All Things Bright and Beautiful

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Songs of Praise

It seems odd that a series that certainly on the face of it lacks commercial value should be transferred to an independent producer whilst more commercial offerings such as “Holby City” remain with a tax payer funded BBC.

There is nothing intrinsically wrong with commercial production companies producing any type of show and indeed they do. Some argue that transferring BBC produced programmes to commercial producers simply means profits are being made by dastardly shareholders from taxpayers money but it could equally be argued that those profits simply represent inefficiencies within the BBC being driven out. If the overall budget stays the same or falls then the taxpayer has not been exploited any more than it is already.

But there is a wider issue at stake here. What is happening is an inexorable drift towards privatisation of BBC assets. Firstly BBC Worldwide has a fully commercial remit and is run to all intents and purposes as a private commercial enterprise albeit owned by the BBC.

Next and inevitably BBC Studios is being commercialised and in fact it is the stated aim of Mark Linsey as reported in Broadcast in October last year “that he wanted BBC Studios to “mirror” the structure of superindies such as Endemol Shine and All 3 Media.”

This process of commercialisation is underway highlighted by the announcement of 300 BBC production redundancies in October 2016 and more will follow as less valuable programming is pushed out to the independent sector and BBC Studios takes on a more “Indie” structure causing a transfer of full time production jobs into less secure and shorter term freelance roles. The reality is that independent producers are more financially efficient solely because they do not have to carry all of the costs of full time staff and benefit from the ability to offer short term contracts and extract the tax benefit of not having to pay employers national insurance on a significant part of their freelance workforce and front of camera talent costs.

What then for the last piece of the BBC asset jigsaw, the commissioning bit?

One of the many things a publicly funded broadcaster, as opposed to a producer, can and should be doing is fund programmes which ordinarily the commercial sector would not find viable. This would be perfectly possible even with a commercial BBC Worldwide and a commercial BBC Studios if the commissioning stayed independent but is it likely?

To the criticism that the BBC would stop showing niche and specialised programmes of little commercial value but justifiable in terms of social cohesion and public information a government could point to Channel 4 and claim this remit is adequately catered for by its Charter at a zero cost to the tax payer.

We know that politicians of all parties dislike the BBC’s impartiality. Labour over Hutton and the Conservatives over election coverage in 2015 to name but two. The dominant Conservative Party, the current party of government, also has an ideological hatred of nationalised corporations. The triumvirate of BBC Worldwide in distribution, BBC Studios in Production and BBC Broadcasting as a commercial enterprise with the potential to add a billion or two into the national accounts (Sky has been valued at £18.5bn) under the auspices of a Conservative lead Government must for the blue party be making them positively delirious at the prospect.

The downside is that the costs for users would go up but this wouldn’t be a problem for politicians. The value would be settled by the market not by the government. The current services provided by the BBC are extremely good value given that it covers substantial radio, TV and online services because of the fact that all owners of a television fund all services. A privatised business would have to offer “choice” leading to a radically different payment structure. Possibly this could be advertising but more likely some form of subscription. Some free to air television content might continue much as we currently have with Sky 1 but for premium content the charge would almost certainly increase. The corporation would be forced to compete more and more head on for rights with the likes of BT, Sky, Netflix and Amazon if it were to maintain a pre-eminent position. The proposed takeover by Fox of Sky is partially being justified by the claim that Sky would be better able to compete for rights with the backing of a financial heavyweight. Likewise the BBC privatisation would put it in the frame for a takeover by a well funded overseas investor and for a government intent on generating the highest value this would almost inevitably become the preferred source of suitor.

The biggest potential loser of any privatisation would be radio and especially local radio. Whilst the large audiences of Radios 2 and 4 could be used to cross promote other services it would seem difficult to justify the non-revenue or revenue lite potential of the other radio assets in the wrapper of a commercial television company.

Much like Scottish Independence there seems to me to be a certain grim inevitability about the privatisation of the BBC. Not an if but a when.