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Huge uncollected funds could transform UK broadcasting

Gerry Morrissey Gerry Morrissey, BECTU general secretary. The union's latest submission to Ofcom urges the regulator to tackle revenue streams which could boost the performance of UK PSBs.

9 November 2011

BECTU has responded to OfCOM’s consultation on the licencing of Channels 3 and 5. General secretary Gerry Morrissey sets out below why the union believes that policymakers are ignoring the biggest issue.

BECTU has responded to OfCOM’s consultation on the licencing of Channels 3 and 5 (pdf).  This covers the licences currently held by ITV, STV, UTV and Channel 5 respectively. But like a lot of OfCOM’s questions, the consultation attempts to steer respondents away from the glaring political issues.

The money for high-quality content is running out at the worst possible time. All over the world, people are looking for better journalism and scrutiny to prevent the kind of abuses that led to the current economic crash.

As the UK attempts to diversify away from financial services, the kind of seed-funding that Britain’s world-beating PSBs (public service broadcasters) provide could be a springboard for economic recovery.

In 2010, OfCOM themselves noted a 19 per cent drop in investment in original UK content on the main public service broadcasters (PSBs) since 2004. Since then, we’ve seen further proposed BBC cuts and a tougher advertising climate.

Key funding streams are being ignored

This brings me to the political question: Why aren’t the huge funds that could be re-invested in PSB even being collected? Here are just three examples:

Levies: IPPR research in 2009, commissioned by BECTU and the NUJ, illustrated that a one per cent levy on ‘pay television’ would yield an estimated £70m per annum and a similar levy on the five major mobile phone operators in the UK would yield an estimated £208m per annum.

Since then, the Intellectual Property Office report on Private Copying and Fair Compensation has illustrated the degree to which the UK is almost alone within EU member states in not applying levies such as this.

Retransmission Fees: BSkyB – the UK’s most profitable commercial broadcaster - is allowed to carry BBC and ITV content without paying for it. Alone, this is dangerously close to Corporate Welfare. That they are actually paid to do so deepens this scandal.

This reflects the disturbing degree of lobbying muscle that BSkyB have in the UK and it’s high time that this ended, The flow of funds needs to be reversed to bring the UK into line with other jurisdictions – most notably the US – where News Corp routinely pays broadcasters a share of the revenues they make as a carrier.  If we were to apply the US model, it could free up an estimated £96million in investment for PSB content.

Broadcast quotas: Another outstanding anomaly in the UK is the regulatory holiday that has been given to BSkyB in relation to EU content quotas. BSkyB is now the UK’s most successful UK commercial broadcaster, yet it was excused from complying with EU rules that oblige successful broadcasters to actually make quality programmes instead of importing them all from the US.

Not only does this bizarre exception deprive the UK of huge sums in terms of investment in high quality drama and documentary, it also results in a race to the bottom on programme quality that impact upon other UK broadcasters.

There is a wider moral argument in play here though. In the information age, we are told that ‘content is king.’ In the UK, PSB content features as an important part of the value chain that boosts the demand met by these carriers such as BSkyB, Virgin and BT. It also drives the demand that is profitably met by ISPs for faster unlimited broadband. High quality PSB content often drives the sales of TVs, tablets, mp3 players, phones, gaming consoles, recording set-top boxes and PCs.

Much of these sales are driven by the way these devices allow users to copy and share content in breach of the licences that they are distributed under. £billions is made selling devices that facilitate time-shifting, ad-skipping and file-sharing.

These are all means by which more value is extracted from content in ways that the creators see little or no benefit.

A recent report by Vodafone illustrates the tiny revenues – around 2 per cent - that rights-holders make from this burgeoning marketplace as well as showing the huge percentages of online traffic that are taken up by the streaming of high-quality content.

It is impossible to escape the political context of these anomalies. Successive governments have been lobbied (and worse) by commercial interests that are unconcerned with the democratic and cultural needs met by PSBs.

It is now time to review the regulatory relationship that the government has - particularly with BSkyB - as this would create thousands of media industry jobs and yield the kind of sums that are needed to finance a significant boost to public service broadcasting quality news, drama and documentary coverage across all UK channels.

Not only would this address historic injustices and release a significant wave of funding to transform the fortunes of PSBs, it would also recast the competitive framework that UK broadcasters operate under, creating a ‘race to the top’ in terms of quality. 

Gerry Morrissey, general secretary, BECTU.

(The above article was first published on Left Foot Forward).

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