BBC conundrum – market share and things that no-one else would do

The BBC is expected to both maintain a large share of the viewing audience and to produce programmes that commercial broadcasters would not broadcast. This seems to me fundamentally confused. The confusion arises because of a error in the design of the BBC which set its defined purpose at odds with its means of survival, and, sadly, ensures that its purpose is subverted.

What is the purpose of the BBC (you might ask). The purpose of the BBC is to show programs that no-commercial broadcaster would make (otherwise the BBC is not needed to make them…). It survives because British subjects are are forced to buy a license (to fund programs they would not otherwise individually or collectively pay to be able to watch… again logically required by the purpose). So far so good. The problem arises because someone decided that to take money was not right unless most people wanted to watch (enough of) the programs. This creates a market test which is essentially that the net output of the BBC should be commercially viable: most programs should achieve a wide-audience. So: the purpose is to create programming that no-commercial make would choose to produce and broadcast, but the programs that are made must enjoy a dominant viewer share (Catch 22 anyone?).

In the monopoly world in which the BBC was created, this test would be easily met: there was only the BBC, and everyone watched most of it, even the products that a commercial provider not in a monopoly would not make. But as soon as people have choice, the only programs that have a wide-market are those that commercial providers would (because a large viewership is a commerical sine qua non) would be happy to make. Ergo… either the BBC should be abolished as no longer necessary, or the trust needs to be re-written to fulfill its original purpose.

The current model sweeps the purpose of the BBC under the carpet, driving the BBC by the 95% of BBC activity which is not its purpose (but which people in the BBC like doing (because it generates large salaries for them bases on mass audience appeal), and people like watching). i.e., the BBC becomes a lowest-common denominator monopoly broadcaster: Exactly the opposite of its charter purpose.

The BBC currently has a revenue larger than the total advertising revenue of all of commercial television and 90% of their output would be purchased by commercial providers (because they claim that they need to pay millions to their staff as they would otherwise be poached by commercial TV – I think a strict reading of the charter would suggest that any staff member who would be poached should in fact be fired).

The solution is straightforward. There are several, but here’s one that is simple to start with. The BBC has a large market value: Use this to create a public arts and science trust: Probably the largest in the world, as the BBC channels would no doubt float for several billion pounds. This sale, and the resulting trust foundation would be accompanied by re-writing the charter to state that free-to-air licence holders will pay an amount (<5% of net-commercial broadcast revenue) to the Trust, and jointly arrange to maintain 2-broadcast Television channels and 3 broadcast radio stations (and an iPlayer type service to maintain the availability of this material), which would broadcast the product of the trust. The trust would act as a contestable fund for public service media, licensed under creative-commons license.

Under this model, the license fee would be eliminated, the trust would continue independent of government, all media production would be open, contestable, and copy-left. The TV channels would broadcast arts, science programming (think Bronowski, Sagan, The Edge, TED), and also political coverage: C-SPAN style.

Making intelligent TV need not cost £4.2 billion (which is the BBC budget!). Take an agreeable example from the past: David Attenborough made his first nature series for about £1000. Even elaborate, timeless productions such as Jacob Bronowski’s Ascent of Man had negligible production costs. Stripped down to its essentials, Question Time, a valuable public service could be made for around £200,000 for 50 episodes. use University lecture theatres for free, automated camera and audio with two operators – say £120,000/yr, presenter paid £64,000, guests attend for no-fee.

A widely accepted rule for determining acceptable government activity – that is for justifying coercion of individuals – is that the activity or event being done or prevented must be both essential for all people in the society, and have externalities or free-rider constraints which make it unfair, impossible or too risky for individuals to achieve voluntarily. Classic examples include armed forces (external security), police and justice (internal security), and education. The latter is more controversial than the two former, but, especially in a democracy, are widely agreed as essential (on the basis that only educated and competent to choose law-makers).

Of course there are solutions other than this. One might simply require all commercial broadcasters to show programs deemed of educational importance (perhaps by open vote) as a condition of their licence, or allow channels to specialise, with channels producing little educational or informative content paying a fee which subsidizes those producing material voted as valuable. I like the first idea as having a channel devoted to intelligent material creates a brand, and allows the formation of intelligent viewing habits. Wikipedia is a good example of this power.

The BBC is expected to both maintain a large share of the viewing audience and to produce programmes that commercial broadcasters would not broadcast. This seems to me fundamentally confused. The confusion arises because of a error in the design of the BBC which set its defined purpose at odds with its means of survival, and, sadly, ensures that its purpose is subverted.

What is the purpose of the BBC (you might ask). The purpose of the BBC is to show programs that no-commercial broadcaster would make (otherwise the BBC is not needed to make them…). It survives because British subjects are are forced to buy a license (to fund programs they would not otherwise individually or collectively pay to be able to watch… again logically required by the purpose). So far so good. The problem arises because someone decided that to take money was not right unless most people wanted to watch (enough of) the programs. This creates a market test which is essentially that the net output of the BBC should be commercially viable: most programs should achieve a wide-audience. So: the purpose is to create programming that no-commercial make would choose to produce and broadcast, but the programs that are made must enjoy a dominant viewer share (Catch 22 anyone?).

