have they fluffed it. We have a fantastic panel for you this evening. On my immediate left Mark Damazer, Master of St. Peter’s College, formerly controller of Radio 4, before that a big wheel in BBC News. I first met him when I was editor of Panorama and he arrived to inherit, I think is the term, current affairs.
Next to him in the middle is Alex Connock, you will know as an investor, a bit of a City bod, involved in Planet 24, Bob [Geldof] and Waheed [Alli] all along. Then set up Ten Alps, more recently has established his own production company in the north, in Manchester called Pretend TV. He’s also a Visiting Fellow with the Reuters Institute for the Study of Journalism.
You will recognise in the middle there Peter Bazalgette, who now calls himself a digital entrepreneur.
Peter Bazalgette:No, I think that’s what you called me Steve.
SH:But I remember him as the producer of Food & Drink. And obviously he did Big Brother. And on the end there is Caroline Thomson, who is not going to make a presentation but is going to respond when the others have had their say. So, rather than hanging about, there’s a short video and then we’ll get going with the presentations.
SH:So, Mark Damazer – Your BBC in Ten Years’ Time.
Mark Damazer:Thank you. So a key difference between Oxford and the BBC is that people in Oxford know more about the BBC than people in the BBC; that everybody at Oxford has a PhD in BBC Studies and a professorship in Radio 4 studies, because I still get berated for everything that happens on Radio 4, dating right back to 1967. I’m just going to make a few points, we’ve only got a few minutes each, and what I’m going to say is largely political. By which I don’t mean party political, or about the interstices of the BBC’s negotiation about the licence fee. But it’s to make the point that whether you want a BBC and what kind of BBC you want is fundamentally a political view.
Resolving the matter of the BBC’s future, and whether it is still to be – as I hugely and passionately am concerned that it should be – which is the central plank of Britain’s broadcasting system is, in the end, a subjective matter of value and politics. It’s certainly a matter of consumer behaviour to an extent but in my view it transcends that, but I’ll come back to that.
Allow me, slightly paradoxically, to begin talking about ten years from now by going back to 1989. Mrs Thatcher held a summit with the TV moguls and panjandrums of her day. There, a man who’s long since faded from the scene persuaded her that we were all hugely underpaying for content, and that if the public were allowed they would end up willingly forking out hundreds of pounds more in real terms than they were then paying for the rather limited broadcasting ecology of the day. And he was right, and it is worth thinking about.
If you look at what the British population at large is prepared to pay for what comes out of its television set it is exponentially greater than what it was 30 years ago. And it’s in that context I ask you to think about the £145 that you pay for the licence fee, because a very large number of people choose to pay a great deal more than that to have Sky.
Sky has been, in some ways, superior to the BBC in doing a limited number of things extraordinarily well. And the BBC would do well, and frequently does do well, to remind itself of the fact because although there are other things to say about Sky – and I’ll get to that – what Sky did in setting up a 24 hour news service, and what Sky did in transforming sports broadcasting in the UK, and how Sky has redefined customer service; are all signal events in the broadcasting landscape and the BBC could and should learn from it.
But I can’t resist, on this day of all days, just quoting the MacTaggart Lecture from 2009, given by James Murdoch, the subject being the BBC. ‘The BBC,’ he said, ‘is having a chilling effect on broadcasting and news provision in the UK. The BBC is fulfilling Orwell’s prophecy of having a centralised state apparatus providing too much of the news. The only reliable, durable and perpetual guarantor of independence is profit. And by the way I’m one of those people who think that profit can generate extremely good news services. Pick up The Economist and you’ll see.’
And then he concludes, ‘Ofcom is an overbearing institution and what we need in broadcasting is the system of self regulation which applies to the press.’ 2009. Now, you could say that’s a rather obvious set of remarks I’ve made, but it does remind you about the BBC’s commitment to a certain sort of standard which it can’t always live up to, but which defines itself as a public good. As, if you like in Economist parlance, a ‘merit good’ which sits above and beyond the immediate consumer response to its services.
If I were to give a justification of that in a rather empirical way about the BBC’s culture, I look no further than Panorama this year. Hilarious sequence of events; everybody from the royal family down desperate to get the World Cup from an organisation which everybody knows is corrupt and rotten. But the pretence continues, and only two big news institutions go after the story. One is The Sunday Times, and the other one is Panorama. Panorama exposes, in vivid detail, everything that we knew about FIFA; bribery and corruption on an industrial scale.
Is this celebrated by the rest of the BBC? Is it heck? The next thing that happens is that the editor of Panorama appears on the Today programme and is treated as a war criminal. ‘How could you possibly have done this so close to the vote? Isn’t this a flagrant example of the BBC’s lack of patriotism?’ This is ridiculously irresponsible behaviour; the poor man flayed within an inch of his media life by another part of the BBC desperate to show its independence.
Now at one level ridiculous, at another level it rather manifests itself as a signal example of the BBC’s culture and I only ask you to compare it with News International’s reporting of Hackgate. Now let me get to the heart of an economic argument; it is of course compulsory. When asked the question over there you can see that most people want to pay less than the £2.70 that they’re paying at the moment. That’s not altogether surprising; one might be just as surprised at how many people are prepared to pay £2.70 as the fact that there is a majority saying that they’re not.
But it is a merit good in the sense that it does things beyond the way it is consumed, which is a social, political and democratic good. And in the end, provided the BBC is able to demonstrate in its programming that it is providing enough excellence and enough of a connection to its audience the economies of scale which derive from the BBC now and should derive in ten years time, by being able to demonstrate these kind of connections with these kind of programmes; which are in those kind of services, justifies in my view both the scale of the licence fee and its compulsory nature.
And I repeat, that is a subjective and political view, and in that sense my belief in the BBC is an ideological belief and the starting point is that an intervention in the market of this kind of size and scale is appropriate.
Now a couple of things specifically about what will make it work and what we learn from the last ten years. One, is that the BBC’s investment in distribution and technology up to now, always unpopular with programme makers who always tell you that spending money on the next digital service or on the next bit of mobile technology is a waste of time, because in some way it detracts from the magic of the programmes.
The BBC’s ability to guess and intuit and analyse consumer behaviour and leave its options open has been remarkable. And the further investment in distribution and technology, up to for all I know, understanding that in ten years time I will be watching television off a fridge magnet. Or I will be able to talk to my car and demand that I listen to the episode of In Our Time that I missed five years ago.
All of these things are pre-conditions for its success, but I am optimistic because the BBC has not only been dextrous and flexible for its own sake; it has also rescued Freeview from what was the appalling mess that it inherited from terrestrial digital broadcasting and made it a perfectly worthy rival to what Sky in many ways rather gloriously achieves.
Just a couple of other points which will define the BBC in ten years time and will define it as being worthy of its status as a merit good with a compulsory licence fee. The heartland will be, as it is now, news and current affairs. And doff a hat to John Birt, because the transformation of news and current affairs in the 1980s as being an amateurish rather backwater place within the BBC to being the pile-driver; irritating and imperial as it can be, has been a transformation hugely for the better, not merely for the BBC’s sake but for the sake of democratic discourse.
And if you look at its ability to hire, in-depth the kind of people who penetrate your psyche every day on the Today programme or the ten o’clock news or Newsnight; Messrs [Nick] Robinson, [Robert] Peston, [Stephanie] Flanders, [John] Simpson, [Jeremy] Paxman, [John] Humphrys, Evan Davis, Andy Marr. The BBC’s ability to recruit, in some cases, rather unlikely talent and turn it into not merely brilliant broadcasting, but people that you feel are part of your life, has been remarkably well achieved and was not inevitable because it was not so when I joined the BBC.
