© The Author 2006. Published by Oxford University Press on behalf of Screen. All rights reserved
Ofcom's first year and neoliberalism's blind spot: attacking the culture of production
I know what the story is. I've read the story. But what is it trying to say? What is it about? Why are we doing this story vs. this story, vs. even another story? Why? What are these characters really saying to an audience? What are we trying to have them think or feel about a story ... ? It's the most terrifying question in this town.1
Thus spoke an anonymous American television executive, describing the industry in Los Angeles or New York in the mid 1980s. And his ‘terrifying question’ – to do with both the content and the purposes of storytelling and of television – has a resonance in Britain today as the marketization of the medium grows apace, as competition intensifies in a multi-channel universe, as ratings drop, profits dip, audiences fragment and costs are cut.
Keen to further this process of competition in the UK, to encourage producers to become more export-aware and to facilitate the early migration of television services from analogue to digital, the British Government has recently completed an ambitious set of legislative arrangements, embodied in the 2003 Communications Act. The first and only child of this Act is the new regulatory agency: the Office of Communications, or ‘Ofcom’, born on 29 December 2003.
This essay suggests that Ofcom, like those who routinely avoid the ‘terrifying question’ noted in the citation above, appears to lack the skills and the will to address some of the key issues of content and of purpose in British broadcasting today. Thus, while this new body is distinguished in its ability to assemble and publish a wide range of statistics about the industry, it may plausibly be accused of knowing ‘the cost of everything and the value of nothing’. Its key operating paradigms appear to rule out an engagement with the splendid and slippery issues of quality and of value and to be incapable of dealing with questions of cultural significance. The standard cultural studies proposition – that cultural context in large part determines the production and circulation of meanings – is banished from its lunar landscape.
This distinctive myopia makes it ill-equipped at present to identify and foster the culture of production and the types of investment that are required to meet some of the key objectives outlined in the Communications Act. Specifically, the Act allocates to Ofcom a duty to oversee the provision of television services which maintain ‘high general standards’ in respect of ‘the contents of the programmes’, ‘the quality of the programme making’ and the ‘professional skill and editorial integrity applied in the making of the programmes’.2
It will be the contention of this article that, while Ofcom has sought to establish itself as the cutting edge public agency for communications in the twenty-first century, it is the BBC that has made a more profound and original contribution to the analysis of the conditions required for a flourishing audiovisual industry within the UK. There are therefore, three ‘O's in this tale: Ofcom itself, and Oliver and Ohlbaum, the authors of a report entitled UK Television Content in the Digital Age, commissioned by the BBC and published in October 2003 in the relatively short ‘window’ between the passing of the Communications Act in July and the establishment of Ofcom in December.3 The Oliver and Ohlbaum report has received relatively little public attention, but its findings make it a key document for any mature understanding of the shifting cross-currents that make up the world of contemporary television, and that define the choices available to audiences. This is so, despite the obvious fact that it is a document rooted in the strategy and tactics of institutional self-preservation. Its findings include a detailed account of how and where money is invested in making programmes in Britain and where, by contrast, there is an extensive ‘recycling’ of old programmes or importation of cheaper ones. The report is informed, this essay will suggest, by a ‘makers' mentality’, that is one that focuses on those conditions that make cultural production and the ‘making of meaning’ possible. It is this stance or orientation that is (so far) rarely to be found within documentation produced by Ofcom.
The new regulatory body has taken over the duties of five predecessor organizations and deals with telecommunications, spectrum allocation, broadcasting standards and the regulation of commercial radio and television.4 Ofcom also has limited powers in relationship to the BBC. It is a powerful body, employing around 730 staff, housed in striking new accommodation overlooking the River Thames and covering a wide waterfront of regulatory topics from mobile phones and broadband to cable and satellite television.5 This essay deals only with Ofcom's broadcasting responsibilities.
Unlike its predecessors on the television side of the family (the Independent Television Commission, the Independent Broadcasting Authority and the original Independent Television Authority), Ofcom has appointed few senior staff with experience of making or regulating television programmes. Its leading figures – drawn largely from the worlds of advertising, cable, consultancy and politics – appear to have little interest in the qualitative dimensions of an audiovisual culture. Its ethos is predominantly neoliberal, and its language and organizing concepts are suitable for an analysis of markets and of competition, but not of social significance and cultural value. In this regard the conceptual world evoked by the BBC's policy document Building Public Value seems foreign to it.6 Rather, Ofcom may be seen to share the preoccupations or prejudices of the European Commission in routinely denying to television the status of culture. As one distinguished Polish commentator has noted, the Commission habitually refuses to ‘take a culturalist view’, whereas the European Parliament has on a number of occasions sought to emphasize the cultural role and significance of broadcasting.7
In addition, Ofcom's emphasis on technological convergence (the digitization of communications that facilitates the merging of music and the audiovisual, of telephone services, computing and the internet) has led to a focus on what are seen as the two major issues of ‘carriage’ and ‘content’. A policy for ‘carriage’ is concerned with ensuring competition in the provision of communicative infrastructure (more than one telephone or broadband provider, for example), while ‘content’ refers mainly – in this context – to radio and television services, since Ofcom has no powers in respect of the content of private telephone traffic or of the internet.
