Sunday, October 10, 2010

BBC TV Licensing - Does it make sense?

(This is blogpost about TV licensing system operating in UK; which requires all individuals who view TV content to pay £145 per annum; generated income goes to BBC to fund for its programs)

Whenever question of BBC TV licensing comes, UK population is divided into two major camps. One justifying existence of BBC, quality of its programs and justification for TV licensing and another camp talking of lack of choice, ever increasing belly of BBC budget and lack of value for money.

I think both are correct. BBC produced some of the finest programs and hence justifies budget spent on those programs; but on other hand if an organisation has no competition, does not need to please audience and has assured increase in budget they can always roll-out best quality. Lets face it, if I have £100K to spend I would buy top of range cars from Jaguar, Ferrari or Mercedez/BMW, but if I have just £10K to spend, I have to find most economical option from market. Its simple equation.

To justify its budget, BBC increases its scope (i.e. channels, radio stations etc), and then asks for more cash to fund this extra spend. That is really bizarre! If this was a commercial entity, it would have long back gone into bankruptcy with this strategy.

Most people are not against BBC, but its revenue model which hurts their pocket.
Over years politicians tried to fix the issue but without much success. They want a model which delivers value for money, please opponents and retain values on which BBC is based. The answer lies into BBC’s history itself. We dont need to reinvent wheel.....

‘BBC = Television’ was equation, hence anyone who owned TV paid TV license to BBC. BBC continued to rollout programs for all ages and appeal to general public.In short, it delivered content which was protecting “public interest”. After invent of other commercial broadcasters, BBC’s TV license model was justified on the basis of retaining impartiality. It is certainly free from influence of political parties, subscriber’s popular demands etc.

If we combine both principles above, we should have organisation which should produce programs which "deliver public interest” and “protect impartiality”. Most of news and journalism related programs would fall in this category. Similarly documentaries would also fall in this category. But most of entertainment programs do not meet thumb rule. Certainly commercial interest does not necessarily threaten impartiality of entertainment programs.

Harry Potter is not going to change his plot based on who is advertising or Tom Cruise is not going to change his strategy in Mission Impossible based on which channel the movie is being broadcasted. That means there is no need to display Hollywood movies on BBC using TV licensing fee.

If we stick to this combined rule, we can easily cut down substantial number of entertainment and sports related programs. This will retain values on which BBC is based and keep scope within its limit and hence TV licensing cost to individual tax payer.

There are certainly other programs which need more assessment such as children’s programs, BBC Proms etc, which need to be funded commercially but ensuring that they do not fall victim of commercial entities interest.

Some might argue that what is wrong with current BBC model? Biggest issue here is choice. When TV licensing cost to individual person keeps increasing, it leaves less funds to spend on their choice of programs.

Hopefully our politicians, BBC Trust and individuals will take pragmatic and out of box approach about BBC.

I have suggestions about BBCs revenue model/funding arrangements and overall reorganisation which I will set out in future blog (will post link here later..). Certainly be assured that revenue model I suggest will retain BBC values (“Deliver public interest” and “Protect impartiality”)

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