Professional Documents
Culture Documents
GrantGoddard July2010
CONTENTS
1. 2. 3. 4. 5. 6. 7. 8. EXECUTIVESUMMARY THEREGULATORYFRAMEWORK THERADIOBROADCASTINGMARKET THEINDEPENDENTRADIOPRODUCTIONSECTOR THEPRESENTBBCSYSTEMSFORTHECOMMISSIONINGOFINDEPENDENTRADIO PRODUCTIONS THERANGEOFCOSTSWITHINBBCINDEPENDENTRADIOCOMMISSIONS THERANGEOFPROGRAMMESWITHINBBCINDEPENDENTRADIOCOMMISSIONS THEDIVERSITYOFPROGRAMMESWITHINBBCINDEPENDENTRADIO COMMISSIONS
1.EXECUTIVESUMMARY
TheBBCisrequiredbyitscurrentCharterandAgreementtoincludewithinitsradio broadcastsaproportionofprogrammesmadebyexternalsuppliers.TheBBCTrustis responsiblefordeterminingwhatitconsiderstobeasuitableproportionofradiooutputto becommissionedfromexternalsuppliersandforensuringthatthisquotaisfulfilledbythe BBCExecutiveBoard.TheBBCTrustisalsoresponsibleforensuringthattheradiocontent commissionedbytheBBCfromexternalsupplierscomprisesasuitablerangeanddiversityof programmes. TheseregulatoryrequirementswereincorporatedintotheBBCCharterandAgreementfor thefirsttimein2006,followingaperiodfrom1992duringwhichtheBBChadvoluntarily implementedaninternalquotaforthecommissioningofexternalproductionswithinits radiooutput.Theinclusionofindependentproductionswithinradiobroadcastersoutputis notastatutoryrequirementofUKorEuropeanbroadcastlegislation,asitisinthetelevision medium,andthecommercialradiosectorhasnotofferedacommitmenttoindependent productionssimilartothatoftheBBC. ThisreportwascommissionedbytheBBCTrustaspartofitsreviewofindependentradio supply,announcedinFebruary2010.Itexaminestheexistingarrangementsforthesupplyof externallyproducedradioprogrammestotheBBC,itanalysesavailabledataconcerning radioprogrammescommissionedexternallybytheBBC,anditconsiderstheopinionsofthe BBCandtheexternalsuppliersregardingfuturearrangementsforthesupplyofcontent.This reportisintendedtoprovidetheBBCTrustwithrelevantinformationandanindependent viewpointtohelpinformtheirdecisionsonthesematters. Radiobroadcastingremainsapopularmediumthathasweatheredrelativelywelltherecent competitionfromnewertechnologies.Consumerusageremainshigh,with91%oftheadult populationlisteningtoradioforanaverage22hoursperweek.Whereasthemajorityof listeningtoBBCradioistoitsfivenationalFM/AMnetworks,themajorityoflisteningto commercialradioistothesectors300+localstations.FundingforBBCradiofromthe LicenceFeeisgreaterthanfundingforcommercialradiofromadvertisingrevenues,though theBBCoperatessignificantlyfewerradiostations.Theoutcomeisthatprogrammebudgets ofBBCradioaregenerallylargerthanthoseofcommercialradio. Furthermore,thecommercialradiosectorhasexperiencedlowerlevelsoflisteningand reducedrevenuesduringthelastdecadewhich,combinedwithitssubstantialinvestments indigitalplatforms,havereportedlyreducedthesectorsprofitabilitytonearzero. Inaggregate,theindependentradioproductionsectorisasmallpartoftheUnitedKingdom radioindustry,withaturnoverofaround20mperannum(2%oftotalfundsforradio broadcasting).Itismuchsmallerinvaluerelativelythantheindependenttelevision productionsectorandcomprisesbetween150and200businessesthatrangeinsizefrom soletraderstocompanieswithmultimillionpoundturnovers.Thesectorsoutputshave wonmanyawards,bothathomeandoverseas,andmanyofitsprogrammesarehousehold names.TheBBCpurchasesmorethan90%ofthesectorsoutputs. Commercialradioscurrenteconomicchallengesmakeitveryunlikelythatitspresent,very limiteduseofprogrammesfromexternalsupplierswillchangeinthefuture.Whilsta
significantproportionofBBCradiooutputcomprisesindividuallyproduced,prerecorded programmes,mostcommercialradiooutputisbroadcastliveandconsistsofcommercially availablemusicrecordings.Consequently,externalsuppliersofradioprogrammestothe BBCarelargelyreliantonasinglebuyerfortheirproductions,especiallyinseveralradio programmegenrescomedy,dramaanddocumentarieswheretheBBCistheonly broadcaster.Neitherdosignificantsecondarymarkets(overseas,online,sellthrough)exist forradioproductions,astheydointelevision. TheBBCcommissionsradioprogrammesfromexternalsuppliersthroughseparate structureswithineachnetworkandadditionally,withinRadio4,throughindividual structuresfordifferentgenres.Thecommissionersofexternalproductionsalsohave responsibilitiesforcommissioninginhouseBBCproductions.Onlyalimitedrangeof programmesbroadcastbyeachnetworkaremadeavailabletoexternalsuppliers.The administrativesystemsbywhichcommissionsareofferedexternallyvarybynetwork,but usuallyinvolvecompetitivebidsbetweenexternalsuppliersand,sometimes,additionally withinhouseproducers. Atpresent,theBBCisrequiredtocontractaminimum10%ofBBCradioseligibleoutputto externalsuppliers.Thislevelofquotawasestablishedin1992andiscalculatedwith referencetobroadcasthours.TheBBCsdefinitionofeligiblehourswasextendedin2006 