A paper on Public Service Broadcasting


The following is written not just for OFCOM where much thought has been given to the nature of public service broadcasting but also for those newer to the debate. It is a primer in all senses of the word, introduction, undercoat, and maybe ignition.


Public broadcasting is not a definition, it’s a formula.


Television is so good at engaging our emotions that in our laughing and crying, we can believe it stands outside the normal rules of economics.

Television seems so powerful that it reminds one of the parasite that can only breed in cats. It propagates when the cat excretes it, a rat then eats it and - here comes the clever bit - the parasite tinkers with the chemicals in the rat’s brain making it think cats are harmless, thus the cat kills the rat, eats and ingests the parasite and the process starts all over again.

So when it comes to television are we infected rats or objective rats?

The rat the cat and the parasite, sounds like the beginnings of a bad joke, but all three are created by and subject to evolutionary forces of change and likewise so is television.

This paper explores a few of the forces that affect our thinking on public service television. It is about how television is in transition from a feudal economy of provision, to a market economy of demand. It questions the nature of market failure, and attempts - to borrow a metaphor from computing - to take the debate from the desktop level (the tantrums of Edinburgh and Cambridge) down to the underlying machine code of the industry.

Can we smell the television we breathe?

We are imbued with concepts of public service broadcasting. Watching television in our childhood was to be raised by public service television. Most of us on the content board were raised with two or three channels, and our parents were raised with the same values on radio.

PSB has become an element in our British cultural identity. It is the television we breathe, and this makes it hard to disentangle facts, thoughts and emotions, thus making UK public broadcasting an almost religious subject, arousing similar passions.

For example:

The majority of people on earth espouse the religion that reflects their local culture, local identity, and is almost invariably the religion of their parents. It is rare for people to step outside their culture and choose a different faith. This concept of staying with the faith of ones birth implies that religion is a function of conditioning, not choice, and this can cause serious indignation.

Hang on to that indignation, as likewise we Brits, or Americans, or Germans, or Japanese, find it equally hard to step out side the broadcasting we were raised with and thus we have a tendency to seek broadcasting answers that reinforce our existing national and cultural beliefs.

You only have to listen to the perennial British television debate reaching its usual Voltarian conclusion that ‘in this best of all possible – public service broadcasting – worlds, all British public broadcasting is for the best’, to realise that it might be time to test our certainties.

The problem in the PSB debate is differentiating between what is real and what causes indignation, as in all good debates we need to tease out the chosen wisdom from that which is merely received. I suspect much of our thinking on television was received in an analogue era.

We often seek to justify public service broadcasting when it may not need justification. The Angel of the North does not need justification, it was a societal act of art like a totem pole. There is nothing wrong in public service broadcasting as an act of societal choice. I just believe that if we are to have public service broadcasting we need this societal choice bound with a mortar stronger than received wisdom.

The beginning of the end for the middle

Broadcasting is suffering a terminal change in the ‘opoly’. Going from monopoly to duopoly to oligopoly, to polyopoly (?). At each point the ability to control television diminishes.

It’s a form of institutional entropy. Manifesting itself in acts of disintermediation.

Disintermediation is a dotcom buzzword I found hard to understand. Then in a flash of realisation I realised literacy disintermediated the village reader, George Eastman disintermediated the photographer, enabling any one to do it, the car disintermediated the train allowing us all to be drivers. Martin Luther disintermediated the Catholic Church, in that you no longer needed a priest between you and your God, and the vote disintermediated your local feudal baron, in that every one can now participate in government. I realised that disintermediation, ugly word though it be, is a useful concept about eroding and democratising the middle.

Multi-channel television, the Internet, and DVDs are disintermediating the role of the traditional broadcaster. With 45% of UK homes being multi-channel homes with between 30 and 200 channels available we are being changed from viewers into programme consumers. We now have other paths to the programmes we want, as each new digital outlet forces television choice upon us, eroding our familiar analogue world where we were truly thankful for what we received.

Disintermediation is a force, neither good nor bad, that we have lived with ever since planting seeds disintermediated the skilled hunter. We go through periods where we mediate and aggregate, and where we disintermediate and disaggregate.

The BBC was founded in a period of aggregation; by men who were raised at the end of that great 19th century movement for reform. The BBC is the broadcasting inheritor of those Victorian creations; municipal baths, sewage works, water, power, and communications. Like them it is a form of social engineering, but social engineering is no longer fashionable.