Given this institutional dualism of ‘carriage’ and ‘content’, there appears to be little sense that content has a qualitative and not merely quantitative dimension. Hence the range and excellence of statistical data to be found in Ofcom's many publications is not matched by reflection upon the social significance and cultural value of radio and television programmes. The emphasis on measuring at the expense of evaluating suggests a kind of institutional autism characterized by a sharp focus on facts and an inability to see the bigger picture or to sense the shifting tones and textures of a social and cultural environment.
In its defence, Ofcom will argue that it was given no brief by government to take a close interest in the form and content of programmes. Yet, as we have seen, there are provisions in the Communications Act which require some engagement with issues of quality and with the activity of production. Clause 264 of the Act refers to ‘the quality of the programme making’ and to the ‘professional skill and integrity’ applied in making the programmes.8 The same clause requires public service broadcasting to ensure that ‘cultural activity in the United Kingdom, and its diversity, are reflected, supported and stimulated’ within the programmes.9 These are quite ambitious requirements and they are rooted in a long tradition of British law and regulation that has assumed since the 1950s that the regulatory body would take a non-partisan interest in cultural matters. In this regard Ofcom can be seen as the product of an uneasy mix of earlier traditions along with newer commitments to neoliberal and deregulatory principles and values.
It will be appropriate now to trace the take-up of these neoliberal principles as they developed during the 1980s and 1990s under the leadership of Margaret Thatcher in Britain, and under both Republican and Democrat Presidents in the USA.
In broadcasting, Thatcher's major innovations can be seen in the Broadcasting Act of 1990. There was widespread subsequent rejection of her policy of allocating commercial television licences to the highest bidder, but this law can be seen to exert a continuing influence on public policy in at least three ways. Firstly it acknowledged that the BBC was something of a special case by leaving it largely outwith the provisions of the law, allowing the Corporation to be retained as the ‘cornerstone’ of British broadcasting (a policy attributable largely to non- or anti-Thatcherite forces within the Conservative government). Secondly, the 1990 law evinced a determination to facilitate increased competition in the field of broadcasting, and gave considerable support to the interests of News International in its then risky and now highly successful move into satellite television. Thirdly it sought to ensure that the regulation of commercial broadcasting would in future be characterized by a ‘light touch’, although it retained a long-standing historical commitment to regulate for services of high quality, for the provision of news and current affairs and for the retention of the principle of impartiality in factual programmes dealing with major current controversies.
However, perhaps as important as the specific provisions of this 1990 law was the changed climate of political principles and values that it reflected and embodied. Increasingly, within neoliberal circles, broadcasting in Britain came to be seen as a tradable service or commodity, best submitted to the market disciplines applying to all other privately traded services or commodities. The arguments and evidence for this new paradigm were effectively marshalled in the Peacock Report of 1986.10 While British conservative opinion was effectively split over the issue of the BBC's status as a ‘special case’, the description and analysis of broadcasting in the UK came increasingly to reflect the tenor of long-established debates about commercial broadcasting in the USA.
With an eye on their American cousins, though some seven years behind them, the British Parliament, under a New Labour government, enacted its new legislation on broadcasting and telecommunications in July 2003. In the USA the Telecommunications Act of 1996 had addressed some of the same issues, moved by the prospect of an increasing overlap between telecommunications, computing and broadcasting and seeking to reposition the state as promoter of the big ‘D’: the world of digital communication that promised increased choice for audiences and threatened slow death for network broadcasters. In 1997 Reed Hundt, then Chair of a Democrat-appointed Federal Communications Commission (FCC), noted that Congress had stated its preference for a national policy framework that was ‘pro-competitive and deregulatory’, signalling a ‘paradigm shift from regulated monopoly to deregulated competition’.11
In this respect the Clinton White House was carrying the torch lit during the Reagan Presidency with a philosophy that had been outlined in 1982 by Mark Fowler, chair of a Republican-controlled FCC: ‘the perception of broadcasters as community trustees should be replaced by a view of broadcasters as marketplace participants’.12 Some commentators have seen a similar philosophy becoming dominant within the EU, and Shalini Venturelli notes this tendency in her detailed study of the process whereby private property interests have replaced or obscured public interest in the field of communications:
The technological-necessity argument for releasing private-communications proprietors from public obligation now forms the centrepiece of most proposals for the information society.13By 1996, in a culture where public service values already had little purchase in US commercial broadcasting, the concept of ‘public interest’ was, as Pat Aufderheide remarks, ‘widely reconstrued to mean an open market environment that could be maintained with a minimum of government interference’.14 It is perhaps not surprising to find that these ideas and principles – gaining momentum in neoliberal circles over the previous twenty years – were to be influential with the New Labour government in Britain, preparing communications legislation at the dawn of a new millennium. Ofcom's difficulties in engaging with issues of culture and content can also be related to the legacy of Mark Fowler, reluctant regulator, whose views were vividly reported by the Washington Post in 1983. Television was, Fowler proposed, ‘just another appliance ... a toaster with pictures’.15 As we shall see, there are elements in the recent UK legislation which mark and to some extent sustain a radically different view of the role of television. Nonetheless, the British law of 2003 pays its respects to this robust American neoliberalism.
