Freeing up the broadcasting landscape would be great for radio

Published by freemarketconservatives on

BY SERENA LIT

Despite unprecedented falls in income and enormous operational challenges, commercial radio continues to play a vital role in keeping us both entertained and informed during this global pandemic. Last month, the industry body submitted a report to the Digital, Culture, Media and Sport Committee (DCMS) measuring the impact of COVID-19 on the sector. They found the drop in advertising revenue had been substantially higher than initial estimates, with year-on-year declines of nearly 50 per cent for Q2 2020. Local stations have seen even larger drops of between 80 and 90 per cent, due to their reliance on local advertisers that have been unable to trade during the crisis. 

While commercial organisations must generate income from advertising to cover their operational costs, the BBC’s 10 TV channels, 10 national radio stations and 40 local radio stations have a huge advantage as a result of the licence fee. Additionally, BBC stations are granted first pick of available frequencies, while commercial radio stations are left with less attractive options at the end of the dial. The BBC is also the only advertiser on its own channels and enjoys free cross-marketing privileges across these platforms. BBC Sounds in particular benefits from excessive promotion across the network, whilst not being bound by the same (albeit loose) regulations as BBC stations. The sheer size of the Corporation lends yet another disproportionate advantage. 

Given Ofcom has a duty to protect both fair and effective competition in the areas that the BBC operates, there must be an assessment to determine the full impacts of the BBC’s activities on competition when its Charter comes up for a mid-term review in 2022. Before COVID-19, the radio industry was already weathering a crisis as more consumers switch to streaming services and the BBC’s monopoly over the industry is making a bad situation infinitely worse. If streaming does eventually kill the radio star, the autopsy will undoubtedly reveal the BBC helped puncture a lung. 

The same restrictions should be placed on BBC Radio as enforced on BBC magazines and other outlets, in order to level the playing field. Furthermore, a new regulatory framework should be drawn up to monitor BBC Sounds. Much like Facebook and Google, there is currently no external oversight or publicly available data measuring its costs and reach. It is unacceptable for those who pay the very licence fees that fund BBC Sounds’ activities to be denied access to such information. 

Ahead of the review, there is an important question to be raised about whether the BBC is still an institution that warrants a Royal Charter. Royal Charters are rarely granted and only to organisations “without significant overlap with other bodies” and, unfortunately, it could be argued the BBC no longer qualifies. For decades, the Corporation has been creating content similar to what is already being produced in the commercial sector. Coronation Street had been running for 25 years on ITV, a commercial broadcaster, before the first airing of BBC soap EastEnders in 1985. Similarly, ITV’s The X Factor had been running for 8 years before the BBC commissioned The Voice for its first series in 2012. 

Across BBC entertainment, there are increasing overlaps with shows on commercial TV. In retrospect, 1985 marks the start of the BBC’s transition out of its established role as a non-commercial institution operating with the purpose of providing original programming and representing underserved communities. The BBC continues to operate radio stations for audiences that are already represented in the commercial sector. There are five striking examples of this: BBC Radio 1, BBC Radio 2, BBC Radio 3, BBC Radio 5 Live and BBC Asian Network. Though Radio 1 and 5 Live were founded first, the current guidelines suggest that their respective similarities to Capital Radio and talkSPORT mean these stations no longer serve a public purpose that merits funding via the licence fee. 

On the other hand, BBC Asian Network has never been unique, providing the exact same services as Sunrise Radio, which had been set up 7 years prior in 1989. When approached for comment on the subject, former Deputy Chief Executive of Radio Authority, David Vick, said: “During the period when commercial radio was moving into a much stronger market position, the BBC’s whole strategy was consistently to try to occupy the ground commercial stations were moving into.” BBC Radio 2 and BBC Radio 3 are also prime examples of this.

Around the turn of the century, both stations were fundamentally altered to chase the audiences tuning into new commercial AC (adult contemporary) and gold formats. BBC Radio 2 used to provide substantial musical content for older listeners and those with specialist genre interests, however largely abandoned these aims to pursue a younger audience. Vick argues that Radio 2’s programming strategy became far more “ratings-driven” and in choosing this path, the BBC abdicated its charter responsibility to serve a full range of music tastes. Meanwhile, the style of BBC Radio 3 was changed to compete with the successful Classic FM.  As recently as 2015, the BBC’s own watchdog found there were too many similarities between Radio 3 and Classic in “some parts of the schedule” and ruled the station must work to change this. 

If the Defund the BBC campaign does triumph, we can expect to see a much more competitive radio and broadcasting industry. Previously, the BBC has been able to use its vast network and resources to squash what would have otherwise been very competitive commercial ventures. If the licence fee were to be reconfigured or scrapped entirely, it would be interesting to see if the Corporation would prove able to compete in the free market, let alone maintain its sectorial dominance. 

I am certain many in the industry will be following developments closely to see if an equally compelling case will be made to revoke the BBC’s Chartered status. 

Serena Lit is the YC Chair of Brentford and Isleworth Conservatives. Follow her on twitter: @serena_tara_lit

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