This shift in public service fashion can be seen in drinking water, once provided by the state, now by private companies in a regulated market. Broadcasting does not stand outside these changes in attitude.

More channels, more outlets, more products erodes the power of the monolithic centre. The BBC fights this erosion by a strategy of forever reinforcing the middle, with ever more channels and on-line services. Technology based services like the BBC inevitably get disintermediated, or if you prefer democratised. In other words, as a process of television market formation, suppliers multiply over time, audiences fragment and the traditional power of a state broadcaster to create agenda withers.

A little history

In the United States one saw this process of disintermediation and market formation with movies. In the 40s and early 50s the theatre chains could make or break a movie by deciding what they would or would not exhibit. One of the worst offenders was United Artistes founded by Mary Pickford, Charlie Chaplin, Douglas Fairbanks and D W Griffiths. It was a production studio, and the owner of the one of the largest theatre chains in the US. It used its distribution power to ensure its films got shown at the expense of others. In the 1940’s Congress broke this market-inhibiting organisation into its consistent parts of theatre chain and studio.

The US cinema chains had power; as there was no television, they stood squarely between the consumer and the movie producer. The arrival of regulation, domestic television, and that you can now buy movies on DVD has disintermediated the power of the theatre chain. Just look at what has happened to Rank in the UK.

This example of United Artistes puts forward the powerful concept that you should not be able to own both the means of production and the means of distribution. That there should be a market in the produce, i.e. what you see, and a market in how you see it, i.e. at the theatre, or rented from the DVD store. Its advances the twin ideas that the regulator is a midwife to markets, and that production and distribution should be split. If as an example we were to apply this concept to Sky, one would split the satellite business of distribution and charging for signal, from the channel producing business. In other words Sky would be two totally separate businesses, television; Sky One, Sky Sports etcetera, and signal sales; i.e. distribution and subscription management. Thus encouraging a separate market in satellite and EPG provision.1

Music illustrates this split between signal reproduction and signal creation. Those who make the CD players, mini disc players and MP3 devices are normally separate businesses from those who record and publish the music (with the major but isolated exception of Sony). Essentially you have two markets, competition between playback devices, and competition between which music you buy. Should not this clear distinction also exit in television, with a clear split between businesses that transport digital signals, and businesses that create digital signals?

This is the normal split between hardware and software, and is essentially about the issues of vertical integration, a traditional target for regulators.

The fitness of markets

One of the major rationales for PSB is that it provides that which the market fails to provide. After all, if public broadcasters merely duplicated that which the market supplied we would have no need for government-owned broadcasters. But this concept of remedying market failure sounds a little like a litany.

In that spirit…

There is no such thing as a public service novel. There is little history of state intervention to create needed novels that the market failed to produce, quite the reverse!

The same is true of newspapers and magazines. It is hard to argue that the market has failed us in range or scope. From the Lancet to Fireplace Monthly, the Daily Sport to the Guardian, the Voice to Angling times, and the Morning Star to the Investors Chronicle, all are products of the market. It is hard to find an example of public resource being used to fill a gap in the print market.

It is true that the precursor for a print market - a mass ability to read - has been created by the public service of compulsory education. It is also true that novels were made accessible and popular by public libraries, but the invention of the cheap paperback book means libraries are no longer drivers of fiction. Amazon and the airport bookshop have supplanted them. Another example of how changes in technology and economics - cheap paperbacks - can affect a corporate body - the library.

The library is an increasingly relevant paradigm for television as in a fully digital broadband world all television is available from a library at any time. The library eliminates that rasison d’etre of broadcasters, the ability to schedule. In turn this makes navigation and access to programme information a critical regulatory issue. In this world the consumer-citizen functions in direct proportion to the quality of the labelling.

Television is following in the footsteps of print; so we know where it’s going. It is too reflexive to say that television and print are different. The economic and public forces are the same, it’s just that books are well past the shock of the printing press, and television isn’t past the shock of abundant bandwidth. I am not aware of any argument about television i.e. wasting time, dumbing down, invading the home, spreading sedition, subverting morals, which was not applied to books in the 15th 16th and 17th centuries.

Television is moving inexorably towards a traditional model of publishing economics, consisting of many authors, many publishers, many outlets and many readers; with the market failing if you lack one of these manys. UK television fails this test in that with only 45% of the market having multi channel television you could argue that we have insufficient viewers participating in the market, and at 45% multi channel does not support enough programme publishers and authors.

