Summary of ipprseminar: Content, Contestable Funding and Competition
ipprSeminar Summary
Content, Contestable Funding and Competition:
ippr Seminar on New Zealand’s Broadcasting Reform
Monday 14th June, 09:30 for 10:00 - 12:30
GREYLONDON, 215-227 Great Portland Street, LondonW1W 5PN
Content, Contestable Funding and Competition:
ippr Seminar on New Zealand’s Broadcasting Reform
Monday 14th June, 09:30 for 10:00 - 12:30
GREYLONDON, 215-227 Great Portland Street, LondonW1W 5PN
Chair
/ Mark Torley, Senior Parliamentary Reporter, Radio New Zealand and Reuters Fellow, OxfordUniversityDiscussants
/ Prof. Patrick Barwise, Head of the BBC Digital Television Services Review and Professor of Management and Marketing, LondonBusinessSchoolTim Gardam, Head of the BBC Digital Radio Services Review
Speakers
/ Paul Norris, Head, New Zealand Broadcasting SchoolDan Cook, Planning Partner, GREY London
Agenda
09:30 / Coffee10:00 / Chair's welcome & intro
10:05 / Paul Norris
10:25 / Q&A
10:30 / Dan Cook
10:50 / Q&A
10:55 / Coffee
11:20 / Prof. Patrick Barwise
11:30 / Tim Gardam
11:40 / Roundtable Discussion
12:30 / Close and Vote of Thanks
Biographies
Patrick Barwise
Patrick Barwise is Professor of Management and Marketing at LondonBusinessSchool, which he joined in 1976 having spent his early career with IBM. His many publications include books on Television and its Audience, Accounting for Brands, Strategic Decisions, Predictions: Media, and Advertising in a Recession, as well as numerous academic papers and practitioner articles, mostly on brands, consumer/audience behaviour, marketing expenditure trends, and new media (internet/interactive marketing, mobile advertising, digital television, long-term trends). His main current project is Simply Better, a controversial book on customer-driven strategy, to be published by Harvard Business School Press in August 2004. Patrick Barwise is also an advisor to Ofcom, the UK communications regulator and is also head of the BBC Digital Television Services Review.
Daniel Cook
Daniel Cook’s interest in the structures of television news began in 1994 when he was a journalist at One Network News, New Zealand leading network news bulletin. The changes he saw there led to a Masters in Political Science, looking at changes to the nature of television news around the world. He was invited to convert the Masters thesis into a PhD thesis in 1996, and focused his attention on deregulation of broadcast environment ant its impact on news values and outputs. He taught on the topic at the University of Auckland from 1996 to 2000.
In 2000, Daniel joined the advertising agency Saatchi and Saatchi as a consultant to the Executive Committee including the CEO, Kevin Roberts. The Ideas Group was tasked with examining broad changes in culture, both within countries and regions, and across the world. Their remit was to discover the opportunities and signpost the pitfalls of a rapidly changing world.
In 2002, Daniel moved to the UK, joining the London advertising agency, Rainey Kelly Campbell Roalfe. He worked there as a senior planner on Lego worldwide, Lloyds TSB and the Times Newspapers. He recently moved to Grey London as planning partner and looks after Procter and Gamble business, SEAT, Wyeth Healthcare and Airmiles.
Tim Gardam
Tim is Principal elect of St Anne's College Oxford, as well as head of the BBC Digital Radio Services Review. From 1998 to 2003 he was Director of Programmes at Channel 4 and from 1996 to 1998 he was Controller of News and Documentaries at Channel 5. He was also Head of Current Affairs for BBC Television and Radio between 1993 and 1996, Editor of Newsnight between 1990 and 1993 and Editor of Panorama between 1987 and 1990.
Paul Norris
Paul is Head of the New ZealandBroadcastingSchool at CPIT (Christchurch Polytechnic Institute of Technology). His previous career was in television journalism and management. After almost twenty years with the BBC in London, he returned to New Zealand in 1987 as Director of News and Current Affairs at TVNZ as the company prepared for deregulation and competition. In 1994 he became a Group Director at TVNZ, before joining CPIT in 1996. His special interests are public policy on broadcasting, the digital future, media ownership and media law and ethics. He is a regular commentator in the media on these topics.
He is a co-author of three reports commissioned by NZ On Air: Local Content and Diversity - Television in Ten Countries (1999), New Technologies and the Digital Future (2001) and The Future of Public Broadcasting: the Experience in Six Countries (2003).
Academic qualifications: MA (Canterbury), MA (Oxon) and Dip. Management
(Auckland).
