BBC boss upbeat despite channel nix

Politics are not a problem for patient British pubcaster

CAMBRIDGE — The BBC is used to getting what it wants. So how come Beeb executives doing the party circuit at King’s College looked so chipper when a government minister had just derailed part of their digital strategy? The answer can be summed up in one word — politics.

Taken at face value, failure to approve BBC3, the most ambitious of the pubcaster’s four new digital TV channels, with a budget of $140 million, was a mighty snub for an organization led to believe it would get approval for its entire digital portfolio.

But far from reining in the BBC, ministers are enabling the pubcaster, flush with extra license fee money, to dominate U.K. media as never before. This is despite the blip over BBC3, a youth-skewed entertainment service that threatened to make life harder still for commercial rivals, and which BBC director general Greg Dyke believes will get the greenlight once its more public service aspects (like news and factual shows) are beefed up.

“It’s all to do with politics,” says Dyke, even more ebullient than usual and knowing that the government hopes an improved BBC digital service will help drive digital take-up, enabling the treasury to sell off analog frequencies.

Had the government approved BBC3 during the traditional ministerial opening address at the Royal Television Society’s biennial Cambridge Convention, it would have further enraged delegates from the private companies who are forced to live in difficult times. The BBC, not so long ago threatened with privatization, is financially on a roll — and knows it.

That was the real message to emerge from the Sept. 13-15 Cambridge confab where industry bigwigs relive their university days by holing up in Spartan student rooms and downing cheap beer in the college bar until the small hours.

Flexing power

“The BBC is now absolutely massive, it’s more powerful than at any time I can remember,” says one ITV man. “They’ve got more money to spend than we have, and they’re not afraid to spend it.”

Cambridge 2001 had intended to address international issues with star billing for Liberty’s John Malone and News Corp.’s Rupert Murdoch. The terrorist attacks of Sept. 11 in the U.S. put an end to that, as both moguls were unable to cross the Atlantic.

Perhaps this was just as well. Had the pair attended, chances are they would have been depressed by the demoralized state of Blighty’s commercial players, reeling from the biggest advertising recession in memory, and disgusted by a resurgent BBC that has the government eating out of its hands.

In one telling session, led by BSkyB CEO Tony Ball, Granada maven Charles Allen and Dyke, soon to celebrate his second anniversary since leaving the private world to run the BBC, delegates were asked for a show of hands about whether they thought it was too late for U.K. telcos to join the big boys on the international stage.

No prizes for guessing the result.

“I remember when I worked in ITV in the ’80s and companies like Thames and TVS attempted to move into the U.S., usually with disastrous results. The Americans used to eat us for breakfast,” says Dyke, knowing full well that he no longer has to compete in the marketplace.

Vision failed

Nowadays it is economic factors and, according to some critics, a failure of management vision during the boom years of the ’90s that is depressing the commercial players like Granada and Carlton. They, in turn, blame regulatory restrictions, British introspection and the lead that BSkyB was able to carve out in the pay market.

Doom mongers predict that ITV’s ad revenue could be down by up to 20% this fall; at Cambridge, Adam Singer, who heads cable packager and programmer Telewest, reckoned ITV’s audience share could fall another 10 points in the years ahead.

The U.K.’s other two terrestrial webs, Channels 4 and 5 also face a testing future. Now that Channel 4 — looking for a successor to Michael Jackson, who is off to work in the U.S. — has moved into pay TV with niche nets FilmFour and E4 (whose audience will be targeted by BBC3), rivals think the time is long overdue for it to start living in the real world and start paying real taxes.

C4 is allowed to broadcast without paying any fees to the regulator in return for carrying out certain public service duties. Detractors claim this represents unfair competition and has led to high staffing levels and a carefree attitude toward budgets.

But even C4 is hurting in the ad squeeze, with off-peak program budgets being reduced to sustain a competitive schedule during primetime. C5 is also feeling the ill winds of the economic slowdown just at the time it needs to invest to increase ratings, which are beginning to stagnate.

Aside from Dyke, the only upbeat note over the weekend came from Endemol’s U.K. chief, Peter Bazalgette. He is the man who brought “Big Brother” to Blighty and is a front-runner to succeed Jackson at C4. In the Huw Wheldon lecture, he spent more than an hour telling his peers, “Golden age be damned,” British TV is better than it’s even been.

As one wag remarked on leaving his lecture: Will he still feel the same way if he fails in his bid to run C4? Or maybe he should not worry. He could always return to his old employer — the BBC.

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