The BBC is About to Repeat Canada's Mistake

As the BBC approaches its 100th anniversary, the venerable broadcaster is in a pitched battle for its future.

The newly-elected Conservative government wants to reduce the financing and the scope of BBC activities; it has just phased out a £750m subsidy that substituted for 'free' TV licence fees for persons aged 75 and over. This is in addition to the elimination of a £245m subsidy that had for decades funded the BBC World Service. Now both must be funded by others' TV licence fees or some other funding source.

The biggest share of BBC revenues comes from the TV licence fee, which a household is required to pay if they watch (live) TV. Much like a driver's licence but there is no exam to pass.

The Canadian experience provides a lesson on how not to fund the BBC. Canada abandoned the licence fee in the 1950's on the premise that TV, which was being introduced, was too expensive to be funded by individual households, especially since only a handful of homes had a TV in the early days. From that day to this the CBC has been subjected to tortuous annual negotiations for direct government funding. Abandoning the licence fee and not replacing it with another mechanism allowing the public to pay directly for public broadcasting was a mistake.

Every year the CBC must plead for government grants and the Corporation is continually on tenterhooks. On several occasions with the onset of a recession governments have made drastic cuts to the CBC budget as part of general austerity programs. There have also been times when funding has been cut ostensibly because of perceived journalistic bias or alleged inefficiencies. The public has no say in these cuts.

Canadian politicians, not surprisingly, are just like British politicians, regularly accusing the public broadcaster of bias. Pierre Trudeau once even asked the CRTC to rule on CBC bias. This at least confirms that the public broadcasting system is open and robust. But it can lead to unfortunate outcomes. The leader of the Canadian Senate recently asked whether the CBC should be out of news entirely, which would basically neuter the CBC and deny Canadians of an important voice. Able-minded politicians should relish the attention granted by public broadcasting journalists who are by definition the most impartial, although management must be vigilant about possible biases in programs.

Lacking direct public funding and given the vagaries of annual grants from Parliament, CBC has sought out revenues from two other natural sources, advertising and subscriptions. Advertising on CBC TV has made the service indistinguishable from commercial networks and undermined one of the core purposes of public broadcasting, which is to examine all aspects of society, including government, without real or perceived servitude to any interest group. CBC TV has lately even resorted to turning over valuable prime time hours of its schedule to commercial broadcasters (Rogers NHL games and TV series).

CBC has successfully raised limited revenues in recent years from subscriptions but then, desperate for revenue, ran ads on these channels for any interest group or business that would pay. Subscriptions to individual services are increasingly difficult today as TV is becoming platform agnostic and, of course, it is not feasible to collect radio subscriptions.

If subscriptions are the way to fund public broadcasting then it should likely not be for individual services. Just as the current BBC licence fee covers the cost of not only TV but also radio and other BBC services, an overall fee added to the bill of pay TV and internet providers (fixed and mobile) could fund all BBC services. This is a concept being explored in Canada, since the present mechanisms to fund CBC have failed miserably.

British consumers would likely willingly accept this new subscription fee, since it would replace the licence fee. The cost of collection would likely be no more or less than the 3-4% it costs to collect the licence fee. Canadian consumers would be more reluctant and so a widespread educational campaign would be required.

Only those households without internet access or pay TV (via cable, satellite or IPTV) would be excluded from the new subscription fee. Those who subscribe would be required to pay the fee in order to receive pay TV or internet, thus no need to force payment by legal means.Ofcom estimates that over 80% of British homes had residential internet access in 2014 and over 60% had smartphones. Many of those without fixed or mobile internet would have some form of pay TV and it is probable that less than 5% of homes have neither, roughly equal to the 5% of homes who currently evade paying the licence fee. Many are likely to be low income homes and/or with persons aged 75-plus and they would not be required to pay the BBC subscription fee. If the subscription fee was based on a percentage, it would mean those who spend the most on pay TV/Internet, would pay more than those who spend less on these communication services.

What BBC services should be offered in future and how to manage them efficiently is another critical issue.

The BBC should seek to serve the whole public since virtually all pay for it but BBC need not continuously "chase ratings." The licence fee is an annual fee, not a daily or weekly fee. Reaching all members of the public on some regular basis or even occasionally with programs or services that are meaningful would suffice, not precluding some programs with wide popular appeal.

As for the concern that the BBC duplicates programs of commercial broadcasters, it can be argued that quality standards of BBC productions only rarely are equaled by commercial British productions. Generally, only U.S. programs funded by the huge American market and their worldwide audience can equal BBC quality and entertainment value.

Commercial broadcasters, understandably, will do whatever necessary to shift costs to the bottom line to profit. The BBC, being funded directly by the public, has the freedom to invest in quality and need not answer to the demand for profits. But it must be efficient and BBC management, ideally drawn from a professional broadcasting talent pool, must constantly evaluate the merits of all programs and ensure the BBC spends wisely and not just equals but exceeds commercial broadcasters.

Certainly, it is a challenge to argue that BBC should be seeking online readers as well as viewers and listeners, given the proliferation of newspapers and other news sources online. BBC internet services would seemingly be better suited to providing mostly audio-visual content and to work with rather than compete with newspapers for readers.

With long term stagnation in government funding, fragmentation of the advertising and subscription markets, CBC TV is today but a shell of its former self and commands a fraction of the BBC's audience share. Today, in weeks without a major sporting event on offer CBC TV captures only about 1 hour of the average Canadian's time. Fortunately, CBC radio fares somewhat better, as do French-language services.

What has befallen Canadian public broadcasting is not what Britain wants for the BBC. BBC released some data that is startling for North Americans: virtually every adult in the UK spends 18 hours per week on average with BBC services. This figure comes from a BBC-commissioned survey and may exaggerate but it is more time spent on any other activity but for sleeping. 

The Beeb is not perfect but is important in the lives of most Britons, and, millions around the globe. I think a case can be made that the BBC is not just a national treasure but also Britain's ambassador to the world and largely responsible for maintaining its reputation as a political, economic and cultural bellwether. When people around the globe are exposed to BBC news or entertainment they imbibe Britain. Surely it is the responsibility of all political parties to ensure another century of BBC services for the world.

Please don't make the Canadian mistake of assuming that the public broadcaster should be funded by annual government grants, which only leads to commercialization of the public broadcaster and ultimately the belief that commercial broadcasters can replace it.