I know I’m at BAFTA, but don’t forget the value that radio currently adds to the BBC, and a lot of it is market failure. Without the licence fee you don’t get Radio 4. Do not fool yourself that you would get Radio 4’s depth and range of content in news and current affairs in particular if you didn’t have the economies of scale justified from that £145. You would not have it.
Finally, is DQF right? I don’t know. There are very, very few people who will know in the final analysis whether all the decisions that make up Delivering Quality First are right. What I do know is that starting that debate with the pre-condition against salami slicing, being in management parlance only one step above paedophilia. There is nothing more terrible than salami slicing; in fact salami slicing is very often, unfashionably, the right thing to do if you slice the salami the right way.
The notion that the BBC needed to discard BBC3 or Radio 1, or some huge enterprise in order to show itself willing to accommodate a more austere age would have been a mistake. All you can ask is that the governance of the BBC and its management looked at this with an appropriate degree of seriousness and diligence and I have no reason to believe that they did not do so.
But finally, talent; I talked about all those names that are household names that make the central news and current affairs spine work. I would say to the BBC, as a friend from outside, and as a BBC patriot, that the under investment in its training scheme amongst production staff, journalists and others over the last 25 years has been bad, that the way it is has operated has been bad and that it is a primary BBC responsibility for the industry as well as itself to have bigger, wider, more imaginative trainee schemes that are not embarrassed to go out and get the best people they possibly can. And if they do that they will flourish, and deserve to do so.
SH:Mark, just a couple of things if I can, before we move on. What should the BBC learn from Sky?
MD:There are a couple of narrow points, I’m a sports fanatic and Sky’s sports broadcasting, although occasionally poor in town and we have the whole Andy Gray thing, but the ability to innovate – Sky has the ability to innovate in the things that it does, as it did in news and as it has done in sport, which is remarkable.
SH:Do you think Sky’s more confident than the BBC in some ways?
MD:I think these things are, as it were, technical. I wouldn’t go so far as to say that they are cultural, and I don’t go with the notion of the BBC being a stultified, bureaucratic, hierarchical organisation. That’s a myth which the BBC sometimes does its best to perpetuate, but it’s not my experience of it. It has elements of that, the BBC, but it’s not the dominant culture.
I mean obviously Sky, as it were, is a consumer service; the BBC operates in a very different way because of the obligations of the licence fee. But anybody who phones up Sky with a broken piece of machinery knows that they are absolutely brilliant at doing it. So embedded into that culture, and I don’t know that it’s a direct lift for the BBC, are techniques and an understanding of how to relate to its audience, which are very impressive.
SH:You’ve said that people’s willingness to pay for the BBC remains strong, in the sense that people are prepared to pay vastly more for other things; £600 a year for Sky, more or less, give or take, £145 for the BBC. But that poll the YouGov.... 2,000 people, so it’s not a small poll, okay there is an issue of whether the £2.80 relates to what households... and it would only cost individuals £1.20 something, but anyway the point is, that would tend to indicate in contrast to most other surveys that I’ve seen that I can remember that people’s tolerance for the licence fee might be declining. Do you think that’s right?
MD:Well I don’t know objectively whether it’s declining or not. I’m not as surprised by the poll finding as you are; it’s very rare that you ask somebody whether they’re prepared to pay more or what they might consider a reasonable amount for something where they think that they might get it for less. My quarrel with it is not the finding itself, but the depth of knowledge that you would need in order to make a correct democratic judgement. If you replaced the licence fee with a subscription service I am as convinced as I can be that you would end up with far less generated British content and it would cost you a great deal more money.
So people around here would all be able to dip into Radio 4 and enjoy BBC4 and BBC 2 and Radio 3, and what’s going to happen? The reason why the BBC can do the Olympics and the Royal Wedding and Children In Need and all the rest of it is to do with economies of scale. The economies of scale come out of a compulsory licence fee. That is an unpleasant truth, but it had better be gripped because if you don’t have that scale of the £3.4 billion you will be able to provide proportionally much less for every pound you spend. There is an economic argument as well as a democratic argument, but the whole thing begins with a democratic argument and a political argument about a level of interference in the market which the BBC needs to display its virtues to justify. And in my view if does.
SH:Do you think it was appropriate for the BBC to protect Radio 4?
MD:But of course. Why do I think that? The point about the licence fee, and the point about the BBC, and this crucially differentiates itself from the United States, it is not a market failure organisation. If you don’t grip that then you don’t have the BBC.
SH:You just described radio as a market failure organisation.
MD:But if I can finish my logic, it is not a market failure organisation, the BBC should be, aspiring to be, the best in a whole variety of genre including those in which there is commercial competition. But if the BBC doesn’t do market failure the BBC filling in for market failure is the necessary precondition.
Without that, and if it’s only going cheek by jowl, hammer and nail, whatever you like, with commercial broadcasters, it’s not worth it. It must do its market failure job. Radio 4, as we have seen from Channel 4’s attempts to do it, is a market failure enterprise and it’s a market failure enterprise which has a mass audience.
You get ten and a half million people a week listening to an average of 13 hours, paying something less than 1p per hour for the product.
SH: So they’re being undercharged?
MD: I would say that, wouldn’t I?
SH:Okay, thank you very much for that, thanks very much Mark. Alex.
Alex Connock:So, my BBC in 2021. I would bet a BAFTA statue made of pure gold – if I had one; that everybody in this room has been on Google in the last couple of days. And anyone who hasn’t probably has a Mac or an iPhone, or Microsoft Windows. If anyone’s been on a jet it’s probably a Boeing, if it’s not a Boeing it’s definitely an Airbus.
If you’ve driven a Toyota, an Audi, a BMW, a Mercedes, drunk Coke, worn Gucci, watched Man United, Barcelona. What have all these things got in common? Well they’re all universal brands with enormous worldwide impact, and they’re all based in regional cities not capital cities, interestingly.
Google is the most successful start up in the whole history of the world, and it’s based in Menlo Park California, which has a population of 32,000 which is five times smaller than Harrogate. Facebook is based in Palo Alto, which is smaller than Grimsby. Microsoft and Amazon are both in Seattle, which is a quarter the size of Manchester. And you can fit Cupertino, California which is the home of Apple, one of the world’s most successful corporations, 40 times over into Manchester. I could go on and on.
In fact, because I have quite an empty life, I counted up the top 30 brands in the world on the Interbrand Index and interestingly only four of them, 13% of them are based in a capital city at all.
So let’s look where we can go with that. The ‘world class brand’ argument was used last year by critics of the move of a few departments of the BBC to Salford. The Daily Mail said shifting ‘gold standards’ from the capital like Match of the Day could ‘inflict harm’ on programmes. And yet from the global evidence, it’s not just demonstrably the case that being in a capital city equals quality or brand value at all; quite the contrary.
The BBC’s initial move of 1,600 jobs to Media City [in Salford] is a great success, it’s a creative renewal. If you go there you’ll find it inspiring and my suggestion for the next decade is basically to build on that excitement in a way that can actually protect the BBC’s quality and its range, without cutting anything in the context of a flatlining licence fee.
So there are two elements to the plan. Number one, cut costs by moving almost the whole corporation to Manchester, essentially. Put some of it in other regions, almost all of it in Manchester, and only leave in London what could only be done in London which is basically news and current affairs and elements thereof.
If you look at the YouGov survey you can see that the top requirement, the top aspiration was in fact value for money, so this is not to be sniffed at. Second, grow revenues, by building the BBC as a global producer of content on a much greater scale than it is at the moment. To make that possible, move BBC Worldwide to Manchester, and put it underneath much more of the output. I’ll talk about that.
