John McLellan: Size of BBC distorts gravity for media

The BBC is able to dominate other news providers. Picture: Getty
The BBC is able to dominate other news providers. Picture: Getty
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It’s not that long ago what is now the Jam House in Queen Street was the grand home of the BBC in Edinburgh. Briefly BBC Scotland’s HQ in the 1930s, it finally decamped in 2002 to a rather less impressive but much more practical base at The Tun in Holyrood Road.

New technology did away with the need for big studios and cumbersome equipment and the BBC was not alone amongst media companies in adapting to circumstances.

The Glasgow Herald was a near neighbour of the BBC in York Place and after decamping to George Street now operates without a bespoke office in the Capital.

Most notably, this newspaper moved from the towering North Bridge offices in 1999 long after the Edwardian wedding cake arrangement had outlived its usefulness, beating the BBC to Holyrood Road by three years. And last year when Barclay House became too big it was off to Orchard Brae.

Changing work practices, new technology and financial challenges have caused a revolution in all parts of the media world and it’s not just survival of the fittest but the most adaptable too.

The particular issues faced by newspapers in the internet age have been well documented, as readers and advertisers switch to digital alternatives which allow them to source the information and markets they need at a fraction of the relative cost of the heydays of print. Publishers hope their investments in technology mean those digital alternatives are theirs.

There is about a four-to-one chance that you, dear reader, are reading this article on some sort of screen free of charge, apart from the cost of whatever device you are using. I don’t blame you. After all, like most journalists I send out links to the electronic version of my articles so more people can see them for free and hope that others send them on, too.

As director of the Scottish Newspaper Society it’s no surprise I still buy newspapers and magazines, but the majority of pieces I read are free, deliberately made available by their publishers to generate digital audiences which in turn generate advertising cash.

Many publishers are now reaching the point where income from copy sales and print advertising will soon be overtaken by digital advertising revenue, but it’s no secret that despite bigger audiences than ever it’s a daily battle to maintain profitability. The biggest exponent of free access, The Guardian, still runs operating losses in the region of £30m.

The one exception is the BBC, which has floated above the fight for survival facing every other media organisation thanks to the £145.50-a-year licence every TV owner must buy.

Readers will need no reminding of the £1000 fine for being caught without one and failure to pay the fine could land you in jail whether you use BBC services or not. Compliance is therefore high at around 95 per cent.

You can chose whether to buy Sky TV or Virgin, but if you have a telly there is no choice, you must fund the BBC.

Most people use the BBC not just because they are forced to pay but because most of its products are good. Not for nothing is BBC1 Britain’s biggest TV station while Radio 2 dominates the airwaves. Radio 4 is often described as the epitome of public service broadcasting and the World Service is an international treasure.

The BBC Scottish Symphony Orchestra won’t be everyone’s idea of spending public money but it’s a highly-valued contribution to cultural life.

In the week of the referendum, BBC Scotland online received over 13 million unique UK browsers and over 26 million worldwide. To put that in context, the UK’s biggest commercial news website, Mail Online, has about 14 million daily users with large 
numbers from the US and Australia.

Last year, despite fears more people could avoid the fee by watching TV on catch-up online, there were 25.5 million fee payers and BBC income actually rose by £13m to £3735m. That allowed the Beeb to employ 18,974 people, an increase of 300. It might still be gripped by PR disasters, but financially it’s in clover.

A previous attempt to ramp up the licence fee to pay for new digital services was blocked, but there is still plenty to invest in expansion, broadcast rights and big star salaries. BBC Scotland has the luxury of sending sports reporter Kheredine Idessane round the world following Andy Murray to join the rest of the BBC crew.

But the pressure is to do more because the licence fee-payers’ watchdog, the BBC Trust, is there to ensure the public gets what it wants, or at least what the Trust thinks it should get.

The BBC’s Charter is up for renewal and with the new funding arrangements announced in last week’s Budget followed by yesterday’s publication of the UK government Green Paper the Conservatives have made it clear the BBC must change.

The SNP, too, wants reform to bring serious decision-making closer to home, which is why Culture Minister Fiona Hyslop was angered by lack of consultation from Westminster.

Everyone in the commercial media world has a stake in this because in a fractured landscape the BBC’s scale, and the absence of real daily commercial pressure, distorts every market it enters because, to borrow from the NHS, every service is free at the point of use.

Knowing a quality, free alternative is always available affects decisions the likes of STV, Radio Forth, The Scotsman and Evening News have to take.

And when good opportunities appear, they know the BBC will argue the licence fee compels it to meet new demand. Most famously, when TV-AM was launched in 1983, the BBC marshalled its resources to launch Breakfast Time in advance and came close to strangling the new commercial channel at birth.

The BBC Trust is very good at backing up such interventionist arguments, but not so hot on the need to tackle a massive bureaucracy, to limit the millions spent on top management, star presenters and sports rights or to prevent six-figure pay-outs to senior staff who simply leave for other jobs.

Scottish viewers’ interests are represented by the Scottish Audience Council, led by a friendly Lanarkshire-based businessman Bill Matthews. The rest are representatives of what has become known as “Civic Scotland,” in other words a collection of people drawn from the senior ranks of the public or voluntary sectors. A cross-section of the population it is not.

Their annual report out this week has attracted much attention because of its thinly-veiled attack on political coverage, in particular during the referendum, but nowhere is there any call to re-examine the extent and effect of its services.

In fact, it’s quite the opposite. For example, presuming that quality is always a cash issue, it expresses concerns that: “Radio Scotland is not sufficiently well funded to match the quality of journalism provided by Radio 4.”

It continues: “The enhanced and rejuvenated coverage of public policy issues on BBC Scotland should be maintained, reflecting the higher degree of civic intervention and voter participation and the increased role of social media as a source of information. The council believes BBC Scotland should be properly funded for this enhanced role.”

Predictably, it’s all about what more it should be doing and little about what it shouldn’t, apart from moving away from what it describes as “conventional” news sources, whatever that means.

It is true the problems of other news organisations are not just the fault of the BBC which will be solved just by cutting Auntie off at the knees. But neither can the independent sector thrive if the BBC always has enough public money to occupy every piece of commercial high ground.

For its part, BBC Scotland management keeps its head down, and if BBC Scotland director Ken MacQuarrie wanted a lower profile he’d have to re-open Bilston Glen colliery.

It is not healthy for our democracy to have so much power concentrated in one place and it’s impossible for a publicly-funded broadcaster not to become a political football which is precisely why the BBC’s position must be addressed and its relationship with the rest of the Scottish news world properly scrutinised

Such is its dominance that it has become easier for politicians to bring unrelenting pressure to bear, as head of news James Harding recently confessed. To its shame, the Scottish Audience Council’s report is if anything an extension of that intimidation.

There is a place for a publicly-funded broadcaster, but it is no longer justifiable for the law to be used to maintain the BBC’s crushing command of UK media markets. It’s time for a fair fight.

BEEB’S MILLIONS

£3735 million: Licence fee income

£1070m: Other commercial income

£2367m: The cost of running BBC TV

£1433m: The cost of running BBC1

£201m: The annual online budget

£32m: Orchestras and performing groups cost

£31m: Radio Scotland annual expenditure

£9m: BBC Alba

101 million: Unique online users in January 2015

Figures taken from the latest BBC accounts. No breakdown of BBC Scotland’s total expenditure is given, although the BBC estimates its total expenditure in Scotland is £200m.