BBC Mid-term Charter Review

Damian Collins Excerpts

Thursday 9th May 2024 Commons Chamber

[Damian Collins (Folkestone and Hythe) (Con)]

I served on the former Digital, Culture, Media and Sport Committee during the last charter negotiations in 2015-16, and I thought then that the charter period of 11 years was very long—it is a substantial extension. Although that allows the BBC to make longer-term decisions, a lot changes in the media landscape in that period of time. When the last charter was negotiated 11 years ago, the social media companies that dominate our media landscape today barely existed. They arrived on the scene in 2015-16 as major market players but were not yet what they are now: the principal way in which many people access their entertainment and news.

Looking at Ofcom’s “Media Nations” study, it is clear that younger viewers—people under the age of 40 —increasingly look first to social media or subscriber platforms for their content, rather than doing what people would have done in the past, which was to turn on the television and see what was on. That is a dramatic change in the way people consume news and information, and it is not just about a change in the type of content that they can access; it is also about broadcasting moving away from a true broadcast service, whereby a very large number of people choose to see the same things, and towards a personalised service, whereby the content that people consume is designed around them and their viewing habits. That applies to news just as much as it does to any other form of content.

That is the very big change that we have seen, and the prospect of artificial intelligence reducing the cost of production, particularly for news content, will only accelerate the process. The shift in people’s habits towards consuming media through online platforms and social media apps will accelerate the personalisation of the content they see. In fact, such tools have been designed precisely to achieve that end.

[Sir William Cash]

As ever, my hon. Friend, who has enormous experience of all this, will add a lot to this debate. He mentioned what was done some years ago compared with now. Has he been watching BBC Four’s repeat of the entire “Civilisation” series by Kenneth Clark? Does he not think that it is one of the most remarkable examples of what the BBC can do fantastically well, and that people should be watching it now? That is not a bad plug for the series.

[Damian Collins]

I agree with my hon. Friend. If I may briefly digress on his theme, I once hosted an event in Parliament for the Royal Television Society at which that programme was discussed. It was said that commissioning budgets and commissioning editors behaved very differently in the past, and that David Attenborough commissioned the entire series without having to ask for the director-general’s opinion; he just did a 14-part epic of factual content. Alan Clark’s father, Kenneth Clark, opens the “Civilisation” series by asking, “What is civilisation?” He says, “I don’t think I can define it, but I think I recognise it when I see it.” I sometimes think that the debate about whether the BBC is distinctive enough and what distinctiveness looks like at the BBC is rather the same: it is hard to define, but we think we recognise it when we see it.

The reason I wanted to open my remarks by talking about the changing nature of viewing habits and of the media, and the fact that it would have seemed impossible 10 years ago that the centrality of a broadcaster such as the BBC could be challenged by a service such as YouTube, is that it is changing viewing habits too. The one big difference between the charter negotiation in 2015-16 and the build-up to the new charter, which will come into effect in 2028, is that those changing habits are leading licence fee payers to make different choices. Increasingly, they are choosing not to pay. This is the great challenge we now face.

In the past, the BBC had to ward off Governments that sought to load substantial extra costs on to it without compensating with a large increase in the licence fee. We previously saw that with the cost of the World Service and then free licences for the over-75s. This time around, the BBC faces the challenge of potentially declining licence fee revenues, alongside the reluctance of consumers to pay much more than they are being asked to pay now. It is doubtful that licence fee payers would support a substantial increase to the licence fee, and I do not think either the Government or the Opposition would be inclined to do it.

The BBC will therefore have to continue challenging itself to consider how it can prioritise resources while maintaining its core principles, which I believe are fundamental to the BBC: that it is a publicly funded and universal service, in which there is something for everyone who pays into it. The challenge of how to deliver that in the modern era requires the BBC to look for alternative forms of revenue.

In many ways, the big change in the last charter renewal empowered the BBC to develop the commercial potential of BBC Studios. In the director-general’s recent speech, I was pleased to hear that he has set a target to increase those revenues to over £3 billion within the charter period. BBC Studios would then bring in a very substantial part of the BBC’s revenue.

Making more programmes for more people and selling them around the world is an excellent way for the BBC to make money, but we also have to consider how it can monetise its current programmes. In the pre-internet world, people would watch a programme they liked, and they could watch it again when it was repeated—some say that it would be repeated too often, but it would be repeated. If they wished to own it, so that they could watch it on demand, as we now say, they could buy a cassette or a DVD in a shop.

I think programmes should be free to air on services such as iPlayer for a period of time, but do they really need to be free for a year? Should there not be a point at which the BBC starts to charge people to watch on demand, just as any other subscription platform would?

