How to save the BBC ANTONY JAY

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1 How to save the BBC ANTONY JAY CENTRE FOR POLICY STUDIES 57 Tufton Street, London SW1P 3QL 2008

2 THE AUTHOR SIR ANTONY JAY joined BBC Television in May He was a founder member of the BBC Tonight team in 1957, becoming Editor in 1962 and Head of Television Talk Features in In 1964 he resigned to become a freelance writer and producer. He was a member of the Annan Committee on the future of broadcasting from 1974 to He is, with Jonathan Lynn, author of the Yes Minister and Yes Prime Minister series. He is currently editing the fourth edition of the Oxford Dictionary of Political Quotations. The aim of the Centre for Policy Studies is to develop and promote policies that provide freedom and encouragement for individuals to pursue the aspirations they have for themselves and their families, within the security and obligations of a stable and law-abiding nation. The views expressed in our publications are, however, the sole responsibility of the authors. Contributions are chosen for their value in informing public debate and should not be taken as representing a corporate view of the CPS or of its Directors. The CPS values its independence and does not carry on activities with the intention of affecting public support for any registered political party or for candidates at election, or to influence voters in a referendum. ISBN No Antony Jay, July 2008 Printed by 4 Print, 138 Molesey Avenue, Surrey

3 CONTENTS 1. A lesson from the great radio crisis 1 2. Do we need the BBC? 5 3. A temple of broadcasting purity 7 4. Zero-based reconstruction 11

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5 CHAPTER ONE A LESSON FROM THE GREAT RADIO CRISIS BACK IN THE DAYS of the Great Radio Crisis in the late 1950s, when the BBC s radio audience was deserting in millions for television, someone pointed out that the real problem was that radio had been invented first. If television had come first, radio would have addressed itself to the needs that television could not meet: motorists, manual workers, small localities all the audiences that radio now satisfies. Instead, the BBC tried desperately to hang on to all the drama, documentary and variety output that the audience had stopped listening to. Eventually, of course, the logic of broadcasting prevailed. But the adaptation was slow and painful. The same is true of public service broadcasting today. If broadcasting had started as a purely commercial enterprise, then when the public service broadcasters arrived they would have sought out the audience needs that the commercial stations were failing to meet. This indeed is what happened in the United States where the Public Broadcasting Service raised the money and devised the programming to fill the market gaps left by CBS, NBC and ABC. But in Britain, we decided to entrust all our broadcasting to a state monopoly, funded by a broadcast receiving licence rather than by taxation revenues in order to distance it from the government of the day. 1

6 HOW TO SAVE THE BBC This device could have been little more than a fig-leaf, delicately concealing the reality of a government-funded broadcasting service. The fact that it was not was principally due to the powerful personality of its first General Manager (later Director General), John Reith who guarded, fought for and established its independence during his 16 years at the helm. But there was a price to pay. That same intellectual dominance and moral fervour that championed the BBC s independence also imposed on the BBC a mission to set the nation s cultural agenda, to raise public taste (to use the patronising phrase that went unquestioned for a generation), and to set a standard for British public discourse that went well beyond the remit of an ordinary broadcasting station. Since Britain had no other broadcasting organisation to compare it with, it was happy to accept the BBC s view of itself as a national institution. This was enormously reinforced by the War, which broke out only one year after Reith left. The tremendous importance of the BBC throughout the War is well known and hard to over-estimate. I was nine years old when it began and fifteen when it ended. The BBC was not only my principal, almost my sole, source of information about the progress of the War but also the medium through which I shared the events and experiences with all my fellowcountrymen. It was the national forum, an institution of state. The idea of having a second broadcaster, let alone several others, never crossed anyone s mind. It would have been as bizarre as having a second monarchy or a second parliament. But it went even further. The foreign language broadcasts of the BBC s Overseas Service had, by the end of the War, gained a unique reputation all around the world for their 2

