The BBC License Fee: the public isn't so sure

I have been waiting for the transcript of a Westminster Media Forum which took place on March 10 where  I was taken to task by Prof Steven Barnett. I was referring to work commissioned by Ofcom for their Second Review of Public Service Broadcasting in 2008: some 2000 people were asked to rate the programme types they considered important “for the good of society as a whole” (Q1) as against the types that were “most valuable to you” (Q2).

So people recognise that News, especially, and Current Affairs are social priorities whereas entertainment genres are personal priorities.  (For parents, Childrens programmes fall into the right-hand quadrants too). This suggests to me that many people would support, at least in principle, public funding for social-priority genres and private payment for personal priority genres.

Steven disagreed.

Sorry David, you are completely misinterpreting those Ofcom surveys, that is not what the public is saying. The public is saying it actually wants to see the BBC funded across the board in all the genres that they are at the moment.

I may have pushed that data a little too far, but I am not aware of any recent poll that has shown majority support for the BBC License Fee.

2004: an ICM poll for Panorama found that 31% were in favour of the existing licence fee, 36% said the BBC should be paid for by a subscription, and 31% wanted advertising to pay for the programmes.

2008: an Ipsos MORI poll commissioned by the Guardian found that 41% agreed that the licence fee was an "appropriate funding mechanism". 37% disagreed.

2009: In the Guardian/ICM Poll licence fee support also rose slightly to 43% amid doubt over commercial viability during a recession.

These are the polls I am aware of. There maybe others.

A European Pay-TV platform?

The US has some 125m TV households as against about 25m in the UK. In my last post I looked at HBO. Where could we find a Pay-TV market large enough to create a subscription base for, say, quality drama and comedy? What about the European Union of which we are a part? After all, every country in the Union (except UK and Eire) watches subtitled or dubbed English-language content in primetime. That should give the UK a huge competitive advantage –but the dubbed and subtitled content is currently usually American.

It is instructive to look at the revenues of the six US studios. (This focuses us on fiction, that is drama and comedy series, the most important type of traded film and TV content.) We have figures for 2008, which tell us that total revenues from licensing content and DVD sales was over $21bn, with $9.2bn – that is, 44% of total sales -- coming from content sales outside the US.

There is no equivalent figure for the UK, but the TV Export survey conducted annually by Pact, the trade association for independent producers, indicates total sales of finished TV programmes (including DVDs) at £610m. (This survey does not include films so it is not directly comparable with the US figures in the chart). In addition the UK report does not break out the UK figures by genre. Assuming a large proportion of the £610m, say £400m, is probably fiction, it is nevertheless immediately obvious that the relationship between home and overseas sales in the US and UK are totally different. OK, so you have heard this before. What is the point of repeating it?

Because it raises this question. Should the UK not be setting its bar higher? Should we not be aiming to become the entertainment capital of Europe? We have significant competitive advantages, as outlined above. We are Europeans. And we have a strong production industry. Moreover aren't some of our basic genres – like the crime series – beginning to look provincial against the reality that so much crime is international – as in the case of little Sahil Saeed, kidnapped in Pakistan, ransom collected in Europe, criminals of various nationality foiled through the co-operation of many national police forces?

HBO: Can We Have One?

HBO has many admirers in the UK because of the quality of its drama, but is usually dismissed as a model because of the much greater size of the US population.

Some facts: HBO gets about $10 a month from 29m US homes, mainly better-off ( median income $63,000 in 2007). Thus around a quarter of the US homes pay a premium for HBO on top of cable fees and basic packages. For this HBO provides about 140 hours of ad-free new content each year. (Subscribers do not just sign up for brilliant series like The Wire or Curb Your Enthusiasm but for films and boxing as well.) Its subscribers value HBO highly and feel a sense of ownership. (In our terms, HBO is a specialist, premium-subscription content provider, carried on nearly all US multichannel platforms.)

In the UK subscription basically means Sky or Virgin. Most Sky subscribers in the UK pay about £40 a month for various bundles -- so Sky as a platform is broadly in line with US cable systems like Comcast which includes HBO as an option. OK, so the UK is probably not large enough to fund a specialist service of high-end drama and comedy funded by subs from better-off homes like HBO. However, though the £12 per month License Fee paid by over 25m UK households has no equivalent in the US, it looks like very good value and delivers a wide range of material -- including some HBO-type fare like Outnumbered or The Thick of It. Does the UK offer the opportunity for new variants of the pay model -- perhaps big advertiser- supported channels going behind a "lite" pay wall? And may we one day find a way to tap the wishes of a minority who want more of what they value and are ready to pay for it, which is what drives HBO -- after all, innovation is so often led by enthusiasts or "early adopters"?