New Vision: Transforming the BBC into a subscriber-owned mutual
10 October 2019
SUGGESTED
ITCU Research
27 September 2019
Monetary Policy
3 November 2019
Economic Theory
IEA Current Controversies 71
- There is a long history of governments and incumbent vested interests restricting competition in broadcasting for their own ends.
- Those interests have subtly changed the definition of public service broadcasting in a way that seems to serve producer interests rather than being helpful in informing good public policy debate.
- The current definition of public service broadcasting used by Ofcom is not coherent.
- The nature of the broadcast market has changed to such a degree that public service broadcasting (insofar as it can be defined) should no longer be delivered largely by one institution. Indeed, we should go further: there is no need for specific policy in relation to public service broadcasting.
- Niche providers are often better than the BBC at ensuring the broadcasting of good quality content to meet minority tastes. The BBC is clearly most attractive to higher-income white audiences, despite the impression it tries to convey in its marketing.
- The fact that the market for broadcasting is now an international industry means that many artistic, educational and cultural programmes, which might not have been economic in the past, may now be economic and not need subsidy.
- Changes in technology mean that the current approach to financing, owning and regulating the BBC is no longer tenable.
- The BBC should be financed by subscription and owned by its subscribers. It could then determine different subscription models for different markets (including online and overseas). This model has a number of advantages over alternative models of reform:– The model is simple. All that is required is to allow people to receive TV signals for other services if they have not paid the subscription necessary to receive BBC services. As such, the reform would be permissive – it would be seen as allowing consumers to receive for free, or through existing subscription services not funded by the licence, channels other than the BBC.– A belief in a market economy should not mean that we are opposed to the evolution of a wide variety of different governance models within the market. It is likely that the model of a subscriber-owned mutual would be preferred to fully commercial models by the majority of nominal owners of the BBC (current taxpayers or licence fee payers) and future owners (subscribers).
- There is nothing to stop the subscriber-owned mutual from having fully commercial or fully charitable arms for different purposes. This is a common approach for mutual and co-operatives and would also allow the exploitation of the overseas market and a wide array of joint ventures.
- The BBC should lose its legal privileges and be treated in the same way as all other news and media organisations for competition and other purposes.
- The government may wish to impose some obligations on the sub-scriber-owned mutual in relation to the provision of radio, international broadcasting and also, perhaps, the broadcasting of Parliament. However, this would be best done under a freely-negotiated contract with the new mutual or with an alternative provider.
Below is a revised version of the paper, updated in January 2020. The original paper can be found here.
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