However with every satellite dish, Freeview box, and broadband connection, a free market publishing model becomes inevitable. With Ofcom being stewards of the transition, ensuring a peaceful revolution that does not guillotine the analogue disenfranchised.

Free market print may work, and it may be television’s future, but how have publishing economics served us in television’s closer relatives of movies and music?

Europe is awash with US movies. This is partly a failure of local funding to match US budgets, and a failure of the market regulator, as most European cinema multiplexes are vertically integrated and owned by the US studios that make the movies. According to Screen International, audiences are declining for indigenous movie product. Even French film, that most passionate of subsidised cinema, is currently in decline, showing you can fund but you can’t make ‘em watch. But I write this in a week where we see the world’s first simultaneous broadband and cinema release of a movie “This Is Not A Love Song”. So the market is seeking to change and find alternatives to the Studios.2

The market in music is more diverse and more like print. State provision of sound - subsidised opera, orchestras, concert halls, and Radio 3 commissions - are a small part of the total industry. By and large, free market publishing economics gives us the music we want, and in a digital world there is no such thing as out of print or out of stock. So can you name the music the market deprived you of?

It's worth noting that free markets do evolve what could be described as public service products. The Guardian through the Scott Trust, National Geographic that is a non-profit making charity, and maybe the Discovery Channel (which is profit-making but whose niche is in a traditionally non commercial sector) are three examples.

Channel Four is analogous to these examples. It has to make money in a free market of supplying commercial airtime to survive. C4 has to attract an audience, but does not have to deliver dividends on profits. This gives it a greater margin for programme experimentation. Channel Four is essentially a non-profit making but commercially revenue dependant broadcaster. If its ownership was in a Trust (like the Guardian) as opposed to being currently owned by Government it is hard to see why Channel Four would change. Channel Four provides a model of a publicly owned and regulated self-funding commercial entity that produces pubic service television.

What do we mean by public service programmes?

It’s hard, if not impossible, to define what we mean by a public service programme, it invariably falls into the ‘I know when I see it’ category of debate.

Was Walking with Dinosaurs a PSB programme? The concept came straight from the CGI of Jurassic Park, it was paid for by significant commercial dollars from Discovery, and global sales, thus making Walking with Dinosaurs a good market product instigated by a public broadcaster.

Was Big Brother PSB? Or was it a classic response to a commercial need for a mould-breaking programme? Big Brother was made and tested on Dutch television before coming to the UK. Reality television was also breaking in the US, so this was a concept whose time had come. Big Brother exists to get ratings and generate advertising revenue; it is a programme of the market.3

The Death of Klinghoffer is an example of providing what the market doesn’t. It cost £1.5 million to make a programme for 300,000 viewers, but it will slowly aggregate audience at successive showings. Was this remedying market failure, or merely an act of subsidy for those who didn’t need it in the first place? Is this good public broadcasting or indulgent public broadcasting, and does it matter as long as it does not drive C4 into the red?

Does Pop Idol fail to be public service broadcasting because it is on ITV? Is the BBC’s Fame Academy, their copy of Pop Idol, an act of public service broadcasting because it is on the BBC?

Great Britons, Restoration, and Seven Wonders of the Industrial World, all conform to our traditional view of public service broadcasting.

Though it is hard to see how the BBC spending £10million with Warner Brothers for the Harry Potter film is public service broadcasting. Everybody that really wants to see this film has seen it, in the Cinema, on DVD; pay per view, and on Sky’s Movie Channel. That’s why it’s called a blockbuster.

We need to be sensitised to the opportunity costs of public service broadcasting, i.e. what else could have been commissioned from UK producers, or where are the ethnic or linguistic minority channels that could have been funded with that £10 million?

The public service debate often lies between ‘if it’s public and popular then it could be supplied by the market’, or ‘if public and not popular it’s indulging the minority’. Good public broadcasting seems to transcend this, by making programmes that lead. For example Channel Four’s property programmes, subsequently copied by the BBC and ITV, or the BBC’s make-over programmes that created a genre, or historically Panorama, World in Action, and Top of the Pops are all programmes that lead.