In the monopoly world in which the BBC was created, this test would be easily met: there was only the BBC, and everyone watched most of it, even the products that a commercial provider not in a monopoly would not make. But as soon as people have choice, the only programs that have a wide-market are those that commercial providers would (because a large viewership is a commerical sine qua non) would be happy to make. Ergo… either the BBC should be abolished as no longer necessary, or the trust needs to be re-written to fulfill its original purpose.

The current model sweeps the purpose of the BBC under the carpet, driving the BBC by the 95% of BBC activity which is not its purpose (but which people in the BBC like doing (because it generates large salaries for them bases on mass audience appeal), and people like watching). i.e., the BBC becomes a lowest-common denominator monopoly broadcaster: Exactly the opposite of its charter purpose.

The BBC currently has a revenue larger than the total advertising revenue of all of commercial television and 90% of their output would be purchased by commercial providers (because they claim that they need to pay millions to their staff as they would otherwise be poached by commercial TV – I think a strict reading of the charter would suggest that any staff member who would be poached should in fact be fired).

Straightforward solutions present themselves. There are several, but here’s one that is simple to start with. The BBC has a large market value: Use this to create a public arts and science trust: Probably the largest in the world, as the BBC channels would no doubt float for several billion pounds. This sale, and the resulting trust foundation would be accompanied by re-writing the charter to state that free-to-air licence holders will pay an amount (<5% of net-commercial broadcast revenue) to the Trust, and jointly arrange to maintain 2-broadcast Television channels and 3 broadcast radio stations (and an iPlayer type service to maintain the availability of this material), which would broadcast the product of the trust. The trust would act as a contestable fund for public service media, licensed under creative-commons license

Under this model, the license fee would be eliminated, the trust would continue independent of government, all media production would be open, contestable, and copy-left. The TV channels would broadcast arts, science programming (think Bronowski, Sagan, The Edge, TED), and also political coverage: C-SPAN style.

Making intelligent TV need not cost £4.2 billion (which is the BBC budget!). Take an agreeable example from the past: David Attenborough made his first nature series for about £1000. Even elaborate, timeless productions such as Jacob Bronowski’s Ascent of Man had negligible production costs. Stripped down to its essentials, Question Time, a valuable public service could be made for around £225,000 for 50 episodes. Venues: Use University lecture theatres for free; Fixed costs: automated camera and audio with operators – say £100,000/yr, presenter paid £64,000, guests attend for no-fee. Variable costs: £1000 per episode for travel? The current budget would pay for the next 20,000 years of Question Time on this budget!!!

Libertarians may ask why not sell off the BBC, retire some debt, and forget about public service broadcasting? This deserves an answer.

A widely accepted rule for determining acceptable government activity – that is justified coercion of individuals – is that the activity or event being done or prevented must be both essential for all people in the society, and have externalities or free-rider constraints which make it unfair, impossible or too risky for individuals to achieve voluntarily. Classic examples include armed forces (external security), police and justice (internal security), and education. The latter is more controversial than the two former, but, especially in a democracy, is widely agreed as essential (on the basis that only educated and competent to choose law-makers). Writers from Adam Smith to Jefferson concur. Jefferson is worth reading. He felt that a good newspaper was more essential to democracy than government: “Were it left to me to decide whether we should have a government without newspapers, or newspapers without a government, I should not hesitate a moment to prefer the latter.” these waters are muddied by other quotes: for instance Jefferson famously claimed only half in jest that “the only truth in a newspaper was its advertisements“. To average these out to nothing is to misunderstand the necessity of an informed and reasonable public. The founding father’s logic in supporting a popular and wide suffrage was pinned to this principle: IF A NATION EXPECTS TO BE IGNORANT AND FREE, IT EXPECTS WHAT NEVER WAS AND NEVER WILL BE. Combating ignorance, then, is the goal, and freedom the cause. Judge Jonathan Ross on those criteria, and he does not remotely begin to justify a compulsory deduction from your pocket! But judge public exposure of politicians to their constituents as in Question Time… I say yes, that justifies compulsion: Compulsion to ensure that this gets made even if advertisers dislike what is said, politicians wish it not to happen, people are too lazy to ask.

Of course there are solutions other that proposed here. One might simply require all commercial broadcasters to show programs deemed of educational importance (perhaps by open vote) as a condition of their licence, or allow channels to specialise, with channels producing little educational or informative content paying a fee which subsidizes those producing material voted as valuable. I like the first idea as having a channel devoted to intelligent material creates a brand, and allows the formation of intelligent viewing habits. Wikipedia is a good example of this power.

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