Why small can still be beautiful by Peter Bazalguette
Source : The Guardian
December 6, 2004
Tomorrow at 10am Mark Thompson will walk into BBC Television Centre's Studio 4 and deliver a speech intended to secure the renewal of the corporation's charter for another decade. The director general's real audience for this "tough love" performance will consist of politicians, Ofcom, commercial competitors and anyone else thrusting chunky spanners into the charter review. Expect to hear of bold economies, an exodus to Manchester of biblical proportions and the symbolic disposal of some BBC Worldwide remnants. But the passage of Thompson's address that will be scrutinised most nervously within the BBC will be his proposals for opening up more of BBC production to outsiders. Over the next three years as many as a fifth of staff may go to satisfy this and his cost-cutting programme. The possible mechanisms to allow independent producers to compete for more programming have been well rehearsed. In particular, a 50% guarantee for in-house production, first floated in this column, looks set to be adopted. Now is the time to float a few more ideas. Tomorrow is a headline announcing and grabbing exercise. The small print that follows will be just as important.
There is a debate in the independent sector about whether small producers can thrive in a business now, apparently, dominated by predatory "super indies". Assisting the next generation of independent producers is something the BBC can play a key role in. More of that later. First we should dispel a few, cosy myths. Recently Michael Darlow, a veteran of the campaigns for Channel 4 and an independent quota, wrote an exhaustive account of those days (Independents Struggle, Quartet Books). Darlow doesn't like this handful of "super indies". It's not clear which is their greater sin - making profits or entertainment programmes. Darlow clearly wanted the companies that sprang from the 1980s to be no more than half-pregnant.
A surprising number of journalists and analysts have started to use the super indie tag, including an uncharacteristically ignorant piece from Accenture last month. I've news for them all. There are no super indies. There are about four companies who have managed to get their turnovers above £100m. That makes them very small outfits with, I'm sorry to report, pitiful margins. They should be ashamed of themselves. They should apologise to their investors, if they have any. The much-heralded consolidation of independent production might, one day, produce some proper companies. They will have turnovers in excess of £300m and operating margins above 10% (the sector average is below 3%). As a counterpoint, the turnover of Granada Productions is £700m and BBC Productions, I estimate, to be between £800m and £900m. Bigger still are the Disneys and Time Warners of the US. We're a long way from having a super indie in the UK.
Yet it would be bad if the future growth of larger production houses meant the erection of barriers to entry for new producers. Not least because these are the individual voices of the next generation which should be heard. But in reality the only barrier is the willingness of broadcasters to commission newcomers. At the moment, with the exception of a small initiative for entertainment producers in the regions, the BBC has few policies in this area. They need to develop some quickly. It should be a fundamental part of their reforms, not least because a number of the producers they are about to make redundant will seek to go independent. In this the BBC has much to learn from Channel 4 where, fortuitously, Thompson resided until six months ago.
Channel 4 works with more than 300 indies a year. The BBC commission fewer than 200. Some Channel 4 commissioning editors have annual bonuses that partly depend on their having contracted new suppliers during the preceding year. They have places in the schedule (like The Slot at 7.55) which have been designed for first time directors. Companies such as Boomerang in Cardiff, Mediabase in Edinburgh and Blackwatch in Glasgow have been given their first commissions this year, while the independent contribution to Channel 4 News has introduced such film-makers as David Modell who made the Bafta-winning Young, Nazi and Proud.
Of course larger companies will continue to supply many of the BBC's major series. But the corporation should also undertake to commission a specific number of small producers every year. All Creatures Great and Small was once a huge hit for the BBC. It could be again.
“Media: Opinion.” (December 6, 2004). The Guardian. Emily Bell. In a world of plenty, as the song goes, it is easy to forget that not so long ago, 90% of households had only four television channels to watch. Remarkably, one of those was owned by a number of lucky people who had managed to impress the government in an X Factor-style arbitrary knockout.
Yes, the wonderfully inappropriately-named "beauty parade" that dished out licences to wannabe ITV franchisees was quite rightly identified at the time as safeguarding "the most ludicrous rules in corporate history". So stupid were they that Jilly Cooper even based a daft novel on them.
Whatever happened in the last 10 years, at least we don't have to put up with the nonsense of glove puppets delivering franchise applications in wheelbarrows as the basis for our broadcasting culture. Or do we?
Ofcom's profoundly flawed idea of a Christmas panto - the suggestion of giving £300m of public money to a public service publisher - is unlikely to happen, but even the scent of public money in the water has sent the industry into a predictable feeding frenzy.
Foremost among the thrashing flippers and open mouths was new Channel 4 chief executive Andy Dun can, with his canny strategy of declaring that in seven years, analogue switch-off etc will conspire to leave Channel 4 £100m in the red. Mr Duncan will not fear closure or the dole queue - his uncanny ability to see the future with such clarity at such distance should see him inundated with offers from merchant banks, or maybe fairgrounds and circuses.
Equally suspicious was the reported sudden appearance of ITV chief executive Charles Allen in regional newsrooms, singing the praises of local services, but sorrowfully hinting that unless subsidy was made available, well, something nasty might happen to the cheerful weatherman who wears jumpers the viewers knit for him. It put one in mind of the brilliant Broadcast News, where Jack Nicholson, the vulpine anchor, comes down from Washington to "be with the people" of the affiliate studio which is being axed. "If there's anything I can do . . . " he offers. "You could try taking a pay-cut," came the rejoinder.