Public service broadcasters exist to lead; they can do this as they have more latitude for failure. For example Men Behaving Badly started and failed on ITV, and then series three went on the BBC. Our public service broadcasters disappoint when they copy, either the formats of others, or in journalism the editorial standards of others. Our public service broadcasters have a privileged economic position in order that they can take risks.

An international perspective

US drama out-sells the UK not just because of the power of the studios but also because the heritage of UK television is literary rather than pictorial and this makes UK drama less accessible than its US counterpart. British programmes in the US get on BBC America, Discovery, or PBS at best a 1% share. So British television in America has roughly the same impact as the channel Living does in the UK.

There is reluctance to believe this, but no British-made TV drama airs in prime time on the four main US networks. In other words, Brit TV in America is like Marmite; few Americans like Marmite but it sells in small quantities in US health food shops.

British television is not as important as our national ego would like. The golden rule of television is that a good native show always beats a good foreign one. This can be seen in news. All news is parochial in that no matter what the subject we like it presented in a local style. Which is why CNN did not out point Sky News in UK multi-channel homes during the Iraq war, and neatly shows that television is a parochial activity.

That’s how it should be - we want our programmes to reflect our culture, and only as a secondary activity do we care how they sell elsewhere.

‘Evolution mama don’t you make a monkey out of me’

Stephen J Gould had the idea of punctuated equilibrium. That in evolution there are long periods of stability, punctuated by a change in the environment that forces relatively rapid adaptation. It seems similar in media, with long periods of stasis, followed by changes in the market that produces increased creative activity.

To quote the Guardian website, ‘The status quo among the quality press was irrevocably altered by the launch of the Independent in 1986. Capturing the centre ground between the Guardian on the left and the Times and Telegraph on the right, the Independent attracted big name writers and readers with a modern design and a distribution network that made the most of the post-union market. Within a few years the circulation of the Independent rose to within touching distance of both the Times and the Guardian, and the previously stagnant market was provoked into a frenzy of defensive activity to retain readers.’

If we look at the US television market, the arrival of the Fox Network and the creativity of HBO parallel this frenzy of UK press activity.

The three networks ABC, NBC, CBS, had for a long time pretty similar fare. The Fox Network, if it was to survive, had to take creative risks, as ‘me too’ was not an option for a fourth network. The Fox Network produced two iconic shows, the Simpsons, and the X Files, both huge successes, with the Simpsons still being made. These shows were a direct result of competitive forces, made the fledgling ‘net’ work and caused significant changes in US production.

HBO (Home Box Office) was one of the founding channels of US cable, it started in the mid 70s as a premium subscription channel providing movies and boxing. It charges approximately $10 on top of the basic cable fee. Like the BBC it carries no commercials, and HBO could be described as being funded by a voluntary licence fee.

With the growth of cable, HBO faced competition from Viacom with ShowTime and Liberty with Starz (I am afraid I am responsible for how Starz spelled its name). HBO realised that to be just movies and boxing was not enough, as with arrival of competition it could not get the same number of movies from the studios. It responded by commissioning its own TV movies, producing specials with Robin Williams, Bette Middler and others, and then moved on to the under served, urban black audience, and produced Def Comedy Jam, creating stars like Martin Lawrence.

HBO realised that as a subscription service people would pay for it not on how much they watched it, but on how it satisfied their television needs. If they only watched HBO three times a month but thought it a great experience they would stay as paying customers. Therefore diversity and quality was more important to HBO than sheer populism.

HBO then broadened its appeal by making television drama. Like the Fox Network, HBO realised they could not copy the three main networks, but took advantage of the fact that they were a subscription service. Because the audience subscribed directly to HBO, it could show programmes with stronger language and sexual content than the networks, and because HBO was subscription based it did not risk offending advertisers. HBO realised that success lay in difference.

Band of Brothers (partially funded by the BBC), The Sopranos, Sex in the City and Six Foot Under were some of the results of this policy. Drama that is recognised as good as any groundbreaking public service drama made in the UK.

I am not saying the BBC should be a voluntary subscription service or that HBO is a solution to the UK PSB debate, but it is a useful paradigm about creative risk in a free market. The creativity of HBO and Fox spurred the networks to produce ER, Friends, Frasier, West Wing, Buffy, Will and Grace, and more. These shows are as good as any mainstream drama produced in the UK, i.e. Casualty, Peak Practice, Holby City, Monarch of the Glen.