So my BBC in ten years time is essentially ‘BBC North and Global.’ And if you don’t believe that’s possible go and ask Intel, eBay, Amazon, Google and so forth because they’re all not in capital cities. So the first step is to actually move the BBC to Salford. Why would we do that? Well the cost of Media City is £189 million – that’s a BBC figure – the cost of building the new Broadcasting House in London was an astonishing £1.05 billion. I would love to find somebody in the real world who could justify that figure.
If you do some really rough, back-of-the-envelope maths based on 5,000 people moving into Broadcasting House versus the number moving into Media City, it looks roughly in terms of capital cost about twice as expensive to have done Broadcasting House. Staff are cheaper in the north too; any survey you ever find will find that staff in the north are cheaper, yet around two thirds of BBC people, even after the Salford move, are still in London.
That really has to drop, just to save money. And then you can make all the social engineering arguments you like about the relative impoverishment of the north or other regions of Britain. I won’t go into them today but they’re clearly well established.
The second argument is growing income. Exporting’s good for the BBC, it’s good for Britain. Media content, actually one of our best exports, £17 billion worth in 2008, 4.1% of the total exports of the UK. We’re also the world’s number one TV formats exporter; six of the top 12 formats in the world are British.
The BBC already has a perfect export platform; BBC Worldwide, £160 million profit last year, so let’s get the ball rolling, move Worldwide to Manchester, put it underneath much more of the BBC content, don’t have it defining what’s made but have the question asked about any given commission – does this have an exploitable franchise to it?
If you look at Worldwide’s income, £1.1 billion, roughly £600 million of that was from overseas sales. Do the maths; £3 billion licence fee, roughly 15% of the BBC’s income is currently coming from overseas sales; WPP, another British global media company, 88%. So we have 15% versus 88% in terms of the revenue they’re getting from overseas.
My argument would be if you could increase that percentage you would be bringing free money into the BBC and every pound that you earned would be a pound that the licence fee payer didn’t have to pay or, if you like, a pound that didn’t have to be found somewhere else in the very inaptly named Delivering Quality First.
We talked about cutting costs by moving north and building the BBC’s revenue overseas. Why Manchester? A good question; Manchester’s not really a regional town, it’s an export town. In fact Manchester basically invented capitalism with the challenge to mercantilism in the early 19th century. It also invented communism for good measure, when they wrote the Communist Manifesto in what’s now Cheetham School of Music. It has an airport that works, which is good.
It has a football export industry to Latin America, Africa and Asia. Manchester United has 20 million followers on Facebook, which is a hundred times more than BBC News does, interestingly. It’s got 90,000 students; it’s got cheap office space, perfect place. So let’s get on with it.
Let’s keep the incredible BBC programme quality. Nothing I’m saying is in any way meant to challenge, quite the contrary it’s meant to underpin that. But let’s exploit our BBC inventions much more ruthlessly. We had Eric Schmidt from Google exasperated at the Edinburgh TV Festival about the fact that iPlayer had been invented by the BBC and then deliberately not exploited worldwide.
Let’s prioritise that global audience, those 80 million digital Brazilians who are coming on stream, LinkedIn is adding two users per second – most of them in India – with content that’s wafer thin compared to the BBC Radio Solent or something. Why isn’t the BBC in that game? Why isn’t the BBC stacking up those people?
Let’s take a quick step back just before I finish. There’s a whole constituency in Britain that would like a Countryfile version of Britain, where we listen to The Archers and read The Daily Mail and so forth, but actually the real 21st century is a do or die global battle, not just for companies but actually for countries. What we have in the BBC is a world class organisation, and we need to keep that but we need to curate it and develop, and that really means cutting the costs by moving it to cheaper places and increasing the revenues by playing in that global world. And if you don’t believe me ask Disney, Nissan, Nike; the list really is endless of companies that have managed to be world players from regional cities.
Finally inventor James Dyson wrote a 2010 government report called Ingenious Britain, and he said ‘we just need fuel to power up our exports, we need a bit of tuning, most of all we need a sense of direction,’ So my direction, you’ll see this one coming, is M1, M6, toll road if you want to avoid the traffic, M6 again, Manchester and then the world. Thank you.
SH:Alex, why do you want the BBC to be a business?
AC:Well what I want is for the BBC to be able to sustain the fantastic programme quality that it’s already got. The YouGov survey said 48% of BBC customers don’t want to pay any more. So I’m saying, in the context of a licence fee that’s not going to go up, if you’re not going to find new revenue or cut your costs you won’t be able to sustain those services therefore you are a business.
SH:So do you think the licence fee is sustainable?
AC:I’m not a political seer, but I’ve yet to meet any politician or political journalist who believes that there’s any likelihood of the licence fee going up.
SH:But you don’t see any likelihood of it being abolished, or taken away, or significantly reduced?
AC:It’s not my field. All I’m saying is I don’t see any obvious sign that it’s going up so we have to find out how to work within it.
SH:I suppose what I’m trying to get at is why would you want to turn the BBC into an export focussed organisation? I can see why you want the BBC to maximise the returns it gets for the content it creates, but surely the glory of it is that actually it is parochial. It is for us, it is ours, we pay for it, the glory of it is that half the stuff could never be exported and three cheers for that, you might say.
AC:Well I’m not sure I see any equation between exportability and lack of quality or lack of interest. In fact if you look at the BBC’s best programmes they’re quite often very exportable. So I’m not sure they’re all on the same continuum, quality and value are one end....
SH:I’m trying to get at how you discipline the process. If you say that our primary purpose is to make the best quality programmes for our British audiences in all their glory and so on, and to maximise all the returns we can get, that’s one way round. Another way round, running a commercial business you’d say, actually our priority is returns to shareholders, commercial revenues; therefore we need to adjust what we do – like ITV’s trying to – to focus on revenue generation. Which might make it much more export focussed than it is. It would be a different place.
AC:All I’m suggesting actually is moving the fader slightly higher up, because if you talk to producers who are working for the BBC at the moment they’ll tell you that BBC Worldwide already has a critical role in a lot of decision making about programme production. So I’m just saying take the commercial core that is the heart of the BBC anyway with Worldwide and just give it more scope. And also I don’t think necessarily that I would agree that all BBC services that are parochial are necessarily high quality. I’m not sure I would make that equation.
SH:No, sure. And just one other thing then; you’ve been an independent producer at Planet 24, Ten Alps and now your own company, what’s your view of the BBC’s in-house production base? It was once described by, was it Tessa Jowell, as venture capital for the creative industries. Would the licence fee be better spent with the BBC being the BBC but buying more of its programmes from independent producers?
AC: I know lots of people who think that, I don’t happen to actually think that. And funnily enough if you go, since we’re talking about Manchester, if you go to the new Media City complex, which is basically a BBC in-house production department it’s actually really impressive and inspiring and from what I can see pretty efficient. I think I quite like the mixed economy approach actually. I don’t know whether the correct WOC percentage – window of creative competition – is exactly perfect at 50%, but I can see a lot of value in the BBC having a big in-house department, yeah.
SH:I see the point you’re making from a sort of argumentative standpoint, maybe we’ll just move the BBC to Manchester. Are you serious about that, and if you are what’s your timescale?
AC: Well, the question was My BBC in 2021, and the direct answer was move to the regions everything that doesn’t have to be in super expensive London, which on The Economist scale of world cities is one of the most expensive places to be.
SH:Although as you know, your independent production colleagues in Manchester are now wailing because all the prices have gone up, because the BBC has arrived.
AC: There’s plenty of office space in Manchester. I am serious, it’s an argumentative point but the fundamental principle of taking the BBC to the regions is absolutely well known.
SH:And you don’t think that might undermine centres of excellence?
AC:No, it’s like saying we can’t have football centres of excellence around the UK, they have to be in London. I can’t see any evidence for that at all.