7 A LESSON FROM THE GREAT RADIO CRISIS accuracy and objectivity. The US counterpart, the Voice of America, was seen as a propaganda channel. But the BBC was widely trusted and deeply respected. Even in 1956, 11 years after the War had ended, when I was in Vienna covering the Hungarian revolution for Panorama, we were given permits and access as BBC representatives that were given to no other broadcasting service. It is not surprising that countries setting up broadcasting organisations after the War should have looked to the BBC as the model for a non-commercial broadcasting system. For all these reasons, the BBC acquired a status and prestige that went well beyond that of a supplier of radio and television programmes. It became a national institution, an arbiter of taste, a custodian of British culture, an exemplar of British civilised values. To be honest, this became too much of a burden for a broadcaster to bear once it had become part of a competitive system. Once ITV took to the air in 1955, we in the BBC s production departments were focused on programmes the audience would watch and enjoy. But the high-minded opinion-formers and bien-pensant decision-makers (who composed the governing class) pressurised the BBC to transmit programmes that they believed it ought to show, whether people wanted to watch them or not. The politicians even imposed a formal obligation to transmit news and current affairs programmes, not least because they did not want to lose the opportunity of getting themselves on the telly. Perhaps the most remarkable aspect of this paternalist and patrician view of the BBC is its persistence. The BBC is now only one voice among hundreds. We now have analogue and 3

8 HOW TO SAVE THE BBC digital, terrestrial, cable and satellite, DVD and VHS, PC and laptop, mobile and blackberry not to mention other competitive visual diversions like platform games, YouTube and Facebook that throng cyberspace and the blogosphere. And yet there are still those who see the BBC as it was 60 years ago, who do not realise that for the vast majority of the nation it is just another broadcasting station, and its only difference from other subscription channels is that, even if you never watch it, you can be fined if you do not pay your subscription. And sent to prison if you refuse to pay the fine. And that is the heart of the matter. There is no longer a case for taking 4 billion a year from the public to produce programmes they do not want or can obtain free elsewhere. If there is a demand for a particular programme, the broadcasting market will supply that demand, without the licence fee. So the real questions are: do we need the BBC at all? And, if we do need it, how can we save it? 4

9 CHAPTER TWO DO WE NEED THE BBC? THERE IS A STRONG CASE for dismantling the BBC. It spends over 4 billion every year, most of it on undistinguished programmes which are indistinguishable from what is available on competitive unsubsidised channels. It also uses this subsidy to compete unfairly with commercial companies in areas like publishing and the internet. Many people also see it as a propaganda vehicle for the liberal élite whose views and values are at odds with those of most of its audience. There is however still a case to be made for retaining, at least for the time being, a public service broadcaster of some sort. Such a broadcaster would provide a service free from advertiser pressure for those who cannot afford to pay for subscriptions. Advertisers, for example, tend to be more interested in younger audiences, a market failure which a public sector broadcaster could counterbalance. Equally, there are some programmes for which advertising breaks are an intrusion. More importantly, the BBC has some excellent production centres of international repute the Natural History Unit is the most frequently cited, but it is not alone which would need to be preserved on the principle that if it ain t broke, don t fix it. And most people feel it is culturally desirable to have a channel 5

10 HOW TO SAVE THE BBC that is committed to material sourced in Britain. Not because imported programming is rubbish; quite the reverse. Much of it is excellent, so much so that it could in time displace the home-made shows that are more expensive to produce. So there is a case to be made for keeping those native production units alive for as long as they deliver good value. And a public service channel is often a better place for innovation: it can afford to persist with a series that is not quite right, when a commercial competitor would be forced to abandon it. And of course a publicly funded broadcaster must have an obligation to provide political impartiality. But it should be the only broadcaster to do so: when public funding is in due course withdrawn from Channel 4 (as in due course it surely will be), commercial channels should be as free as newspapers now are to take whatever political line they want. The obligation to maintain political balance made sense in the days of only one or two broadcasters. But as stations proliferate, so that obligation becomes more and more illiberal and restrictive. Some people notably the House of Commons Culture, Media and Sports Select Committee have argued for public funding to be available to applicants from all channels. This is wrong: the Government should surely stay out of the communication and information business as far as possible, not extend its reach. And how would such a system work? Only by creating a new quango, a mini-bbc, to distribute the funds. Producers would soon work out which type of programme this new quango favoured, and tailor their applications accordingly. It would become an editorial body in no time. Nothing could be less necessary to the future of broadcasting than an extension of public funding. One public broadcaster is plenty. 6

