The BBC is obsessed with the internet – and with good reason: online, on-demand TV threatens the Corporation’s very existence. Indeed, basic broadcasting concepts like ‘channels’ and ‘scheduling’ will become obsolete in the years ahead.
Thus far, the BBC has managed to preserve its position, despite growing competition from new broadcasters and platforms. It’s not-so-secret weapon, of course, is the licence fee – which has allowed it to make successful investments like BBC iPlayer as well as blowing tens of millions on the disastrous Digital Management Initiative.
But what if people stop paying the licence fee – not because they’re dodging it, but because they no longer watch broadcast television?
For the first time, there is now an alternative – instead of forking out for a TV licence, you can use the money to subscribe to a commercial online content provider like Netflix. These paid-for on-demand services provide access to a library of US and UK TV shows – including original dramas of a quality that more than matches what the BBC produces these days.
In combination with free on-demand services like iPlayer (for which you don’t need a TV licence), you can get just about everything that the broadcasters provide – and a great deal more besides. So what happens if increasingly large numbers of people switch from broadcast to on-demand?
It’s a question that’s explored by Pascal-Emmanuel Gobry in an article for Quartz. However, his subject isn’t Britain, but France:
“Oh, France. You hate new things. You hate foreign things, particularly American things (or so you like to say). You hate business. Of course you’re going to hate Netflix…
“Since the era of Jean-Baptiste Colbert, Sun King Louis XIV’s Minister of Finance, the French economy has functioned as a government-managed oligopoly. Consumers exist to reward friends of the state.”
Though France doesn’t have an equivalent to the BBC, the French state certainly pursues a policy of cultural intervention:
“Basically, if you want to operate a TV network in France, you are mandated by law to also become a movie producer and set aside a percentage of your profits to produce movies. Does Netflix count as a TV network? Netflix has described itself that way before; its French competitors—and the French government (which, if you’ve been paying attention, is the same thing)—certainly think it should count as one for those burdensome rules.”
And that’s not the only trick the oligopolists have up their sleeves:
“There’s another problem for Netflix: net neutrality. In France, the important technology companies are not the internet services companies—they are the telcos. The biggest one, Orange, used to be a state company. The state is still a major shareholder and usually picks the CEO… Orange has also made it clear that it views itself as having a future in media.”
The threat therefore is that the telcos might use their control over the internet to strangle Netflix by deliberately slowing down its online traffic.
If this is the direction that things are moving in France, then it is all the more important that Britain moves in the opposite direction. Investment in superfast broadband must be stepped up and net neutrality guaranteed.
Furthermore, Britain’s own cultural oligopoly – centred on control of the licence fee – should be broken wide open. Whether the money is raised through the existing arrangement or by some other ring-fenced method, all programme makers should be free to bid for the funds.
These measures would attract inward investment, enhance Britain’s position as a creative industry world leader and maximise consumer choice. Public service broadcasting – or its online equivalent would continue – but without the impediment of the BBC’s bloated bureaucracy.