toincludetheNationsradiostationsandthesportsprogrammegenre,andwasextended furtherin2007toincludeBBCdigitalradiostations. Additionally,in2007,Radio4adoptedaWindowofCreativeCompetition,acommissioning systemforbothindependentandinhouseproductionsthathadalsobeenimplementedin BBCtelevision.Asanadjuncttothe10%quota,theWindowoffersafurther10%ofRadio4 eligibleoutputwhichissubjecttocompetitivebidsbetweentheindependentradio productionsectorandinhouseBBCproducers.Asaresult,independentproductions contributebetween10%and20%ofRadio4seligibleoutput. AccordingtodatasuppliedbytheBBCforthisreport,itisevidentthatexternally commissionedprogrammesexceedthecurrent10%quotaandexhibitarangeofcostsand diversityofprogrammegenres,asrequiredbytheBBCCharterandAgreement.However,a significantproportionofprogrammesarecommissionedfromarelativelysmallnumberof externalproducers.Thisconcentrationinsupplyislikelytoincreasefurtherasaresultof amendmentstocommissioningpoliciesbeingimplementedbytheBBC.Thedatasuppliedby theBBCregardingitsexternalcommissionshaslackedthegranularitynecessaryto illuminatefurtherthisissueandotheraspectsofdiversity. TheBBCseemseagertorecognisethecreativestrengthsoftheindependentradio productionsectorandthevalueitsoutputsbringtotheLicenceFeepayer.Atthesametime, theBBCappearstofinditanadministrativeburdentoprocessthethousandsofcreative proposalsreceivedannuallyfromexternalsuppliers,particularlyasthesearesubmitted individuallytocommissionerswithineachoftheradionetworks. Foritspart,theindependentradiosectorhasexpressedconcernabouttheworknecessary tosubmitsomanyprogrammeproposalsthatarenotcommissionedbytheBBC,aresultof therelativelysmallproportionofBBCradiooutputavailabletoexternalsuppliers.Thesector tradeassociation,theRadioIndependentsGroup,wishestoseethe10%quotaincreasedto 25%,theWindowofCreativeCompetitionincreasedfrom10%to25%andexpandedto othernetworks,andcommissionsofferedtoawiderrangeofsuppliers.
Underlyingtheseconcernsistheapparenteconomicweaknessoftheindependentradio productionsectorwhich,after18yearsofBBCcommissions,stillseemsunabletotransform itselffromacottageindustryintoaprofitablecommercialmediasector.Thesectors dependencyupontheBBChasoffereditlittleleverageinnegotiations.Individualproducers economicsecurityislowbecausetheaveragevalueofindividualradiocommissionsissmall, comparedtotelevision,andasignificantproportionofcommissionsappeartobeoneoff orshortseriesratherthanpermanentprogrammes. AspartofapackageofwiderchangessubmittedtotheBBCTrust,theBBCExecutivehas proposedthatthequotaforindependentproductionsbeincreasedfrom10%to12.5% though,infact,theBBChasalreadyexceededtheexistingquotabymorethan2%inallbut oneofthelasttenyears.TheBBCExecutiveproposalsseemunlikelytoprecipitatethe increaseinscaledemandedbytheindependentradioproductionsector.Neitherwouldthey addresstheissueoftheslimgrossprofitmarginassignedbytheBBCtoeachcommission, whichthesectorfeelsisrestrainingtheabilityofsupplierstocovertheirbusinessoverheads. TheBBCspresentinsistenceuponnegotiatingthebudgetsofindividualradiocommissions onalinebylinebasismightseemtobeindicativeofthemicromanagementthatappearsto besouringtherelationshipbetweenthetwoparties.In40%ofcases,externalradio productioncontractsarevaluedatlessthan8,000,andthetimeconsumedbysuch detailedbudgetnegotiationscouldappearinappropriate.Formanyproducersinthesector, theirBBCcommissionsgenerateinsufficientnetprofitforthemtooperateasfulltime productionbusinesses.Evenforthelargestproductioncompanies,itappearsthatincome fromotheractivitieshasbeenimperativefortheircontinuingexistence. Evidencesuggeststhatthereisstillaseriousquestionaboutthelongtermpotentialfor profitabilityintheindependentradioproductionsector,thoughthisissuedoesnotappear tohavebeenconsideredwithintheBBCExecutivesrecommendations.UnlesstheBBCcan improveanddevelopitssystemsfortheexternalcommissioningofradioprogrammes,the independentradioproductionsectorisunlikelytoevertransformintoaprosperousmedia industrysubsector. Atpresent,itappearsthatthetwopartiestheBBCandtheindependentradioproduction sectorexhibitalackofunderstandingofotherspositions,theresultofnothavingbeenin constructivedialogueaboutthemostfundamentalissues.Thisisdisappointingand, ultimately,isunproductivefortheLicenceFeepayer,whoshouldbeofferedthemost creativeandinspiringradiocontentavailable,fromwhateversourcethoseprogrammes mightderive.Aconversationbetweenthetwopartieswouldseemtoberequiredthatcan refocusmindsonthereasonswhytheBBCcommissionsexternallymaderadioproductions, andonwaystoimplementproductiveandefficientsystemscapableofturningthebest ideasinthemarketplaceforprogrammesintorealitywithinBBCradiooutput.
