The consequences of Lord Grade’s vision would not be pretty
Let’s assume for a moment, writes Raymond Snoddy, that Lord Grade’s plans for the BBC and Channel 4 are serious ideas rather than jolly wheezes dreamt up over a bottle of claret, and try to envisage some of the consequences…
Lord Grade has done everything in British broadcasting – former chairman of ITV, the BBC and chief executive of Channel 4. In fact the only major channel he has somehow never managed is Channel 5.
So when he comes out with a revolutionary plan for the future of the BBC, Channel 4, the world and everything, in a chapter in a new book – Is The BBC in Crisis? – it would be foolish not to pay attention.
The heart of his underlying argument is that the BBC has always tried to do everything itself, has always expanded as much as it has been allowed to do and has been badly managed – in recent times you could say appallingly managed. There is more than an element of truth in all of it. As a result the BBC, according to Grade, has become “almost unmanageable.”
The solution? The BBC becomes a publisher/broadcaster like Channel 4 with the exception of news, and maybe also current affairs.
BBC 2 and BBC 4 would be merged, the spectrum sold off, and all processes and facilities of the BBC would be farmed out to the private sector. Naturally Grade declares an interest. One of the beneficiaries of such farming out would be the company he chairs, Pinewood and Shepperton Studios.
Lord Grade would then take Channel 4 out of the advertising market entirely and have it funded from the overall licence fee. It would have its own constitution to avoid “the suffocating embrace of the institutionalised BBC” and would march to “quality criteria to be designed by, say, Ofcom.”
The consequences would, at the very least, involve the loss of many thousands of jobs”
Hmm. Ofcom.
In response to Grade’s evidence on his ideas to the House of Commons Media Select Committee this week chairman John Whittingdale noted that as a result the BBC “is going to get significantly less.”
The former BBC chairman replied: “Yes I think some things will have to go.”
Of course you can have any size of BBC you want. You could get really radical and abolish the licence fee as has happened in Eastern Europe. You could adopt the Greek model and close the BBC down overnight because of its waste and inefficiency and leave virtually all broadcasting to the private sector – if you wanted to.
Let’s assume for a moment that Lord Grade’s radical solutions are serious ideas rather than a number of jolly wheezes dreamt up over a bottle of claret on a Sunday afternoon, and try to envisage some of the consequences.
The consequences would, at the very least, involve the loss of many thousands of jobs, at least initially, causing massive disruption in an industry where the UK curiously still manages to retain a leading position and an international reputation.
Turning the BBC into a publisher/broadcaster would involve a massive transfer of funds to the independent sector with the accompanying further rise of super-indies run by multi-millionaire producers which would increasingly be snapped up by American majors. Fine if that’s what you want.
Lord Grade believes that Channel 4 will be “unsustainable” in future and should give up on advertising and be funded by part of the licence fee.”
In such a battle the BBC programme commissioners might manage to out-gun Channel 4 and cause the channel serious pain.
There would also be an equally massive transfer of intellectual property to the independent sector and away from BBC Worldwide, an institution Lord Grade wants to retain.
In-house BBC production equals 100 per cent of the rights to exploit. The BBC keeps 15 per cent of the value of its indy commissions. Grade talks of “full terms of trade” in future without saying what those are.
Curiously, while at ITV Lord Grade was a big supporter of ITV Studios, the commercial broadcaster’s in-house production unit, precisely because in the Internet age owning rights is vital.
Yet he would strip the BBC of virtually all its ownership rights because news and current affairs doesn’t exactly bring in the dollars.
Training? The BBC is the most important training organisation for the British broadcasting industry and, indeed, films. That would largely go under Lord Grade’s plans, although he does have a single sentence on the subject: “Some monies freed up (from becoming a publisher/broadcaster) should be mandated for industry training.”
Lord Grade believes that Channel 4 will be “unsustainable” in future and should give up on advertising and be funded by part of the licence fee.
This is really curious and will come as a surprise to Channel 4’s chief executive David Abraham. In 2012, the latest results published, Channel 4 advertising fell by £10 million to £833 million. There was a “planned” loss of £29 million on turnover of £925 million through extra investment in programming. The strategy is to return to profit this year.
Strange evidence to support tearing up a structure that has worked for more than 30 years and making the organisation subject to the vagaries of licence fee settlements. And what would the advertising industry make of losing the opportunity to reach £800 million worth of Channel 4 viewers?
Grade’s rationale for this “unstainability” argument is apparently the flow of advertising towards the internet and social media. It is, of course, but what is clear is that the economics of television, and the loyalty of audiences that underpin it, are holding up better than most of the existing media.
As for the BBC being “unmanageable” this is not the same as being badly managed.
Tony Hall, the director-general, should be given a little more time to prove that no organisation is unmanageable and he has plenty of guidance from the immediate past on how not to go about it.
Be prepared over the next 18 months for avalanches of ill-thought-out ideas from well-meaning thinkers who feel the need to be “radical and revolutionary” about the future of British television.
Sense will usually be found elsewhere.
For now try a comment from Greg Dyke, former director-general of the BBC who can come up with the odd wheeze himself from time-to-time, speaking at the same Commons Select Committee.
Dyke, the current chairman of the British Film Institute, said the BBC was the reason the UK television industry was more successful than its film equivalent.
Though no-one would invent the licence fee today, the principle of universality with the BBC services available to everyone remained hugely important.
Far too important in fact to be mucked about by “radical” thinking.
‘Is the BBC in Crisis’ (Abramis), edited by John Mair, Richard Tait and Richard Lance Keeble.