The future of television: Public money 

27 December 2021 tbs.pm/74181

[PART 1] • [PART 2] • [PART 3] • [PART 4] • [PART 5] • [PART 6] • [PART 7] • [PART 8] • [PART 9] • [PART 10] • [PART 11]

 

Line drawing by John Farleigh

From the Daily Mirror Spotlight on the Future of Television, published in 1958

“A detailed study of the B.B.C.’s accounts and accountancy methods has shown that the Corporation has a firm grasp of the principles of financial control and wields them most effectively.”

— Report of the Broadcasting Committee, 1949

There is another reason why the B.B.C. demands a second television service. And that is that the B.B.C. is financially committed to expansion. Only by extending and increasing its television services could the Corporation possibly justify its vast capital outlay.

For the British Broadcasting Corporation, although taking a characteristically gloomy view of its own fiscal prospects, is by no means the Cinderella of television finance. The B.B.C.’s last accounts for home radio and television services show liquid assets of £4,113,228 [£106m in today’s money, allowing for inflation]. Its excess of income over expenditure for the year was £2,573,885 [£66m] (even had it not been requested to reduce its capital expenditure during the year by about £1¼ million [£32m], it would still have shown a healthy profit).

The B.B.C.’s capital account for home and television now stands at £16,500,000 [£425m] — £13,632,807 [£350m] in fixed assets and the balance in British Government Securities “to meet future capital expenditure.”

“The amount carried forward is not a high one,” says the B.B.C. cautiously, “when account is taken of the increases in revenue expenditure which can be foreseen in television, in consequence of which the amount which can be reserved in future for capital expenditure will considerably diminish.” What “future capital expenditure” does the B.B.C. have in mind? Why is the B.B.C. saving up?

Its capital commitments at the end of March 1957 exceeded £10 million [£256m]. Much of this money was committed to the lavish Television Centre now being built at Shepherd’s Bush, due for occupation by 1960. The Centre was originally scheduled to cost £9 million [£230m]; the final cost will very likely be nearer £12 million [£310m].

The B.B.C., whose offices and studios already stretch all over London, will be hard put to explain such heavy expenditure on a venture which, after all, produces only fifty-odd hours of television a week. Before the coming of commercial television, when the Centre was first planned, the B.B.C. could argue that this was to be the headquarters of a great and growing television monopoly. Now its only justification for this costly emporium lies in the Corporation’s expectation of “two alternative programme services, centrally planned.”

The B.B.C. may not get its alternative channel — but at least it is determined to have a place from which to do the central planning.

 

1960s advertisement for Zal disinfectant, sung by chart-topper Matt Monro

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What of these gloomy predictions that the amount which can be reserved in future for capital expenditure “will considerably diminish?”

As usual, the B.B.C. is pessimistic.

Last year the income for home and television services was £23,790,208 [£640m], plus another million [£27m] from publications (the B.B.C.’s commercial interests have always yielded big profits; it is said that Broadcasting House was built on the proceeds of the Radio Times). £12 million [£325m] went to sound, and £11,600,000 [£312] to television. This was after the Treasur y— which insists that licence revenue should make a contribution to the Exchequer — had abstracted a flat sum of £2,750,000 [£74m] from the licence money.

Under a new agreement, however, the Treasury instead of taking a flat sum reverts to an old arrangement whereby it takes a percentage of the licence money. For the next three years, then, the Treasury will get 12½ per cent. of the increasing licence revenue. So that this year the B.B.C. will have a total income of about £25 million [£617m] instead of the £26 million [£642m] or so it would have otherwise got.

The B.B.C. yields this extra million reluctantly. It has never subscribed to the view that its share of the licence revenue is but a grant from the Exchequer. The Divine Right of Broadcasting includes the right to 100 per cent. of the takings, and the Treasury is being gross and impertinent in insisting on its levy.

 

1960s advertisement for Weetabix, with ‘Voice of God’ commentary by ABC’s John Benson

 

The B.B.C. has always begrudged, too, the post office expenses which are deducted from gross licence revenue (£1,914,284 [£52m] last year), and it has fought for many years against paying income tax on its surpluses. The B.B.C. is now paying an average of a million pounds a year income tax on its unspent revenue. It has several times unsuccessfully appealed for exemption — on one occasion on the inspired grounds that it was a charity.

The new agreement giving the Treasury a percentage of the licence revenue was intended, of course, to keep the B.B.C.’s income within reasonable limits. By the end of 1962, under the old arrangement, the B.B.C. would have an annual income of some £35 million [£865m]. Even under the new agreement — assuming that the Treasury percentage does not increase — it will have by 1962 an income from licences of over £30,000,000 [£741m] a year — over £6 million [£150m] above present income, and yielding an annual £18 million [£444m] for television.

Hugh Carleton Greene

Hugh Carleton Greene by Godfrey Argent, 1968

But the B.B.C., looking dismally into the future, “is doubtful whether the income in view will suffice to maintain the B.B.C.’s services and to introduce essential progress in television… and to meet the burden of competition.”

Under the new agreement the Postmaster-General may, if the Treasury is satisfied that the Corporation’s income is inadequate, pay additional sums to the B.B.C. The Corporation, with gloomy satisfaction, has said that “in the circumstances” it attaches importance to this proviso.

The B.B.C., then, does not see how it can get by on an income of £25 million [£617m] a year and the prospects of another five or six million [£123m-£148m] pounds annually.

It cannot even afford to expand its existing programme. At a recent television convention in Bad Boll, Germany, Mr. Hugh Carleton Greene, B.B.C. Director of Administration, pointed out how reluctant the B.B.C. had been to fill the gap between six and seven p.m., the “toddlers’ truce.” “The B.B.C. was in no hurry to fill this period,” he said. “The B.B.C. view was that on balance it would be better to strengthen existing programmes by spending more money on them rather than dilute the service by increasing hours.” Mr. Greene then pondered on the question of further extensions of viewing time. “There is, I would say, no substantial evidence of any public desire for more television. The position, to put it bluntly, is that every extra hour a day would cost the B.B.C. more than a million pounds a year and could mean more revenue for our competitors.”

In other words, the B.B.C. wants to peg all television, state and commercial, to its own snail’s pace rate of progress.

If the B.B.C. cannot afford even an extra hour a day television how — once it has got over Mr. Greene’s assertion that there is no public desire for more television — does it propose to pay for its alternative television service? The answer is that it does not propose to pay for them at all. As the B.B.C.’s last annual report says:

“Nothing, of course, is included in present estimates for major new developments such as a second B.B.C. television programme…”

Only by asking the Treasury for vast loans, or increasing the licence fee, or both, could the B.B.C. produce its second programme.

 

1980s advertisement for Ever Ready batteries

 

The B.B.C. has argued vociferously its case for an alternative television programme. But it has also put up the soundest case possible against it.

It could not pay for it.

 

[PART 1] • [PART 2] • [PART 3] • [PART 4] • [PART 5] • [PART 6] • [PART 7] • [PART 8] • [PART 9] • [PART 10] • [PART 11]

 

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