Broadcasting
Stone age BBC
Paul Johnson
Television advertising is now so popular that the ITV network cannot accommodate all the businesses which want to advertise their products and ser- vices on the box. The companies have asked the IBA for permission to increase the number of advertising minutes they can Show every hour. The alternative, which they deplore, is to raise rates still further, Which might have the effect of crowding out some of their oldest customers from Peak time. A survey conducted for Market- ing Week by D'Arcy MacManus Masius of the price of advertising on TV from 1970 to 1983 shows an appalling cost inflation, Produced mainly by excess of demand over Supply. While the Retail Price Index has increased annually by an average of 12 per cent over this period, the TV advertise- ment revenue index has risen by an aver- age of 18 per cent, a six per cent increase in real terms. Businesses have to pay nearly twice as much in real terms to advertise on ITV than they did in the early 1970s. Crowding the ITV schedules with yet more ads is not a satisfactory solution in the long term, though a one-minute in- crease every hour is certainly acceptable for the time being. The real solution is to unload some of the surplus advertising °nto the BBC's two channels. This would also help the BBC's perpetual, growing and apparently insoluble financial prob- lems. At present the BBC is financed almost entirely by the licence fee of £46, an illogical and much-hated poll tax, which falls hardest on the poor, most of whom rarely watch the BBC anyWay. This ineffi- cient tax costs £50 million to collect; nevertheless, evasion reduces its return by a further £65 million.
If the licence fee remains at £46, the BBC will be an estimated £30 million short next year, rising to nearly £250 million in 1.990 (at constant 1984 prices). TV produc- tion costs continue to rise fast. Writing in The, Stage and TV Today, the BBC's Direct& of Resources, Michael Check- land, gives some up-to-date figures of cost-per-hour of BBC network program- es. The cheapest, you may be surprise to hear, is sport, at £25,000 an hour. Current affairs costs a further £25,000 an hour. Then comes childrens,' some 50 per cent higher, feature and documentaries at £65,000 an hour, and light entertainment at £95,000. By far the most expensive is drama, at a staggering £215,000 an hour. Much of this huge increase in drama costs, Checkland says, is due to expenditure on design (scenery, properties, visual effects, costumes) which has trebled in recent years and now accounts for almost half of drama costs.
I have no confidence in the BBC's ability to control costs. The new chairman of governors, Stuart Young, though an accountant, does not seem to be having any effect. Design costs may be rising but where the BBC needs to economise is on people. .Why do they need so many more than ITV to produce the same amount and quality of programmes? They had 200 people at Blackpool last week to cover the Labour Party Conference. Rumour has it that over 50 BBC executives found it imperative to pop over to San Francisco this summer for the Democratic Conven- tion — not an earth-shattering news event, I'd say. Checkland reveals that for every ten pounds of BBC income one pound goes on new equipment and buildings, only three pounds for direct programme costs, and six pounds is taken up by paying and housing staff (most production staff must be housed in the top hotels and are entitled to first-class air travel). So staffing is the key to the BBC's financial mess, and the Corporation has never shown any real will to curb its workforce. By comparison with other public sector corporations, such as BA, British Leyland and British Steel, its record is lamentable.
'He may be right, when you think of the time Scargill gets on TV. Instead it simply expects the Govern- ment to jack up the licence fee periodical- ly, and is just about to begin a new campaign for this purpose. Various target- figures have been suggested — £60, £75 even £92 — and the general expectation is that the new fee will be less than £60. Why should poor people have to pay this hefty sum, when in the US they can get ten or more channels free? And don't tell me that TV financed by .advertising is not 'free' since it is reflected in the increased costs of the products you buy: that is simply not true, for effective mass advertising actually enables good products to be produced and sold more cheaply. Don't tell me, either, that US television is poor quality. That is a myth assiduously propagated by the British TV industry. No one outside this country believes it.
The solution proposed by the Masius survey for Marketing Week is for the BBC to take in advertising on a progressive basis to meet its rising costs, while pegging the licence fee at £46. This would mean it would show only 15 seconds an hour of ads in 1985, rising to 30 seconds in 1986, with further increases thereafter. The air-time available for advertising would be in- creased by six per cent a year, until by 1990 the BBC would be carrying about £250 million-worth (at 1984 prices). This would not damage ITV's sources of revenue, would benefit businesses looking for air- time at reasonable rates, and would not mess up BBC programmes, since the inci- dence of advertising would be low and most BBC commercials could be slotted solus rather than grouped in breaks.
The merit of this ingenious plan is that it does not stipulate the revolutionary step of the BBC going commercial with a bang — with all the psychological resistance this would provoke and, incidentally, unpre- dictable effects on ITV One and Two. The new element would be introduced gradual- ly and with the minimum disruption and drama. The BBC has not yet commented officially on this proposal and I look forward to hearing its reply. To a growing number of people, the BBC's opposition to advertising looks more and more like sheer, upper-middle-class, snobbish pre- judice against 'trade'. It is quite illogical, since it does not extend to the Radio Times, for instance, which is a prodigy in the advertising world, or even the Listener. The arguments the BBC deploys against accepting ads are remarkably similar to those, which it indignantly refutes, put forward by the more obscurantist MPs to keep the television cameras out of the House of Commons. The Lords are now to have a television experiment next year, and the BBC should be induced by the Home Office (which handles the licence- fee negotiations) to leave the Stone Age and accept a similar advertising experiment of the kind Masius suggests. At present, the Corporation's obstinancy has no more foundation in reason and economics than Arthur Scargill's refusal to accept pit- closures.
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