BBC Bracing For Big Budgetary Brouhaha

Reach, not ratings, is the buzzword at the BBC as debate on the future funding of the pubcaster drifts to the top of the political agenda.

The BBC claims that 94% of the U.K. population tunes in to its tv and radio services at least once a week. That figure, says the BBC, better reflects its key role in broadcasting rather than individual ratings of any program or channel.

It’s all part of a pre-emptive strike against the argument that the BBC’s ratings don’t justify the annual tax on tv sets (about $130 a year). Currently, the BBC’s two national tv services attract just under 50% of total viewing (versus ITV and Channel 4); mass-audience BBC-1 is trailing ITV by 38% to 43%. However, by mid-decade competition from new satellite and cable channels and a possible fifth national web could pull the pubcaster’s overall figure down below the politically sensitive 40% mark.

The BBC’s charter is up for renewal at the end of 1996. It’s thought likely that by 1993-94 the government will set up a review body to consider the best way of funding the broadcaster. According to Howell James, the Beeb’s director of corporate affairs, the pubcaster will have to start preparing its case by the end of this year, or early 1992.

Leaner and meaner

Although the BBC emerged relatively unscathed from the government’s new broadcasting law (it confirmed BBC as the “cornerstone of British broadcasting”), there’s no letup in the drive to make the BBC more market-sensitive and cost-conscious.

For the past three years, the license fee has been tied to the rate of inflation. The BBC argues this has resulted in a net loss, as its costs are rising faster than the rate of inflation. (The license fee raises about $2 billion a year.)

Like other broadcasters, the BBC is being forced to commission 25% of output (other than news) from indie producers. At the same time, it wants to bring its salaries more in line with those in the commercial sector.

All of these factors explain why early last year, the BBC announced it was aiming to cut £ 75 million ($145 million) from its budget by 1993, and that planned capital expenditures running into millions of dollars would be shelved.

Michael Checkland, the accountant-turned-director general of the BBC, argued that progressive program cuts of 5% a year would not affect program quality.

Sir Paul Fox, newly knighted head of network tv, said the BBC was going through “a golden period” in its drama output. However, one senior drama producer said items like time allowed for post-production were being pared to the bone. “It only requires one show to go over budget, and the whole system is thrown into gear,” he claimed.

The cost pressures on the BBC will get worse still. Later this month, the government plans to publish its decision on how much the license fee will increase for the next couple of years. Speculation is that the government will peg the rise to the rate of inflation, minus 2%.

The BBC’s scheme to raise extra revenue from subscription services (as urged by the government) is progressing slowly. A scrambled service for the medical profession failed last year, but the BBC said it was planning to offer other special-interest programming.

Later this year, the BBC plans to roll out a tv version of its World Service radio. A new subsid, BBC TV Intl., hopes to start airing five half-hour newscasts a day within the next few months. The venture is linked to BBC TV Europe, which is available to about 7 million homes in Europe via cable and direct-to-home dishes. Financing will come from BBC Enterprises with a £ 6 million loan arranged by the J. Henry Schroder Wagg merchant bank.

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