If Ofcom's leadership and actions can be seen to carry forward the implementation of neoliberal principles in broadcasting, it is also – like the statute that created it – torn between civic and market principles. One of these civic principles, the one most fought over as the Communications Bill moved through both Houses of Parliament, concerned the recognition of citizen as well as of consumer interests in the field of communications. It was largely as a result of a cross-party alliance between the opposition Conservatives and Liberal Democrats, and as a result of sustained political battles in the House of Lords, that a striking new responsibility was given to Ofcom and listed as one of the two ‘principal duties’ of the new body: ‘to further the interests of citizens in relation to communications matters’.16
In subsequent documentation Ofcom adopted a phrase which attempted to condense the two duties into one term, that of the ‘citizen-consumer’. This term – to be found nowhere in the Act – attracted much criticism on the grounds that, both linguistically and philosophically, it subordinated the first term to the primacy of the second, appearing to reinforce the dominance of the theory of the ‘sovereign consumer’ and of the relative and adjectival insignificance of the ‘citizen’. It is unclear at the time of writing whether or not Ofcom will continue to use the term.17
What aspects of the Communications Act and of the powers granted to Ofcom might be seen to promote the interests of citizens in respect of broadcasting? And what elements of the new law see broadcasters as at least to some extent ‘community trustees’ as well as ‘marketplace participants’ (to adjust the terms proposed by Mark Fowler and cited earlier in this article)?18 There are three sets of topics outlined in the Act that are relevant in this regard: firstly, the requirements for news and current affairs, secondly the support for the principles of impartiality and of editorial integrity and, thirdly, the issue of pluralism and of diversity in programme content. This last topic also includes some provisions that recognize the significance of national and regional differences within the UK.
The public service remit defined by the Act (and applied only to the five terrestrial channels) requires, among other things, services that are:
appropriate for facilitating civic understanding and fair and well-informed debate on news and current affairs, a comprehensive and authoritative coverage of news and current affairs in, and in the different parts of, the United Kingdom and from around the world.19Well-resourced news and current affairs programmes on radio and television may be seen to provide part of the bedrock for informed citizenship and therefore for democracy itself. The Act requires that News and Current Affairs programmes of ‘high quality’ must be shown at intervals throughout the day, including in peak time.20 In addition, the ‘special impartiality requirements’ apply to programmes transmitted by all broadcasters licensed in the UK – not only to the ‘old gang’ of the five terrestrials. This clause of the Act makes it clear that, unlike newspaper proprietors, the owners of television stations may not use them to advance their own views and opinions – although this does not limit the representation of a wide spectrum of views and opinions expressed by others. It should also be noted that the impartiality provision relates not to all topics but only to ‘matters of political or industrial controversy’ and ‘matters relating to current public policy’.21 The idea that television should provide, as far as possible, non-partisan information is further reinforced by the prohibition on political advertising, although there is provision for political party campaigns.22 Ofcom's Standards Code is also enjoined to promote (in the context of advertising, sponsorship and any other pressures):
the desirability of maintaining the independence of editorial control over programme content.23With regard to pluralism and diversity there are a variety of elements in the law that try to give substance to these essentially cultural principles. Ofcom must recognize
the different interests of persons in the different parts of the United Kingdom, of the different ethnic communities within the United Kingdom and of persons living in rural and in urban areas.24As already indicated, a variety of programme genres – drama, comedy, music, feature films and visual and performing arts programmes – should ensure that ‘cultural activity in the United Kingdom, and its diversity, are reflected, supported and stimulated’. There should also be a sufficient range of educational programmes and of programmes dealing with: ‘science, religion and other beliefs, social issues, matters of international significance or interest and matters of specialist interest’, and there is some recognition that children (perhaps remembered here as non-consumers) should be served by ‘a suitable quantity and range of high quality and original programmes’.25
The Act also recognizes the differences between the various nations and regions that make up the country, and seeks to make provision for correspondingly distinctive cultural needs. Thus there are special arrangements for Welsh language broadcasting, provided by Sianel Pedwar Cymru (the Welsh Fourth Channel) and funded both by advertising and by special parliamentary grant, and there is provision for the public funding of a Gaelic Media Service in Scotland.26 Moreover, the cultural and economic benefits of distributing investment in programme-making throughout the UK, and not concentrating it predominantly within London, are noted. Consequently, Channels 3 (ITV), 4 and 5 are all required to ensure that a suitable proportion of programmes designed for network transmission are made by centres or companies based ‘outside the M25 area’.27
The needs of the English regions have been noted in British legislation since the 1950s, in particular as a consequence of the regional structure and production bases of the ITV companies.28 Historically two categories of regional programmes have been supported within commercial television; firstly, regional news and, secondly, other programmes ‘of particular interest to persons living within the area for which the service is provided’.29 There is also, in the 2003 legislation, a requirement that the majority of such programmes, intended for regional and not for national network viewing, should be made within the region where they are transmitted.
