Analysis: ITV and BBC call for rapid regulatory change

Dame Carolyn McCall and Sir David Clementi have both warned for the need to reform legacy broadcast regulation. It’s vital their warnings are heeded, writes Ray Snoddy

There is nothing quite as good as at clearing a hall than launching into a long dissertation about the importance of broadcasting regulation.

If the talk were advertised in advance then the hall wouldn’t have been very full in the first place – beyond a huddle of wonks in the front row.

No more. Suddenly the subject has come to the fore. The need for regulatory change is sexy, vital, urgent, and for public service broadcasters, close to existential if nothing is done.

Quite independently two of the twin peaks of the British system, Dame Carolyn McCall, chief executive of ITV, and Sir David Clementi, chairman of the BBC, warned of the pressing need to reform a system that essentially dates back to the 2003 broadcasting act – legacy linear regulation struggling in the digital age.

The problem has been growing for some time as the inequality between how the traditional public service broadcasters are regulated, and the obligations they face, diverge dramatically from what is required – very little – from streamers and the technology giants of California.

Suddenly the problem burst into clear sight on Wednesday (20 Nov) at the autumn conference of the Voice of the Listener & Viewer.

It was Sir David who reminded the audience that it was Reed Hastings, the chief executive of Netflix, with the sort of blunt honesty that often comes from American media executives, who earlier this year admitted that European regulatory authorities has been “the best protector of Netflix in the world.”

Who can forget that it was the competition authorities in the UK who blocked the BBC and ITV coming together to create a streaming service on the grounds that future competition might be inhibited?

Tell that to billionaire Reed Hastings.

But it was Dame Carolyn who was most passionate about the subject.

What she called “discoverability”, or the threat to discoverability of programmes, was the main thing that kept her awake at night.

ITV can spend millions on the best possible drama and it is money wasted if no-one knows it is there, and marketing can only go so far.

The danger is lack of prominence, or even visibility on the screens of smart TVs.

The historic agreement is that the channels of the public service broadcasters would appear in a prominent position in the electronic programme guide (EPG).

Newish digital broadcasters like Sky would have to carry the PBS channels and although the likes of ITV would not be paid they would have the advantage of their prominent position.

Some, mainly older viewers, still operate through the EPG, but increasingly viewers navigate through apps or the symbols on the smart TV screen.

The PSB channels are still there for free but with absolutely no guarantee of prominence or even visibility at all from the new platforms.
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It gets worse according to Dame Carolyn. When the likes of Amazon or Apple launch their own TV sets, ITV channels, and presumably the BBC too, could simply disappear unless they pay like products on supermarket shelves.

Some of the new US owners of the broadcasting chain, all the way from programme production to display on sets are even asking to take a slice of ITV advertising revenue in order to be there.

Unlike in the past there are no clear rules of engagement other than the fact that the inequality of power between the platforms and the production grows ever wider.

The ITV executive believes that there is a “clear and pressing need” for action and it can only come from the Government and the Department of Digital, Culture, Arts and Sport, or whatever it will soon be called, and whomever passes through the revolving door for Culture Secretaries.

Pressed about what she wanted other than urgent action Dame Carolyn said that in the absence of “agreed rules of engagement” it might be necessary to ban the sale of televisions sets which did not offer reasonable prominence to national broadcasters such as ITV and the BBC.

Discoverability and with it regulation is suddenly the most important concept.

Sir David took a more measured approach, but heartfelt nonetheless, looking at how regulation and broadcast regulation had failed, and was still failing, one of the most vital British creative industries.

It would not serve the UK well, the BBC chairman warned, to protect competition between the BBC and other UK players while ignoring the obvious effect that competition from global players was having.

A broadcasting regulator such as Ofcom should indeed have “step-in” powers to tackle abuses, but please only when there was evidence of actual, rather than hypothetical, harm.

And please can the regulatory process move up a gear. Under the BBC charter agreements with Ofcom, the communications regulator is allowed eight months to consider changes while the American streamers can change their operations at the drop of a hat in response to the market.

The BBC’s decision to make its programmes available on the iPlayer for up to 12 months – a sensible move for licence payers – was delayed for months after Ofcom decided a full public consultation was needed.

Sir David, a former deputy governor of the Bank of England, says he is not convinced that the current regulatory framework allows the right balance to be struck.

“The risk in getting the balance wrong is that high quality British content will inevitably suffer; and that the UK market will become dominated by global players who will then no longer need to invest in local content to compete,” the BBC chairman insisted.

What chance that Dame Carolyn will get her pressing need for action and Sir David will achieve the need for introducing a little common sense and speed into the regulatory process?

Alas the omens do not look good. A divisive general election will be followed by endless trade negotiations with the EU. Then another Culture Secretary few of us have ever heard of with little knowledge of the subject will yet again start from scratch.

The terrible danger, which must be avoided at all costs, is that there will be a knee-jerk Government reaction to set up a inquiry which will delay action for years.

Instead the new Government should take on board the recommendations of the recent Lords Select Committee chaired by Lord Gilbert of Panteg which understood the problems very well.

And just get on with it.