Wednesday, 21 November 2007

Paying for the BBC, Channel 4

Today I'm asking a question rather than making a comment.

There has been some conversation recently in the UK, about how Channel 4 - a commercial business that is re-finding it's 'mandated by law' function of being a Public Service Broadcaster.- will fund itself in the coming years. The business has been harping on about at it will have a funding deficit in the mid-term and has made a bid for a £300 million found 'top-spliced' from the BBC's Licence Fee funded budget.

Articles like this one suggest some of the ways forward for Channel 4, but to me there is a massive flaw in the arguments put forward so far in the press, and that is the matter of market context. More specifically, I mean the BBC.

Now the Beeb not long ago got it's funding formula (Royal Charter) renewed, but just for another 6 short years until 2012/13. However, I think it's fairly likely that this is the last time the BBC will get a budget set in its current way; revenue form the TV Licence, a tax paid by every TV household in the UK.

I don't think you need to be too much of a futurologist to guess that defining a 'TV household' in 7-10 years might well be a toughie. Granny may still have a TV in the corner of the room hooked up to a Freeview digibox but for large swathes of the population today's trends of having 'TV' screens hooked up to computers and home networks will have continued. Mobile phones, laptops and other 'screens' will more commonly be used to watch 'shows' and shows themselves will increasingly delivered by downloaded and streaming over the web by the likes of Joost, Bebo and the like, many of which will be non UK 'broadcasters'.

In this world, the current TV licence just doesn't make sense and will be harder to collect. I think the BBC is well aware of that, which is why it's commercial arm BBC Worldwide has become quite so aggressive is buying and setting up new businesses as part of its strategy of creating and growing new revenue streams internationally. They've set up new stations, launched production businesses, added advertising to international sites and become much more astute in exploiting their brands commercially.

So, back to my original point. How can we have a constructive conversation about the future funding of a PSB (Public Service Broadcaster) Channel 4, without having some realistic idea - or at least opened a wide discussion -about how one of the world's biggest media organisations, the (Public Service Broadcaster) BBC will be funded too.

Many of the suggestions put forward for Channel 4, like say giving ownership to a not-for-profit trust (as the The Scott Trust owns The Guardian) might actually be what we want for the much larger BBC. Do we want 2 such Trusts? What would happen if we made both organisations all ad or subscription funded? Do we privatise one or both and how might that affect the purely commercial Networks?

I'm not making suggestions today about the right funding formula - I'm just saying we can't effectively discuss Channel 4, until we have a better knowledge how the market place is likely to look in a few years - and the BBC is just too rich and too dominant in terms of budget and in terms of audience reach to ignore.

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