Philip Booth is Professor of Finance, Public Policy and Ethics at St Mary’s University, Twickenham, and Senior Academic Fellow at the Institute of Economic Affairs.
The BBC has come under severe criticism recently for the way in which it seems to be ditching the nation’s history, apparently because many of the party pieces at the Last Night of the Proms are anachronistic.
As many people who understand the origin of the words of “Rule, Britannia!” and similar songs have pointed out, the BBC seems to be totally misguided. However, there is a deeper irony here. The BBC itself is a living, walking, talking anachronism.
The BBC has been financed by a hypothecated tax levied on television sets since 1946. The link between television sets and watching mainstream television no longer has any meaning.
In the UK, 18-34-year-olds watch seven times as much Netflix and YouTube as BBC1 content, and spend more time watching Netflix and YouTube than all other public service channels put together. The average time spent by all adults watching Netflix and YouTube is greater than the amount of time spent watching BBC1. Interestingly, most non-broadcast content is now watched on a television set.
The idea of linking the funding of a television channel to the ownership of a television set does not belong in the 21st century. Collecting licence fees in relation to the use of other devices is unenforceable.
The BBC tells us that compulsory licence fee funding is appropriate because the channel brings the nation together. But, not only are young people not sitting in front of the fire with their parents watching The Generation Game any more, they are enjoying their own ‘shared experiences’, without the BBC. Amongst young people, the proportion of shared viewing of content is increasing dramatically, and the length of viewing sessions is increasing.
The economic case for licence fee funding and compulsory funding of the BBC has evaporated, and the BBC no longer makes such a case. The case it makes is basically cultural. But broadcasting has become like publishing became in the 18th and 19th century, and nobody argues that a state-owned publisher, funded by a tax on books, would add to culture.
Around 200 years ago, in the publishing industry, technology improved, raw material costs fell in real terms and real incomes rose. As a result, publishing blossomed.
A similar phenomenon is happening in relation to broadcasting and content provision today.
In both broadcasting and streaming, there is a huge variety of genres, delivered in different ways through different platforms and responding to different tastes and by different organisations. This is similar to how bookshops, libraries, pamphlets, novels and newspapers all proliferated in the nineteenth century: in 1898 there were around 400 publishers in Britain and Ireland alone. The growth in publishing both encouraged and was encouraged by a growth in literacy. Good quality literature was read and literature from the period is still read today. We did not need a state-funded publisher to produce great books.
The parallels between publishing and broadcasting continue almost down to fine details. In publishing, as well as a variety of formats (magazine, newspapers, serialisations, books and pamphlets) there was also a variety of payment mechanisms (subscriptions to series or serials, pay-per-chapter, pay-per-book and subscription to lending libraries, which would allow readers to read as much as they wished in return for the subscription).
Surely the BBC should be funded by subscription by those who wish to avail themselves of its services. There is no justification in the modern world for requiring people to pay for television services they do not wish to watch. But this leads to the question of the ownership of the BBC. If it remains a state-owned corporation it will surely become an irrelevance.
Even if politicians thought a commercial sale of the BBC desirable, surely that is not on the table (though this should be pursued for Channel 4). Perhaps we should consider something else. In a thriving free economy we see a wide variety of ownership arrangements. And, in the field of culture and education, mutual, co-operative and similar forms of ownership are very common.
There is a strong case for turning BBC subscribers into owner-members so that the BBC would become a subscriber-owned mutual. In fact, this was the Peacock review’s preferred model. It would be very difficult for a subscriber-owned mutual BBC to be captured by closely connected political and commercial interests as its ownership would be dispersed. But it would be possible for it to expand into the 95 per cent of the English-speaking world that lives outside our shores through joint ventures and wholly-owned subsidiaries.
We should not pretend that a subscriber-owned BBC will not remain a participant in the left-dominated culture wars. The executives will not necessarily reflect the views of the members (as we have seen with the National Trust). However, we should be able to choose whether we support the BBC with our wallets.
Whatever the economic and cultural arguments for compulsory licence fee funding (and they are very weak), there is no moral case for requiring people to finance the BBC if they have no interest in its services.