SH:You can, but they grow organically don’t they. Manchester United has always been in Manchester, it’s had a 30 year youth policy, which explains one of the reasons why it’s so successful, it’s indigenous. The businesses you talk about being non metropolitan, from all over the world; they all started there.
AC:That’s because the spending’s been in London. There wasn’t a North Sea oil industry in Aberdeen until they discovered oil in the North Sea. You can’t build an independent production company in Galashiels if no one’s prepared to commission in Galashiels; you have to first put the spend and then you will find the talent.
And, by the way, there has been great talent in Manchester for the last half century as well.
SH:Thank you very much Alex, Peter, over to you.
Peter Bazalgette:Thank you very much Steve, good evening everybody. I was in a taxi this morning, and I got a phone call. I put the phone to my ear and a voice said to me very conspiratorially ‘The BBC in Ten Years Time, in the debate this evening you must say in ten years time Alan Yentob will still be on the BBC,’ And I looked on my phone and the call was from Alan Yentob.
That sort of self interest is also the sort of self interest we’ve heard from Alex this evening, with his provincial whinging about Manchester. And that sort of pork barrel politics is fine, but it isn’t where we should be at the beginning of this discussion about what the BBC’s for. Alex, you depress me slightly by going on like that.
What we need to discuss, and by the way in terms of discussing the BBC in ten years time we’re talking about one thing only and that’s the charter renewal in 2016-17, that’s the opportunity for a debate between now and then as to why we want the BBC. We’ve got to go back to basic principles. Why do we want the BBC? We may not agree but here are my principles for why I would like a licence fee of a particular level.
The first is for its contribution to democracy, something Mark touched on. And not just Mancunian local politics Alex: Britain’s democracy. The second, culture; its contribution to culture. And third, its contribution to the creative economy. Now you may say those are truisms, or statements of the obvious, but it’s contribution to democracy, culture and the economy are the basic principles of why we have the BBC I believe, and from that flows the other things you want the BBC to do.
So to see a questionnaire on the screen saying ‘core objectives, improving value for money,’ I mean bloody hell; are the bean counters taking over everywhere; a core objective of an organisation to improve value for money? What about what it’s meant to be doing, not the value for money it’s delivering; we can talk about that later.
Likewise going on about regionalism as Alex did, others go on about diversity; they’re all wonderful. You know, the BBC could be in Rickmansworth or Aberystwyth for all I care, but I want to talk about why I want it and what I want it to do. So how is it going to satisfy those three principles? I talked about its contribution to democracy, culture and the economy.
And I’d say in three key ways for me, my BBC. The first is its news and information services, something Mark talked about earlier. I think the core and most important objective of the BBC going forward is to be a trusted and reliable source of news and information in the internet age. I think in the internet age, where the world wide web is that well known home of rumour and paranoia and madness, to have a trusted voice is more important than it’s ever been before.
So I think there’s more reason for a licence fee and the trusted and reliable news and information services than there has been in the past; a stronger argument for it. The second thing after trusted and reliable sources of news information is its investment in original British programming. We actually haven’t heard that phrase so far in this debate, extraordinarily enough.
We did have, in 2005, about £3.5 billion put into original programming. That fell during the economic crisis to as low as £2.6, £2.7. I see David Abraham over there in the audience; good for Channel 4 putting up their spend to £600 million. We’ve got Sky actually doubling its spend to £306 million; but the investment in original programming is – for me – the second important thing the BBC does. It puts more than a billion into original programming; that is of immense cultural significance. It helps us define our culture to ourselves and to others.
And the third way it should satisfy those three principles I talked about is by investing in new talent – again something Mark said – because the new talent that it invests in is in fact what Tessa Jowell talked about being venture capital for the creative economy. That’s what it’s all about, new talent. And there are legions of examples of that, bringing forward new writers, new presenters of immense significance to the three principles I talked about.
Everything we want from the BBC, everything we say we want the BBC to do in the charter, has to flow from the basic principles before you get to all the nit-picking over whether Manchester can get more money in its pocket than London or vice versa. These are the things that really matter.
Now, let’s just dwell very quickly on DQF, if I’m allowed. The DQF process was quite interesting because I personally think that if the Director General had been a new Director General as opposed to somebody who’d been there for six or seven years you’d have seen some radical thinking with DQF. With DQF it has been radical in terms of the amount of money that’s had to be cut, but it’s not been radical in terms of the way it applies itself to the organisation.
Now, we all know, governments, individuals, it’s in the first year that you’re there, you make the big changes. After that time it becomes more and more difficult and toward the end of that time you don’t. The BBC didn’t look at itself very radically during DQF because from the top it was looking at salami slicing. We haven’t time now to discuss some of the big issues that should be looked at when we come to Charter renewal, but let me talk about three things that are examples; they’re not a whole strategy.
One would be, is it right for the BBC to continue – however it has got to that position – of having 55% of the radio market? It doesn’t seem to me right; it doesn’t seem to me that that is how you encourage a commercial, healthy radio sector. I think that needs to be looked at and it needs to be tackled, complex though the subject is.
A second point I’d make, and I think it was just touched on by Steve in a question, is that if the purpose of the BBC is to do this massive investment in original programming, and this great contribution to the creative economy, and bringing forward new talent, does it need – if you add news and sport to the various quotas – it probably produces about 60% of its programmes in-house. I’m adding all sorts of quotas together there, and Caroline you can correct me, because it’s quite a complex subject.
Does it need that amount in-house? Or should it be using the money it gets to invest in programming more widely than it currently does, throughout the creative sector? I’m not an independent producer any longer, that’s not an indie whinge, I’m not doing my own version of pork barrel politics, I’m just saying it’s a fundamental issue of how it should be looked at, how it spreads its money across the creative economy. Does it need quite so much in-house, even though what it has in-house is crucial for doing its news and information, it’s crucial for bringing forward the next generation and training the next generation of talent.
The last point I’d make is that the licence fee system is a very, very old fangled, old fashioned way of collecting money. There are many new ways of collecting money these days, micro payments, deposits and so on. My hunch is that if the BBC can’t get more money for some of the wonderful things it does from the public attitudes that we saw in those questionnaires, my hunch is that if you had a licence fee set at a particular level and you allowed people on a subscription basis or a contribution basis to put more into the BBC, the BBC could raise more every year than it does via its compulsory licence fee by people volunteering to subscribe to a particular service that they’d like to support. And I know I’m right because Ann Leslie just shook her head. Thank you very much.
SH:Peter, before we go to Caroline, a lot of time has been spent over the last number of years with the BBC under attack or under pressure on account of its market impact. And one of the things that the Trust system can be credited with, with the public value test, is taking a certain amount of heat out of that argument. Do you think, from outside in the business as you are, that the market impact issues of the BBC are history now? Or are there still some serious ones?
PB:They’re not history because the BBC, which I think is a very healthy organisation, is competitive and it constantly wants to be bigger and do more things, and actually that’s healthy. We want a BBC that has that sort of appetite. But appetites have to be controlled, do they not Caroline; and you can’t have an organisation just growing bigger and bigger, and bigger and bigger.
So every time the BBC wants to do something it should have that test. I’d add, not that you asked it, that I’m not absolutely certain that the BBC Trust is really a qualified competition authority, and therefore I very much welcome Chris Patten saying he wants to work more closely with Ofcom, because the competition judgements that are applied to the market-place should be consistent across the whole market-place. I think that’s the way through.
SH:Okay, forget what the BBC might go on to do because that can always create difficulties depending on circumstances. Is there anything that the BBC currently does that you from the outside thinks ‘do you know what, that is a market impact that’s inappropriate,’
PB:Okay Steve, let’s just remember the BBC is a bleeding enormous market intervention. It is massive. It’s massively anti-competitive, it keeps all sorts of people out of the market-place on a massive scale, the question is does the public benefit weigh up against it. And I think most of us on this stage this evening, in various different ways, think it does. But at the margins that has to be monitored all the time.