The same goes for audio content. The BBC has tried to take a big position in the podcast market, although it has been very effectively challenged by new entrants that are producing programmes of the same quality as Radio 4, on a wider range of topics, and attracting very big audiences. Again, I think those programmes should be free to air and available to all, but should access to the full archive remain free forever, or should there be a charge? It is perfectly legitimate for the BBC to consider such commercial revenues in the same way as it sold books, DVDs and CDs in the past. These are ways in which the BBC can seek to bring in more revenue to reinvest in the programming that it needs to make.

The BBC also needs to consider the distinctiveness of its local newsgathering. This is a very important part of the BBC service. I think most Members are concerned about the apparent dilution of investment in local radio, which is an area where the BBC can deliver something in a way that no one else is delivering it. I think there should be increased investment. These are often among the BBC services that local audiences value most, and I am not sure those local audiences would have made some of the investment decisions that the BBC has made.

The breadth of services that the BBC offers has changed dramatically throughout its history. It may well be that the BBC needs to consider whether to prioritise certain services over others, while still remaining a universal broadcaster, because it may not be able to deliver the breadth that it delivers now while maintaining the quality standards it wishes to maintain. These are going to be very important considerations.

In terms of distinctiveness, I would like to see the BBC taking creative risks. It can afford to take creative risks because it is not reliant on advertising revenue to fund its programming. Holding an audience at a certain level throughout the day might be a demonstration of universal appeal, but it is not a commercial necessity for the BBC because it is not dependent on advertising revenue. It is a fair criticism to say, “Are the services on the BBC schedule, particularly the daytime one, distinct from what we would see on other channels?”. We largely see the same menu and diet of quiz, antique and property shows, which, although popular, are widely available. Could the BBC afford to take more risks and be more distinctive there?

The principle of the BBC being publicly funded is important. An aspect of this debate that is not mentioned enough is that under the alternative where we say to the BBC that we want it to be a voluntary subscription service, the volume of those subscriptions is almost certain to add up to less than we are talking about for the licence fee today. We would therefore have a much smaller BBC, largely making programmes for a smaller group of subscribers who wish to pay. That would be a gross act of vandalism against an important national institution.

If we have a fully commercial BBC, with full advertising, the biggest losers would be the other commercial broadcasters—ITV and Channel 4. They would discover that the revenue pot from advertisers for live TV audiences in the UK is not infinite and the BBC would simply be soaking it up. We would weaken our creative sector and our television market in the UK by doing that. We cannot disturb one part of the ecosystem of a great success, British television and film production, without disturbing the other component parts of it. That is why the BBC’s remaining publicly funded is important, although the mechanism has to be open to challenge.

As the hon. Member for Ellesmere Port and Neston (Justin Madders) said, younger viewers, in particular, see the licence fee as a type of subscription, no matter how the BBC wants to see it. In effect, people see this as a monthly charge they pay, just as they might pay for Amazon Prime or for Netflix; they do not understand it as a device levy if they are watching TV through a computer or on their laptop. It might be that the BBC will have to be funded in a different way, be it a property-based tax, as has been discussed before by the Select Committee and is the case in Germany, or some other mechanism. If the BBC was funded publicly in that way, it is perfectly legitimate to say, “What amount, what proportion, of that funding should be contestable? To what extent should another free-to-air broadcaster, or even a subscriber broadcaster such as Sky, be able to come along and say, ‘We will make this instead, we will make it better and we will make it free to air.’”? What proportion of that revenue should be contestable in that way? There will be a legitimate debate on that, but opening this up too widely would make the BBC’s sustainability difficult to protect.

As we look forward to the end of this charter and the start of the new one, we face a lot of challenges on getting this funding mechanism right. It needs to give the BBC the revenue and flexibility it needs to do what we want it to do. It needs to be funded through a charging mechanism that makes sense to the public. We also have to consider the viability of other services such as the BBC World Service, which is of huge strategic value to the UK but is largely funded by licence fee payers now. We must consider the extent to which there should be government support for that, particularly in respect of services that are further afield.

In closing, I just wish to say that I regard the BBC as a vital national institution. In a world that is becoming more fractured and where audiences are more scattered, the role of a trusted national broadcaster that can be impartial—although that will always be open to challenge from people who hold different views—that is resolutely focused on trying to get to the truth, and that can be a trusted source of news and information in a world riven by disinformation, conspiracy theories and lies, is of the utmost importance. As my right hon. Friend the Member for Ashford (Damian Green) said, a national broadcaster can put on those moments that bring the nation together, be it a royal wedding, royal funeral or the coronation, Eurovision or major sporting events. At such times, the nation can come together and the BBC becomes the national town square. That is a fundamental part of its role in our public life.