A coalition of 20 media businesses has penned an open letter warning of the “disastrous impact” the BBC’s plan to take on advertising would have on the sector.
Addressed to culture secretary Lucy Frazer, the letter expressed the group’s “deep concern” about the BBC’s proposal to run advertising on its podcasts and on-demand audio in the UK on third-party platforms. The move, first set out in the BBC’s Annual Plan in March, would both “directly compete” with commercial businesses and “fundamentally undermine” the BBC’s existing funding model.
The letter added that the proposal “risks setting a dangerous precedent” that might usher in advertising across more BBC services, which are funded by the licence fee and created not for commercial success but for the public interest.
Moreover, the BBC’s proposed changes also raise fair trading and competition concerns in the UK podcast market and would make it more difficult for producers, broadcasters and publishers to generate “a reasonable return on investment”.
The 20 signatories are: Audioboom, Bauer, Channel 4, COBA, DMG Media, Global, Goalhanger, Guardian Media Group, ITV, National World, News UK, Newsquest, News Media Association, Paramount/Channel 5, Podmasters, Radiocentre, Reach, Sky, the Telegraph and Tortoise.
Radiocentre CEO Matt Payton said industry opposition was “overwhelming” and urged the government to “act quickly” and engage with media regulator Ofcom, which could intervene.
He added: “Audiences do not expect advertising around BBC content, which they have already paid for through the licence fee. The BBC receives significant funding from the licence fee and should not be seeking advertising in addition to this.
“The unique funding and position of the BBC also means that any change of this nature would have a serious impact on the broader market, as well as an inevitable negative impact on the wider UK creative economy.”
Last month, Payton spoke about this topic at The Future of Audio and Entertainment and highlighted a recently commissioned study on the impact of ad-funded BBC radio services.
The competition analysis found that: the size of radio advertising in the UK was “not sufficient” to fund both the BBC and the commercial sector; the BBC does not offer more valuable younger audiences for advertisers; and there is not a “premium on quality” in radio advertising.