11 CHAPTER THREE A TEMPLE OF BROADCASTING PURITY WHEN I JOINED THE BBC in May 1955 there was only one channel, and we were it. But not for long: ITV had been given the go-ahead to start in September an act of cultural barbarism, in our view, and totally unnecessary: we were confident that there was no public demand for it. People were perfectly satisfied with our monopoly service. But already staff were defecting. It is strange to recall how they were regarded not just as jobchangers but as deserters, traitors even heretics. Many BBC staff felt an almost religious attachment to the corporation; we were a temple of broadcasting purity, the golden mean between what we saw as the cheap crude commercial populism of the US and the government propaganda machine of the USSR. The strength of this belief derived from the fact that, if it were not true, there was no justification for the licence fee; so we had to believe it. It is not held so strongly now, but it is still there and is part of the argument the BBC still uses to defend itself and its source of revenue. It was never terribly convincing and has become steadily less so as the commercial channels have shown they can produce excellent programmes in every category, while the BBC screens are plastered with advertising every time they televise a sporting event. 7

12 HOW TO SAVE THE BBC An even greater formative influence on the BBC over the years is that its Charter does not require the BBC to produce any programmes. It was set up to provide them, but not necessarily to make them. Of course when it started it had to produce them there were no other radio producers in the country back in 1926 but the dominant ethos has always been that of corporate administrators managing a publishing house rather than creative editors producing a newspaper or magazine. So when a third channel became available in the early 1960s, it was both a threat and a challenge; the threat of competition and the challenge of enlarging its publishing empire. The BBC attitude was there should not be a third channel, and the BBC should run it. These two factors corporate gigantism and belief in a unique moral mission have made the BBC what it is today. And yet both are of vanishingly small concern to viewers and listeners. What they value the BBC for, and have throughout its 80 year history, is good programmes, and it has a long and proud tradition of making them. The behaviour of the BBC has been questioned, challenged and criticised pretty much every day since it was incorporated, but up till now its existence has been taken for granted. Even when I sat on the Annan Committee on the Future of Broadcasting, none of the half-a-hundredweight of submissions we received argued seriously for its dissolution. The question was never even discussed. The technological changes over the past 15 or 20 years have been far more rapid and profound than ever before. Viewers 8

13 A TEMPLE OF BROADCASTING PURITY and listeners now enjoy a range of programmes unthinkable when I was sitting on the Annan Committee. I am a Friedmanite. My company produced Milton Friedman s 10 part documentary series Free to Choose back in 1979, but I was a convert to market economics long before that. In fact, that was why my company got the gig. My first reaction is to look to the market for a solution. But broadcasting always posed a problem: in the past, international telecommunications agreements and a limited frequency spectrum created a need, or at least an excuse, for government intervention or regulation. But that was then and this is now: cable and satellite broadcasting of digital signals have more or less removed that need, or that excuse. And there is an even bigger problem for the BBC: convergence. In the words of an IT commentator, the computer is converging with television in the same way as the railway converged with the horse and carriage. Now that the BBC is making its flagship programmes available online, viewers using the PCs and lap-tops will not be receiving broadcasts and will therefore no longer need to pay for a broadcasting receiving licence. The BBC insists for the moment that the licence fee will still be payable. But it is hard to see why. The licence is for receiving broadcast transmissions, not for receiving electronic signals sent down a line by an internet service provider. The question will surely be tested one day soon in the courts. But what is the alternative? To tax every home computer? Even a hesitant and moderate libertarian must ask what business the government has in controlling what we access on our PCs and charging us for the privilege, once terrestrial transmissions 9

