DCMS to Review BBC Impact on Market and Commercial Rivals

The BBC’s impact on its commercial competitors including ITV, Sky and newspapers will be examined as part of the Charter Review, the Culture Secretary announced yesterday (Wednesday 16 September). He also told the BBC it should commission content from local newspapers in order to “help local media rather than further undermine them.”

Giving the keynote speech to the Royal Television Society in Cambridge, John Whittingdale said it was “important to look at the impact that the BBC has on its commercial rivals and – again to give just one example – whether it is sensible for its main evening news bulletin to go out at the same time as ITV’s.”

He added: “I am delighted that the BBC plans to invest in local news, covering important components of local democracy such as councils, courts and public services. By commissioning such content from local media outlets, and by making it freely available to all, the BBC can support local newspapers and enhance local accountability and democracy.

“It is an excellent idea – not least because it was proposed by the Select Committee last year. However, it is important that it should help local media rather than further undermine them and I would therefore hope that the BBC would not seek to recruit or employ these journalists directly. Instead they should look to commission content from qualifying local media organisations and news agencies perhaps on the basis of tender.”

He said the DCMS would be commissioning independent research into the BBC’s impact on the market and on its commercial competitors, which would feed into the evidence base for Charter Review.

Earlier yesterday, the department announced an independent review into BBC Governance as part of the ongoing process to review the BBC’s Royal Charter. The review will be led by Sir David Clementi – former Deputy Governor of the Bank of England.

“No-one could deny that the BBC has made some bad mistakes in the last few years,” the Secretary of State said. “Savile, McAlpine, Ross-Brand, severance payments and excessive salaries have all contributed to a widespread view that the governance structure needs reform.”

The independent review will examine whether the right framework of accountability, incentives, checks and balances necessary are in place so that the BBC can take account of its market impact, spend its money wisely and is held to account in doing so.

Sir David has been asked to make proposals, by early 2016, for an appropriate regulatory and governance model for the BBC, in relation to:

  • the model of governance and regulation of the BBC;
  • the specific mechanisms of governance and regulation; and
  • the way in which the BBC and the bodies that govern and regulate it engage with licence fee payers and industry.

“The review will take into account responses to the green paper and will report early next year,” Mr Whittingdale said. “I want to engage the public in a debate, so I am delighted that we have had 28,000 responses already and that the BBC Trust has received around 40,000 to their own online consultation.” 

He also raised the issue of BBC funding, saying: “Public support for the licence fee is not unqualified. The BBC’s own annual report shows that it no longer enjoys majority support among the public. And of course the BBC benefits from subscription and advertising in foreign markets.”

Three future funding models were under consideration: a modernised licence fee, an alternative household levy, and elements of subscription. Objective research about public preferences and willingness to pay would form part of the Charter Review.

In looking at BBC’s impact on the wider media environment, including the independent television production sector, Ofcom had been asked to undertake a review of the terms of trade regulations to ensure they remain the most effective way of supporting small independent producers in light of consolidation in the sector.

“The regulatory framework put in place to support independent producers has played a part in fostering a vibrant and creative sector. The terms of trade, for example, have helped small independent producers to grow by maximising value from intellectual property rights.”

Earlier this month, the NMA called on the government to implement 10 changes to the BBC objectives and governance designed to establish an effective system of accountability that enshrines collaboration between the BBC and the UK’s commercial news providers. It is meeting with the BBC to follow up on these proposals. 

UK News Provision at the Crossroads (Oliver & Ohlbaum report )

Culture Secretary Keynote Speech to RTS: https://www.gov.uk/government/speeches/culture-secretary-keynote-to-rts-cambridge-convention

Local newspapers want access to BBC video content to improve regional news coverage

Further details on the BBC Charter Review can be found online at www.gov.uk/bbccharterreview