UK MEDIA
WE are now overwhelmed with the number of ways in which we can view content. It can be difficult to know where to begin: Netflix, Apple TV, Amazon, YouTube, TikTok, and Instagram are all just a click away.
This profound transformation of the entertainment and digital media industry has fragmented audiences and also altered the future prospects of the UK broadcasters that previously dominated our viewing experience. The BBC in particular faces profound questions as it enters discussions with the Government on charter renewal.
The BBC is not alone in facing critical questions about its future. Channel 4, too, is caught up in the complexity as the globalised entertainment industry reorders itself around a handful of gigantic platforms.
Most in Britain still like to talk about “our” broadcasters as if they are permanent fixtures of national life. In reality, they are now islands under threat in an ocean dominated by American tech companies and our addictive relationships with our smart phones.
In the United States, the industry has drawn the obvious conclusion. If you want to survive in this era, you need more scale. That is why we see major studios and platforms circling each other, exploring combinations that would have been unthinkable just a decade ago. When a studio as diverse and storied as Paramount concludes that it needs to combine with a bigger partner like Warner Bros simply to flourish in the streaming age, it tells us something about the brutal economics of global entertainment today.
Yet in the UK, our public service broadcasters risk remaining stuck in old models and old ways of thinking. They are still organised around linear schedules, legacy silos, and institutional pride, rather than around the single hard question that now matters: how do we build something big and compelling enough to matter in a digital world where the viewer is always one click away from bypassing British content altogether? At precisely the moment when courageous transformation is required, we risk clinging to structures designed for a previous century.
For the BBC, this question is existential. The age profile of its audiences keeps creeping upwards. Younger viewers are drifting to platforms whose names barely existed when the last licence fee settlement was negotiated. The corporation has made great efforts to pivot to digital and to find ways of connecting with young audiences, but the time has come to acknowledge that on its own it cannot achieve what it needs to with that demographic. It would benefit immensely from a new, deep and durable relationship with younger audiences at scale.
For Channel 4, the risk is different but just as stark. It has always prided itself on being smaller, nimble, and more disruptive. But in a world of global streaming, “small and nimble” can start to look like under-capitalised and vulnerable. The advertising market is fragmenting. Production costs are rising. The channel’s ability to take creative risks depends on a financial base that is no longer guaranteed. It needs scale – not to become safe and bland, but to ensure it still exists a decade from now.
As charter renewal begins, questions on the BBC’s future are starting to revolve around the possibility of advertising and subscription-based services.
But there is a different solution: a merger between the BBC and Channel 4.
This would address both of their problems at once. The BBC would gain more of the younger, increasingly diverse audiences it desperately needs for a long-term future. Channel 4 would gain the scale and security it needs to keep commissioning the bold, distinctive work that has always been its hallmark.
Together they could build a single, world-class public service media platform that is genuinely capable of competing in a global market.
Needless to say, there would be objections. How would the advertising model work? Would Channel 4’s irreverent tone be smothered by BBC bureaucracy?
Such concerns are real but could be overcome with political and institutional courage. It is far easier for ministers to tinker at the margins than to rethink the entire architecture of public service broadcasting. It is more comfortable for executives to protect their fiefdoms than to imagine themselves as part of something larger. But comfort is not a strategy. In the absence of bold change and reform, both organisations will slowly move towards irrelevance with younger audiences slipping further away.
The question, then, is not whether a merger between the BBC and Channel 4 would be complicated. Of course it would. The most pressing question is whether we are prepared to let two British institutions wither on the margins of a global entertainment market, or whether we are willing to give them the scale and strength they need to thrive.
In an age of giants, muddling through as we are is the most dangerous option of all. That can only lead to demise.
TWO
THE terms for the decennial review of the BBC’s Royal Charter have been set. Unsurprisingly, the Government has chosen to avoid asking the difficult question of whether the licence fee continues to make sense. While raising other forms of revenue will be considered, the regressive tax on those consuming live media is going to stay.
This is a missed opportunity. The licence fee has become an embarrassing anachronism. The notion that a licence is required to watch live content produced by broadcasters charging their own independent fees to consumers is a bizarre legacy of early arguments over radio broadcasting. If it has failed to keep pace with the developments in media of the last century, it has certainly failed to keep pace with those in the new millennium.
Yet the BBC is financially reliant upon this structure, and desperate to retain it. This unique and privileged position allows the organisation of being able to charge not only their own customers, but those of their direct competitors. The results, however, are strictly negative.
The BBC is simultaneously desperate to retain public approval and also to maintain the line that it produces public services which would otherwise have no home. These objectives are in clear tension: the first drives it to produce the sort of content commercial stations would already produce; the second, a sort of Reithian public education. In practice, the former objective seems to dominate, and the latter instinct to be redirected into nakedly political exercises that promote the views of the organisation’s staff.
It is difficult if not inconceivable to argue that this activity permits the subsidies given to the BBC through the licence fee – particularly when they increasingly drag Britain into disrepute.
President Trump’s lawsuit against the broadcaster for misrepresentation – and the long, shameful list of incidents demonstrating bias on foreign policy issues – illustrate how problems for the state broadcaster can become problems for the Foreign and Commonwealth Office.
Given this, it would have been better to rip the sticking plaster off before the Government confirmed the BBC’s autonomy over the licence fee. It should have made clear to the BBC that it must prepare for a future without it, and begin to separate the state from the broadcaster. This is, after all, the long-term direction of travel. As things stand, the inevitable has been postponed, and the adjustment will be all the harder when it eventually arrives.
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