However, as has been widely noted in the general and the trade press, ITV's commitment to non-news regional programming has diminished and there have been large numbers of job losses within the English regional centres. Ofcom has endorsed these changes in the belief that ITV can no longer afford the luxury of such an extended regional service, although regional news requirements remain.30 In the light of government and ministerial support for the principle of foreign investment and ownership, it may be that Ofcom – in acting to reduce ITV's costs and in tolerating a reduced regional service – is acting to prepare the way for this foreign intervention.
Finally, in respect of pluralism and diversity, considered as a contributory element within ‘civic’ broadcasting, Channel 4 retains some of the key elements of its remit as defined in earlier legislation. This includes an obligation to demonstrate ‘innovation, experiment and creativity in the form and content of programmes’ and a requirement to appeal to ‘the tastes and interests of a culturally diverse society’.31 No longer the lightning conductor of political dissent, as in its first decade of existence, Channel 4 has now joined the competition club and fears loss of viewers and of advertising revenue. Nonetheless, the legislation (and continuing Ofcom support) sets Channel 4 apart from the privately owned sector of broadcasting and thus from shareholder and profitability pressures.
These are, in summary, some of the key public service provisions and consequences of the 2003 Act and, taken together, they constitute Ofcom's prospectus or mission. However, there is a touch of unreality about this prospectus, for Ofcom is enjoined to act not just as a light touch regulator but as a retrospective or ‘after the fact’ regulator. Companies are required to publish their programme proposals for the year ahead and then to monitor and comment upon their own work. This new principle of self-regulation makes Ofcom something of a distant observer, despite its continuing power to fine companies that contravene their licence conditions.
It is too soon to make an informed judgement about the extent to which this reluctant regulator will be able to ‘maintain and strengthen’ public service broadcasting or ensure the provision of a ‘wide range of television and radio services ... of high quality’.32 However a number of distinguished industry executives have criticized aspects of the Labour government's emphasis upon competition, considered as a tool for ensuring excellence. At a Royal Television Society conference in 2002, as the Communications Bill stood poised on the brink of Parliamentary scrutiny, the then-Chair of the BBC Governors, Sir Christopher Bland, expressed concern about the possible consequences of a government competition policy designed to enable US ownership of British commercial television. Appointed to his post by a Conservative government, Bland noted that ‘ownership and investment are not necessarily linked’. His Director General, Greg Dyke, elaborated on the point:
In a mature industry like British commercial broadcasting US companies won't buy to invest ... They will buy if they can increase their own profitability by reducing investment in UK programming and selling more of their US programmes into this market.33As we shall see in a later section of this article, the Oliver and Ohlbaum Report addresses the issue of investment in programme-making in some detail, but industry concerns in 2001–2 were not limited to the BBC. In a speech delivered in 2001, the then Director of ITV, David Liddiment, expressed his concerns about changes in the industry, criticizing a new emphasis on quantitative measures, and suggesting that competition in television was delivering uniformity not innovation:
Numbers now seem to be the only universal measure for excellence we have: how many, how much, how often. We are losing sight of the innate value of programmes in our fixation on the success that can be measured by profit.... The relentless quest to find out what viewers want and then to give it to them has made for sameness.34A year later, John Willis – an executive with wide experience of both ITV and Channel 4 and driven into the temporary exile of working for the US public service broadcaster WGBH – wrote critically of US television output seen at close quarters. He lambasted the approach of the British government and its proposed new legislation in these terms: ‘The government's vandalism is commercial as well as cultural, risking jobs and export revenue as well as range and quality of production’.35 Despite the creative risks taken, exceptionally, by the US Home Box Office (HBO) and the high peaks of achievement represented by programmes like The Sopranos or West Wing, Willis found a system whose programmes were, in general, repetitive, ‘old fashioned and conventional’, and a society where ‘disenfranchised citizens’ saw commercial television as ‘off their cultural radar, an irrelevance’. This kind of television, characterized more by choice of channels than by choice of content, is seen to have almost no civic significance and Willis's most devastating summary is cast in the words of his predecessor at WGBH, Peter McGhee: ‘Most television enters our people and our body politic not as food for thought, but as an embalming fluid’.36
Prior to the passing of the 2003 Act these were the reservations expressed in Britain about the consequences of earlier Conservative legislation and the likely impact of the new deregulatory measures proposed by New Labour. We turn now to consider the eighteen-month period following the Act, the period during which Ofcom has been ‘making its mark’ as the body charged with fulfilling the Act's intentions, and the BBC has been quietly suggesting some alternative routes to the attainment of excellence on television.