SH:And the 55% of radio, does that strike you as an intervention too far?
PB:Well, it’s not an intervention as such. The thing is that BBC radio is better funded than commercial radio. It can buy the talent more easily and particularly with Radio 1 and 2 – because I think Mark’s right about Radio 4 supplying something the market doesn’t; speech radio. But in terms of music radio the market could do more in that if it got the chance.
Now there are many in the commercial sector who don’t want Radio 1 or 2 privatised; they’re frightened and they don’t think the market can support it, but for me it’s a fact and it should be properly examined, that you shouldn’t have the state broadcaster with a 55% share, where you want a healthy commercial sector.
SH:As I said at the beginning, I remember when you used to produce Food & Drink and those other things, you’ve worked inside the BBC, you’ve worked outside it for probably longer than you’ve worked inside it. Let’s leave aside mission critical areas like news and current affairs where the argument for doing it yourself is paramount. Is there really any purpose, do you think, in the BBC seeking to maintain in-house documentary, comedy, drama? Wouldn’t they be better buying it from the market and giving the market that sort of stimulus as a result?
PB:I think there’s a very strong argument for it making those sorts of programmes in-house, but as I said earlier I question at what level and at what size.
SH:You mean all those programmes?
PB:Yes, because the rationale for making drama is that you bring forward the next generation of talent by training that talent and you train that talent sometimes in the best environment which is in a creative organisation. And that means some of it should be done and can be done in that way. But a lot of it isn’t.
SH:And that won’t happen in the independent sector?
PB:Well no it does happen in the independent sector, and when you commission programmes in the independent sector you’re encouraging that process too. But I’m saying there should be a core that supplies that expertise; takes risks, brings forward the next generation in a more coherent way than a fragmented market can. I question the level at which it is, I think it could probably be smaller, but I think it should have a certain avoirdupois.
SH:Okay, so Caroline, lots has been said, just going back right to the start to begin with, one of the first slides from the survey, I think Peter picked it up, when people were asked what they thought the most important of the BBC’s objectives was, the one they came up with at the top was increased value for money. Does that surprise you?
Caroline Thomson:It doesn’t surprise me, and indeed I share it, I think it’s perfectly reasonable. I rather agree with Peter’s point that it’s all a bit de minimis, and actually the BBC in ten years time has got to be about more than value for money, it’s got to be about it’s great programmes.
SH:But 51% of the people that were asked said that was their top one.
CT:The current management of the BBC would say that one of the things they are driven by is making sure we give people greater value for money. And one of the things that’s happened is that the period of BBC growth in income has stopped. Not just with the most recent licence fee settlement, but with the previous one which didn’t go with inflation either.
SH:But did it worry you at all that 51% in a reasonably large sample, 2,000 people, 51% of them said improving value for money was the top priority? It struck me as odd, to be honest when they first showed it to me I didn’t believe it.
CT:To be honest if they said ‘improving programme quality,’ you might be worried for different reasons mightn’t you? Because it might imply the programme quality wasn’t good enough. I think you can take it any way you want really. I wasn’t dismayed by that, actually, because I think improving value for money is something that absolutely ought to be at the heart of everyone who’s in a public service and paid for by compulsory charges.
SH:Do you think that as things stand the BBC is held in the same affection by the population at large as it always was? The traditional back stop position was, and there were a few ups and downs over Blue Peter cats and Ross-Brand and whatever, but that all, by all the measures that you do, appears to have recovered somewhat. It’s a slightly odd question but nevertheless assume there was no licence fee and it was a voluntary subscription, 29% of people said they would pay nothing, in other words they would forgo the BBC’s services.
CT:To be honest that was the answer which gave me more pause than the value for money one. I looked at the YouGov poll in a bit more detail and actually some of the answers are a bit contradictory, so although they say that 76% also say they would be prepared to pay for a television subscription service from the BBC.
So the answers are a bit confused on that. Our polling we do, and some of this is backed up by some of the work Ofcom does as well so it’s not just BBC polling, shows if anything that people are more valuing the BBC and indeed interestingly, and I think this may go back to the value for money point, more likely to think the licence fee is value for money and 51% now think the BBC should be funded by licence fee. Whereas interestingly only 21% think it should be funded by subscription.
SH:So only 51% think it should be funded by the licence fee?
CT:51% think it should be funded by the licence fee...
SH:But didn’t that 51% used to be much, much higher?
CT:No, it used to be much, much lower, it was about 31. Four or five years ago it was 31%.
SH:Only 31% thought it should be funded by the licence fee five years ago? That was not a number the BBC made a great deal of noise with, was it?
CT:I think we did, it was always quite well known because basically it used to break up a third, a third, a third. A third thought licence fee, a third thought advertising because they think that’s free; and a third thought subscription. Actually interestingly advertising and subscription have gone down, and I think it’s because the licence fee is regarded as better value for money and people recognise we’re making it better value for money. But this is supposition on my part as to why they think it.
SH:The question is slightly odd, and the results one can interpret slightly differently, but taken at the level of generality this would strike me as a prima facie evidence of less willingness to pay. Leave aside the system for a moment but less willingness to pay. Is that what you detect?
CT:No, it’s not what we detect at all, and actually I think that’s one of the things, evasion has been going down and for all there is compulsion behind it the truth is we’d be having much more trouble collecting the licence fee. In a sense we might come on to the vision of the BBC and some of the other points people are making, but the BBC in the end does exist by a social consensus for all that there are penal powers behind it. And I don’t see any evidence from the collection of the licence fee that that social consensus is breaking down.
SH:This question is a bit of an open goal really, Peter talked about the Charter review in 2016-17, that’s the longer term game. Is there anything in DQF that we, the great unwashed, should read as straws in the wind about where you intend the BBC to be in 2016-17?
CT:Well only in the most general sense which you will have got, which is for the BBC its be-all and end-all is great content. By saying that what we’re intending to do is get the overheads costs of the BBC down below 10p in the pound. Focus on content, focus ruthlessly on five editorial priorities. You can analyse the DQF for cuts against those five editorial priorities to show that they’ve been met, But that’s, in the end, what we’re about.
I hate to disagree with anyone on this panel because you’re all such good supporters of the BBC in principle, but I was a bit concerned by Mark’s characterisation of the commitment to the BBC being an ideological one. I think that the BBC survives, its be-all and end-all is its relationship with audiences and can it produce great output for audiences.
Actually Patricia Hodgson put it rather well, she just did a leaving speech to the BBC Trust and she said ‘in the end it’s the output and everything else is special pleading,’ I think that’s what you should take from DQF.
SH: At some level you have to believe though that funding something publicly and collectively as a flat tax in this way is capable of generating benefits that other forms of funding are not, otherwise you should opt for other forms of funding.
CT:Yes, absolutely, and it should create public value and in its interaction with audiences it’ll create public value for the reasons that it will.....
SH:But ITV and Channel 4 create lots of public value, they make great programmes. What’s the problem? Sky makes some great programmes, but isn’t there a flip-side to James Murdoch which is kind of right. His ideological position is against this kind of public venture. There must be an ideological component to the way you see the BBC, isn’t there?
CT:I wouldn’t characterise it as ideological, no. I would characterise it as civic. Perhaps you’ll regard civicism as an ideology, I’m not sure. But what it is doing is create public value in the way we interact with audiences.
PB:Can I just comment on that? I think you should regard it as ideological and as a senior person at the BBC you should be able to expound the ideology, and I think you have been actually already this evening. It is ideological. Let me give you one example. I meant to say it earlier, but I forgot. To have a news service that is independent, that is government funded, seems to me to be one of the best expressions of a mature democracy I can think of anywhere in the world.
