Equity

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July 2002

Alex Towers
PSB Review - consultation response
Ofcom
Riverside House
2a Southwark Bridge Road
London SE1 9HA

Friday, 21 May 2004

Dear Alex

PSB Review - Consultation Response

Please find attached Equity's response to the above consultation.

If you have any questions, please do not hesitate to contact Equity's Research and Parliamentary Officer, Kelly Wiffen on 020 7670 0260 or via email kwiffen@equity.org.uk. We are happy for our response to be made public if required.

Yours sincerely

 

Ian McGarry

General Secretary

Enc.: 1

 

Ofcom: Review of Public Service Television Broadcasting

• Equity welcomes this opportunity to contribute to the discussions surrounding public service television broadcasting (PSB). As the trade union representing 37,000 performers and creative personnel, we have already outlined our general stance on PSB, and will therefore focus on the main propositions outlined by the above report.
• Before tackling the propositions and outlining our consideration of the Licence Fee, we would like to echo the comments in the document about drama. Equity agrees that within programme types, there is a reliance on those with more popular appeal, for example soaps within drama. This has been a trend that has developed over the last few years and the reason why Equity lobbied to have the Communications Act amended to provide a requirement on broadcasters to commission new programmes (both in writing and ideas) and to ensure that drama was made in a variety of formats (e.g. one-off, series, serials, themed shows etc). If this provision is properly regulated, we believe this will help reverse the trend and ensure the continuation of a wide range of high quality original drama, which is so valued by audiences. We are therefore concerned by the statement on page 10 that the regulations should "break away from narrow obligations specifying hours of certain types of programming across the schedule". As we have stated in previous consultations to the ITC, in our view, the quality and range of British television production has resulted directly from the existence of regulation, which has in any event in recent years been applied with a "light touch". We are therefore unconvinced that the existing regulations are an unnecessary burden to the industry in an admittedly more competitive market, and fear that without them, the more recent and apparent decline would accelerate. Our preference would be, rather than lifting regulatory obligations on existing terrestrial channels, comparable requirements should be placed on their competitors.

Proposition One

We need to examine prospects for PSB funding and case for seeking alternative resources.

Equity believes that, despite it imperfections, the continuation of the Licence Fee is essential for the survival of high quality, diverse and original public service programming on the BBC. We believe that without the Licence Fee, the BBC would be unable to continue to meet its public service obligations. It would not be able to act free of market concerns and trends and it would be forced to react to developments in the way the commercial PSBs have had to do repeatedly over the last five years. Operating in a market-orientated environment would put a huge strain on the BBC (and the commercial broadcasters) and we do not believe that any of the alternatives suggested by commentators would allow the BBC to be as significant and respected as it is now.

If further convincing were necessary, the experiences of other countries can suggest the possible implications of changing the BBC's funding. ABC in Australia, TVNZ in New Zealand, CBC in Canada and PBS in the United States are all poor examples of public service television broadcasting when compared to the BBC. These channels are forced to weather advertising slumps, seek sponsorship, raise money through telethons or beg Government's for public subsidy. As a result, they fail to live up to their potential and are often criticised for poor, unimaginative programming or worse, that their editorial independence is questioned.

We have detailed below our consideration of each of the proposed alternative funding possibilities for the BBC.

a) Advertising:

Advertising is being spread among more and more broadcasters, and it is still suffering from the effects of an economic downturn. ITV reports an 18% downturn in advertising since 2000. It makes no sense for the BBC to share a diminishing source of revenue, especially as it is likely to result in irreparable damage to all broadcasters. As well as reducing Channel 4's ability to produce high-quality programming, introducing advertising to the BBC threatens the quality and diversity of BBC programming. Producers would seek programmes generating high audiences to ensure high advertising.

b) Sponsorship:

Programmes would become reliant on their sponsors and editorial values could be threatened. The risk of sponsorship withdrawal would make planning for the future less certain and is likely to result in a decrease in worldwide recognised quality of programming.

c) Subscription

Making the BBC a subscription only service will create a number of problems. Firstly, while the Broadcasting Policy Group may consider that the BBC will be able to offer a selection of packages of their services, we believe that for the current television services to be financially viable, they would need to be either sold as a group or part of a bundled package with other broadcasters. The latter would cause problems for European audiovisual regulations. Additionally, it is likely to cost viewers more than the current Licence Fee to access these services, if the current quality and range levels are maintained. At present, figures show it costs £4 to collect the BBC Licence Fee per head, compared with £24 per head to collect one year's subscription to BSkyB. This would be reflected in any subscription costs. If the Licence Fee were to supplemented by subscription this would also increase the burden on viewers, including those poorer people, who would be deprived of the full range and quality of the BBC, which would otherwise be universally available. Finally, we are unsure as to how this approach could be applied to radio services. It would mean separating the BBC into radio and television organisations and we believe that in order for them to continue to produce a range of high quality programming, they need to operate together.

d) Combination of Commercial and Public Funding:

If the BBC was funded by a licence fee and commercial funding, future European rules could turn the BBC into a ghettoised public service, providing a limited range of "worthy" programming equivalent to PBS in the USA.