How are the interests of citizens to be met in broadcasting, how is diversity to be delivered and pluralism sustained? How are programmes of ‘high quality’ to be made and transmitted? Ofcom's general answer, offered throughout the three phases of its 2004 review of public service television, is ‘through enhanced competition’. The title of its final report, Competition for quality, makes this clear.37 Yet the multi-channel universe, growing exponentially since 1990 and offering audiences a greater choice of channels, has raised the cost of television services and increased the amount of re-cycled and imported material. A number of commentators have also suggested that the quality of television programmes has deteriorated since 1990.38 In respect of rising costs there is a problem for the theory of competition since, in general, it is argued that economic competition is a mechanism for delivering the best to the most, at the cheapest prices. As various commentators have noted over the years, the theory cannot with ease be applied in the realm of audiovisual production.39
In its Phase 3 report Ofcom offers a fairly consensual and traditional definition of public service broadcasting.40 However, two key elements are missing: the principle of universality of service on the one hand and the role of entertainment on the other. In both respects Ofcom may be seen to be preparing a defence for those commercial interests in broadcasting threatened by a BBC that is too popular. ‘Entertainment’ was, of course, the third element in the Reithian trinity of public service objectives: ‘to inform, to educate and to entertain’.
The issue of increased costs for audiences in multi-channel (though not in Freeview) homes has been little acknowledged or reflected upon. As Ofcom's own figures demonstrate, the costs of viewing the five terrestrial channels are significantly lower than the costs of viewing the new channels. In 2002 the programmes to which audiences devoted, on average, 77% of their viewing time attracted 57% or just over half of total costs (for the five terrestrial channels), while the programmes which won a share of 23% of the audience attracted 43% of total costs (for the ‘other’, non-terrestrial channels);41 and while multi-channel viewers may be aware of the monthly cost to them of subscription services on the one hand and of the BBC licence fee on the other, they may not be aware of the highly differentiated overall cost profile, or of the ‘value for money’ offered by terrestrial broadcasting; an economic and cultural value not fully acknowledged by Ofcom.
In this context cultural value (and ‘content’) may be linked to economic value in the sense that resources are a precondition for content creation in Britain as elsewhere in the world. Wherever content is produced and programmes made (more or less creatively), people are employed, economic activity is enhanced and there is a potential for the content of programmes to address local concerns. Where programmes are imported and exported there is, of course, potential for cultural exchange as long as this remains a two-way street and as long as each culture and country retains a production capacity.42
What the Oliver and Ohlbaum report notes is that the new, non-terrestrial channels, despite their considerable collective wealth, devote a very small proportion of their resources to making new programmes and therefore to giving British-based producers an opportunity to bring new ideas and insights to local audiences. Ofcom implicitly recognizes the value of investment in indigenous content creation by pointing out that the top ten programmes viewed in multi-channel homes in the third quarter of 2003 were all drawn from the five terrestrial channels, and all had British subject matter.43 Five of these programmes were transmitted by the BBC, four by ITV and one by Channel 4, and their success in homes paying the costs of access to the multi-channel universe seems to indicate the continuing popularity of the ‘old’ providers in the face of competition from new services.
Given that one of Ofcom's main duties, from the point-of-view of government, is to encourage the migration of television households from analogue to digital reception, it is perhaps unsurprising to find an emphasis in Ofcom's statistics on viewing habits within multi-channel, digital homes; these are seen to be the forward-looking trend-setters. However, as also seems obvious to all but the technologically obsessed, audiences wish to watch what they consider to be good programmes rather than digital programmes per se. Any balanced assessment of the cultural significance of the multi-channel revolution in the UK therefore requires some awareness of the relative popularity and use of the various old and new channels. The percentage share figures for the five terrestrial channels, as well as for the top five most popular non-terrestrial channels (‘other’ channels) are therefore given in Tables 1 and 2.
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While it is important to recognize that the share of viewing that goes to the new commercial channels is still rising, it also seems to be the case that the majority of the audience continue to recognize the value of the older free-to-air services, as well as of the new, and free, BBC digital services. This is substantiated by the accelerated take-up of the Freeview service (providing access for analogue homes to the BBC's and other's free-to-air, non-subscription digital services). Regarding the relative popularity of new and old, an inspection of the figures below indicates that the most watched of the non-terrestrial channels (Sky One) has less than half of the audience for the least watched of the terrestrials (Channel 5). It may also be worth noting that it is the terrestrials that are defined as ‘public service broadcasting’ by the Communications Act, and that it is these channels, taken together, that retain a majority share of the audience.
In considering these audience share figures it may also be helpful to be aware of the overall breakdown of television revenues in Britain. Ofcom's figures indicate that total revenue in 2002 – for all channels – was around £7.6 billion. These figures are made up of Net Advertising Revenue at around £3.15 billion; subscription income at around £2.00 billion; the television component of the licence fee at around £1.80 billion; and other income, including sponsorship, at around £0.65 billion.44
By 2004 the benchmark figure of fifty per cent of UK households with access to digital television had been passed, with around forty-five per cent having access to the internet.45 However, as the audience share figures given above indicate, the ‘old’ terrestrial channels continue to attract the majority of viewing. As already suggested, the Oliver and Ohlbaum Report gives some indication of why this might be the case. There are three important factors noted in the Report: firstly, the transmission costs of the new channels are disproportionately high; secondly, the new channels spend relatively small amounts on new programming (although significant amounts are spent on acquiring sports and film rights), and thirdly, a larger proportion of the BBC licence fee income finds its way into programme production compared with the proportions of television advertising revenue or subscription that are spent on production.