SH:Yeah, but it’s not government funded.
CT:It’s not state funded, it’s funded by the audience.
PB:It’s funded by state decree.
SH:You’ll end up on the same bus as Greg Dyke in a minute.
PB:No hang on, Steve you’re splitting hairs in the way that you’ve made your fortune.
SH:It’s not state funded.
PB:It is funded by state decree; that is what the licence fee is. It may be a matter of consensus but I’m saying that I think that is a really brilliant expression of mature democracy, that you have independent news services funded in that way. Don’t quibble over my definition; accept it, that’s ideological. And it’s good, it’s good ideology.
CT:Actually that’s a very good illustration of why I don’t like the characterisation of ideological, precisely because it’s not done by the state, the licence fee is underpinned by a social consensus and that news funding works because people are prepared to carry on paying for it. And if we lose that contact with an audience who are carrying on valuing us and being prepared to pay for us then actually we will be lost because that’s the underpinning of the independence.
PB:That’s true, but that doesn’t deny the ideology.
CT:That’s precisely why we’re not state.
SH: Let’s just ask Mr Ideology to fill us in.
BD:I just feel I’ve gone back to Oxford for a seminar on the meaning of the word ideology. I didn’t mean to set a lot of hares running. What do I mean by ideology? It’s a system of beliefs that come together to form an expression of who we are and what we – and by we I don’t mean the BBC, I mean the United Kingdom – believe in. The notion that you would have a public service broadcaster of scale, whose justification has to be its content and its programmes, is an expression of public and political will. And to that extent, and to that extent only, it can be described as an ideology. I don’t mean that it’s a campaigning partisan organisation for another system of beliefs; it merely is an expression of what a polity looks like.
SH:I’m beginning to feel like I’ve gone to Oxford for a seminar as well.
CT: I think I agree with him, we’ve decided we agree.
SH:There’s a couple of other bits of information from that survey which were not in that little film there which might inform this. The first one is about which genres people would pay for if it were a subscription service that could be broken down in that way. Take all the caveats with it, there it is.
People were very likely to pay for comedy and entertainment; news, current affairs and documentaries; lifestyle possibly less so; sport.... hmm, not sure, they don’t do much I suppose, and Children’s... can forget it.
CT:Can I make a point about all of this? Which is that I think that the characterisation of subscription as somehow a voluntary licence fee is completely wrong and very mistaken, before we get onto that. The genius of the British broadcasting system is that what was created were a series of broadcasting organisations which competed for audiences but not for revenue.
Once you start funding the BBC by subscription it’s then competing with other subscription funded services for revenue, and it will inevitably change the nature of the programmes. So if BBC1 was funded by subscription BBC1 would have to start thinking how many subscribers could it get, compared with Sky One.
SH:I’m not sure..... I wouldn’t necessarily disagree with you, lots of other people wouldn’t either but this doesn’t......
CT:I just think before we go down the subscription route as if though it’s somehow some version of the licence fee it’s important to say that it would be a very significant shift because you’re essentially putting the BBC into the market-place.
SH:But in fairness to the people who did the survey; people were asked, it was laid out quite clearly, this wasn’t a bit of an addition. You get the BBC but this is what you spend more on, this was right, if you choose not to spend it you don’t get it. That was the point.
MD: But the whole point about the BBC is that it’s an interlocking set of minorities as well as majorities. So everybody wants to do the Olympics, and quite a lot of people want news and current affairs and Spooks and/or Cranford.
But what this doesn’t measure is intensity of feeling for those people who value the service and what they think that they’re getting for the licence fee in response. So it may very well be, that a lot of people who don’t have children or can’t remember what it was like having children, don’t particularly want to pay for children’s programmes.
SH: Or who have children who watch commercial TV the whole time.
MD:Even, except Children’s at the BBC is a classic example of market failure. It did not used to be the case, but in terms of generating decent content I’m afraid the BBC has been left beached as the only one providing it. And so in measuring what the BBC’s activities should be; doing it by a simple plebiscite in that kind of way completely misses the point about everybody needs to extract something from it which justifies the £145 and they will derive it in different measures, in different proportions, each one to the other.
SH:I think you’re being a bit harsh on SpongeBob SquarePants, to be honest.
CT:The other point which actually goes partly to the question you haven’t yet asked me Steve, which is about in-house production is that the culture of the institution exists partly because it’s got the mix of genre; And because it’s got production.
If you cut it down to just being a news and current affairs producer, and you didn’t have the shiny floor, and you didn’t have any of the drama, of course the BBC would survive but actually the news and current affairs itself would be the poorer. That sense of a mixed culture in the organisation, which marries the best of the quality showbiz culture with the most serious, high minded Radio 3, Stephanie Flanders describing the Euro culture, that’s one of the key ingredients for success.
SH:Just a couple more questions on this; but there’s one more to have a look at in a second which will give you a laugh. People who would be likely to pay for the following in the same circumstances; BBC1, 2, 3, 4 – 3 is a bit dodgy, 4 is definitely dodgy. News 24 there’s a surprise; maybe not? I don’t know if that’s telling us anything. BBC Parliament. What do you make of that Caroline?
CT:Well, I don’t know. I suppose you expect a division like that based on the audience ratings, wouldn’t you? I could make lots of my points again about subscription and dismembering and so on.
PB:There is something that relates to that slide and the previous slide, the popularity of entertainment at the top of the previous slide, and BBC1 at the top of this slide. It’s a point that Danny Cohen made to me recently, actually in this building, Danny Cohen now the controller of BBC1.
And it’s a good and shrewd and clever point. The people for whom the licence fee is the largest proportion of their income, he would like them to get even more out of the licence fee than people you could say, in advertising parlance, in Grade A.
SH: So you’re saying you might pay it as a flat tax, but you recoup to a greater degree the more of your spending it represents.
PB: And he was pointing up the importance of BBC1 and entertainment, because that’s the most popular element and the people in the bottom of the triangle, if you like, it’s the largest part of their income and therefore it means the most to them and therefore they should get what they want out of it. I think it’s quite a good point.
CT: It is, yeah.
SH:Just on DQF, there is an argument that says that the way that the BBC has chosen to do DQF in the end, for all the radical ideas that were passed around and looked at, where you’ve ended up is really a matter of politics; that in order to avoid the kind of 6 Music but writ large, the public reaction to things, you’ve avoided those headline grabbing [things], the only one that stands out is perhaps local radio which we could talk about. It’s the only one that stands out as something resembling a service which appears to have been cut significantly. Are you comfortable that this was the right approach, because it does look like salami slicing? Again, I take Mark’s point, sometimes there’s nothing wrong with salami slicing, but if you’re going to do it you might as well say it; and indeed, Chris Patten, with his jokes about how Italian meat products shouldn’t be so easily dismissed....
CT:Well it’s not salami slicing in that we looked at sets and models and we tested them against editorial priorities, against audience value and we changed them as a result of it. And we also looked at them against what do we need the BBC for, so for example at one point we were proposing to remove comedy from Radio 2, and we looked again at the importance of comedy nursery slopes on Radio 2, Miranda and so on, and we reinstated.
The Radio 4 point, again in radio, we have relatively protected Radio 4. Relatively protected doesn’t look as though the audience there would like it too much, CBeebies and CBBC, against our editorial priorities, and we have hit some other areas harder. But what we haven’t done is sort of taken out one service and axed it. And interestingly, your audience surveys clearly thought that was right. There’s no point in being radical and destroying things for the sake of destroying them.
