Our friend in the West

Our friend in the West

Ron Jones
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Ron Jones argues that the BBC is wrong to claim that market failure is not part of its remit 

One of the best contributions to the issue of the public purposes of the BBC was written almost 20 years ago by a then-future Chair of the BBC Board of Governors, Gavyn Davies.

He wrote: “Some form of market failure must lie at the heart of any concept of public service broadcasting. Beyond simply using the catchphrase that public service broadcasting must ‘inform, educate and entertain’, we must add ‘inform, educate and entertain in a way that the private sector, left unregulated, would not do’. Otherwise, why not leave matters entirely to the private sector?”

My own sector, television production, has prospered on the back of necessary government intervention in 2004 to restrict monopoly abuse by broadcasters. These are clearly concepts that the country and successive governments are comfortable with.

Today, the argument goes that, in the digital age, the market for content is more efficient. In this new world, lower entry cost, the absence of spectrum scarcity and new monetisation arrangements – such as subscription and pay-per-view – give people the programmes they want to watch.

These factors do change what we mean by PSB now. The market has made a difference. The issue is: what do we make of these changes in determining the public purposes of the BBC today?

It’s such a shame that this is a discussion the BBC seems reluctant to engage in. By maintaining that market failure is no part of its remit, it is, at the same time, delusional and dismissive of a key element in its importance to British public life.

The BBC produces a wide range of statistics that record its performance in Wales in terms of spending, hours and genres. All indicate significant, and mostly disproportionate, cuts. The analysis of market failure is right and the remedy is wrong.

I say delusional because, since its inception, the BBC has provided content that the market could not provide. This role continues in some areas of news and current affairs, in its significance in the nations and regions, and in UK-centric programming across many genres.

The BBC’s contribution to filling the market gap has sometimes been half-hearted. The size and wealth of Northern Ireland, Scotland and Wales mean that they suffer permanent market failure in television production and broadcasting.

The public-good argument has been strengthened by devolution, as these countries build their new democracies within the UK. The BBC has not risen to the challenge.

In the case of my patch, Wales, the BBC has cut its spending and its commitment to providing what people want and what society needs.

The BBC produces a wide range of statistics that record its performance in Wales in terms of spending, hours and genres. All indicate significant, and mostly disproportionate, cuts. The analysis of market failure is right and the remedy is wrong.

In other cases, the BBC’s role has been to provide services before the market could. Whatever the later complaints by industry, the BBC’s early commitment to the iPlayer, online news services and education helped to create markets that others have benefited from.

Economists argue that subscription services help to create a more efficient market. Indeed, they do and that is what the BBC is. It is a subscription service made compulsory by the need of society to ensure that it provides the public goods that we all need but might, individually, not particularly want. The unique BBC remit blends what individuals want with what society needs.

By sticking to its slogan of “inform, educate and entertain” and no more, BBC managers and trustees are underselling our most important broadcaster.

The Government is calling for a review of the public purposes of the BBC. An honest appraisal on these lines would deliver a BBC that is stronger and that maintains its central role in British life. Gavyn Davies, all those years ago, had it about right.

Ron Jones is Executive Chair of Tinopolis Group, based in Llanelli, south-west Wales.

Photo by Tinopolis