Opinion: Perspective - Ofcom's approach to BBC funding is sensible one

There are few people more entertaining and acerbic on a platform than Michael Grade and there was no better timing to enjoy an audience with the man than at the grand 30 Club dinner this week.

The BBC's chairman took to the podium at Claridges on the day Ofcom made its pronouncement on public service broadcasting; apparently Grade himself had spent most of the day glued to coverage of Ellen McArthur's triumph rather than Ofcom small print, though.

As usual, events at the 30 Club are shrouded in the Chatham House Rule, though in truth there are no secrets burning after this week's do. But it's worth pointing out that, for a man about to face one of the toughest charter reviews in the BBC's history, Grade seemed a soul at ease with the world.

There is much for the BBC to take comfort from in the Ofcom report, particularly the view that it should remain fully funded by licence-fee income.

It's seemed increasingly anomalistic, to me, to present the licence fee as a payment for the BBC. We've all heard people complaining that they never watch BBC programmes and yet are still forced to pay for the privilege of receiving them; it would seem to make much more sense to position the licence fee as the price to pay for receiving any television channel, or of funding any public service television content. For this to be workable,while fully sustaining the BBC, then the licence fee must be increased, and then top-sliced to provide extra monies for, say, Channel 4 once it hits its forecasted £100 million "funding-gap" towards the end of the decade.

And there would also be an opportunity to create a public service funding pot to which other broadcasters could apply for funds to produce quality programming that fits the public service agenda.

What Grade did convince me of the other night is that the notion of the BBC taking some advertising revenue to shore up its funding would be a disaster. Many advertisers, and some agencies, have long argued that the benefits of adding commercial money to the BBC wallet while opening up some of the BBC's most attractive programming to commercial messages is a win-win situation. But I totally disagree.

A partially commercial BBC would force the corporation to compete (even more) head on for mass audiences, which would stranglehold the breadth and depth of the programming produced. It would also drive down the cost of advertising - in the short-term, crippling the commercial broadcasters' programming budgets.

These are perennial issues, but with Ofcom now providing a rational point of reference and (so far, so good) a measured, impartial foil to any political pressures, there is hope that sense will prevail. Which may well help explain why Grade is looking so relaxed these days.

If the IPA Census figures (page 18) on the youthfulness of the industry are anything to go by, then there will be very few people around who remember Don Elgie.

The chief executive of the mysterious Creston - the proud owner this week of Delaney Lund Knox Warren - was once something of a name on the advertising scene. A marketing services veteran (and there aren't many of them left) Elgie was a founder of the defunct Grandfield Rork Collins, which sold to Saatchi & Saatchi in the 80s.

Now as a new holding company force in the ad world, Elgie and his Creston team have a lot of ground to make up to prove what Creston and its collective assets will add to DLKW's stock. In the age of integrated communications and the holding company pitch, there needs to be a sense that the agency is rounding out its offering with the deal. At the moment, it seems little more than a case of a neat exit strategy that lines the DLKW founders' pockets while allowing them to retain a sense of independence.

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