Public argument 

21 January 2009

BBC licence fee ‘digital surplus’ could help fund new PSB body, says Ofcom

Ofcom: Report summary plus links to full versions

Now that the long-awaited report from Ofcom has finally appeared, some of the rampant speculation (along with accompanying deliberate leaks) can now be resolved, although the forthcoming “Digital Britain” report will be wider-ranging and may help to answer some of the remaining questions that are still unanswered.

For one thing, Ofcom’s report does not clarify what will happen to Channel 4 apart from that magic word ‘something’, and this really highlights the basic problem with Ofcom as a regulator in that it doesn’t dare suggest that “If we had more power we would tell Channel 4 to do this or that”, instead meekly suggesting a few ideas to try and sort out the current mess.

The main problem with a ‘new’ alternative public service broadcasting setup is that if the fundamentals are unchanged then all we will be left with is something that’s much the same as Channel 4 is at present, notably a lot of effort expended with very little to show for it in terms of what the viewer sees on screen.

Public service broadcasting should be about diversity of commissioning in terms of ideas as much as changes in structure or alliances with broadcasters here and there; failure to address this issue has resulted in modern-day Channel 4 having to rely on Big Brother to bring in essential revenue.

So has Channel 4 lost its basic argument?

The idea of giving Channel 4 a one-off payment from the licence fee ‘surplus’ so as to somehow secure its own future may work as intended but would still have an uncertain outcome beyond any immediate benefits that may be gained as a result. And there will still be no direct ‘incentive’ to commission a wider range of programming.

If RTL was to subsequently acquire Channel 4 it could potentially benefit financially from that one-off payment (if made), so that payment might be classed as a commercial subsidy under European Union legislation therefore it might have to be refunded as a consequence if such a thing were to happen.

As for the defence of Channel 4 as a public service broadcaster, the problem seems to be that Andy Duncan has been publicly defending his channel as if it’s a national treasure of the highest order, whilst the general perception seems to be of a broadcaster that’s only slightly more worthy than Channel Five despite what still remains in parts of the schedule.

Plus as someone else pointed out, running Celebrity Big Brother at the same time as its public service future is being decided is tactically speaking nothing short of an own goal (it could have at least been postponed until the summer), with painful memories of the Shilpa Shetty fiasco lingering in the background as important decisions were being drafted.

Unless of course Channel 4 wanted to remind people of the commercial sacrifices it has to make for funding at the present time in order to maintain its public service output, although a bit of self-sacrifice may have persuaded Ofcom to have taken a firm view on the broadcaster’s future as opposed to the resultant fence-sitting that’s clearly evident.

Andy Duncan seems to have spent too much effort defending the status quo as opposed to persistently conveying the message that “Channel 4 is good as it stands but with more secure funding we can make it a whole lot better, akin to the diversity and quality achieved 20 years ago but with more viewers”.

This stance becomes even more important when you realise the potential for real damage any merger with Five could bring, no matter how good the intentions are on both sides of the deal. Short term security could be the only thing that Channel 4 obtains as a result, with the potential for real and lasting damage in terms of programming quality.

RTL is not a charity and will primarily want to run Channel 4 under its own terms and conditions; it knows that its position will be relatively secure, therefore RTL will exploit any and all of the potential leverage that will exist (we run things our way or we’ll pull out of the deal) to make life easy for itself as opposed to performing a public service.

There’s nothing here to suggest that the eventual outcome will be any different from ITV’s recent and ongoing history of cutting back public service commitments despite promises of a tighter regulatory framework, and could very easily end up being even worse than before.

RTL was (and perhaps still is) also the most prominent potential candidate to buy ITV plc, but its warchest for buying a broadcaster isn’t enough for the total amount needed (shares plus pension commitments), and with financial markets currently in turmoil easy credit is virtually nonexistent to obtain and looks like staying that way for the time being.

