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Is TV's ecosystem under threat?

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12 October 2015

The ‘ecosystem’ that lies behind the success of the British television industry is under threat as never before. That’s the warning from a swathe of senior executives and creative figures who have voiced their concerns in recent weeks about the future of the television sector, one of the key drivers the UK’s £76.9bn creative industries.

A number of events in recent weeks have sparked the concerns: an increasingly acrimonious and political debate about funding levels of the BBC ahead of Charter Renewal; the revelation
that the government is actively mulling the privatisation of Channel 4; a surprise review of
the Terms of Trade; and ongoing acquisitions in the UK production and broadcasting sector by US media companies. 

The future funding of the BBC has galvanised creatives to speak up in the corporation’s defence, in particular following the government’s surprise emergency Budget in July which saddled the corporation with the £700m cost of licence fees for the over-75s.

The Thick of It creator Armando Iannucci got the ball rolling in August with a rallying cry to programme makers to support and champion the BBC in the face of attacks from politicians in his MacTaggart lecture at the Edinburgh TV Festival.

Meanwhile, Wolf Hall director Peter Kosminsky accused the Conservatives of “trying to eviscerate the BBC” for ideological reasons. Former Doctor Who executive producer Russell T Davies told the Radio Times festival last month that he believed the BBC was doomed, labelling the threat to the corporation a disgrace. “In 10 years time, everything we understand the BBC to be, will be gone.”

But it was at last month’s Royal Television Society’s Cambridge Convention that many of industry’s concerns were vented most loudly.

RTS President Sir Peter Bazalgette said the single most important issue facing the TV industry, particularly around BBC Charter Renewal, is the fall in investment in originated programmes, down from £2.6bn to £2.4bn in the five years to 2013.

“Originated programmes are about our democracy, they are about our culture, they are about our economy. They are by value the single most important intervention in the creative industries, and they are declining at the moment and I think we should come up with policies and strategies to get that number going the other way,” said Bazalgette.

The BBC is the UK’s largest investor in new, first run, originated programmes. As director general Tony Hall noted at Cambridge, the licence fee accounts for around 20 per cent of TV revenues – but around 40 per cent of the investment in original British programmes.

So it may have been reassuring to hear Culture Secretary John Whittingdale, in a speech at the Convention, say that there is no prospect of the BBC being abolished. “Let me be clear,” he said. “There is no threat to the BBC as a world class broadcaster.”

However, many in the industry are not sure if they can trust the emollient words of the Culture Secretary. In August, Whittingdale said that
the government was not currently considering
a sale of Channel 4, only for an official to be photographed in late September outside N.10 Downing Street holding papers that proposed privatisation.

The leadership team of Channel 4 has warned of the risks of privatisation in the past. Chief executive David Abraham said that privatisation would inevitably mean less money being spent on original content so that C4 could achieve a “20- 25% margin, like ITV”. The implicit warning is that C4 would have to spend less on distinctive, not for profit shows like Dispatches and Channel 4 News if it is privatised.

Meanwhile, Whittingdale’s decision to review the Terms of Trade, one of the foundations of the UK production sector’s growth over the past ten years, has shocked indie producers.

Pact chair Laura Mansfield called the move “utterly astonishing.” She said: “Given that the terms of trade are there to help and support qualifying indies and entrepreneurs who need it - such as my indie Outline – and do not apply to the non-qualifying indies,
I just don’t understand why a government
which champions small businesses would want to create such instability”.

Reviews of the
BBC, C4 and the Terms of Trade have led to real concern about government policy towards the TV sector. Iannucci has accused the government of creating ‘a rather frightened atmosphere’ within the industry.

This comes on top of fears that consolidation, in particular US acquisitions of producers and broadcasters, is already reshaping the British television industry. Ofcom recently reported that large foreign media companies now own six of the top seven UK producers, accounting for around £1bn of UK revenue. This has led to concern that the bigger companies will focus only on the most commercially attractive genres, leading to a lack of innovation in the less commercially attractive genres such as current affairs.

It was a theme picked up by Tony Hall
at Cambridge. “The Britishness of British broadcasting is under challenge. It’s obvious and measurable,” he said. C4 boss David Abraham warned the industry shouldn’t “sleepwalk” into a major change to its ecosystem. What does the world look like,
he asked, if ITV and Channel 4 are taken over, and the BBC is hit by a ‘different’ licence fee settlement? “Then you are in a different country. We really do need to wake up to the consequences of those cards falling in that way.”

Some, however, argued that the UK makes too much of its special TV ecology. Tom Mockridge, the CEO of Virgin Media, said: “I’ve worked in many countries. For a period I was a chairman of Bulgarian TV. Pretty much every country I have worked in believed that their TV was the best in the world...But there is a great deal of creativity around the world.”



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