A new dilemma for broadcasters

Many believe UK broadcasters and their production arms should do business with the big American tech companies – but it makes it rather tricky for them to bite the hand that feeds when arguing for regulation and legislation, writes Raymond Snoddy

It is really difficult to know exactly what is happening in the tortured relationship between the big social media players, the FAANGS, and broadcasters, regulators and government.

It is even more difficult to predict what will happen in the end – if there is a discernable end to what could turn into endless squabbling.

The Royal Television Society’s biennial London conference this week was a crucible and a microcosm for some of the swirling arguments with many top players on parade.

But you had to listen carefully to what everyone was saying, or not quite saying.

Many might easily have thought that the Government was actually promising to do something by detecting a “hint” from the very latest Culture Secretary, Jeremy Wright, that a financial raid was being considered on the multi-billion digital groups.

It made a page lead in The Times.

The money could go to cash-strapped organisations like the BBC to help combat fake news, something that BBC director-general Lord Hall would like very much.

At the RTS the BBC Director General warned that “the cracks were beginning to show” and more money was needed to even attempt to keep up.

A sign that Lord Hall may not be bluffing came soon after his speech with the news that DR, the distinguished Danish public service broadcaster, would have to close three TV channels and three radio stations because of a 20 per cent budget cut.

At this stage in the argument the word “somewhere” is usually deployed.

Wright, who like most politicians also has a natural mastery of the conditional tenses, told the conference: “The money must come from somewhere. It may be that there is scope to look at some of the other businesses in this sector.”
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Then they reach for the politician’s best friend – everything is on the table.

It’s a cross party tool, as in Jeremy Corbyn’s attitude to a referendum on the Brexit terms. Everything is on the table.

Everything or nothing.

Damian Collins, who chairs the Digital, Culture, Media and Sport Select committee, was more outspoken and called for tech companies to have the same accountability as newspapers.

From painful experience he was able to say that the FAANGS only begin to listen when threatened with legislation or facing something that will hit their profits.

Collins is right, but though his position gives him influence and public prominence, it falls short of the power to make anything actually happen.

Sharon White, chief executive of communications regulator Ofcom, has hardened her line in recent months and is now highlighting the great harm social media can do, particularly to children. She also warned about the increasing gap between the standards of the tech giants and those of the regulated public service broadcasters.

“We are very conscious of the growing disparity between the safeguards that everyone in this room is required to observe when making traditional TV programmes, with the much more limited ones that apply elsewhere,” White said.

Ofcom would obviously like to be able to regulate but it’s less easy to see how it can be done – and of course it would almost certainly require legislation.

Presumably that is also one of the things on the overcrowded table.

The position of broadcasters everywhere is even more confusing, and possibly conflicted.

They denounce the FAANGS, to which we must add Netflix which is heading towards 200 million subscribers by year end, while happily doing business with them.

The US network broadcasters essentially created Netflix by being willing to cash in on their long tail of library programmes.

Now they will be lucky if Netflix stops at merely eating their lunch.

Bodyguard, one of the most successful dramas of recent years, is also a perfect metaphor for the complexity of the relationships involved.

It was announced at the RTS by ITV chief executive Carolyn McCall that Netflix had bought the rights to show the hit drama outside the UK.

This would mean lots of money for ITV. Although the tale of the probably dead fictional Home Secretary was shown on the BBC, it was made by the independent production company World Productions, which is owned TV.

In a further twist, Bodyguard took ITV’s Sunday drama Vanity Fair, which was foolishly run in the same time slot, to the cleaners.

Everywhere you look broadcasters are more than happy to do deals with the likes of Netflix, alongside Amazon and Apple who are increasingly crashing into the television space.

Another of the big beasts at the RTS, Bob Bakish, chief executive of Viacom, owners of MTV and Channel 5, among others, was of a similar persuasion.

While Viacom would do more niche streaming it had no intention of trying to create another Netflix. Its studio production business was very happy indeed to make 13 Reasons Why for Netflix and the John Krasinski-fronted Jack Ryan series for Amazon Prime.

Bakish added that MTV studios was currently making a reality programme for a FAANG, although he declined to say which one.

Most will say that broadcasters and their production arms should do business with Netflix and the FAANGS but it makes it rather tricky for them to bite the hand that feeds them when it comes to arguing for regulation and legislation.

This dilemma, and even greater conflicts of interest, will surely manifest itself if the UK’s public service broadcasters really do launch an international best of British streaming channel.

Will they be able to show their best work on it or will all the important rights be tied up in pre-production financing deals with the big international players?

ITV’s power in the marketplace would be greatly enhanced if it were to manage to acquire Endemol Shine – of which McCall was saying little.

Such a deal could also act as a poison pill helping to protect ITV from being swallowed by all but the biggest predators.

As for regulation and legislation, the time to start believing is when the proposals become less conditional and come off the items on the table and turns into a White Paper.

With everything for years ahead subsumed into the Brexit processes, broadcasters are probably wise to fetch for themselves and continue to offer Danegeld to the digital raiders.