Hence RTL’s interest being now focused on Channel 4, but anyone thinking that RTL will be a financial panacea for Channel 4 is very likely to be misguided; Channel Five may not appear to be on the brink of collapse but it’s dangerous to assume that Five isn’t suffering financially from the economic downturn.

So Channel 4 plus Five will result in short term cost savings that will prove insignificant in the longer term, and the obvious potential for further erosion in terms of the quality and depth of programming that still exists on Channel 4 despite any current superficial similarities between it and its Five neighbour.

You only need to look at ITV’s recent history to witness how commercial considerations have triumphed over public service considerations based on the viewpoint of one major commercial television broadcaster, and there’s nothing here to prevent history from repeating itself once the dust has settled.

A Channel 4/Five merger will also raise questions about the number of digital channels that RTL would own as a result (Channel 4, E4, Film4, More4, 4Music, Five, Fiver, Five USA), and it’s probable that it would have to relinquish control of at least one or two of them in order to avoid accusations of being a monopoly.

The Channel 4 question now seems to revolve primarily around keeping the channel going in its current form as opposed to fundamentally improving its public service credentials, which is a real shame given its illustrious past and how commercial considerations have since eroded the idealism that once existed.

It’s possible to draw some parallels between C4’s Andy Duncan and his BBC counterpart Mark Thompson; both have laudable aims and objectives but seem to be relatively poor at communicating these objectives to a wider audience – for example, Mark Thompson could have been more vocal in defending the licence fee from being ‘raided’ for other purposes.

Whilst Channel 4’s position is still fundamentally to be resolved, more radical intentions are paradoxically being suggested for ITV, namely having a “parallel plan” (a separate franchise) for regional news, which is a potential solution for sidestepping any commercial subsidy concerns that would exist if ITV was given money to fund regional news.

This principle could be further extended to secure regional programming, but Ofcom still seems to think that regional programming is less important than regional news, even though the former is worth its weight in gold if done properly as opposed to cheap generic trash that ends up being made by a disinterested commercial broadcaster.

Anyone expecting ITV plc’s competence to be challenged in this report was always going to be disappointed, and it’s unlikely that Lord Carter’s forthcoming “Digital Britain” report will fare any better. The idea that another commercial organisation could actually do a better job of running the English and Welsh ITV franchises still seems to be elusive.

Of course tighter regulation for ITV may arrive when the regulatory structure is overhauled in preparation for the forthcoming changes, and there are still lingering issues over the longer term future for the channel, especially if someone is daring enough to launch a takeover bid – the cost of ITV plc’s pension fund being the deterrent for potential bidders.

But in ITV’s case most of the damage in respect to its public service commitments has already been done, with its regional centres now reduced in most cases to little more than news gathering hubs. There are numerous arguments surrounding ITV’s fate but some of the cost cutting has definitely resulted in unnecessary reductions of public service output.

Even during times of economic prosperity ITV has had the upper hand, and no consideration has been openly made of the effectiveness of the current Channel 3 franchise system apart from some tinkering around the edges. Which is doubly ironic given Ofcom’s occasional pleas for “radical thinking” in relation to broadcasting.

So ITV plc as it currently stands has done pretty well out of this for itself, with a promise of more concessions (no surprise there) and the prospect of local news being taken off its hands even though it may still remain on ITV. (The fact that local news might transfer to Channel 4 is worthy of note in that it illustrates the impotency of Ofcom as a regulator.)

Therefore this Ofcom report should really have been truthfully entitled “Putting ITV first, followed by the viewers, and who cares what happens to Channel 4”.

Likewise the BBC hasn’t really suffered either, with its future relatively secure apart from the BBC Worldwide funding issue and some noises in relation to somehow re-using that ‘digital dividend’ money. Presumably this is because everyone has been preoccupied with preserving an ‘alternative’ to the BBC as opposed to worrying about it.

And finally…it seems somewhat appropriate that this just happens to be my 400th blog entry, even though on this occasion nothing has still been truly decided in relation to the long term fate of British public service broadcasting.

So no change there then.

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