The crude threat of "give us the cash or Jon Snow gets it" is the least good reason for handing public money to commercial broadcasters (sorry Jon). In fact it is a positive reason not to hand over the cash. If axing the news bulletin is your first act of sacrifice, then you are not a public service broadcaster.
The very business of running a contest for funding raises an interesting issue about motivation in media management. If someone is genuinely a public service broadcaster, then this part of their remit is at the centre of their purpose, not an optional extra, and if there is certain programming they would make only if they were paid to do it, then they shouldn't really be the people in receipt of public funds.
In all probability, the imposter would not have the passion and commitment to do it particularly well. At some point, broadcasters will have to make the same choices offered to the independent production industry - poor but happy to turn out quality work of a meaningful nature, or rich and nakedly commercial. This is why at producer level, the BBC works fantastically well, and arguably less well when it starts to bring in senior managers who have a commercial ethos at their core.
Both Charles Allen and Andy Duncan have plenty of commercial credentials - one served pot noodles, the other marketed them - and both have now had plenty of exposure to the limitations of public service broadcasting. Salaries are such now in television that it is no longer possible to say that love of the medium is the sole reason for doing the job, or indeed, that they could earn more elsewhere. Both C4 and ITV have meandered varying distances from the path of righteousness in terms of a public service remit, and it is this rather than profitability levels that cast doubt over their suitability to duck back into the fold at will.
So a decision needs to be made about which route they prefer to travel. Channel 4 has begun to look more like a public service broadcaster of late, to the extent that there are a number of programmes that simply do not fit on the nakedly commercial but allied E4.
This is why Four More is now in the pipeline for our second chance viewing pleasure. If a commercial broadcaster cannot carry on programming without subsidy, it does not make it a public service broadcaster - it makes it a failed commercial broadcaster.
If Ofcom were to offer money on an out to tender basis, there is no reason why Channel 4 or ITV should not compete for it, but public service broadcasting is for life, not just for Christmas.
“As the BBC diversifies, the licence fee looks more, not less, relevant.” (December 6, 2004). The Guardian. Emily Bell
Although you may not have noticed, the licence fee has just been put up to £126.50. An extra fiver for the BBC in the last-but-one plus inflation rises secured by former director general John Birt. A day before the announcement, Lord Burns delivered the latest report into the BBC's sustainability and joined the orderly queue to read last rites over this unique form of funding.
The Burns report arrives on the heels of Ofcom's review of public service broadcasting, parts one and two (apparently when they have delivered part three they are going back to fashion a couple of prequels, and the DVD box set will be available next Christmas), the Elstein and Cox committee report, and Patrick Barwise and Tim Gardam's respective assessments of the BBC's digital value in TV and radio.
The Burns Report is significant not least because its author is the most likely to be listened to. It also makes available the highly attractive political option of taking no action for the next two terms of government, whilst pointing out that there is a problem to be addressed.
It is not surprising that under the pressure of so much papery harassment, BBC director general Mark Thompson has gone into tormented-dog mode and started to eat his bedding. Cuts of 15% to many parts of the corporation, battalions of staff moved to Manchester, if there were croissants still for tea, they too would be no more.
This is a battle for the survival of the licence fee. All reports overtly or covertly concur that in the long term, justification for the licence fee as we understand it is at best shaky, at worst untenable. In turn, the rapid reformation of the BBC is a shock tactic to preserve universal funding for longer than the decade Terry Burns suggests is its natural lifespan.
But there must be some support still for the method of funding, if not for its collection and relative price. We accept too easily the adage that the "licence fee is unsustainable in the digital age". Why? Well, the argument goes, people can choose what to watch on a much broader spectrum, and the BBC merely replicates much of what is already available and - worse still - actually increases the cost of it by being in the market. It is regressive and it does not give fair value to everyone because not everyone uses it to the same extent.
The licence fee no longer looks chic in the days of subscription and micro payments. But, like hessian wallpaper, it is possible that the profoundly unfashionable concept of the licence fee will again have its day. Think back to the 80s when the hue and cry was all about shoehorning advertising on to the BBC. Imagine what a mess we would have been in if this modish suggestion had been adopted. Equally, some of the assumptions now being made about what will happen to television in the next 20 years are prone to being similarly wide of the mark.
The licence fee is no more anomalous or unsustainable than advertisements, which are sold on the basis of finger-in-the-air ratings, are routinely ignored and and have no defined benefits to the advertiser. Nor is it any less future-proof than subscription, which relies on a narrow distribution channel and copyright rules for its efficacy. Both of these look like going by the board in the next generation.
In a world where BBC content will be anywhere and everywhere, a vague, unspecific charge like a licence fee looks more appropriate as a fair way of funding than the alternatives. Of course, one has to accept the principle that the BBC will continue to provide something impossible to get from a free market - though the answer to this is in the question. By being an independent, universally funded entity, the BBC will always be different. The closer the BBC is brought to another funding model, the less pressure it will feel to act differently. The issue is with the behaviour and output, not the funding.
This is not to say the licence fee is priced or levied correctly, just that the market changes precipitated by digital make the licence fee more, rather than less, relevant. Curiously, it might be that as we progress technologically, we regress in terms of the media economy. It could be that we will soon be heading for an era where all media become uneconomic - trapped by business models which failed to account for shifts in consumer behaviour, and uncontrolled technological development. Enthusiastic amateurs and Russian oil barons will form the core of our media operatives, and we will all be left trying to remember what happened to that neat idea where you paid £126.50 for a year's unlimited television, radio and internet access.