14 HOW TO SAVE THE BBC are obsolete. It is no different, essentially, from licensing every printing press and bookshop and taxing every reader. And even if the government continued to try, how would it enforce it? Unless it licensed every PC and laptop (and every mobile phone and BlackBerry for that matter), every user could claim he was not watching, and never watched, the BBC. Even if the BBC restricted its transmissions to terrestrial digital, does anybody really believe they would not find their way onto some pirate website out in cyberspace? And even if the BBC could stop it, nobody would have to pay a licence fee to watch all the other channels. It would become an optional charge. Detector vans would be useless. The licence fee could of course be replaced by taxation revenue, but that would entail ministers answering in Parliament for BBC programmes, which is precisely what the BBC was set up to avoid 80 years ago. With its financial integrity already compromised by event sponsorship and by advertising at sports events, and its political independence stripped of the fig-leaf of the licence fee, how do you justify handing it a 4 billion a year grant eight times the total budget of the Arts Council? It seems more likely that within ten, or at most 20, years, the licence fee will be indefensible in theory and unenforceable in practice. So we are probably discussing only the next decade or so of the licence fee. So how do we save the BBC? 10

15 CHAPTER FOUR ZERO-BASED RECONSTRUCTION MANY PEOPLE WOULD LIKE TO abolish the licence fee and let the BBC fend for itself with advertising, subscriptions, pay-perview and whatever other ways it can find of earning itself a living in the marketplace. Of course this is possible, but every study has shown that the result must be a serious impoverishment of television in Britain. Subscription and pay-per-view could not begin to replace the missing 4 billion, and advertising, apart from not generating enough income, would also seriously diminish the advertising revenue and consequently the production budgets of the commercial broadcasters. I cannot see any government taking 4 billion out of broadcasting and not expecting a national outcry and a dramatic loss of votes. The free market may, and in my own view should, be the ultimate destination, but it is neither desirable nor practicable to head straight for it immediately. As one of the earliest Sir Humphreys, Henry Taylor, said in 1836: A statesman should steer by the compass, but he must lie with the wind. But before we can construct a realistic plan to save the BBC we have to confront another ancient assumption that sustains its corporate mythology, the assumption that the BBC has to provide a total broadcasting service. 11

16 HOW TO SAVE THE BBC Like all myths it springs from a long-forgotten fact. The BBC did once have an obligation to cover every aspect of British life and satisfy a wide range of demands and tastes. News, sport, music, drama, comedy, current affairs, education, children if the audience was to find them on radio or television in the monopoly era, they could only find them on the BBC. That had indeed been the case for 30 years, and the arrival of ITV did not change the BBC s attitude. Indeed it is still buried deep in the soul of the Corporation. But the massive increase in channels over the past 15 years means that many of the viewers and listeners requirements are satisfactorily met elsewhere. A varied schedule may well make sense from a purely broadcasting point of view, but it does not justify expenditure on programmes viewers can get from other sources, purely from some delusion of national obligation. So what should the BBC not be doing? Do we really want it to enter auctions against the commercial stations for Hollywood movies, American television series and national or international sporting events? If the audience is going to see them on television anyway, why spend their licence money just to enable them to see them on a different channel? And then there are the endless space-filler programmes: cookery, gardening, DIY and so on if the BBC s were significantly better than anyone else s, they could be justified. But if (as is so often the case) they are just there to fill space and save money, and are virtually indistinguishable from competitors, why bother? And do we still need Radio 3? No one questions the excellence of some of its output, but at 45 million a year it costs as much as Radio 1 for a fraction of the audience, most of whom have a rich library of CDs. If there is a genuine demand for it, the government 12