Regarding digital transmission costs and the use of cable and satellite platforms, the Report points out that much of the value of advertising and subscription income, used to support the new channels, is swallowed up in the costs of transmission or delivery. As a result of this, less money – proportionately – is available to invest in making new programmes.46 Regarding the general cost-effectiveness and beneficial effects of licence fee money, the Report argues firstly that the level of BBC investment in original programmes requires competitors to keep pace with such investment and secondly that any reduction in licence fee payments and consequent increase in advertising income would result in proportionately less investment in original programming (as opposed to repeats or imports).
There are some complicated calculations and hypotheses behind these assertions, but they seem generally to rest on an analysis that, whereas some seventy per cent of BBC income goes into making new television programmes, only fifty per cent of commercial income on ITV, Channel 4 and Channel 5 (combined) finds its way into original production. The proportion for pay TV channels is much less than this, as we shall see. The rather complicated arguments in the Report can perhaps be better represented by the more familiar view that, in the ecology of British broadcasting, audience expectations are raised, and programming standards maintained, because the BBC is such a significant investor in the making of new (not repeated or imported) programmes.47
In their introduction the authors point out that the amounts invested in television in Britain are very high, considered in global terms. Significantly more is spent on television, on a per capita basis, than for example in France or in Germany, and the recent government Green Paper on the future of the BBC suggests that Britain invests a higher proportion of its Gross Domestic Product in television than any other country in the world (including the USA, although the size of the USA means that its programme market is vastly larger than that in the UK).48 In part as a result of this, some seventy-five per cent of the terrestrial television programmes shown in Britain are also made in Britain. Oliver and Ohlbaum compare this with a British share of the domestic cinema market of some twenty per cent (the other eighty per cent being devoted to imported American films).49 The figures showing proportions of indigenous and imported programming on the five terrestrial channels are given in Table 3.
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However, it is the figures on programme spend by the British pay TV channels which are perhaps of most interest and which may explain the continuing popularity of the terrestrial ‘big spenders’. These figures should be treated with some caution as they derive from 2001, and it is clear – at least from intentions announced in the trade press – that the bigger pay TV channels intend to increase their proportion of spend on original and more prestigious programming.
Oliver and Ohlbaum calculate that the total revenue for all Britain's pay TV channels in 2001 was around £3.4 billion (with £2.9 billion coming from subscriptions and £0.5 billion from advertising). Of this total of £3.4 billion they calculate that nearly half of this amount went on delivery costs (some £1.6 billion) and some £1 billion on film and sports rights. This left around £0.8 billion for all other costs including administration. Of this remaining amount the Report calculates that some £400 million was spent on non-sport and non-film programming. Just under half of this amount – around £150 million – was spent on UK programming. One-third of this (or £50 million) was spent on repeats and this left around £100 million to spend on commissioning new UK programmes. If Oliver and Ohlbaum are approximately right, then the new, pay TV channels – taken together – are spending just under three per cent of their income on commissioning new UK programmes (in addition to all sports and film programming).50
This, of course, is one very particular account of significant trends in the ever-expanding audiovisual sphere. It is not an account that is foregrounded in Ofcom's telling of the tale of contemporary broadcasting, and it is easy to see how the Oliver and Ohlbaum version is motivated by BBC self-interest, but a disinterested observer might also conclude that the UK citizens and consumers making use of these services might also find this account illuminating, just as some have found Freeview a useful alternative to pay TV.
It is impossible to do justice to a large organization like Ofcom in one short article. The range and detail of the empirical data that it generates is impressive and puts most comparable academic research in the shade. It is a very big beast in the jungle with considerable powers for good or ill, but by February 2005 some distinguishing characteristics have emerged. Ofcom must inevitably prioritize government commands to make the UK ‘home to the most dynamic and competitive communications and media market in the world’,51 and it is required to do everything in its power to facilitate the creation of ‘digital Britain’. In the field of television this has effectively meant supporting the roll-out of digital services that (with the exception of the BBC's new digital channels) are predominantly subscription-based. This support, developed within the framework of the dominant market rhetoric of competition, has brought it uncomfortably close to being the cheerleader for these new commercial services, and it is possible to see its early regulatory actions in allowing ITV to reduce the range and quality of its regional and children's services as an action that puts the interests of the television business ahead of the interests of television users.
It is arguably the case that the twin factors of the drive to digital and a fascination with market transformation have had the effect of flicking off a key switch in the Ofcom institutional brain. This off-switch is currently set against four key issues: the communication requirements of citizenship, the cultural quality, value and impact of television programmes, the support measures required for creative, critical and innovative programme-making and the ‘value for money’ represented not just by the BBC but also by the other ‘free to air’ broadcasters.