2.THEREGULATORYFRAMEWORK
Underthetermsofthe2006BBCCharterandAgreement,itistheresponsibilityoftheBBC TrusttoensurethattheBBCcommissionsasuitableproportion,rangeanddiversityofradio programmesfromexternalproducers. ThisresponsibilityderivesfromClause58oftheBBCAgreement,whichstates: Productionofradioprogrammesandmaterialforonlineservices 1 (1) TheTrustmustimposeontheExecutiveBoardtherequirementsitconsiders appropriateforsecuring (a) thatwhatappearstotheTrusttobeasuitableproportionof (i) theprogrammesincludedinthoseradioservices(takentogether) whichareUKPublicServices,and (ii) thematerialavailabletomembersofthepublicaspartofthose onlineservices(takentogether)whichareUKPublicServices, consistsofprogrammesor,asthecasemaybe,materialmadebyproducers externaltotheBBC;and (b) thatwhatappearstotheTrusttobeasuitablerangeanddiversityofsuch programmesandmaterialismadebysuchpersons. (2) Indeterminingforthepurposesofparagraph(1)whatisasuitableproportionof programmesormaterial,andwhatisasuitablerangeanddiversityof programmesormaterial,theTrustmusthaveregard(inparticular)tothedesirability (intheinterestsoflistenersandusersoftheBBCsonlineservices)ofboth (a) encouraginganappropriatedegreeofcompetitionintheprovisionofradio programmesandofmaterialtobeincludedinonlineservices;and (b) maintainingwithintheBBCinhousecapacityformakingsuchprogrammes andmaterialonasubstantialscale. (3) Inthisclause,range,inrelationtoprogrammesormaterial,meansarangeof programmesor(asthecasemaybe)materialintermsofcostofacquisitionaswell asintermsofthetypesofprogrammesormaterialinvolved. InitsinitialsubmissiontothegovernmentsmostrecentCharterReview,theBBChadnoted: Inradio,theBBCistheonlybroadcasterinEuropetocommissionasignificantamountof outputfromindependents.WithintheUK,theBBChashadavoluntaryagreementinplace
DepartmentForCulture,Media&Sport,Broadcasting:AnAgreementBetweenHerMajestysSecretaryofStateforCulture, MediaandSportandtheBritishBroadcastingCorporation,Cm6872,July2006,p.30
1
since1996tocommissionatleast10%ofitsnetworkprogrammingfromindependent producers.Ithasconsistentlyexceededthattargetandcurrentlycommissionsaround13% externally.ThereareongoingdiscussionsbetweenBBCradioandtheindependentproduction sectorwithaviewtodevelopingtherelationshipwiththesectorfurther.Thecommercial sectorcommissionsvirtuallynoprogrammingfromtheindependentsector. 2 Subsequently,thegovernmentsGreenPaperonCharterRenewalindicatedthattheBBC wouldbelikelytoremaintheonlysignificantbuyerofindependentradioproductions: TheBBCsstatedgoalwastostimulatethedevelopmentofahealthyradioproduction economyoutsidetheBBCacrossarangeofgenresinwhichanumberofbroadcasterswould invest.However,thecommercial[radio]sectormainlyproducescontinuousprogramming ratherthanindividualprogrammes,andtheformerdoesnotlenditselfsoreadilytothe segmentingneededtoenableindependentproduction.Theresultneverthelessisthat,in manyareasofradioprogramming,unlikeTV,theBBCremainsamonopolypurchaser. 3 TheGreenPapernotedaBBCproposaltoextendthequotaforindependentradio productionstoadditionalsegmentsofitsoutput: TheBBCsrecentcontentsupplyreviewconcludedthattheexisting10%voluntaryquota shouldbeextendedtocoversport,radiointheNationsandthenewdigitalradiostations. Wewelcometheseproposals,whichtheBBCestimateswillresultinitcommissioningabout anadditional3,000hoursofindependentproduction.TheBBChasalsorecentlyconsultedon newtermsoftrade,andisproposingaProgrammeDevelopmentFundtosupportthe developmentofcreativeideasfromindependentproducers. 4 TheGreenPaperalsosetoutthegovernmentspolicyobjectives: WethinkthesameprincipleshouldapplytoradioproductionasinTVwherepossible,we wanttoencouragecompetition,becauseitislikelytobringthebestprogrammestolisteners. GiventheBBCscurrentpositionastheonlysignificantpurchaserofindependentlyproduced material,itmaynotbepossibletocreateathrivingandcompetitiveproductionmarket throughGovernmentinterventioninthisarea.Nevertheless,asintelevision,thereremainsa questionastowhethertheBBCsrecentmovesaresufficient,orwhetherthequotamight insteadbeincreasedormadebinding. 5 InitsreviewoftheGreenPaper,theBBCagreedthatgreatercompetitioninthesupplyof radioprogrammescouldbenefitlistenersandstated: However,whilemanyoftheprinciplesunderpinninginhousetelevisionproductionapply equallytoradio,thereareconsiderabledifferencesbetweenthetwomediawhichliebehind thedifferentapproachtakenbyBBCRadioandBBCTelevision.Becauseofthenatureofthe radiomarketandtheuniquecharacterofmuchoftheBBCsradiooutput,manygenresare almostentirelysupportedbytheBBC,radiodramabeingoneobviousexample.Television reliesheavilyonrecordedbuiltprogrammes,whilethevastmajorityofradiooutputislive. Thisinitselfdoesnotprecludeindependentproductioncompaniesfrommakinglive streamedprogrammesforradio(andtherearemanyexampleswheretheydo),butthese
2 3