There is a notion that US viewers are benighted and denied the enlightenment of the public service world. You won’t find many Americans agreeing with that, not least because, contrary to received, wisdom US television is richer and more diverse than ours. Primarily because it is a TV market five times the size of ours, with hundreds of channels, and where satellite and cable penetration is up to 70% in major urban areas.

In addition to the three networks, Fox and HBO, there is ESPN, CNN MTV, USA, WTBS , and you can add the documentaries of PBS and Discovery, the arts programming of Bravo, the history on A & E , plus BBC America, Spanish language channels, black channels, Korean and Japanese Channels, local city channels fishing channels, DIY channels, Disability services and on and on making for a highly pluralistic television ecology.

The problem for visitors to US Television is finding the programme you want. There is so much it’s hard to find the ‘good stuff’ and even those who live there complain of that. We need the equivalent of Google for TV EPGs.

America’s television market works for the audience it is intended for. It produces gems and junk, but so do we. US television illustrates that commercial television in a large multi channel, multi TV home, multi supplier market is not solely about the lowest common denominator and the maximisation of populism.

A letter to Mars

A Martian writing a description of UK television might conclude the following:

UK commercial television through advertising and subscription produces half of British television. Because television is popular the government matches the revenue of the commercial television sector with a television tax to ensure that there is more television than the market could normally supply.

The BBC receives this tax and as a public service makes commercial programmes to promote its public programmes and justify its licence fee. The commercial sector, ITV /C4 make public programmes to justify their use of public analogue spectrum.

The public and the commercial systems survive by competing for the viewing attention of the public No viewers, no justification for the licence fee, no viewers and no advertising revenue for ITV C4 & C5. This fight for audience makes British television a competitive market system.

The programmes shown on BBC1 and ITV, BBC2 and C4 in prime time are essentially interchangeable. There is no difference between East Enders, Coronation Street, and Brookside, they are all populist soaps. There is no difference between ITV Drama and BBC drama, there is no difference between C4 property programmes and BBC property programmes, there is no difference between competing archaeology and history shows. The difference is to do with personal preference, in other words, viewer choice drives the market.

The fact that ITV companies make programmes for the BBC and independent production companies make programmes for all the major broadcasters show there is no inherent gene one needs to make public service programmes.

Play School, Horizon, Arena, are examples of fulfilling a public broadcasting brief, but these shows are also acts of filling in the niches. Filling the niches is the right market response to protect your mainstream products, by stopping your customers from wandering, and to achieve a greater level of satisfaction with your business. It’s what Amazon, Borders and the BBC are doing well and what Waterstones, ITV, and C5 are doing not quite as well.

It may well be that a broadcaster fills the niches more vigorously because of regulatory encouragement. (Not dissimilar to regulated private water companies maintaining higher standards then they other wise might because of regulators). But regardless of their public service virtue these and every other television series only survive if they deliver significant audiences. It is this market for audience attention that drives British broadcasters, and creates in macro sense homogeneity across the system.

The essential split in UK television is between broadcasting organisations that have to deliver dividends to their shareholders and those that don’t. This is not quite the same as needs to make a profit. Channel 4 needs to make a profit; but it does not have to distribute that profit to shareholders.

The UK television system is at the moment, and has been for the last 50 years, in balance. Any significant break out by one of the players has to be matched by the others if they are to maintain their funding.

This means that public service broadcasting is not an act of definition but the result of a formula. A formula that through the licence fee and regulated commercial companies has created an ecology that creates a market, which generates a wide range of programmes that satiates our needs.

A puzzle

Channel Five started out by wanting the youth audience and aimed to get them with nipples and pierced game shows. Its schedule would not have been defined as predominantly public service. If you look at C5 now, it is seeking an older audience with history documentaries. This commercial company has been forced by the UK market to look like a public service broadcaster.

Similarly, Sky has bought the failing Artsworld, and Sky News, which could have been a TV version of the Sun, or (the truly ghastly) Fox News, has ended up as a pretty good replicate of BBC or ITN news.

This might indicate that we Brits like our television served in a ‘public service’ style, and the market responds to that. It may be that there is no such thing as public service television per se, and that public service television is a phrase like Italian Cuisine, or French Cooking, and is just a descriptor of the television we British like to eat. Our broadcasters appear to be conforming to the public tastes they have created. Tastes that were formed on a founding recipe of duopoly economics and public service regulations.4

Meanwhile you could argue that most important act of public broadcasting is not on television or radio but currently on the Internet with the release of the Hutton enquiry documents.