SH:No, but there’s another bit of evidence which suggests that the two things that people objected to were the two things they recognised you’d closed. So more people objected to taking programmes off daytime BBC2 and more people objected to local radio than have objected to anything else. So even within what you have done there are signs that if people get their teeth into it that you may not.....
CT:We did a lot of audience research work with focus groups and so on, and everyone starts from the position of ‘well you should close a service,’ And then they all say ‘not mine,’ No one can agree on one, it’s very interesting.
SH:Lastly, the inflation assumption in the arithmetic if you like behind DQF as I recall was about 2½ %. And Mark Thompson told me and I’m sure he’s told other people that provided inflation does even out at about 2½% over the period then the existing financial arrangement will roughly speaking hold. That seems highly unlikely; it’s currently running at 5+ %. It’s been well above 2% since the licence fee was done, no one predicted the financial crisis going exactly as it has done, but what’s plan B? The rough and ready reckoning that you’ve done so far will be nowhere near enough to maintain financial stability if inflation stays at 5%.
CT:Well, there is obviously for the economy as a whole, not only the BBC, a risk if quantitive easing drives really high inflation up to 5, 10%.
SH:It’s at 5% now.
CT:Yes, it’s at 5% now, it’s generally thought to be coming down which is what we would be expecting. The BBC is not as exposed to inflation as you might imagine in that the last licence fee settlement was decoupled from inflation, so as we’ve been re-contracting we’ve stopped putting inflation multipliers into contracts.
And a very high proportion of our costs are salaries, so keeping salaries under control, that’s why we’re doing tough pay settlements, is a very effective way of keeping costs down, though painful for staff and cannot be done continually.
SH: But all those assumptions, as you know better than I do, were in the existing financing plan. If inflation runs above 2½ % for the period you’ve got to find more money to save.
CT:We’ve got a bit of a contingency, if it runs over 5% we’re going to have to look again.
SH:So you could manage up to 5%?
SH:And where does that contingency come from?
CT:In our financial plan you’d expect us to have contingencies wouldn’t you, for all sorts of things?
SH: Yes, I’m just trying to work out how much they are before I go back to my local radio station and start campaigning.
CT:Shall I just mention local radio?
SH: By all means.
CT:Your characterisation of it having been particularly hard hit is not right in that the figure for the cuts in local radio is 10-12% actually, which is less than the 16%, 20% that we were seeking from across the place. It is, however, the case that because they’re small that level of cut is hitting them very hard.
SH:The infrastructure costs are relatively large.
CT:The infrastructure costs are large. The problem is the 12% translates to higher figures because they have less control over their technology and property costs and so on. And that’s one of the points for consultation, to listen to what people are concerned about with that.
SH: So if the public come back in any significant volume and say ‘we just think this is wrong, you shouldn’t be doing it, the commercial sector’s not doing it, no one stepped in when the BBC stepped back with the ultra local and all the rest of it, so we just think this is wrong,’ you’d reconsider?
CT:Well I can’t speak for the Trust who are doing the consultation, but I’m sure they are listening. Last week in Salford we met a delegation from Radio Merseyside who’d come over from Liverpool specifically about the cuts to Merseyside. We will listen hard. If we had to reinstate some money into local radio we would have to cut something else, so in looking at it you’d have to look at the relative merits of the thing you’d have to cut further in order to find the money, but it’s not out of the question.
SH:Okay, who would like to throw their five pence worth in, there are microphones along the side of the room. Do say, if I can’t see very well. Do indicate if you’d like to speak.
Q (from the floor):David Abraham, Channel Four. I think one of the most interesting things I heard was when Peter touched on new ways in which customers, consumers are choosing content and are able to.... a lot of these questions are about what would you do if you could unbundle the services? Effectively the BBC licence fee is a bundled subscription, so is Sky a bundled subscription, but we’re moving to a world of hyper individualisation of consumer choice driven by the internet. So what interests me is the self referential arguments, backward looking about how you can maintain the logic for the bundle as opposed to thinking about new ways in which the licence fee would actually be connected to technology; connected to consumer behaviour, connected to choice because if you do sustain this model for another five, six, seven years that’s possible, but it seems extremely unlikely that the model is going to sustain this next wave of technological change which is crashing over the shore.
SH:So, just to be clear, you don’t think the licence fee in its current form will survive the next generation of technological change?
SH:So what do you think will have to replace it?
DA:Well I think that technology is already setting out a path whereby consumer choice as expressed through their behaviour through connected devices, will naturally set new prices and set new ways in which consumers will choose their content.
SH:So, in effect, subscription.
DA: We don’t know, we don’t know whether or not it might be one of the things that, was inferred by Peter, which is a way in which loyalty is measured by new means, which create new currency for the future. We just don’t know. We’re talking about changes that will happen over the next decade.
CT:I think, I’m not sure I completely agree with it, I think what David is talking about is a really interesting point. It’s normally characterised as can you carry on charging the licence fee on television receiving equipment. Actually I think that argument is overplayed, but that wasn’t the one I think you were making. I think the much more interesting argument is the one you were talking about, and I think will be the big issue at the next Charter renewal, is what exactly does the licence fee pay for? What does it buy you?
When we did the last Charter renewal the licence fee essentially bought you linear television networks which you could record on a PVR or not, and linear radio networks which you could record or not, and online. Now the licence fee brings you the linear television networks and radio, plus radio players, plus seven day window of access to things. So it’s already extended. When we get to the next Charter, what does the licence fee payer think they’re going to be getting for their money?
Are they getting the linear networks? Are they getting a seven day window? Are they getting a 30 day window? Are they getting access to all the archive? At what point do they have to start paying for some of this, if they want it? I only know the questions at the moment, I certainly don’t know the answers, but I think there’s a really interesting set of issues around that. You might be surprised, but I would agree with that.
PB: Imagine a situation, David and I were both implying it, where the basic licence fee which remains obligatory is £100 because we all agree we want a core BBC, however you define it. The organisation needs to be able to plan and needs visibility on its finances and so on. But then there are parcels of say 30 or 40 or 50 quid which you essentially pay for additional things and they tick off.
Micropayments of 1p or 5p or 10p, and you come to the end of that meter, it wouldn’t really work with radio with current technology, but it certainly works with television as David is saying and I’m saying. And then you might put another 50 quid in. What I was saying was I think the BBC would raise a lot more money than it thinks it would, and the technology is certainly allowing things like this. The Charter renewal is an opportunity, as David is suggesting for us to look at this and debate; and we should do, because technology is thrusting it on us.
CT:I think you’d have to model it carefully; what the impact was, but I absolutely think it’s the central debate probably.
MD:Well, so there we were ten years ago in this debate, that David has raised is not brand new. Where are we ten years later? The iPlayer, tremendous success, both as presenting the BBC as flexible and creative and audience focussed. 99% of radio programmes are listened to live, though the BBC has a very good streaming and podcast service. And TV consumption is going to be somewhere in the high 90s.
David Abraham: You didn’t have superfast broadband ten years ago.
MD:No, but we’ve got it now. I don’t wish to pre-suppose that you’re wrong because you may very well be right. The BBC’s flexibility over the last ten years in being able to adapt to new technologies and find ways of delivering its content via those technologies has been dextrous. Other people have done pretty well too, but the BBC – which you might have thought would have been left behind – far from being left behind, has actually matched and in some ways innovated as well as anybody else in the broadcasting business.
So what audience behaviour will be in ten years time, and the extent to which the technology will drive the content around in such a different way that the basic funding model will be bust is, to put it mildly, a lively question. I happen, instinctively, to disagree with you and what I don’t think the BBC should do is pre-suppose a market and get out of all kinds of things involving watching on a large cathode ray screen or listening out of a box before it knows that it’s the right thing to do. And keeping its bets open is what it needs to do, not to argue for a change in its funding model.