Mark Torley
Currently Mr Torley is a political journalist for Radio New Zealand News, based in the parliamentary press gallery. As a radio documentary maker he has covered issues such as civil unions, neo-fascism in New Zealand, the origins of Pavlova and Trans-Tasman migration. He has won several journalism awards including the 2001 Bill Toft Memorial Award for Broadcasting. He has previously worked at Television New Zealand (TVNZ) as a presenter, reporter and documentary researcher.
The following is a summary of the themes of Content, Contestable Funding and Competition: ippr Seminar on New Zealand’s Broadcasting Reform prepared by Emily Keaney, Research Assistant, ippr.
Introduction
ippr’s work has been crucial in the development of the government's current approach to media and communications regulation, however there is still much to be done. Public service broadcasting must change if it is to survive. The licensing and funding arrangements that support it are challenged by long term technical and market changes including the pluralisation of channels and services, the rise of new interactive services and the shift away from mass-access to niche services and alternative platforms for content delivery. New Zealand represents one of the most interesting examples of broadcasting reform in the world to-date. New Zealand deregulated its television broadcasting in the 1990s and established a contestable funding regime for public service television content. Academics have fiercely debated the pros and cons of the New Zealand reforms. This seminar featured two of the leading New Zealand contributors to the debate and two experts from the UK.
The seminar examined the following key questions:
1) What was the impact of structural reform on New Zealand broadcasting content?
2) What were the pros and cons of New Zealand's broadcasting reforms?
3) What lessons can we draw from New Zealand's experience for the UK?
The Context
It was pointed out at the outset that the context in which deregulation took place in New Zealand is very different to the UK. New Zealand has a tiny population which makes it very expensive per capita to fund the production of programmes and it is therefore much harder to justify the licence fee. Domestic production therefore became one of the leading priorities for TVNZ as it is so difficult to get the money to do it and because New Zealand views Public Service Broadcasting (PSB) as a means of reflecting a young and diverse country back to itself. However it was pointed out though that domestic production in New Zealand does not always achieve this aim. There are a lot of foreign companies making programmes in New Zealand because it is cheap with high skill levels. These are then shown in New Zealand but they were not necessarily created for a New Zealand audience. It was also pointed out that the desire to reflect the nation does not mean that TVNZ funds regional broadcasting as it is obliged to have regard for the potential size of the audience. Again this is partly because of the small population.
It was also pointed out that the motivation was very different. New Zealand wanted the shock of competition in a moribund market. In the UK we want to maintain quality in a highly competitive market.
Quality
The need to ensure quality recurred repeatedly in the discussion. It was argued that Dan Cook’s paper shows that dumbing down can be measured objectively, although this is an arduous task which would need to be done on a large scale and would require a lot of resources. A report commissioned by Saatchi and Saatchi showed that in 1989 16% of people over five watched at least fifteen minutes of news per day, in 1993 that figure had fallen to eight per cent. There was concern that there was not competition for quality in New Zealand.
There was a general feeling that it was very important to ensure competition for quality in the UK. Without this it was suggested that even if we have strong institutions they will not deliver the quality we want. Competition for quality has to be on a large scale. Small digital producers don’t have large enough audiences to really provide competition to the BBC.
Contestable Funding
It was argued that in a digital world we need to find a system of incentives to replace the system of obligations if we are to ensure quality. The UK already has contestable funding to a limited extent but currently the broadcasters are the gatekeepers. However in the future the broadcasters won’t have the money to finance this. Channel 4 will be forced to go for profit maximisation. The terrestrial broadcasters currently have 75% of the market share but are investing 95% of the content. An entirely digital market will drive out cross subsidisation. It is unclear how much advertising revenue will be over and over what timescale but if there is not enough advertising revenue there will be competition for ratings and not for quality. It was generally agreed that we need some mechanism to ensure that there is competition for quality.
Some participants argued that contestable funding could be a way of achieving this. It was pointed out that the New Zealand experience shows that contestable funding is possible, contrary to the arguments of some of its fiercest detractors. It was argued that a contestable fund would ensure quality in certain types of less profitable programming so that even the most commercially driven broadcaster would want to maintain their reputation in that area and that in high risk genres like current affairs contestable funding will be essential. Other positive aspects of contestable funding that were put forward were that it brings a financial incentive to independent producers and that the money can be used to pump prime projects so that the market produces something it wouldn’t have had the courage to produce otherwise. However several participants questioned whether a contestable fund would really deliver quality.
Institutions
There was a feeling among some participants that the debate and Ofcom’s thinking did not take sufficient account of the role of our institutions. It was pointed out that New Zealand did not have the same history of strong, PSB orientated institutions as the UK. While in New Zealand contestable funding was a pragmatic approach to ensuring local production there was concern that this form of financing would be difficult to combine with the licence fee. It was generally agreed that we do not want the BBC to be a monopoly provider and that competition was a vital factor in successful PSB however it was also argued that if we believe in an institutional answer to these problems we ought not to advocate taking money from the licence fee. That left the question of where the money for contestable funding would come from. One suggestion was that a more effective way of ensuring competition for quality would be to relieve the pressure of costs on Channel 4 to help sustain it. Otherwise we would be supporting two publicly funded broadcasters. However one participant argued that the premise behind this – that the public would not accept a higher licence fee – was flawed. That willingness to pay research, which underpins this idea, is rendered ineffective because the public do not really believe that the BBC would be taken away.
