18/08/2008

allmediascotland.com is about to change, in terms of design, functionality and style of editorial. That may lead to some disruption of normal services over the next few weeks, not least because there are holidays to be had. It does mean also the prospect of new voices, from a galaxy of bloggers. So far, Nick Clayton, David Calder, Chris Bell, Craig McGill, Paul Hineman, Shaun Milne and Mark Gorman. Here, BRIAN MCNAIR writes for a third time. You’ll see his biog below. Feel free to become an AMS blogger yourself, by emailing us, here.

ITV’s share price improved a little last week, a rare piece of good news for chief executive, Michael Grade. But the structural problems remain. Leaving aside the cyclical downturn in the economy, which could last for years, and the knock-on effects of this for consumer confidence and advertising revenue across the media sector, ITV is in the midst of a long-term migration of audiences away from its free-to-air services to multichannel digital, online and mobile platforms.

And where audiences go, advertisers follow. Broadcasing regulator, Ofcom’s report on the state of the UK communications market - published the other day - notes that spending on online ads grew by 40 per cent in 2007 to nearly £3 billion, and for the first time exceeded the value of advertising on terrestrial TV (worth around £2.4 billion).

The trend is clear – the end of analogue broadcasting’s historic dominance of the communications environment is upon us. ITV’s access to analogue spectrum is declining in value, and the business model which sustained it for more than half a century is bust.

So what can be done to save ITV, and with it commercial public service broadcasting in the UK, assuming (and I will, for the reasons set out last time - here) that these are desirable policy goals?

In its recent summary of responses to its consultation on the future of British public service broadcasting, Ofcom listed four possibilities for making up the analogue subsidy hitherto enjoyed by ITV:

New taxation to support public service content, in addition to the current licence fee;

Top-slicing of the existing licence fee;

Re-allocation of monies (£500 million is the figure often quoted) earmarked by the government to support digital switch over, and currently in the hands of the BBC;

Industry measures, such as levies and the maximisation of potentially valuable regulatory assets such as ITV’s prominence on the Electronic Programme Guide, or income from joint ITV-BBC ventures in the global media marketplace.

Some combination of these sources could provide the funds to sustain the public service elements not only of ITV, but Channel Four and Five. And not only on TV, but in the new media.

We should no longer talk about public service broadcasting, after all, but public service media. The success of BBC’s iPlayer shows the future – we will access more and more of our TV viewing online, when we want, where we want (anywhere with broadband connection, at least).  But how will it be paid for?

Of the options listed above, industry and regulatory measures on their own are likely to do the trick. In a rapidly evolving communications environment, the long term value of an asset such as universal mutiplex availability (i.e. where ITV is bundled free on all digital networks), or use of the number ‘3’ on the EPG is uncertain.

Nor is it clear why commercial companies should be asked to pay levies for the privilege of supporting public service output which the BBC already has £3.5 billion a year to produce. Joint ventures could work, and already do, for the sale of programmes and formats overseas, but could they generate sufficiently predictable and substantial income streams?

Re-allocating the money set aside for digital transition seems like a no-brainer, since the costs have not been as great as predicted. This option is complicated, however, by the fact that the BBC denies the existence of the money (Ofcom begs to differ).

Which leaves either new taxation, or top-slicing. The first is extremely unlikely, especially in the current climate. Would a Brown government add to the nation’s economic woes and its own political difficulties by asking hard-working families to pay yet more taxes so that the News At Ten bong will continue to be heard in the post-analogue era?

Top-slicing of the BBC’s substantial licence fee income seems more likely. The diversion of some portion of the licence fee, probably in conjunction with elements of the other income sources mentioned above, looks  like the simplest solution all round.

Gung-ho pro-market opponents of the BBC like Anthony Jay, and commercial rivals, such as News Corp, call for its budget to be slashed by as much as two-thirds. That won’t happen, nor should it if the government cares about the future of British broadcasting, but we could easily see a more modest raid on the licence fee, justified by the extraordinary circumstances of analogue switch-off and the need to preserve public service pluralism in the coming decades.

The BBC, as always, say that they can’t possibly give up any of their licence fee income, and that they are already cut to the bone. But an organisation which pays its director general in excess of £800,000 a year, and two years ago offered Jonathan Ross a deal reported to be worth £18 million, can’t plead poverty, nor say that it can’t review its priorities or make savings. 

These are not ordinary times, and the traditional arguments for preserving the BBC funding status quo no longer apply. Eighty years of analogue - an era of broadcasting - is coming to an end. No organisation can escape radical change. Few, if any, have the cushion of guaranteed income enjoyed by the BBC.

If the cost of pluralism, diversity and competition in the public service media of the future is the BBC having to share a portion of its income, maybe 10-15 per cent, which could then be made available to companies like Scottish and Channel Four for the production of regional TV news, current affairs, children’s programmes and other threatened content categories, or to independent producers working online, I for one think that would be a price worth paying.

Brian McNair is Professor of Journalism and Communication at the university of Strathclyde. He is the author of many books and essays on media-related topics, and a regular contributor to the press and broadcast media.

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Brian McNair is Professor of Journalism and Communication at the University of Strathclyde. He is the author of many books and essays on media-related topics, and a regular contributor to the press and broadcast media. The fifth edition of News & Journalism In the UK will be published by Routledge in early 2009.