twofactorstakentogethermeanthatitisnotpracticaltoaimforashighaproportionof independentproductionsforradioasfortelevision. 6 TheBBCarguedthatavoluntarytargetremainedpreferabletoamandatoryquota: Theindependentradioproductionindustryisstillinitsinfancy.Whilethereareseveral largercompanieswhichdonotrelyentirelyontheBBC,therearemanyotherswhicharevery smallandforwhichtheBBC,andRadio4inparticular,representstheirentiremarket.During thecourseofthenegotiationsforthenewtermsoftradeithasbecomeclearthat,as technologyandregulationchange,theBBCisgoingtohavetoworkverycloselywiththe industrytoensurethatitisabletotakeadvantageofthisdevelopingmarket. In1991,theBBCannounceditsintentiontoreachavoluntarytargetof10%by1996,atarget ithasalwaysmetandgenerallyexceeded.Commissioningcurrentlyrunsat13.3%ofeligible hours.Becauseofthis,theBBCdoesnotbelievethatamandatoryquotaisanappropriate wayofstimulatingtheindependentsectoratthistime.ThevoluntaryapproachthattheBBC hastakenthusfarhashelpedcreatetheconditionsforastrongersector. 7 TheBBCproposalsforindependentradioproductionwere,infull: Newtermsoftradewillsoonbeannounced,whichwillbemuchmorebeneficialtothe independentsectorthanhashistoricallybeenthecase; Aresearchanddevelopmentfundforindependentshasbeenlaunched; ThecommissioningprocessforRadio4isunderreview,withtheintentionofmakingit simpler.AtthesametimeRadio4hasformaliseditsopenslotsstructurewhichwill applytoprogrammestobebroadcastfrom2006/07onwards; Radiomanagementwillcreateacentralcontactpointforindependentstoworkwithon complianceissues,andjoinforceswithtelevisiontoextendtheonlineinformation availabletoindependentcompanieswishingtoworkwiththeBBC. 8 TheHouseofLordsSelectCommitteeontheBBCsCharterReviewconcludedthattheBBCs proposaltomaintainavoluntarytargetwasinadequate: Amandatoryquotafortelevisionproductionhasstrengthenedtheindependentsectorand providedstabilityandsecurityforestablishedandemergingcompanies.Webelievethatthe BBCshouldcontinuetoinvestinindependentradioproduction,buttosecuregrowthinthe sectorfurtherreformsareneeded.Wethereforerecommendthatthe10percentvoluntary quotaforindependentradioproductionshouldbemademandatory.TheBBCshould considerthe10percentquotaasafloorandnotaceilingandshouldoperatea competitivecommissioningprocesstosecurethebestprogrammingavailable. 9 Consequently,thegovernmentWhitePaperproposed: Wewillthereforeplaceonthe[BBC]Trustanoveralldutyofensuringthatindependent radioproducershavetheopportunitytocontributefullytotheBBCsprovisionofthebest possibleprogrammesforlisteners.
6 7
10
DepartmentforCulture,Media&Sport,Apublicserviceforall:theBBCinthedigitalage,March2006,p.42,paras.8.3.38.3.4
3.THERADIOBROADCASTINGMARKET
TheBBChasthegreatestshareoftheUnitedKingdomradiomarketplace,intermsofboth listeningandexpenditure.Commercialradiohasexistedsince1973,mostsignificantlyin localmarketswhereithasprovenpopular.Comparedtosometraditionalmedia,radios performanceinmaintainingitsaudienceinrecentyearshasremainedrelativelyrobust, thoughtheeconomicmodelforcommercialradioispresentlyunderstressfromboth structuralandcyclicaleconomicfactors. Figure1:sharesofradiolistening(%oftotaladulthourslistened)
1993 Q4 1995 Q4 1997 Q4 1999 Q4 2001 Q4 2003 Q4 2005 Q4 2007 Q4 2009 Q4
54.9 44.0
44.0
47.2 37.1
37.1
47.9 38.3
38.3
51.3 40.5
40.5
53.4 42.0
42.0
52.9 42.0
41.0 1.0
55.1 44.0
42.4 1.6
55.4 45.4
43.6 1.8
55.2 46.7
44.4 2.3
34.7 2.5
39.1 3.1
39.5 2.6
38.4 2.0
36.8 2.1
35.7 1.9
32.7 2.1
31.1 2.2
32.2 2.2
In2008,theBBCaccountedfor56%ofUKradioindustryfunding,aproportionthathas increasedsteadilyasaresultofthedeclineincommercialradiosectorrevenuesfromapeak in2004. 14 In2009,commercialradiorevenuesfellby10%yearonyear,whichislikelyto havefurtherwidenedthedifferenceinfundingbetweenthetwosectors. 15 AlthoughtherevenuesoftheBBCandcommercialradiosectorsarerelativelybalanced, theiroperationalstructuresareverydifferent,resultinginverydifferentflowsoffunds.The BBCdominatesthemarketinnationalradiowithitsfiveanalogueNetworks,whereas commercialradiodominatesthelocalradiomarketwithmorethan300locallylicensed stations.Thecoststructuresofradiobroadcastingstationscomprisemostlyfixedcosts
11 12
10
Ofcommercialradios97.5mperannumexpenditureonproduction,22.9mwasallocated totheproductionofradioadvertisements,leavingtheremaining74.6mperannum estimatedascommercialradiosexpenditureonprogrammes. 20 BBCexpenditureon programmeswasestimatedtobe405m,demonstratingthesignificantdifferencethat existsbetweentheBBCandcommercialradiosectorsintermsofprogrammeproduction budgets.Onanaveragehourlybasis,itwasestimatedthattheBBCspent40timesmore (1,097perhour)thancommercialradio(27perhour)onprogrammeproductionin 2007/8. ThissubstantialgapbetweentheaverageradioproductioncostsperhouroftheBBCand commercialradiohelpsexplaintheirmarkedlydifferingapproachestoprogramme production.Muchofcommercialradiooutputcomprisesmusicrecordingsinterspersedwith livetalkfromapresenter,whereasmuchoftheBBCsoutput(particularlyonitsnational Networks)consistsofprerecorded,craftedprogrammesproducedbyaproductionteam overaperiodofdaysorweeks.