It is also important not to view the Licence Fee only in terms of television programme production. The Licence Fee enables the BBC to be innovative in radio, help maintain and set standards through training and education and support the film industry by helping to provide a secure financial production base. If the only obligation that will remain on the BBC is to make high quality programmes in underrepresented genres on a limited Licence Fee, it will be unable to fulfil this requirement simply because the broadcasting ecology to support it will have been undermined by the loss of the Licence Fee elsewhere.

The BBC's impact on training and education is particularly important for Equity members. It has provided a consistent source of employment in a variety of programming, both audio and visual, and heavily invested in the training and development of the industry. Despite increased efforts of the other public service television broadcasters through Skillset to invest in training, the BBC continues to far outstrip them in financial commitments and training opportunities.

It also has an important role in sustaining the independent production sector. Without the BBC's investment and commissioning, the UK's production base, which also serves the UK film industry, would not be as strong as it is today. Even with the scaling down of BBC film production, its television production has supported the industry and benefited their in-house production. There does not appear to be any comparable investment by other broadcasters and in the case of channels only available through Sky, there is no indication that they ever intend to match this level of investment.

Finally, revenue from the BBC's commercial ventures is reinvested back into the industry, which can only help and support the overall public service broadcasting ecology. The BBC is committed to investing in programme production and this money is vitally important for the independent production sector as well as other broadcasters.

Proposition Two

We need to examine the case for sharing existing funding streams among a greater number of broadcasters and allowing broadcasters or producers to bid for PSB funding.

A recent report by Oliver & Ohlbaum Associates called UK Television Content in the Digital Age identified that redirecting BBC funding may increase commercial audiences but the consequent pressure on airtime prices would limit actual revenue increases for commercial broadcasters. As commercial broadcasters recycle a lower proportion of revenue into original production, the net effect would be to lower the overall level of domestic content investment in the UK market. Additionally redirecting existing or new public funds to commercial broadcasters to subsidise high cost genres could result in these funds being distributed to shareholders or new ventures which do not rely on quality, home-grown programmes, effectively crowding out new commercial investment.

Some commentators argue that the Licence Fee money could be made available to other broadcasters to produce 'worthy' programming. We are concerned both about how that 'worthy' programming will be judged, and also how the BBC could continue to act as a public service broadcaster is any of the Licence Fee was diverted away from it. Deciding whether a programme should be able to access the Licence Fee is a subjective decision. It would be impossible to effectively judge whether a programme is 'worthy' based on a synopsis and would therefore be open to abuse.

If the intention were to ensure that money is made available to the industry as a whole, Equity would argue that this is already the case through the BBC's independent production obligations. This in effect means that independent production companies are able to pitch for Licence Fee money. In 2002/3, the BBC Annual Report confirmed that it spent £319m on independent programme productions transmitted (12.6% of the total Licence Fee).

One other issue to consider would be the fate of advertising revenue earned for advertisements placed around a programme that has been produced using money from the fund. It would be difficult to agree that this money should not be returned to the fund, but should instead be absorbed by the commercial broadcaster. We would also be concerned that any body created to administer a PSB fund would result in another level of bureaucracy that all broadcasters would have to accommodate.

Proposition Three

Where public funding is necessary to secure the purposes and characteristics of PSB, different means of distributing funding should be examined.

Any body created to administer a PSB fund would result in another level of bureaucracy that all broadcasters would have to accommodate or provide more power to existing regulators, neither of which is desirable.

Proposition Six

Where a high cost of delivery is associated with low viewing figures, it will be harder to justify continued public intervention. Alternative means of funding [for the BBC], such as subscription, should be considered for these services.

We have already detailed our concerns about alternative means of funding above. One question raised is whether all of the BBC's output should be public service broadcasting when taken as a whole and judged in its entirety. Equity believes that it is inevitable that there will be some overlap of output with other broadcasters, and we would argue that this does not matter. As long as the programming is of the highest quality and offers alternatives that challenge other broadcasters within genres, viewers will be able to access a range of programmes and that is the most important measure for the BBC.

We do not believe it should not be the BBC's responsibility to only provide for genres in the public service environment not produced by commercial public service broadcasters. This would risk ghettoising the BBC and prevent it from setting standards for all broadcasters. Equity believes that the BBC is at the core of PSTB, and as such it is important that it should be allowed and encouraged to continue its range of programmes and be supported by the Licence Fee. We believe that the BBC should set standards for all broadcasters, whether or not they have public service obligations and that they have a greater responsibility to the broadcasting environment because of the privileges of the Licence Fee.

On behalf of Equity: Kelly Wiffen, Research and Parliamentary Officer 020 7670 0260

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