On the outside

The one area that is meant to be of the market is the independent production sector, but their need for constant regulation and market interference to ensure its existence indicates they do not operate in a real market. It’s an oligopsony5.

While the BBC and ITV can produce 75% of their programmes in house, they can dictate the nature of commissions independents get, and hence the nature of their survival. The system is neither in house fish nor out house fowl.

Horse and buggy vision

British television works. A simple definition of working is that it delivers roughly the same number of viewing hours per citizen as in any other developed nation. We like the television we have; there is as yet no rioting over the poll tax that sustains the BBC, personal video recorders have not yet destroyed the TV advertising base, there is no need for radical alteration of the system. But change is inevitable, so how do we influence it?

Change often happens gradually building to a sudden discontinuity with the past. This is likely to happen in UK broadcasting. After all, the digital revolution that is less than 10 years old has seen BBC share across all homes fall from 50% to 38%, and in digital homes to 30%. (See ITC for statistics). To try and preserve its falling share, the BBC has had to expand in terms of revenue and organisational size. Worth noting that this is the BBC’s current share in a period when ITV has been weak. A resurgent ITV and an ever-growing base of digital households will further deteriorate the BBC’s position. What happens if the BBC share drops to ITV’s current share of 23ish% - how long do we fund an expanding BBC used by fewer citizens?

The UK system has proved robust at coping with the expansion of television and this system of balance between public and commercial is likely to last for a number of years, but we cannot stop the fragmentation of audience. Our job is to manage the transition, from analogue to digital, against a background that each multi channel home owes less allegiance to traditional public service television.

In the desire to preserve our familiar broadcasting landscape, we must not over conserve, over define, and by default create Amish television.


The BBC is highly successful at providing programming that we want to watch. There is currently no major groundswell against the licence. The BBC works.

That said there are some questions that ought to be considered.

  1. Does the principle of self-regulation of the BBC by the BBC work?
  2. Is there creeping editorialisation and speculation in BBC news and is this driven by the feeling it has to compete with Fleet St and Sky News? Should publicly funded news be less concerned with the speed of headline and more concerned with accuracy and reflection?
  3. The BBC strategy for the last 40 years has been expand to meet the market. Commercial Radio begat Radio One, TVAM begat BBC Breakfast, Sky Digital begat, BBC3 BBC4, C BBC, BBC News, BBC Parliament, and the internet begat BBC Online. Meanwhile BBC radio has gone from 4 to 12 channels. The principle is that the BBC must mirror the market or risk being used less by the audience, thus jeopardizing the licence fee. Can the BBC keep pace with an accelerating media market, and how long are we prepared to pay for that?6
  4. Should the BBC subsidise its expansion by ever increasing use of repeats? Last Saturday in prime time on BBC1 we had David Jason in Open All Hours and David Jason in Only Fools and Horses7, both shows over five years old and already well-worn. In prime time on prime channels should the BBC have a stricter policy on repeats; i.e. not more than once and not more than five years old?
  5. The BBC’s commercial activities, magazines, books, records distort the market, as these publications are sold on the back of free television publicity and therefore have a major advantage over their commercial publishing competitors. E.g. Top Gear the programme promotes Top Gear the BBC-owned magazine and makes it the number one car monthly in the UK. Is this right? Addressing these issues does not harm the BBC as we currently know it, but poses the question, how does a publicly funded entity behave in commercial society and that the BBC cannot do every thing forever. So what does it concentrate on?

The difference engine

Once we were fed and sheltered we have always spent part of our spare income on inessentials for the benefit the spirit. Art, entertainment and public broadcasting are part of that.

Keeping public service broadcasting because it remedies the market, or it protects us from Murdoch, are expressions of taste anxiety, rather than reasons for public service broadcasting. We don’t need public service broadcasting as a remedy, as we don’t need curing. We want public broadcasting because human societies like creating wonder, be it the handprint on the cave wall, a ziggurat in the desert, or the mapping of the human genome. We want public service broadcasting to report and create wonders.

This is what the British television system has by and large done, so how do we preserve it in a digital age?

The rise in digital homes means that the proportion of channels that are truly public service channels will diminish. This is not of consequence if the BBC and C4 can maintain their audience share, but multi channel viewing trends would indicate that their audience share would fall. So is there a way one can harness the forces of fragmentation and disintermediation and maintain the public service broadcasting we want?