16
11
Figure5:numberofanaloguecommercialradiostationsandtotalcommercialradiosector revenues(mat2009prices)
310 315 317 350 268 272 300 242 248 255 226 250 205 172 200 143 122 150 106 100 50 231 206 218 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 271 126 177 288 1,000 300 750 712 734 683 628 619 557 506 500 250 0
107
326
num ber of analogue local com m ercial radio stations [left axis] com m ercial radio revenues (m @ 2009 prices) [right axis]
261
source:Ofcom,RadioAdvertisingBureau
21
40,000
30,000
20,000
10,000
source:JICRAR/RAJAR,Ofcom
22
12
Manylocalcommercialradiostationsfacethechallengeofhavingtocovertheirlargelyfixed costswithsmallerslicesfromthesectorsdiminishingrevenuecake.Theoverall profitabilityofthecommercialradiosectorhasbeenreducedsosignificantlythatcurrent estimatessuggesttheindustryasawholeisnowlossmaking,accordingtoareportin January2009commissionedbythesectortradebody,RadioCentre. 23 Thecurrentfinancialpressuresoncommercialradiomakeitveryunlikelythatthesectorwill considerincreasingitsexpenditureonexternallyproducedcontent.Areportcommissioned byOfcomidentifiedseveralreasonsforthecommercialradiosectorslimiteduseof externallyproducedcontent: Commissionedprogrammingismoreexpensive Mostcommercialradiooutputislive,DJledmusicprogramming Fewpeaktimeopportunitiesexistforradiostationstoshareoutput Stationformatrequirementsortheneedtoidentifywiththeaudienceonalocallevel. 24 Thereportestimatedthatthecommercialradiosectorhadspent6.9mperannumonthe productionofsyndicatedprogrammingin2007/8,someofwhichwasmadeinhousefor networkingacrossaradiogroupsstations,andsomeofwhichwasindependentlysourced. 25 ThiscontentincludedtheHit40UKandFresh40chartshows,newsbulletinsprovidedby IRNandSkyNews,andentertainmentnewsprovidedbyUBC. Figure7:volumeoflisteningtoallradio(15+adults,000hoursperweek)
1,200,000
1,092,034
1,072,417
1,075,871
1,060,070
1,039,901
1,100,000 1,006,329
1,051,075
1,057,127
1,017,842
1,013,107
1,000,000
900,000 Q4 1999 Q4 2000 Q4 2001 Q4 2002 Q4 2003 Q4 2004 Q4 2005 Q4 2006 Q4 2007 Q4 2008 Q4 2009
987,585
source:RAJAR
26
Turningfromtheeconomicsoftheradiosectortoitsaudiences,themediumslistenership hasweatheredthearrivaloftheinternet,electronicgamesandsmartphonesrelatively well.91%oftheadultpopulationlistenstoradioeveryweek,foranaverage3hoursper day. 27 However,althoughthetotalUKadultpopulationhasbeengrowingbyaround1%per annum,totalhourslistenedtoallradiohavebeendecliningyearonyearsince2001.Thisis because,althoughthesamehighproportionoftheadultpopulationcontinuestouseradio atleastonceaweek,theyarespendingconsiderablylesstimelistening.Asaresult,inQ4 2009,totalhourslistenedtoradiofellbelow1bnperweek,aphenomenonlastrecordedin 1999whentheadultpopulationwas4mlessthanitisnow.
23 24
13
Figure8:weeklyreachofallradiobyagegroup(%ofagegroup)
93.4 92.6 91.2 91.9 91.4 93.1 92.5 92.6 91.2 92.6 95 92.0 92.0 91.7 90.7 90.7 91.6 90.6 89.5 89.8 90.3 91.3 91.3 90.9 92.4 87.0 55-64 Q4 2007 84.1 15-24 Q4 1999 25-34 Q4 2001
28
86.5
88.8 87.9
90
90.3
91.3
85
source:RAJAR
22.3
16.1
18.2
20
20.0
20.9
23.8 23.1
25
25.6
source:RAJAR
29
RAJAR RAJAR
14
Figure10:totalaudioconsumptionbyplatformandagegroup(%oftotalaudioconsumed)
100 6 5 4 20 75 38 34 2 16 4 14 3 12 7 11
50 76 25 55 60 81 82 85 82
25-34
35-44
45-54 podcasts
55-64
65+
catch-up radio
unclassified radio
source:BBCAudio&Music
The1524and2534yearolddemographicsarethemostlikelysectionsoftheadult populationtobeconsumingtraditionalradioinnonlinearways,andtobeconsumingnon broadcastradioservicesviatheinternet.ThiswasconfirmedbyBBCresearchwhichtooka widerdefinitionthanRAJARofradiolistening.Itfoundthat,amongst1518yearolds, traditionalliveradionowaccountsforonly55%oftheirtotalaudioconsumption,whilst38% oflisteningissourcedfromnonradio. 31 However,podcastsandlistenagain(orcatchup) consumptionremainonlyaverysmallproportionoftotalaudiousageacrossallagegroups. Figure11:totalaudioconsumptionbyagegroupandgender(averagehoursconsumedper dayperhead)
5 4 3.8 4.0 3.6 3.6 3.7 4.0 3.8 4.1 3.6 3.7 3.7 3.7 4.1 4.2 4.4 3.9 3.9 3.5 3.7 3.8 3.4 3.3 3.8 3.6
0 15-18 15-24 25-34 35-44 45-54 55-64 Total 65+ Male 65+ Female 15-18 Female 15-24 Female 25-34 Female 35-44 Female 45-54 Female 55-64 Female 65+ Male 15-18 Male 15-24 Male 25-34 Male 35-44 Male 45-54 Male 55-64 Women Men
source:BBCAudio&Music
32
30 31 32
15
TheseBBCdatashouldbeveryencouragingfortheradiosectorbecausetheydemonstrate thataudio,inthewidestsense,remainsaverysignificantpartofthepopulationsleisure time,acrossalldemographics.Thechallengeforthetraditionalradiosectoristomaintain theaudiencesinterestinradioaudio,particularlyforyoungpeople,andtooffer sufficientlycompellingcontenttoconvincethemnottomigratetonontraditionalaudio sourcessuchaspersonalaudioplayersoronlinemusicapplications. Althoughthesedataofferevidencethatdemandfortheradiomediumasawholeislikelyto bestrong,thecommercialradiosectorcontinuestofaceacombinationofstructuraland cyclicalchallengesthathasdamageditsshorttermviability.Additionally,asignificant proportionofcommercialradiosectorsprofitshavebeendivertedintoexpenditureonDAB digitalradioinfrastructureduringthelastdecade.Atpresent,thereisnoindicationthatthe growinggapbetweentheBBCandthecommercialsectorslevelsofexpenditureon programmecontentwillbehaltedorreversed. Ananalystreportonthecommercialradiosector,commissionedbyOfcomin2009, concludedthat: Programmingcosts,spentmainlyonbringingonboardhighqualitytalent,are extremelyimportanttomaintainthelistenerbaseofthestation Most[commercialradio]stationsarealreadyrunningextremelyleanandtherearefew opportunitiestoreducecosts Theimpactoflowerrevenuescouldbesevereonstationswhichareeitherlossmakingor currentlyoperatingwithlowmargins.33 Asaresult,itislikelythattheindependentradioproductionsectorwillcontinuetobe largelyreliantontheBBCforcommissions,outsideofthefewnetworkedchartshows alreadybroadcastoncommercialradio. However,thelongtermaudienceprospectsfortheaudiomediumasawholewouldappear toremainrobust.
