Press Office

Wednesday 24 Sep 2014

Speeches – 2011

John Tate

John Tate

Director, Policy and Strategy

Speech given at Westminster Media Forum

Check against delivery

Looking for inspiration for this seminar, entitled Dear Jeremy, I turned to the eponymous column of the Guardian's agony uncle on work issues, I suspect the source of the seminar's title. It's surprisingly relevant.

As we in the communications sector have been articulating how we will rise to the Government's growth challenge, step up to the mark and pull our weight – one Dear Jeremy reader asked [Monday 5 March 2011] "Dear Jeremy, how can I convey commitment without resorting to cliché?"

Other readers were perhaps less certain of their commitment. Take this one. [Monday, 13 December 2010] "Dear Jeremy, I am confused after much TV and radio work. Is the media still for me?"

Or this. [Monday 6 December 2010] "Dear Jeremy, my TV job is unfulfilling – how can I move back towards business and management?"

I've checked and none of these came from Horseferry Rd, Grey's Inn Rd, White City.

Those were all genuine letters to the Guardian. But the BBC's response to the Government's questions to industry doesn't start "Dear Jeremy" – not just to save words responding to the DCMS request for replies of just 4-5 sides – but because we haven't written a BBC wish list.

The BBC supports the Government's ambition to enhance the contribution of the communications sector to economic growth while delivering greater benefits to UK consumers and citizens.

In our view, economic objectives need to be balanced with wider social and democratic goals.

Our approach has been to look seriously at how the industry could be changed to meet the Government's challenge.

We believe the starting point should be to agree the long-term policy aims for the sector and then, informed by market and audience analysis, identify where the policy framework could be reformed to support delivery of such aims

So what should we aim for – what does "good" look like?

First, effective competition supporting investment, innovation and choice. "Competition for quality" between the BBC and commercial operators has put the UK in a position of strength. We have the highest per capita TV production spend in the world; we are digital leaders; and UK audiences have greater choice than ever before. The UK's unique success is because of public intervention, not in spite of it – and the need will remain.

Second, we should ensure universal access to services that educate, inform and entertain and to a plurality of voices in news. As a society we benefit from universal access to programmes which increase our knowledge of the world, and content which reflects different parts of the UK, and informs our cultural identity. As a democracy, the universal availability of a variety of a variety of independent sources of news sustains our political discourse.

Third, we should make the UK one of the best places to create excellent, high-value content. We need a well-funded pipeline of content leading to worldwide success across genres and formats. The BBC has already committed to maximise the proportion of its income spent on content creation. From next year, YouView will help get services like iPlayer to all UK citizens and offer the sector new opportunities to monetise content. Internationally, the commercial version of iPlayer will soon offer a new route to market for UK producers.

Fourth, we should develop world class infrastructure but – as BSkyB's (Chief Executive) Jeremy Darroch has rightly pointed out – this mustn't come at the cost of investment in content. Content drives the uptake of new technologies and video is forecast to be key to superfast broadband adoption.

Fifth, content standards should reflect audience expectations in a converged world. A simplistic "levelling up" or "levelling down" across platforms is probably not practical or desirable.

These seem like appropriate policy aims in the BBC's view. A new policy framework to meet these aims will need to be future-proofed.

Looking ahead to the world in 2016, we can anticipate some opportunities to enhance deliver of these aims: in wider distribution of content, more direct routes to market and new sources of funding.

But there are also challenges for sustaining high levels of investment in a range of UK content available to all.

TV advertising revenues which have traditionally supported UK content investment have fallen in recent years.

The fastest growing segments of the market – pay TV, social networks and aggregators – have not so far invested in UK content on any scale.

Subscription TV revenues increased by 34% between 2004 and 2009 to £4.6bn but only a relatively small portion of programming budgets has been allocated to UK original content. 90% of UK content investment was by PSBs in 2010.

BSkyB's recent commitment to increase significant its investment in UK content over the next three years is very welcome.

Indeed, if imitation is the sincerest form of flattery, then we feel very flattered indeed – BSkyB have not only copied our content strategy they've named it after us: "Backing British Creativity" they call it: B. B. C.

On a serious note, it's exactly the "competition for quality" we support and what Mark Thompson called for in his McTaggart speech.

Nonetheless, forecasts suggest that by 2016 PSBs are likely to still be contributing 80% of UK content investment – and the challenge remains to sustain investment in a range of great UK content and universal access to it.

So, if Government were minded to achieve these aims, what – in the context of these opportunities and challenges – might they look to reform? The debate here is only just beginning. For now, I want to focus on a handful of areas.

I think most of the panel will agree with me that content investment and innovation can be furthered by modernizing the UK's Intellectual Property regime. The BBC broadly supports the key recommendations of the Hargreaves report and supports proportionate measures to tackle piracy including those in the Digital Economy Act.

Similarly, there will probably be some agreement on this panel that regulation should be a last not first resort, particularly in nascent markets like online. Well-targeted and proportionate intervention can tackle market failures, promote competition and benefit the economy and society. But where it is appropriate – deregulation can reduce costs and aid innovation. Ofcom identified last week some areas of regulation they thought needed significant updating – including commercial TV and radio – it seems likely the review will consider these.

Perhaps an area for more debate by the panel – if the last Westminster Media Forum is anything to go by – is the issue of re-transmission.

At present, platforms pay nothing for re-transmitting the main free-to-air broadcasters, despite the fact that taken together, they are by far the most watched channels and so bring considerable value to those platforms.

On the contrary, PSBs – who are for all practical purposes obliged to seek re-transmission to meet their universality and "must offer" obligations – pay significant access fees for the privilege on the satellite platform.

This is a significant diversion of funds from content investment towards the finance of platforms – and is contrary to international norms.

Rebalancing the regime could be an important way of sustaining investment in UK free-to-air content.

This seems an area worthy of further debate.

One final area: production. In the past, regulation such as the independent production quota and terms of trade have acted as a spur for creative growth. Over the last 30 years, the sector has grown 20-fold. And in the last year alone the largest indies grew their market share by 20%. It is no longer a nascent industry.

The current pace of change affecting broadcasters, together with the scale and ownership of the indie sector make it worth debating whether regulation covering these commercial relationships is fit for purpose.

So there are some areas of reform to discuss – on IP and piracy, on deregulation, on re-transmission, on terms of trade – but more importantly – some policy aims the sector must first agree. For the BBC, our response starts by putting UK content investment centre court.

It's not a "Dear Jeremy" – Hunt or Darroch – but it is the BBC's contribution for the moment. Thank you.

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