I would propose that rather than continue to reinforce the centre and the BBC, we make a small change in the formula and create a virus that infects commercial television so that it is motivated to make the public service television we seem to want. We create a publicly-owned entity that encourages commercial broadcasters to make different and risk-taking programmes.

It would be a publicly owned co-production fund. All commercial broadcasters, ITV, SKY, C5 C4 Living, et al, would have access to the fund. The fund and the broadcaster would both put up, money and both have money at risk. The broadcaster having to commit money with the fund means that some of the more indulgent ideas would get weeded out.

Essentially it is a risk mitigation scheme for commercial broadcasters. If these co productions were successful and there were overseas sales or other revenues the fund would participate in those.

The fund would be paid for from the licence fee. The licence fee is not the BBC, it is just how we currently pay for the BBC, and there is no reason why a percentage of the licence should not go to create this fund.

The reason to have another body (a small compact body at that) spending the licence fee is to fund commercial companies to make risk-taking programmes. To ensure that they are directly encouraged to make these programmes in an era when the influence of the BBC will diminish.

In the analogue era the BBC could push the commercial sector as an act of competition to make PSB programming, in the digital era it would help if we could find a way of pulling the commercial sector to make PSB programmes, and the fund would do this.

In approximate figures 10% of the licence is £250 million per annum, if this were matched by commercial funds it would be putting onto our screens £500 million of public service programming. So we take £250 million away from the BBC’s £2.5 billion and get £500 million of public production. That is almost the equivalent of Channel Four’s production budget.

Losing 10% of the licence fee would harm the BBC but not seriously. It would make the BBC focus on whether it needs to spend £10million on Harry Potter, £100 million on BBC Online or own Radio 2.

This fund could be used for movies, for TV programmes, public broadband products and alternative radio services. To borrow Tessa Jowel’s phrase, a sort of venture capital fund for British Media.

The fund is a device to maintain the market’s current taste in ‘public service programmes’. It would exist to be a difference engine, but hopefully more successful than Mr Babbage’s.

It would be the puff of wind on the dandelion head of the licence fee.

And so to bed

UK public service television has been a formula of balance between public and commercial entities, working in a regulated field.

The BBC was balanced by ITV, BBC 2 by Channel Four, Sky by the new BBC digital channels. This still works because we are not fully in the digital age. In that age we will need different mechanisms to create the values we want from our television.

This concept of balance is a mechanical system. You can wind it, you can adjust it, and you can regulate it. Digital clocks no longer have balance wheels, they are so cheap and accurate they are disposable items, and those clocks that have balance wheels like Rolexes are just flash anachronisms. Television is crossing the same divide.

Hence The Fund to be an equivalent of Iona, conjuring visions of cyber monks in binary habits preserving analogue values, while a digital Dark Age gropes for its civilized form.

It is an age where soon everybody under 30 has been brought up with video games, and one wonders what a public service video game look like?

It is an age where it is a contradiction to expect a monolith to provide plurality.

1 If Oftel/Ofcom believes there should be a free market in telephone information, i.e. 192 becomes 118, should there not be a free market in television information in the guise of the EPG? There is no difference in role between the EPG and 192.

2 Backed by the UK Film Council, This is Not a Love Song will be available to UK users to stream or download from the website from 6pm on 5 September 2003. For no more than £3, viewers have a choice of bandwidth and can see the film as many times as they like. It will also be screening at cinemas in London, Bristol, Manchester, Sheffield and Edinburgh.

3 As audiences fragment, programme budgets come under pressure, reality TV costs less than drama and is cheap way of responding to this economic pressure. In many ways reality programming is the successor to the 50s game show.

4 If one follows this metaphor too far you end up with the thought of Sky as the Café Spice of British television restaurants, and Granada Men and Motors as a Kebab stall.

5 To coin a word I can’t find in my dictionary but if monopoly is one supplier and monopsony is one buyer then oligopsony would be a limited number of buyers.

6 This strategy of defending the core business by matching every aspect of the market reminds me of an axiom of Frederick the Great, who said “to defend everything is to defend nothing” so what should the BBC really defend?

7 Meanwhile on the same night ITV had David Jason in a Touch of Frost but at least it wasn’t a repeat, you just couldn’t escape him that night. So much for diversity!

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