33
ValuePartners,UKRadioFlowofFunds,4March2009,p.90
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4.THEINDEPENDENTRADIO PRODUCTIONSECTOR
Inthetelevisionmedium,theconceptofindependentproductioniswidelyunderstood. Mosttelevisionprogrammesarerecordedinadvanceoftransmission,ratherthanbroadcast inrealtime.Itwouldproveimpossibleforonepersontosinglehandedlyproducea broadcastqualitytelevisionprogramme.Theproductionprocessusuallyconsistsofateam ofpeoplewithdifferentskillswhocollectivelyworktogetheroveraperiodoftime(daysor weeks)withtheendproductoftenbeingaprerecorded30minuteoronehourprogramme. Thus,anindependentlyproducedtelevisionprogrammecanquiteeasilybedefinedasone producedbyateamofpeoplewhoarenotemployeddirectlybythebroadcaster. Bycomparison,theconceptofindependentproductionintheradiomediumisconsiderably moreambiguous.Themajorityofradiooutputisbroadcastlive,ratherthanprerecorded, becauseimmediacyisoneofthemediumsadvantagesovertelevision.Totheaverage listener,aradioshowisentirelytheonairpresenter(s)becausetheyhearnothingmore. Thereislittleunderstandingoftheresourcesrequiredtobringthatonairvoicetotheradio receiver.Thisistheresultofanotheroftheradiomediumscharacteristics,itsintimacy, whichoffersthelistenertheclosestthingtoaonetooneexperiencewithinmass communicationbroadcasttechnology. Inthetelevisionmedium,anindependentproductionisdefinedinlaw: Inthisarticleindependentproducermeansaproducer (a)Whoisnotanemployee(whetherornotontemporaryleaveofabsence)ofa broadcaster; (b)Who,subjecttoparagraph(7),doesnothaveashareholdinggreaterthan25per centinabroadcaster;and (c)WhichisnotabodycorporateinwhichanyoneUKbroadcasterhasa shareholdinggreaterthan25percentorinwhichanytwoormoreUKbroadcasters togetherhaveanaggregateshareholdinggreaterthan50percent.34 Thelegislationproceedstosetout,insomedetail,aframeworkthatdeterminesthecriteria notonlytoqualifyasanindependentproducerbutalsoforaprogrammetoqualifyas independentlyproduced.Thisdetailhasbeendevelopedovertheperiodoftwodecades thathasfollowedtheEuropeanParliamentsadoptionoftheTelevisionWithoutFrontiers Directivein1989,ofwhichArticle5stated: MemberStatesshallensure,wherepracticableandbyappropriatemeans,that broadcastersreserveatleast10%oftheirtransmissiontime,excludingthetimeappointedto news,sportsevents,games,advertisingandteletextservices,oralternatively,atthe discretionoftheMemberState,atleast10%oftheirprogrammingbudget,forEuropean workscreatedbyproducerswhoareindependentofbroadcasters. 35
34
35
17
AlthoughthisDirectivereferredgenericallytobroadcasters,itwasneversubsequently appliedtotheradiomedium.In2005,whenanextensionoftheDirectivewasbeing consideredbytheEuropeanUnion,animpactassessmentcommissionedbyOfcomhad noted: TheEuropeanCommissionhasstatedthatradiowillnotbecoveredbytheextension,butit ispossiblethattheEuropeanParliamentwillarguethatradioservices,andespeciallythose providedoverTVsets,DABreceiversandmobilehandsetswhereradioislinkedtovisual images,shouldbeincludedwithinthescopeofthenewDirective. 36 However,todate,radiohascontinuedtoremainoutsideofthescopeoftheDirective.Asa result,thecommitmentbytheBBCtoindependentradioproductionsinitscurrent Agreementisunilateralanddoesnotapplytothecommercialradiosector.Thereappearsto benomorerobustadefinitionofanindependentproductionthanthatcontainedwithin theBBCAgreement: materialmadebyproducersexternaltotheBBC. 37 Similarly,thetradegroupforindependentradioproducers,theRadioIndependentsGroup [RIG],statedonitswebsite: IfyouproduceradioprogrammingforaUKbasedbroadcasterorplatformonan independentbasis,thenRIGisforyou! 38 However,thedefinitionofanindependentproducerintheradiosectorismuddied considerablybyseveralfactors: Unlikethetelevisionmedium,inradioitiscommonpractice(incommercialradiomore sothanintheBBC)forprogrammestobeproducedandpresentedbyasingleperson Theservicesofradiopresentersaresometimescontractedtoaradiostationbya productioncompanythatisestablishedasaconduitforthepresentersrevenues,even thoughthepresentermayworkaloneontheirradioshow Asignificantproportionoftheworkforceincommercialradioisemployedonafreelance orcasualbasis. Inthisrespect,datafromtheSkillsetWorkforceCensushavedemonstratedthedifferences inworkingpracticesbetweenBBCradioandcommercialradio.Only19%oftheBBCradio workforcewasrecordedasfreelance,comparedto38%incommercialradio.Inthe occupationalgroupsofradiobroadcastingandradioproduction,acrosstheentireradio sector,37%and32%respectivelyofworkerswererecordedasfreelance.Skillsetnotedthat itsresultsprobablyunderestimatedthetruepicture,asaresultofthedatacollection methodology,sothat,infact,freelancerswillmakeupanevenhigherproportionofthe overalllabourpool. 