“Commercialism is doing well that which should not be done at all.”
The news that half of Britons support a commercial model for the BBC, and only 27% support the current television licence, is a real challenge for the state broadcaster - and for broadcasting generally. When combined with a strong prime minister who has already proposed scrapping the licence fee in favour of a ‘pay to watch’ subscription model, it sets the cat among the pigeons for the next expiry of the Royal Charter in 2027.
The majority - 37% - prefers an advertising model, but this is strongly opposed by commercial television broadcasters such as ITV and Channel 4. We also know that, as a source of revenue for ‘linear transmission’ broadcasters and printed news media, advertising is becoming less and less effective. As is the case in a number of very different issues, the prime minister may well be on the right track here.
So in this commentary we start the New Year looking at how broadcasting is being challenged by the tech giants and why advertising which cannot give a feedback response, doesn’t work.
‘Linear Transmission’ is the broadcasting of a TV/radio signal without any direct possibility of response or acknowledgement from the viewer/listener. Apart from surveys, there is no way of knowing how many people are viewing/listening, and certainly no way of knowing who they are. It is like standing blindfolded at a station entrance with people picking up an unquantifiable number of free newspapers which you’ve paid for, and the only income you can get is from businesses prepared to put an advertisement in your newspaper.
However those advertisers no longer have to share in your blind generosity: they can advertise on social media, search engines, websites and (if they’re careful) email - and they will be told precisely what the level of interest is. So it has to be a very compelling proposition for them to advertise in your free newspaper instead.
This is the challenge for commercial TV and radio, and the lion’s share of that responsive advertising, and the data harvesting that accompanies it, accrues to the tech giants: Facebook, Google, Amazon etc. So it’s a reasonable question to ask – are we approaching the end of linear transmission for broadcasting?
While 37% of people may wish to see the BBC funded by advertising, it’s very unlikely to happen. Its gargantuan annual budget of over £4 billion is in any case way beyond the scope of speculative advertising. Some form of streaming subscription, at least on some channels, is inevitable, combined with the very effective content production and overseas sales of programmes (provided that the BBC’s quality is maintained).
The licence fee may feel like a charge, but in practice it has many of the features of a universal benefit (readers will be aware that we’re not great fans of universal benefits). For example, BBC radio is free to air for everyone no matter how wealthy they are, and TV is free for all over 75s. A state broadcaster should ensure that any future streaming charges would be waived for those on benefits and the most disadvantaged, but people who can afford to pay, should pay. It’s notable that ‘general taxation’ was only supported by 7% in that YouGov survey as a method of funding the BBC.
We know from our own experience that broadcasting must change. For the past two and a half years we’ve operated a sign-in process on Share Radio, and this followed the realisation that the old survey-based (RAJAR) model was hopelessly stacked against small new entrants, and particularly those offering quality speech radio. Meanwhile Ofcom currently has no remit for regulating commercial practices in the industry: perhaps this might change as a result of new leadership.
Share Radio will shortly move to subscription streaming ourselves, but with substantial free access gateways for customers and contacts of corporate and charity partners who work with us - such as The Share Centre and The Share Foundation. We will also continue to provide major public service broadcasting programmes such as ‘Managing My Money’ without charge, and Share Music will remain free on sign-in.
Revenues will allow us to start promoting Share Radio again, and we look forward to building a listener base tuned to our somewhat different take on the world. Perhaps in due course we’ll meet the BBC in that space - I look forward to it.
Gavin Oldham OBE