With just over one year left on the BBC’s Royal Charter, the UK Government is working out the terms of the public service broadcaster’s (PSB) next Charter during a particularly turbulent time for the BBC, which faces ongoing financial strain, and has recently moved to distribute content on YouTube in order to reach younger viewers.
The government launched its Charter Review back in December, publishing a Green Paper that outlined options for the future of the PSB, including potential reform of the licence fee, and placing a new obligation on the organisation to drive economic growth, build skills and support the creative economy across the UK.
On Friday, the Communications and Digital Committee wrote to Lisa Nandy MP, the Secretary of State for Digital, Culture, Media and Sport, setting out its view on the government’s proposals. Among the recommendations, the committee found that moves by the BBC to distribute content on YouTube comes with a trade-off between “reach and control”, and that the next Charter should support the PSB in both third-party distribution and strengthening BBC-owned services. The committee also argued that there were “no obvious benefits to giving the BBC a broad new public purpose focused on driving economic growth.”
The recommendations come ahead of the publication of the government’s White Paper, and are based on the committe’s own inquiry into the Charter Review, focusing on the proposals that concern the future of the UK’s public service media (PSM) system and wider creative economy.
New obligations amid financial strain
The committee noted the “significant financial pressure” facing the BBC, which announced 550 job cuts in June, as part of plans to save £500 million across the organisation over the next two years. The letter added that the BBC’s public funding has declined by £1.3 billion in the last decade, according to Director-General Matt Brittin.
Given this financial pressure, the Committee argued that any new or expanded responsibilities “must be matched by adequate funding”, and risks distracting the BBC from its core public service objectives.
“We did not seek to assess the merits of different funding models, but our evidence underlined that new Charter obligations will be credible only if they are accompanied by the resources needed to deliver them,” wrote Baroness Keeley, Chair of the Communications and Digital Committee. “The Government should set out a bold, confident and unapologetic approach to the BBC’s long-term financial sustainability in the forthcoming Charter Review White Paper. Any new or expanded responsibilities should be matched by adequate funding or supported by a clear acknowledgement of the trade-offs required elsewhere.”
Risks in third-party distribution
The letter further highlighted shifts in the domestic media market, with Sky’s acquisition of ITV’s media and entertainment business positioned as a play for scale in order to compete with global streaming services and YouTube. At the same time, YouTube has become part of ITV and Channel 4’s distribution strategies, while the BBC is to make content specifically for the Google-owned video service. The committee heard from a number of PSM leaders on the benefits and risks of these moves.
Martin Baker MBE, Chief Commercial Affairs Officer and MD, Paralympics at Channel 4, told the committee that third-party distribution comes with a trade-off between “reach and control”. While the strategy does put PSB content in front of audiences the broadcaster might otherwise miss, it gives them less agency over how their content is presented and discovered.
Stephen Lotinga, Group Director of Corporate Affairs at Sky, also noted that these distribution methods reduce access to audience data, while Magnus Brooke, Group Director of Strategy, Policy and Regulation at ITV, warned that the share of advertising revenue retained by third-party platforms could pose a “medium or long-term threat” to commercial PSBs.
More broadly, Professor Catherine Johnson, Professor of Media and Communication at the University of Leeds, warned that “the values of public service media and public service remits are not aligned” with those of Big Tech-owned social platforms. This could put pressure on broadcasters to adapt editorial choices to suit platform incentives, according to Johnson.
In light of these risks, the committee expressed its support for strengthening iPlayer as a destination in its own right, and welcomed a proposal from the BBC to open the BVOD service to trusted media partners, including Channel 4. But the committee said the partnership must respect the different brands and funding models of participating organisations, while maintaining plurality and competition.
While Channel 4’s Martin Baker described an expanded iPlayer as “a very interesting idea”, not everyone felt so positively about the discussions. ITV’s Magnus Brooke called the proposal “an invitation to become a tenant of the BBC on iPlayer”, and warned that other PSB video services could “wither as a result.”
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