17 ZERO-BASED RECONSTRUCTION could allocate it an independent radio channel funded by some mixture of subscription, sponsorship, advertising and Arts Council grant. And does it need to spend 22 million on supporting their five house orchestras and a choir? They are certainly not value for licence money. If the government wants to support them, the Arts Council could pay for it. And while Radio 4 is a unique speech channel, do Radios 1 and 2 provide programmes sufficiently different from what listeners can receive from commercial stations and through their ipods to justify their 93 million a year? Is BBC local radio really necessary? The question is not whether the programmes are good, but whether they are a proper and cost-effective use of licence money. Even more important is the question of the new digital television channels. Clearly the BBC was under considerable government pressure to lead viewers to install digital terrestrial receivers to help the phasing out of analogue transmissions. This may help the government and the industry, but it would be hard to argue that it gives 355 million worth of value to licence payers. As digital becomes established, it is time for the BBC s digital channels to make their excuses and leave. And then there is educational television. When I saw the first domestic video recorder, back in the 1970s, I prophesied that schools broadcasting would be dead in ten years. That was about 30 years ago. It s still there. Why? Schools and colleges do not want to arrange their timetables to fit round broadcasters schedules when they have audio and video tapes, CDs, DVDs, CD-Rom, and the internet that they can access when it suits them, and the range of commercially available educational material for schools is huge and growing. 13

18 HOW TO SAVE THE BBC Finally there is the perennial question of the BBC s expenditure on administration, consultancy and general overheads. Almost everyone seems to think that these are far too high, and yet (as always happens in great bureaucracies) any specific item can always be plausibly defended. If cutting down the BBC bureaucracy had been Hercules s thirteenth labour, he would still be in slavery to Eurystheus. Learning the lesson of the Great Radio Crisis No, the only possible approach is a zero-based reconstruction. This means turning the whole problem upside down and learning the lesson of the Great Radio Crisis by asking the question: if broadcasting had started as a purely commercial enterprise, then what would be the role, structure and resources of a public service broadcaster? This means starting simply with objectives and resources and building up from there. Let us take the objectives to be the provision of one national television channel and one national speech radio channel. What income would that require? At the moment BBC1 costs 1,400 million a year and Radio 4 costs another 100 million. That makes 1,500 million. The BBC spends 88% of its output on programmes, so at that rate the overhead would now be around 180 million. This might come down quite a lot as decisions would be taken by production executives to support programming, and not by corporate administration to support the institution. The resources would be, in the short term, the continuing revenue from the licence fee and from worldwide sales. These would be backed by considerable assets, consisting principally of the property portfolio and the programme library. 14

19 ZERO-BASED RECONSTRUCTION These figures are of course massively simplified approximations and do not take account of traditional costs like pension commitments and severance pay (though sale of property might go a long way towards meeting them). But they do give an illustration of the sort of savings that could be made. Two fundamental changes Having saved the BBC all this money, how are we going to ask them to spend it? There are two fundamental changes to be made before we start. The first is a spiritual conversion. For 80 years the BBC has seen itself as a provider of services: A unique institution, historic role. world s greatest broadcasting service, cultural beacon (the inscription inside Broadcasting House describes it as a temple of the arts and muses ), national treasure. All that has to go. The corporate imperialism and institutional selfregard are now a millstone. Instead it must place the professionals, the programme producers, on the throne. It must seek respect not for what it is but for what it does. It must measure its success as the public have always measured it, by the quality of its programmes. Does this mean chasing the ratings? This is a criticism that does not bear close inspection. If it has any validity, it is as a criticism of the scheduling of programmes which have no purpose or merit beyond attracting a large audience. But all producers of good comedy, drama, documentary and the like strive, and should strive, for the largest possible audience for their type of programme. The ratings are their principal indicator of quality and measure of success. Do the critics of chasing the ratings really want producers to be oblivious of 15