Countering this though was the idea that the contestable funding model brings market discipline to institutional funding. It was argued that the BBC needs to be transparent about how it spends its money. The reform of the board of governors should make them custodians of the licence fee. An over generous licence fee settlement has an inflationary effect and the money that goes into PSB is not currently delivering. BBC1 has been mirroring the commercial interests of ITV and has therefore been pushing ITV further down that track.
There was also concern that the culture of our institutions is an integral factor in high quality PSB, and that this needs to be carefully guarded. Once the public service culture is lost it is very difficult to recreate it and we are in danger of loosing a system which still works effectively by pursuing a theoretical ideal. This is particularly the case for the public service broadcasters other than the BBC. We can project the future commerciality of these channels with relative confidence but the BBC is not a one way street in the same way.
A concern was also raised about whether we will be able to maintain the independence of our institutions. The aim is for broadcasting which is independent of both the market and the state. Broadcasting is currently becoming less independent of the market, and the question was raised of whether the remedy would make broadcasting less independent of the state. It was generally agreed that in New Zealand this had not proved to be a problem, although one participant asserted that the dependence of producers on the broadcasters has been a problem as they produce programmes which interest the public rather than what is in the public’s interest. Others disagreed with this however claiming that there was a mixture of programming of both types.
What is PSB?
Some participants felt that examining what type of funding mechanisms we need was approaching the problem from the wrong angle. We need to consider what the objectives of PSB are and how will we ensure these are achieved in a digital age. We shouldn’t just see PSB as boring programmes which are good for you. The key role of British PSB is, like New Zealand, to reflect the nation back to itself, but there was a feeling that this had been neglected in the discussion. The wider public often has a very different idea of what constitutes PSB than the broadcasting policy community. Regional broadcasting was seen to be an important aspect of this by several participants and there was concern that there had not been sufficient consideration of whether contestable funding could be applied to this. The infrastructure which supports this would certainly be under threat if revenue was threatened.
Economic Value versus Social and Cultural Value
Finally there was a plea not to apply indiscriminate economics which point to market failure as the only answer. It was pointed out that the economic stakes are not that high. As a proportion of GDP broadcasting is a tiny industry, but the social and cultural implications are huge. We must therefore be wary of any solutions which do not have these implications at their core.
Future Actions
ippr’s Digital Society and Media Team will shortly be launching a new project: Manifesto for A Digital Britain. This will take the form of a major new series of seminars and publications for 2004/2005, leading ultimately to the publication of a landmark Manifesto for A Digital Britain. The Manifesto process will be an opportunity for a national, cross party, cross sector debate on the public policy options and choices facing the United Kingdom in the Digital Age. More information can be found at or you can contact .
Further Information
From Public Service Broadcasting to Public Service Communications
edited by Damian Tambini and Jamie Cowling
Published January 2004 price £16.95 isbn: 1 86030 2297
Public service broadcasting must change if it is to survive. The licensing and funding arrangements that support it are challenged by long-term technical and market changes including the pluralisation of channels and services, the rise of new interactive services and the shift away from mass access to niche services and alternative platforms for content delivery. Although in the short term UK public service broadcasters are in a state of rude health, they neglect these longer-term challenges at their peril.
The contributions in this book present a positive debate about the potential for public service communication to thrive and take on new functions in the digital environment, rather than a negative debate about protecting the privileges that PSBs have come to enjoy.
Contributors come from academic, policy, creative, regulation and senior programming backgrounds. They include: David Bergg, ITV1; Professor Patrick Barwise, London Business School; Professor Steven Barnett, University of Westminster; Dr Damian Tambini, University of Oxford; Jamie Cowling, ippr; Phil Redmond, Mersey Television; Professor Stephen Coleman, University of Oxford; Mike Bracken, Consultant; Nanne Priebs, Referendar to District Court for Land of Brandenburg; Professor Richard Collins, Open University; and Robin Foster, Strategy Development, Ofcom.
‘We are beginning a debate on the future of the BBC prior to charter renewal in 2006. But the debate involves much more than just the BBC. It is one which will fundamentally shape the future of public culture in this country. This publication sets its terms of reference. It is wide ranging and provocative and it should be widely and intelligently read.’
Prof Roger Silverstone, Director of Media, LondonSchool of Economics
To order a copy please go to
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