39 Initsearlydays,commercialradiointheUnitedKingdomhadbeenorganisedinternally muchalongthelinesofexistingBBCradiostructures,witheachprogrammeproducedbya teamofdedicatedstaff,mostofwhomwerelikelytobestationemployees.However,asa
Indepen,ExtensionoftheTelevisionWithoutFrontiersDirective:AnImpactAssessment:FinalReportForOfcom,September 2005,p.34 37 DepartmentForCulture,Media&Sport,Broadcasting:AnAgreementBetweenHerMajestysSecretaryofStateforCulture, MediaandSportandtheBritishBroadcastingCorporation,Cm6872,July2006,p.30 38 http://www.radioindependentsgroup.org/about%20rig.htm 39 Skillset,RadioSectorProfile,[undated],[notpaginated]
36
18
resultofsectorconsolidationandbudgetcuts,programmeteamsarenowararityin commercialradiooutsideofthekeydailyshows(breakfastanddrivetime).Muchofthe workforceinproductionandpresentationrolesisnowemployedonafreelancebasis.This structuralchangehasofferedcommercialradiostationownersincreasedflexibilityinstaff deploymentandhasminimisedtheirexposuretopotentiallyexpensiveemployment contractissues. Asaresult,significantproportionsofcommercialradiooutputcouldbeconsideredtobe independentproductions,wherebythestationownerpaysthepresenter(ortheir productioncompany)afixedamountpershowunderthetermsofasupplycontract.At largerlocalcommercialradiostations,thecontentofapresentersshowmayhavetofollow aprogrammeformatwhereas,atsmallerstations,thecontentisverymuchtheentire productofthepresenterscreativityandingenuity,sometimesincludingtheparticularsongs thatareplayed.Bythisdefinition,aconsiderablevolumeofcommercialradiooutputisin thehandsofindependentradioproducers. Atthesametime,thefreelancesituationinBBClocalradiohasmovedintheopposite direction.Foralongtime,manyspecialisteveningandweekendshowswithinBBClocal radiowerepresentedandproducedbycasualstaffwhomighthavehadlittledirect associationwiththestationsemployeeswhoproducedthemainstreamdaytimeoutput. However,inrecentyears,therehasbeenaconcertedefforttointegratetheseprogramme makersintothestationfabricbyofferingthemparttimestaffcontracts,providingthem withrelevanttrainingandcreatingpathsfortheircareerdevelopmentwithintheBBC. Theexistenceofthisgreyareaintheradiosectorbetweenthedefinitionsoffreelancers andindependentproducersisnotconfinedtotheUnitedKingdom.IntheUnitedStates,a benchmarkstudyin2004ofthepublicradioindependentsectorfoundthatindependent producersfill2%ofpublicradioscontentstreamandgenerateUS$1.3millionrevenuesper annum.However,thereportnotedthatthetermsproducer,independentand freelanceraresynonymousandexplained: Thefocusofthestudywasprimarilyindividualfreelancerswhoworkoncommissionthat is,soleproprietors,commentatorsandstationbasedproducerswhogeneratefreelance incomeapartfromtheirregularradiojobs.40 Thus,intheUnitedStates,thetermindependentradioproducerisappliedtoafreelance presenter/producerwhomayalsobeemployedbytheradiostationinaseparatecapacity. Confusingly,theAmericanreportwentontodefineindependentproductionhousesas anotherimportantsectoroftheindependentlandscapewhosecontentstreamis differentfromthoseoffreelanceindependents. 41 ItappearsthattheroleoftheAmerican surveysindependentproducersmightbecloserinourparlancetoonairexperts, analystsandcommentatorsusedbybroadcasterstocommentonnewsdevelopments.In turn,whatwecallindependentproducersseemtobelabelledintheUSasindependent productionhouses. IntheUnitedStates,theAssociationofIndependentsinRadiotradeassociationisfocused exclusivelyonthepublicradiosectoranddescribesitselfas:
SueSchardt,MappingPublicRadiosIndependentLandscape:OpportunitiesForInnovation:FinalReport,SchardtMedia,13 February2006,p.1 41 ibid.
