Opposing the move for BBC to take on sponsorship and advertising would be the argument that suggests that the BBC would have to give into the commercial pressures of its advertisers. Advertising can lead to advertisers dictating to broadcasters what is shown on the television. Advertisers, for example, may insist on a channel showing programmes with pure entertainment value, as public service broadcast programmes may not prove to be as popular with audiences. For example, sponsors may not want to support minority programmes such as ‘Songs of Praise’ because they do not attract large audiences. Scannel (1990, p.18) argued that when commercial television was introduced in the 1960s, it failed to ‘live up to its responsibilities as a public service’. He went on to say that this was because they equated ‘quality with box office success’.
Essentially, if the BBC took on advertising and fell into the same trap as ITV and other commercial channels, they would have to move away from its public service broadcasting philosophy. It is this commercial pressure that John Reith and the government wanted to avoid. However, in the Selsdon Committee 1934, Reith claimed that he had ‘no objection in principle to the sponsor system and we do in fact do something which is near to that and might do it in the future’ (Curran and Seaton 1991, p.198). This suggests that although Reith felt that the BBC could take on sponsorship without succumbing to commercial pressures.
It could also be argued that the quality of the BBC’s programming would be reduced if they took on advertising. In the past, the BBC has been the benchmark of what is good television and they might lose this sovereignty if they had to use advertisers who dictated what to show on television. Drummond and Paterson (1986, p.40) said that when the BBC had faced financial crises in the past with the licence fee, they had felt ‘compelled to use considerable amounts of imported programming that are cheap while producing soaps, quizzes and the like that gain large enough audiences’. If the BBC was to take on advertising and sponsorship to fund their new digital channels, it is feasible that the same thing may happen again, ignoring the public service broadcasting ethos of the BBC. A limitation of what Drummond and Paterson said would be that soaps, quizzes and other such programmes attract large audiences and so are satisfying the public’s wants, therefore justifying their licence fee.
Although there is separation between the BBC’s publicly funded and commercial activities - licence fees are not used for commercial activities and vice versa - the BBC clearly has an advantage over other commercial channels. This is because the BBC has more revenue per annum than commercial channels. The licence fee earns the BBC in excess of £2billion a year, allowing them to make more expensive programmes and then earn extra revenue by selling them on to other channels, UKGold, for example. Advertising revenue for commercial channels is rapidly decreasing. On ITV for example, Media Analyst Neil Blackley has predicted that advertising revenue will grow just 0.5% in 2003. In the past it was expected to grow by 4%. This means that commercial broadcasters have less money to create original programmes of their own. This information implies that the BBC should not be given the extra revenue earned through sponsorship and advertising as they may already have an unfair advantage over commercial channels.
Furthermore, if the BBC did take on advertising, it could mean taking away advertisers from other channels, making it even more difficult for them to compete. John Cassey from the Guardian reported that ‘ITV’s share of advertising revenue had fallen to its lowest ever level.’ In 1999, ITV had a 60% share of the advertising revenue. Now it is just 52%. This implies that ITV (along with other commercial channels affected by the downturn in advertising) have even less money to produce quality programmes with. As mentioned before, it has been predicted that there will be a further slump in television advertising. If the BBC were to take on advertising, there would be several implications. Firstly, it would take away advertising from existing digital channels, reducing their advertising revenue further. This means that competition between channels may be further diminished. Secondly, the BBC would have limited advertising revenue. Therefore, could it afford to continue to make quality public service programmes or would it have to buy in programmes from other broadcasters and show repeats? It seems unfair of the BBC to fund digital channels through advertising and sponsorship if it means that existing channels suffer as a consequence.
It could, however, be argued that by taking on advertising and sponsorship, it puts the BBC in direct competition with other commercial digital channels that are funded in the same way. This could improve the quality of programming because broadcasters would have similar budgets to produce programmes with and competing over the same audiences. However, as there are no public service broadcasting restrictions on digital channels and the BBC want to continue with public service broadcasting on their digital channels, existing channels and the BBC would effectively be competing in different markets. The BBC would still be producing a public service whereas other commercial channels compete in more profitable markets to attract large audiences with programmes with high entertainment value.