CT:I don’t think that’s what David was arguing.
AC:I just spent the month of September doing addresses to freshers around the country, and my opening question was always the same; ‘how many people in the room have been on the BBC in the last 24 hours?’ and it would be about 30%, roughly. And ‘how many of you have got a TV licence?’ maybe half of them. ‘How many people have been on Facebook this morning?’ 100% always. ‘How many people have been on Google?’100%. These are two brands that didn’t exist in the year 2000; one of them didn’t exist in the year 2005. That’s how dynamic the environment is. Actually the BBC come 2016, and this session is about 2021, is going to be in a fundamentally different place because these are the 18 year old digital natives you’re going to be dealing with as the mainstream audience at that time.
SH: So what do you think then, about the issue of micropayment and subscription?
AC:I think it’s great, I think it’s ironic that the person who was saying we should be focussed on the artistic glory of the BBC is actually the person suggesting the funding model for the year 2016, in a very micropayment way. But absolutely, I think David’s onto something, we have to really sit down and think how we’re going to pay for this thing because I think the idea of getting out your debit card in 2021 and paying £145 is kind of laughable actually, I don’t think anyone will do it.
CT:Actually I disagree with that, I’m with Mark on the basis that I think there’s a future for the licence fee, but I think there’s a question of what it pays for and how you monetise the rest.
Q (from the floor): Roger Hendry, I had the good fortune to work for the BBC for 16 years. I’m a bit surprised that apart from it being just mentioned in passing the panel hasn’t really focussed on what to me is a unique selling point for the BBC and all its services that they do not carry advertising. There are some public broadcasters abroad that do have an element of advertising. I’m pleased to see that none of the forecasts for the future are suggesting that the BBC goes that route. But I think that should be borne in mind, and to pick up on Peter Bazalgette’s point that 55% of radio being in the public sector is too high a figure, maybe 55% of people if they’re like me just would not listen to radio if it has interminable adverts. It’s bad enough now that Radio 3 is constantly interspersed with people having to email, and you hear their emails back. We don’t want it; we just want to hear the music.
Q (from the floor):A question that Alex raised, which is about exploitation of the BBC brand overseas. What about the test case, if you like, of BBC World News. What do we do with that? Most of that is current affairs and news; how do you exploit that safely, as it were?
Q (from the floor):Peter Bennett-Jones. There’s seems to be a clear consensus from the panel here that news and current affairs is the heartland of the BBC, it’s sort of journalistic function. But a clear consensus from your audience, and the audience research, that it’s valued most for its entertainment and drama functions in a way that as Kenith there was saying is under represented here. And if you’re going to retain this consensus you’re going to have to deliver the goods in that respect. It struck me, and I argued this in a BAFTA lecture a few weeks ago, that the journalistic emphasis and because most of the people at the top of the BBC come from that background, comes at the expense of entertainment and drama and the cultural impact. Is there not an argument for the division of these functions, both in terms of its financing, its governance, its relationships with politicians – which seems to dominate the way the BBC has to react to the market in many ways; and divide it in the middle between a current affairs and a news organisation doing its work which is very valuable, everybody would agree that, allowing it to be a major provider of international and domestic showbiz. I come from the showbiz side of the fence obviously, but I feel we’re the poor relation within the organisation at the moment.
SH:And would you have them both funded by a licence fee?
Peter Bennett-Jones:I think you could strongly argue for the licence fee, but it should be transparent and in some degree separate. And separate rules applying to them, particularly of compliance; which is like a dead hand over original content at the moment, because we’re having to use almost news compliance rules applied to comedy and drama output and it doesn’t foster creativity.
SH: Okay, we have nearly come to the end, but perhaps Mark you’d like to respond to that.
MD: I remember the day I left news and current affairs and joined Radio 4. It was a tremendous liberation not to have to think for the 25th year in a row how to cover the Budget. The BBC is much, much greater than its news and current affairs content, the problem in choosing to emphasise it is that you make the BBC look more binary than it is. News and current affairs, and everything else; it would be desiccated if it were only Panorama, Newsnight and the Today programme. Its glory has been in its ability to be broad enough to sustain many genres and although massively imperfectly, imperfection is built into the nature of the enterprise, is to make programmes which aspire to be the best they possibly can in all of these genres. I think that what happens with news and current affairs, and the deep history here is worth something because news and current affairs was criminally neglected for 25 or 30 years until, unfashionably John Birt did quite a lot and got it right in the mid to late ‘80s onwards. You’re right that it can be, as it were, over assertive and that it can be over imperial both in its culture and in the way that it projects outside. But that having been said; and I’m glad that you said you value it, you have to start from somewhere but it’s only the starting point.
PB:Peter, I think if you get the sense that news has been over emphasised in this conversation at the expense of entertainment and drama, and Ken’s point that there aren’t even any of those current practitioners on the stage so it’s not a good enough debate because you haven’t got that perspective – which, I understand the point. One of the reasons news gets over emphasised is that the news services that we value in Britain, that are a cornerstone of our democracy all lose money and all need to be subsidised; have to be subsidised, partly by the BBC. ITN and Channel 4 News lose money and have to be subsidised by other activities. The Times loses money, The Guardian loses money, Sky News loses money.
If you put all those news services together, admittedly the Daily Mail makes a profit to be fair but if you put all of those news services together there’d be a huge hole if we didn’t find a way of subsidising it. Now, it is the case that some of the popular entertainment that comes at the top of that poll actually is self-financing, and indeed finances some of the other things like news. It cross subsidises. Not all, and I’m sure there are plenty of dramas that Ken would like to see made and thinks there are some dramas that should be made and aren’t being made at the moment, that aren’t that popular and do need subsidising as well. But that’s why the tenor of the argument goes the way that it does and starts with news and current affairs, because we think it’s important for democracy and it has to be subsidised because it loses money, and therefore we start with that as the first building block.
AC:I really appreciate the comedy and entertainment point, but I think the BBC could be more outward looking to the world without being less inward looking. It’s the opposite of a zero sum game if you like. And actually I think the solution to some of the creative and funding challenges could lie in a thinking-out-of-the-box thing in bringing more revenues in. That way we can have more entertainment, more comedy and so forth. What’s interesting is that nobody here has really suggested cutting anything, but somehow or other, in a radically changed landscape, we’re going to need to find some more money and that’s why I come back to what I said in my talk, which is we’ve got to go global.
CT:Well I come, like Peter and Mark, from a journalistic background myself, that’s the way I came into television. So I find myself slightly surprised to be saying this, I think news and current affairs is absolutely at the heart of the BBC but I think perhaps it has had a bit too much emphasis as we’ve gone through, at the expense of some of the other genre. There was that point in the last Charter review where a politician, Tessa Jowell, stood up in the House of Commons and said ‘actually the BBC needs to be about fun,’ I think that old, Huw Wheldon adage of the popular good as well as the good popular is a really important thing that we have to keep hold of.
It’s essential, I would be heartbroken, I think what you’re proposing Peter would be seriously the death of the BBC, that marriage as I think I said earlier of the real popular culture and the ability to do the Children In Need shiny floorshow, alongside Stephanie Flanders, those two cultures... I can’t point to a KPI which will demonstrate it. Thank God, really, but I can just tell you. You feel it in your bones about the organisation that sense that what you’re about is communicating with big audiences, with programmes of quality, which really help them understand but also delight them and engage them. If we didn’t have that crossover you wouldn’t get The Frozen Planet in the same way from the same culture if you didn’t have Strictly Come Dancing. I think it’s integral and absolutely crucial, and I thought Ken’s point was well made about programme making.
SH:I’m sorry about this but we have run out of time, so above all your appreciation for the panel please.