Save the BBC - by setting it free
A Modest Proposal
Beeb Week Although the BBC has now secured its Charter and Licence for another ten years, the debate about its future rages on.
Forcing people's hands into their pockets on an annual basis is going to become more difficult politically in an age where viewers will be able get whatever they want, on any device, wherever they are, at any time. The latest settlement could well be the corporation's last.
It could well be that a licence fee funded BBC may offer something genuinely different and radical in the emerging multi-channel, multi-device, multi-platform age. But the market failure will surely become harder to identify; the public service rationale harder to value.
This emerging environment is likely to be so competitive that although some of the content offered will be low-grade and banal, much of it will also need to be excellent for producers to survive.
The best television is yet to come. We are entering an age where competition will really start to drive production. Expect the Americans to win on big budget production and everyone else to win on innovation and humour.
These developments raise important questions about the BBC - and perhaps more importantly, how we ensure that we in the UK realise the return from years of public investment. It is too easy to forget that by paying for the BBC we also own it.
Given the market changes, it is likely that the BBC is currently somewhere near the peak of its value curve. Rational economists would argue that if the UK was to realise the greatest economic return from the mandatory investment in the BBC over seven decades, that we would wise to do it before its value starts to fall.
Could there be more attractive options that we don't hear about?
At present there is a healthy level of support for the BBC - and seemingly, for paying the licence fee. The corporation is seen to provide a pretty good deal given the range of other options on the market. Indeed, a lot of the BBC's content is damn good - something it suggests it couldn't achieve in the market. Given that point, it's odd that most of its best content sells well globally and also tends to dominate DVD sales charts in the UK.
But as the modes and methods of consuming audio-visual content start to radically change it is difficult to see this level of public support being sustained beyond 2016 - the time frame in which the new settlement runs.
Partly out of self-interest, and partly out of a failure to identify how the BBC could both capitalise on its assets and continue to deliver unique programming, the BBC works to keep the option of a sell-off out of the public debate.
This also tends to suit some of its major 'competitors' also given the seismic impact such a move would have on the wider market. In a business where the future is challenging enough already a new well resourced competitor could cause further pain - so better not to risk it.
The figures generated through a sell-off would be truly staggering. Hard estimates based on revenue are difficult to make today, and even a precise valuation of the BBC's assets isn't easy.
But one thing is sure: a privatised BBC would overnight become one of the biggest and most powerful global media and entertainment companies in the world.
The assets are impressive. There's the infrastructure - a global network of production and distribution facilities. Then there's the real estate - some of the choicest cuts of property in Central London and beyond. There's the archive itself - seventy years of original programming that could, in itself, keep some viewers happy for another seventy years. And then there's the most valuable of all of the assets - the brand.
The BBC is a global and iconic brand that has credibility and a sense - however fiercely contested - of integrity. But this is also perhaps where most value will be lost over the next decade, particularly as the BBC starts to lose credibility amongst its home supporters as it wrestles against the forces of a rapidly changing market, and risks looking much the same as everyone else.
The public are therefore rarely alerted to the value of the BBC as an asset, and how they/we could benefit if the corporation was sold. On this basis the BBC has to do a lot more than just produce good television. It also has to make sure that it covers its societal opportunity cost also - e.g. extra schools and hospitals and housing or measures to reduce climate change.
The value we could derive from the BBC would help - in part - tackle some of the most significant problems the UK faces today and help ready the country for challenges in years to come. It maybe that people are still happy for the value to be locked into BBC and to continue to fund it too - but it is difficult to make a choice without all the options out on the table.
Threats and opportunities
Of course, for the BBC's crop of competitors there is both threat and opportunity in a sell-off. A privatised BBC would have new options and be in a position to suck up major competitors. It could quickly diversify too, taking significant stakes in major film studios, satellite or cable platforms, or even telecom and technology companies.
But such a sell-off would also offer other companies a chance to get on the inside and buy a significant stake in the new company. Indeed, for many, the spectre of existing global media companies buying into the last bastion of British media would in itself be a major reason for keeping the corporation off the market.
This is short-sighted. Timed correctly, a sell-off would be fiercely competitive and realise massive returns - in part due to the fact that all major players will have to look seriously at taking stakes.
Overall, this is likely to stimulate longer term investment in quality television and media production in order to realise a return in a market where increasing numbers of delivery channels will make it difficult to merely charge advertisers or levy subscriptions for weak content.
It would also sharpen the existing market, particularly given that for competition and plurality reasons, existing media UK owners such as the Murdoch family would almost be certainly prohibited from buying a stake in the BBC without first divesting other interests - perhaps a key reason that despite being the BBC's most vociferous critic Sky rarely mentions its privatisation.
That would leave the public with one remaining problem: ensuring that the government really does then allocate the funds - raised in a way that genuinely provides a legacy for selling something so precious to so many - wisely. ®
Policy analyst Luke Gibbs co-founded the Ofcomwatch blog.