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20 May 2015

Think smart and the BBC could be the new Netflix

Written by: Ed Williams, Chief Executive Officer, Vice Chairman Europe at Edelman

Media

Charter talks offer the chance to be a global player via mobiles and to cut the licence fee, says Ed Williams

Negotiations over the BBC’s charter will begin soon and will be the most important in the corporation’s almost 100-year history. What is decided will determine the media landscape for the next 100 years. The collective wisdom is that a Conservative government with a Thatcherite culture secretary will take revenge on the BBC for decades of perceived liberal bias. The first target, under this argument, will be the level of the licence fee; the second, BBC activities that compete with commercial rivals. Thus, the “forces of darkness” are ranged against it. Nonsense.

The impending negotiations are unprecedented in importance but not for the reasons advanced by this simplistic portrayal. John Whittingdale, the new culture secretary, is a sophisticated and nuanced thinker with a genuine belief in public service broadcasting. The decision facing him and the government is not “whither the BBC”, but whether or not Britain can ever aspire to fulfil its potential and compete globally in media and entertainment. While short-sighted arguments debate the BBC’s size and scope, the likes of Google, Facebook, Amazon, Apple and Netflix are building businesses that will dominate media for our generation and the next.

The tired rhetoric about the BBC’s impact always rests on comparisons to other UK television operators, other minnows in the global pond. While we have been fighting among ourselves, giants have been created. If we want a dog in the global media fight — you might almost say, if we want our culture to endure and thrive — we need to lift our heads and look outside our back yard. Giant global players are accumulating cash at a rate unseen in the history of the world. (Apple could buy ITV with little more than three months’ cash flow.) In Britain, we may have one chance to play with the big boys but it means putting the one asset we all own to work in a way we haven’t done up to now.

There is a solution that would impose strict limits on the BBC’s extracurricular activities; that would reduce the level of the licence fee; and that at the same time would create a global media player. Not bad — so how do you do it?

First, the BBC needs to articulate clearly the red lines of business activity that it will never cross. Over the past few years, it has correctly retreated from areas of mission creep, such as the ill-fated purchase of Lonely Planet. The new charter should expressly set out the boundaries; not just what the BBC will do, but what it won’t do. Protections for commercial media in Britain should be put in place, and the BBC must show its commitment to helping support the wider media ecology, such as artists and producers.

Second, our regulators need to be brave. In 2009 the competition commission blocked the launch of a “British Netflix”, known by the codename Project Kangaroo, because it was deemed to be a threat to the nascent British video-on-demand market. Since that decision, British television companies have each developed a video-on-demand service, such as ITV Player. But Netflix, the global giant that Kangaroo could have become, now has 60m global customers paying £10 a month, on average, while adding 4m subscribers every three months.

Third, BBC Worldwide needs to be given the freedom to compete overseas in an unfettered way, in the best interests not only of BBC licence payers but of the entire British television industry. One way of catapulting this venture would be to float half of Worldwide, creating an immediate fighting fund of more than £1bn to invest in Britain’s creative industries. That provides funding for the next Top Gear or Sherlock, whichever producer or broadcaster makes it.

The unleashed, commercially global BBC should then focus its attention principally on delivering its content on mobile, the fastest growing platform in the world. It should invest in a workable global version of iPlayer, a platform that brings great British content to those who want to pay for it, wherever they are in the world. Content would come from any UK producer. The supplier could receive a cut of profits or sell their rights to the platform. Downton Abbey could be streamed alongside Luther. As the profits from this export giant grow, the load on the licence-fee payer could be reduced proportionately, while not compromising the BBC’s core role of continuing to produce great content for viewers and listeners.

In the end, it all boils down to the question of what we want the BBC to be: a shrinking domestic broadcaster that every 10 years has to justify its existence, or a true global media player that benefits everyone and that Britain can be proud of. We have an opportunity to play on the global stage because we have the one thing they don’t — British creative genius. It may already be too late to achieve this. If we wait another decade, it certainly will be.

This article originally appeared in The Sunday Times.

Image: Maisna / Shutterstock.com

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