Future of the BBC: why the ‘market failure’ model is a flop in broadcasting

For any fans of the BBC – and that would include the 59% of Britons who say it is the source they are most likely to turn to for accurate news coverage or, for that matter, the 34% of Americans who told Pew last year they turn first to the BBC for their new – then the government’s green paper on the future of the UK’s public broadcaster will come as worrying news.

At the heart of the green paper is a belief that public funding should only apply to those areas where the market fails to deliver. It is worth reminding ourselves where this philosophy has prevailed and what it has produced.

Up until the 1960s broadcasting in the US was run purely as a commercial enterprise, lightly regulated by the Federal Communications Commission (FCC). Programming was constructed around the needs of advertisers (who paid the bills) who had a preference for light, mildly entertaining fare that could be regularly interrupted with commercial messages.

US president John F Kennedy’s first chair of the FCC, Newton Minow, in a memorable speech to commercial broadcasters, castigated US broadcasting for its poor quality, formulaic and ad-filled content. The US television landscape, he said after having spent a week watching American TV, resembled a “vast wasteland” – repetitious, uninformative and cajoling. The UK system, meanwhile, run very much along public service principles, was entering a golden age of serious popular drama, biting satire, innovative comedy, news, current affairs and documentary programming rarely seen in the US.

Democratic administrations, looking enviously across the Atlantic, decided to introduce public service broadcasting into the US system, creating PBS and NPR. Under pressure from commercial broadcasters, however, they adopted the kind of “market failure” model that appears to inform the current government’s thinking. Public television, in particular, was there to provide what that market did not.

US television a ‘vast wasteland’.

Worthy but dull

With the possible exception of children’s programming (notably Sesame Street), this pushed PBS away from making popular programmes. It quickly gained the reputation for being high-brow, worthy but dull. Its financial dependence on government also laid it open to budget cuts whenever politicians found its programmes too questioning or critical. This made PBS increasingly risk averse. So, for example, while Year Zero, John Pilger’s famous documentary about the genocide in Cambodia, aired on primetime on ITV, PBS refused to show it in the US. Many worry that our government’s threat to reduce BBC funding is having a similarly chilling effect.

BBC in his sights: culture secretary John Whittingdale.PA / PA Wire/Press Association Images

Politically compromised and under-funded, PBS does its best, but it pales by comparison with the BBC. While the BBC is the most popular British broadcaster – on TV, on radio and online - PBS is marginal to American broadcasting.

Some would argue that this doesn’t matter, that US commercial broadcasters produce plenty of high-quality, innovative programmes. Having lived in the US for 12 years, I would ask anyone who thinks this to do what Newton Minow did, and sit down for a week in front of a TV in America – or even worse, to listen to the radio. This is the wealthiest media market in the world; it is far richer than the UK and yet the original, critically acclaimed shows it produces (think The Wire or the West Wing – or even well-crafted sitcoms such as Friends, Big Bang Theory or Parks and Recreation) are very much the exception rather than the rule.

Many of the critially well-regarded US shows are made on subscription channels such as HBO that are only really viable in a market as lucrative as the US. The rest, with endless repeats, commercials and hollow canned laughter, is so formulaic and derivative that it makes Bake Off and Strictly Come Dancing seem positively uplifting. As for radio, the BBC alone offers more high-quality and diverse programming than the entire commercial network in the US.

Crowd-pleasing TV

There are many areas where a sensibly regulated market works well, but the evidence suggests that broadcasting is not one of them. So, for example, our wealthiest broadcaster is Sky, yet few could argue that Sky produces anything like the range of high-quality output produced by the BBC. British broadcasting is a huge success story precisely because it has a well-funded public service, commercial-free broadcaster at its core.

Focus on royaltyPA / PA Archive/PA Images

One of the reasons for this is that the programming produced by commercial broadcasters is designed to please advertisers – after all it is they, rather than the people watching, who pay the piper. The wishes of advertisers – who prefer mildly entertaining, easily interrupted content – are not the same as the preferences of audiences.

So, for example, when BBC and ITV show the same event live, people overwhelmingly choose to watch the BBC. This is, in part, because of its reputation as a national broadcaster, but also because, given the choice, people prefer their TV commercial-free. The “market failure” model takes away this choice.

The success of UK television, in other words, is because of its mixed ecology, with strong public service and commercial channels, a system that offering far more choice and high-quality programming than a monotone, commercial model with a weak public service provider. With a smaller BBC, commercial broadcasters could make more money to provide more programmes. But to suppose that they would do as good a job as the BBC is to take a huge risk. As the Americans would say: if it ain’t broke, don’t fix it.

Justin Lewis does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond the academic appointment above.