20 HOW TO SAVE THE BBC whether anyone will want to watch their programmes, like priests celebrating mass in an empty church? The success of public service broadcasting lies in how many of the public it serves, and how well the public believes it serves them. If it does not attract significant audiences, it has failed. As Frank Muir said of Battleship Potemkin, That shows what happens when you don t watch the ratings. The second fundamental change is in focus. The principal reason why so much of the BBC s output is so undistinguished is lack of money. Its resources are too thinly spread over too many channels. Obviously it must keep a mainstream television channel, (though not necessarily all night) and a radio speech channel. The World Service is paid for by the government, so is not a drain on the budget. What other services should it provide? There will of course have to be a news department to supply its television and radio channels; anything beyond that will be up for discussion. The irreducible minimum however, is one television and one radio channel. What is required is a planning exercise similar to the Jackie Fisher reforms of the Royal Navy. In 1904, Admiral Sir John (later Lord Fisher) became First Sea Lord. He took over a Navy that for the past hundred years had been maintaining the Pax Britannica and defending the British Empire across all the world s oceans. But Fisher realised that its job had changed. There was now only one danger that mattered, the German High Seas Fleet, and only one objective for the Royal Navy: to defeat it. He saw no need to keep a gun boat in every creek around the South China Seas, or half a dozen frigates for social or diplomatic purposes in every port from Mombassa to Hong Kong. He needed dreadnoughts, and he built them, and at the 16

21 ZERO-BASED RECONSTRUCTION same time dramatically cut the Naval estimates. The new BBC will need to start with the same ruthless logic. The threats to the BBC are broadband and the loss of its licence revenues. Its dreadnoughts are high quality programmes. Should certain categories of programmes be excluded quizzes, panel games, reality programmes? No. The audience does not want to be denied the likes of Mastermind, The Apprentice and Have I Got News for You?. It is absurd to prescribe or proscribe categories. Quality means the best of its type, not the best type, whatever that would be. And how do you define quality? Management consultants spent years investigating and debating this, and only one definition made any sense or gained general agreement: quality is what the customer wants. High quality is what delights the customer. The BBC s remit is to produce a volume of high quality programmes. With a much reduced output, its long tradition of producing fine programmes and a budget of 4 million a day, it should be able to achieve it triumphantly. We could see a golden age of drama, comedy, documentary, children s television and arts and science programmes. It would be a great production powerhouse, enriching television for all the nation s viewers and exporting British creative programming to the rest of the world. There is one other obligation that must be laid on the new BBC: it must be committed to making as much money as it possibly can, and cutting out all its ancillary activities BBC Resources, BBC Online, Publications unless they can contribute profits to go into programmes. The BBC is a powerhouse, but it is also a treasure house. Its sales of programmes reached 800 million in 2006, with profits of 110 million. With much more professional and aggressive 17

22 HOW TO SAVE THE BBC marketing qualities it is rarely accused of that sum could be increased dramatically. The new focus on quality production quality in quantity should provide a large and growing increase in programme sales. The world-wide market for high quality programmes is expanding all the time: sales of programmes, leasing of formats, sales of CDs, DVDs, books and magazines. And quite apart from programme sales, its supplying of resources like studios, outside broadcast units, editing and dubbing facilities, wigs and costumes brought in 5 million profit last year. But the great resource is the rich library of television programmes; the twentieth century was the century of the franchise holder, but with the massive increase in digital channels and DVD sales, the twenty-first century is the century of the copyright owner. I know this from personal experience: my income (in money terms) from Yes Minister and Yes Prime Minister in was getting on for double what I earned from all the 38 original scripts put together. With the market growing all the time and an increased injection of new high quality programmes, this source of income could be enormously more significant than most people now realise. At the moment, the BBC does not even actively market its own programme library; it makes its programmes available to commercial distributors to sell through their catalogues. It has no catalogue of its own. The City media experts who I have spoken to regard this as a joke. A bad joke. This is significant. Once viewers receive all their programmes on their PCs, the licence fee will be gone. The BBC could take advertising. It could run as a pay-per-view 18

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