On the other hand, if the BBC did opt to advertise and accept sponsorship on its new digital channels as well as continuing to receive the licence fee, is this fair on other broadcasters? ITV and Channel 4 do not receive a share of the licence fee yet in order for viewers to watch them they must own a licence. If the BBC took on advertising, it would have significantly more revenue than it’s competitors, giving it an unfair advantage in the quality and range of programming it could produce.
According to The Broadcasters Audience Research Board Ltd (BARB), on the week ending 17 November 2002, the BBC had 27.8% of the total viewing audience. This is compared to 20.2% for ITV. Before the introduction of digital television and an increase in competition in broadcasting, these figures usually lay around 50/50 between ITV and the BBC. The change in figures highlights the changing tastes of viewers as they are given a wider selection of channels to choose from. ITV now have less of the audience share than the BBC. This could be blamed on ITV producing less original dramas and other productions of their own due to the advertising slump.
A further argument to support the BBC taking on sponsorship and advertising could be that the audiences actually watch what they want to as advertisers only want to advertise on channels and programmes that have high viewing figures. The Peacock Committee’s Report into financing the BBC in 1986 suggested that ‘Consumer sovereignty… should determine the nature and scope of the available broadcasting services.’ (Goodwin and Whannel 1990, p.21). In effect, it said that consumers should be the best judges of what is good for them to watch and people shouldn’t need the BBC to regulate their viewing for them. Taking on advertising and sponsorship could make the BBC far more responsive to what audiences actually want to watch. The BBC could lose its reputation as being ‘stuffy’ and advertising could force it to bring itself up to date. Even so, The Peacock Committee realised that their suggestions, if taken up, would probably lead to the wearing away of public service broadcasting. Yet Peacock suggested that public service broadcasting came ‘a long way second to commercial considerations and consumer choice.’ (Goodwin and Whannel 1990, p.22). However, Scannel (1990, p.14) sees ‘public service as a cultural, moral and educative force for the improvement of knowledge, taste and manners.’ This implies that public service broadcasting has a responsibility to the improvement on individuals in Britain.
If the BBC was to take on advertising and sponsorship for its new digital channels, the implications for the future of public service broadcasting on the BBC could be positive. The BBC argues that the profits earned from Pay-TV channels and merchandising help finance their public service broadcasting and keeps the licence fee lower than it would be otherwise. ‘If we can find the funds, and if we can convince the BBC's governors and the wider world that it's the right idea ... we should devote an entire digital channel to serious music and the arts, and to the world of ideas, in science, politics and philosophy.’ (Mark Thompson, BBC Director of Television 2002). This implies that the BBC is still endeavouring to secure a future for public service broadcasting even within it’s commercially funded channels. In the BBC’s Commercial Policy Guidelines on the BBC website (http://www.bbc.co.uk/info/commercial/chapter_one.shtml), it states, ‘Commercial activities must be consistent with, and supportive of, the BBC’s core purpose as a public service broadcaster’. However, without experiencing the pressures of advertisers, would the BBC be able to keep this promise? Especially if the new channels prove to be unpopular with the British public.
In conclusion, it appears that if the BBC did opt to take on advertising and sponsorship to fund its new digital channels, it could possibly give them an unfair advantage over other commercial digital channels in terms of revenue. However, the BBC has always been seen to set the standards in terms of good broadcasting and this position should be protected so that the BBC can carry on producing quality programmes for the British public and making other channels strive to meet the same standards.
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CASSEY, J., 2002. ITV losing out to rivals in advertising revenue carve-up. The Guardian, 26 November
CURRAN, J. & SEATON, J., 1991. Power Without Responsibility. 4th ed. London: Routledge.
DRUMMOND, P. & PATERSON, R., 1986. Television in Transition. London: British Film Institute.
GOODWIN, A., & WHANNEL, G., 1990. Understanding Television. London: Routledge.
SCANNELL, P., 1990. Public Service Broadcasting: The History of a Concept. In: A. GOODWIN & G. WHANNEL, Understanding Television. London: Routledge, 11-29
-Speech by Mark Thompson, Director of BBC Television
Wireless Telegraphy (Television Licence Fees) (Amendment) Regulations 2002