In assessing future performance the biggest ‘faultline’ to watch is probably Ofcom's unfolding relationship with the BBC. For these two organizations there is a continuing sense in which ‘this town ain't big enough for both of us’ and some critics and commercial competitors of the BBC have proposed that the Corporation be brought under the regulatory control of Ofcom. This proposal, although formally rejected by the regulator, nonetheless provides the ‘deep story’ behind Ofcom's Phase 3 report on public service television, published in February 2005. The February report remained very quiet about the contribution made by the BBC-supported ‘Freeview’ service in enabling more households to creep into the digital world without significant additional payment and bypassing the subscription route to change, and Ofcom confirmed its proposal that there should be a new competitor to the BBC: the ‘Public Service Publisher’.52 However, in also proposing that this new institution might be funded by the re-routing of some portion of the BBC's licence fee it suggests, in my view, that the BBC's right hand might work better if its left foot were cut off, and the proposal appears to endorse the views of those critics and commercial competitors, including News International, who have been arguing since the mid-1980s that the BBC should be financially diminished and politically contained. Of course this is not the publicly stated rationale, and the case not unreasonably advanced by Ofcom is that audiences will be better served by the provision of a new public service competitor to the BBC, but there is, as yet, no legal framework in place for the creation of this new body.
In the light of the findings of the Hutton Report, the general fall-out over coverage of the war in Iraq, and the expression of the Prime Minister's severe displeasure with the BBC, the surprise of 2005 is perhaps the government's Green Paper on the renewal of the BBC's Royal Charter.53 This makes it clear that – whatever manoeuvrings have been taking place behind closed doors – the BBC will retain its institutional independence, possibly being established for the first time as an independent Trust, and it will retain the full value of its licence fee, at least for the next few years.54 Perhaps Ofcom will tolerate this Trust; perhaps it will reinvigorate its own Content Board in addressing citizenship issues and concerns. We shall see.
What is certain is that, in the ethos generated in the new Faulty Towers on the south bank of the Thames, there is an inability or unwillingness to see that it is the lauded and arguably most competitive television that invests the least in original production. This is one of neoliberalism's blind spots and, in the field of culture, the policies that flow from this will inevitably have damaging consequences.
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I would like to thank the Arts and Humanities Research Council for their support for the AHRB Centre for British Film and Television Studies. Much of the research for this article was undertaken within the ‘Public Policy and National Identity’ strand of the Centre's work (www.bftv.ac.uk). Some of the findings of the paper were presented at the annual conference of the Media, Communications and Cultural Studies Association (MeCCSA) held at the University of Lincoln, January 2005.
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Professor of Broadcasting Policy at the University of Lincoln, and Principal Associate Director of the AHRB Centre for British Film and Television Studies. Her recent work is on broadcasting regulation, the history of Channel 4 and British film policy
1 These are the words of an anonymous American television executive (Entertainment Division) interviewed by Jay Blumler, ‘Television in the United States: funding sources and programming consequences’, in Jay Blumler and T.J. Nossiter (eds), Broadcasting Finance in Transition. A Comparative Handbook (New York, NY and Oxford: Oxford University Press, 1991), p. 73. 
2 Houses of Parliament, Communications Act, 2003 (Norwich: The Stationery Office, 2003), Clause 264, (4), (d).
3 BBC, UK Television Content in the Digital Age. A Report by Oliver and Ohlbaum Associates Limited (London: BBC, 2003).
4 Ofcom's five immediate predecessor institutions were: the Office of Telecommunications (Oftel), the Radio Communications Agency, the Radio Authority, the Broadcasting Standards Commission and the Independent Television Commission (ITC).
5 Details of staff numbers in March 2004 are given in Ofcom's Annual Report 2003–04 (London: Ofcom, 2004), p. 98.
6 BBC, Building Public Value, Reviewing the BBC for a Digital World (London: BBC, 2004).
7 Karol Jakubovicz, ‘A square peg in a round hole: the EU's policy on public service broadcasting’, in Ib Bondebjerg and Peter Golding (eds), European Culture and the Media (Bristol: Intellect Books, 2004), pp. 277–301, especially p. 295.
9 Ibid., Clause 264, (6), (b).
10 The Peacock Committee, Report of the Committee on Financing the BBC, 1986, Cmnd 9824 (London: HMSO, 1986).
11 Patricia Aufderheide, Communications Policy and the Public Interest. The Telecommunications Act of 1996 (New York, NY and London: the Guilford Press, 1999), pp. 284 and 291.
12 Mark Fowler and Daniel Brenner, cited in Aufderheide, Communications Policy and the Public Interest, p. 28.
13 Shalini Venturelli, Liberalizing the European Media. Politics, Regulation and the Public Sphere (Oxford: Clarendon Press, 1998), p. 153.
14 Aufderheide, Communications Policy and the Public Interest, p. 26.
15 Fowler, cited in C. Edwin Baker, Media, Markets and Democracy (Cambridge and New York, NY: Cambridge University Press, 2002), p. 3.
16 Communications Act 2003, Clause 3, (1), (a).
17 Ofcom's final report on Phase 3 of its review of public service broadcasting appears not to use the term ‘citizen-consumer’: Ofcom Review of Public Service Television Broadcasting. Phase 3 – Competition for Quality (London: Ofcom, February 2005).
