Last week Gerald Kaufman, chairman of the House of Commons culture
select committee, noted that the BBC was becoming a ’hybrid
Not half, as they used to say in broadcasting circles. And Kaufman was
probably generous in his choice of tense. The Beeb surely passed the
point of no return many months ago.
There’s the corporate stuff for starters. Last week it was a pounds 338
million joint venture deal with Discovery Communications to run a US
cable channel, BBC America. It’s the mirror image of a deal it has in
the UK with Flextech.
And they’ve only just begun. The BBC director-general, John Birt, wants
to triple the corporation’s commercial turnover - currently pounds 500
million a year - within the next decade.
But that shouldn’t affect the Beeb’s mainstream UK terrestrial
activities for which it receives pounds 1.9 billion in licence fee
monies. That’s ring-fenced.
Oh yes? BBC 1 is a commercial animal, red in tooth and claw. Not
surprisingly, there are growing calls for ads on the BBC. The
Incorporated Society of British Advertisers has made this modest
proposal several times in the past - usually to gasps of outrage from
those who can vaguely remember who Lord Reith was. And ISBA’s at it
again - it outlined new proposals in a recent letter to the Chancellor,
Gordon Brown, and the letter has also been seen by the Culture and Media
Secretary, Chris Smith.
Bob Wootton, ISBA’s director of media and advertising affairs, explains
why the time is right to revisit this old chestnut.
’The BBC is clearly acting as a flagrantly commercial broadcaster and
faces less restrictions than ITV. It is clearly an inequitable
’What we want is an open and formal debate about advertising on the
We have a number of suggestions about how it might be achieved - for
instance, giving public service advertising the option of using the BBC.
I reckon about 45 per cent of Central Office of Information revenue
would migrate. That would cause a gentle slackening of inflation on
As a next step, ISBA could envisage perhaps a total of three minutes
advertising on the BBC per day at peak time. That would bring in pounds
300 million and mean the Government would be able to waive the licence
fee for pensioners. Then, as a third stage, they’d like to ask what’s so
sacred about the BBC - why can’t it run advertising across the board and
still be a public service broadcasting channel, like all of its
counterparts in Europe?
The answer, according to some, is that the change would be too
Edward Lloyd Barnes, council member of the Association of Media and
Communications Specialists, is certain of that. ’This is a truly awful
idea and I don’t think anyone’s really thought through the economic
dynamics. Has anyone asked themselves how the loss of, say, pounds 500
million in revenue would affect ITV? Would advertisers really be happy
if that sum disappeared from ITV’s programme budgets? The direct
consequence of a programme budget loss of that magnitude would obviously
be a big audience loss. This would put advertisers back to square one
where inflation was concerned.
’Meanwhile, the general public would start refusing to pay the licence
fee on the grounds that the BBC was now funded by advertising. The only
way that we at AMCO would support it would be if ISBA gave an
undertaking to underwrite all revenue lost by ITV - in effect, that
advertisers would spend more. Ideally, though, we would like to see the
BBC shackled. It should not be allowed to replicate the output of ITV
merely to compete for audience.’
David Cuff, the broadcast director of Initiative Media, disagrees: ’It
is feasible. And, yes, it is desirable. If some of the COI spend was
shifted on to the BBC, it would reduce demand by up to 1.5 per cent on
’And people who say that advertising will spoil the BBC clearly haven’t
noticed that there’s actually rather a lot of advertising already
It runs a huge number of promos - everything from Radio 5, Radio 3,
’Perfect Day’ to corporate pleading.
’The second point is that you can restrict the influence advertising has
on the schedule by slotting ad breaks around the two peak-time news
programmes on BBC 1. Two minutes on either side of each - eight minutes
in total. At ITV prices, that would take only pounds 157 million or just
6 per cent of demand out of the equation.’
And Cuff can’t see it hurting commercial broadcasters. He points out
that there’s no problem with revenue supply to commercial stations - 92
per cent of inflation, which has been running at three times the rate of
the Retail Price Index, is down to revenue growth. If you take a little
of that growth away, it shouldn’t hurt commercial stations as a
’It certainly doesn’t need to damage programme budgets. ITV spends
pounds 800 million on programming and gets pounds 1.7 billion in
advertising revenue in return. Not many businesses get that sort of
return,’ he adds.
But Jim Marshall, the chief executive of the COI’s centralised TV buying
agency, MediaVest, points out another slight wrinkle. ’Some people have
a very odd view of what the COI is about. It runs structured advertising
campaigns with goals that are every bit as sophisticated as those
pursued by packaged goods advertisers. Some of it, for instance, is
The idea that we’d ever want anything to do with breaks that have
back-to-back COI ads is hideous. And if we are talking about, say, Army
recruitment, you obviously want to reach young men - and running ads at
9pm on the BBC is not the way to do it.
’In any case, it wouldn’t do much to help inflation. The COI’s spend
probably represents less than 1 per cent of total commercial
One per cent audience growth would be far more effective - as would
increased minutage. Putting COI ads on the BBC would be a remarkably
convoluted way of addressing inflation, especially as it would have such
a potentially damaging effect on COI advertising.’