18 Some of these questions are explored in more depth in Carole Tongue and Sylvia Harvey, Citizenship, Culture and Public Service Broadcasting, a submission to Ofcom's Review of Public Service Television Broadcasting, June, 2004. Available at http://www.ofcom.org.uk/consult/condocs/psb/responses/q_z/ccpsb.pdf (accessed on 23 March 2005).
19 Communications Act 2003, Clause 264, (6), (c).
20 Ibid., Clause 279, (1), (b) and Clause 279, (3).
22 Ibid., Clause, 321, (2) and (7).
23 Ibid., Clause 319, (4), (f).
25 Ibid., Clause 264, (6), (b), (e), (f) and (h).
26 Ibid., Clauses 199–207 and 208–210.
27 Ibid., Clauses 286 and 288.
28 For other contributions to the debate about regional broadcasting see Paddy Scannell and David Cardiff, A Social History of British Broadcasting. Volume 1, 1922–1939. Serving the Nation (Oxford: Basil Blackwell, 1991) and Sylvia Harvey and Kevin Robins (eds), The Regions, the Nations and the BBC (London: British Film Institute, 1993).
29 Communications Act 2003, Clause 287, (1), (a). For further discussion of Channel 4 see Sylvia Harvey, ‘Channel 4 and the redefining of public service broadcasting’, in Michele Hilmes (ed.), The Television History Book (London: British Film Institute, 2003), pp. 50–4.
30 Ofcom Review of Public Service Television Broadcasting. Phase 3 – Competition For Quality (London: Ofcom, 2005), pp. 52–3 and 101.
31 Communications Act 2003, Clause 265, (3).
32 Ibid., Clause 264, (3) and Clause 3, (2)(c).
33 Cited in Steve Clarke, ‘Big guns join battle against US ownership’, Television, Journal of the Royal Television Society, October 2002, pp. 20–21.
34 David Liddiment, McTaggart Speech at the Edinburgh International Television Festival, August 2001, cited in Michael Darlow, Independents Struggle. The Programme Makers who Took on the TV Establishment (London: Quartet Books, 2004), p. 582.
35 John Willis, ‘The Sopranos won't save us’, Guardian, 10 June 2002; cited in Darlow, Independents Struggle, p. 587.
36 John Willis, ‘The real cost of US ownership’, Television, Journal of the Royal Television Society, November 2002, p. 9.
37 Ofcom Review of Public Service Television Broadcasting. Phase 3 – Competition for quality.
38 See Steven Barnett and Emily Seymour, "A Shrinking Iceberg Travelling South". Changing Trends in British Television: A Case Study of Drama and Current Affairs (London: Campaign for Quality Television, 1999); and Jennie Stone, Losing Perspective: Global Affairs on British Terrestrial Television 1989–1999 (Third World and Environment Broadcasting Project, 2000).
39 See, for example, Andrew Graham and Gavyn Davies, Broadcasting, Society and Policy in the Multimeda Age (Luton: University of Luton Press, 1997); and Nicholas Garnham, ‘Public Service versus the Market’, in Capitalism and Communication (London: Sage, 1990), pp. 115–35.
40 Phase 3 – Competition for Quality, p. 7.
41 These figures are drawn from various sections of the Ofcom Review of Public Service Broadcasting, Phase 1 – Is Television Special? (London: Ofcom, 2004). Revenue share figures are given on p. 27 and in Figure 38 on p. 63; audience share figures are given in Figure 14 of the Annex Documents, What People Watch: The Television Audience, made available on CD-ROM.
42 These issues are discussed from the perspective of those who have felt themselves pushed into a one-way street in Peter Golding and Phil Harris (eds), Beyond Cultural Imperialism. Globalization, Communication and the New International Order (London: Sage, 1997).
43 Ofcom, What People Watch: The Television Audience, Annex to Is Television Special? (CD-ROM), Figure 30. The ten programmes were: Eastenders, Coronation Street, Emmerdale, Match of the Day Live, Holby City, Big Brother, The Full Monty (film) and Heartbeat.
44 These figures can be deduced from Figure 38 of Is Television Special?, p. 63.
45 Is Television Special?, p.62. By February 2005 Ofcom noted that digital take-up had grown to 56% of households, although it made no mention of the role of the Freeview service in this process, Phase 3 – Competition for Quality, p. 2. The role of Freeview was recognized later in the year.
46 BBC, UK Television Content in the Digital Age. A Report by Oliver and Ohlbaum Associates Limited (London: BBC, 2003), p. 33. Report referred to as ‘Oliver and Ohlbaum’.
48 Ibid., p. 25 and Department for Culture, Media and Sport, Review of the BBC's Royal Charter. A Strong BBC, Independent of Government (The Green Paper) (London: DCMS, 2005), p. 48.
51 Department of Trade and Industry and Department for Culture, Media and Sport, A New Future for Communications, Cmnd 5010 (The White Paper) (Norwich: The Stationery Office, 2000), p. 10.
53 Review of the BBC's Royal Charter (The Green Paper), p. 3.
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