40
19
aglobalsocialandprofessionalnetworkof750producersbothindependentandthose employedbymediaorganizationsrepresentinganextensiverangeofdisciplines,from NationalPublicRadionewsjournalistsandreporters,tosoundartists,stationstationbased producers,podcasters,gearheads,mediaactivists,andmore. 42 IntheRepublicofIreland,thesituationistheopposite,withthecommercialradiosector beingthemainbuyerofindependentradioproductions.AccordingtotheAssociationof IndependentRadioProducersofIreland[AIRPI]tradeassociation: Thecommercialradiosectormakesupthebulkofthepotentialindividualoutletsfor [independentradio]productions.Localcommercialstationstargetingabroadbased listenershipintheirlocalfranchiseareaareprobablymostopentotakingworkfrom independentproducers.. 43 InIreland,theoverwhelmingmajorityofindependentradioproducersaresoletradersfor whomradioworkisaparttimeoccupation,accordingtoanAIRPIanalysisofits membership. 44 ItfoundthattheindependentradioproductionsectorinIrelandonly supportedsevenfulltimeequivalentposts.AsintheUnitedStates,theindependentradio productionsectorinIrelandwaspopulatedmostlybyselfemployedindividuals,ratherthan bycompanies. IntheUnitedKingdom,ourrathervaguedefinitionofindependentradioproductiondoes notseemtobotherthesectoritself.BecausetheBBCissuchasignificantpartofthemarket forthecommissioningofindependentradioproductions,thesectordefinesitselflargelyas thosewhosupplytheBBC. Skillset,theindustryskillsandtrainingbodyforthecreativemediaindustries,onlyrecently startedtoconsiderindependentradioproductionasadistinctsectorinitsworkforce census.Itslatestsurveyestimatedthat1,000personswereemployedinindependentradio productionin2009,upfrom400in2006.Itfoundthat,in2009,62%ofthesectors workforcewasfreelance,30%wasfemale,3.5%wasfromethnicminoritiesand0%was disabled.However,interpretationofthesedatamustbetemperedbythefactthatthe estimateswereextrapolatedfromonlyfivecompletedquestionnairesreturnedfromsector participantsin2009.45 Asaresult,Skillsetnoted: Thisisoneareaofintelligencegatheringthatneedstobeaddressedtobuildaclearer pictureofthesizeofthiscommunityinfuture. 46 TheRadioIndependentsGrouphasconductedtwosurveysofitsmembershiptodate,one mostlyquantitativeandtheothermostlyqualitative.Its2008survey(withreturnsfrom54% ofitsmembers)foundthat: 73%werelocatedinLondon 67%wereconstitutedaslimitedcompanies Theaveragetradingperiodwas10years 54%ofstaffwereemployedfulltime
http://www.airmedia.org/PageInfo.php?PageID=1&LayOut=1 MariaGibbons,AnAnalysisoftheIndependentRadioProductionSectorInIreland,TheAssociationofIndependentRadio ProducersofIreland,10August2009,p.36 44 ibid.,p.17 45 Skillset,2009EmploymentCensus,December2009,pp.7,10,14,16,19&22 46 Skillset,RadioSectorProfile,[undated],[notpaginated]
43 42
20
Themajorityofbusinessesgeneratedrevenuesoflessthan500,000perannum 83%ofradioprogrammesalesderivedfromtheBBC BBCRadio4alonegenerated45%ofcommissioningrevenues. 47 ThesecondsurveybytheRadioIndependentsGroupfocusedmoreonqualitativeresponses toquestionsaboutthecommissioningprocessesanditfound,amongstotherthings,that: 9outof10membershadpitchedprogrammeideastoBBCRadio4,themajorityinevery commissioninground Aroundaquarterofmembershadpitchedideasregularlytocommercialradio. 48 In2008,areportcommissionedbytheBBCfromPriceWaterhouseCoopersconcludedthat: IntheabsenceofBBCcommissioning,thesizeoftheindependentradioproduction sectorwouldbenegligible Thereislittlecommissioningbycommercialradiostationsfromtheindependentradio productionsector ExpenditurebytheBBConindependentradioproductionsaccruesaneconomicbenefit totheseproducers. 49 ThedependenceofindependentradioproducersupontheBBCforcommissionsisstarkly differentfromthesituationinthetelevisionmedium,wheretheBBCgeneratesonlyabout 20%oftheindependenttelevisionproductionsectorsrevenues. 50 In2007,anexpansioninthedemandforindependentradioproductionshadbeen anticipated,followingtheawardbyOfcomofthelicenceforasecondnationaldigitalradio multiplexto4DigitalGroup,whosemajorityshareholderwasChannel4television.The groupsplansincludedthelaunchofeightnewnationalradiostations,anditsprospectus stated: Channel4'sbiggestambitionistodoforradiowhatithasdoneforTV.Ifthecommissioning structureofradiocanbechangedinlinewiththeseambitions,thentheradioaudiencewill growasnewtalentandcreativityisencouragedinthemedium. 51 The4DigitalGrouplicenceapplicationpromised: "Currently,commercialradiooffersfewopportunitiesforindependents;producersmustrely ontheBBCasthesolecommissionerformanygenres.Channel4RadioLimitedintendsto changethatbycommissioningindependentstoproducemanyofthedistinctiveelements withinkeydaypartsandbuiltprogrammesacrossitsthreenewservices.Over25years, Channel4Televisionhasbuiltaremarkablerelationshipwiththeindependenttelevision productionsectornurturinganddevelopingcompaniesineveryregionandnationoftheUK andprovidingaplatformforagenuinediversityofvoices.Thatapproachandexperiencewill informChannel4RadioLimitedsrelationshipwithindependentradioproducers.Channel4 RadioLimitedspresenceintheindependentcommissioningmarketwillbeatleastasgreat astheBBCs,creatingamoreopen,competitiveandcreativeenvironmentforproducers." 52
47 48
21
However,in2008,Channel4informedOfcomofitswithdrawalfromthe4DigitalGroupand, asaresult,neitherthedigitalradiomultiplex,theeightnewradiochannelsnortheproposed contentmaterialised.Ofcomdecidednottoreadvertisethelicence. Anotherpotentialboosttoindependentradioproductionoccurredin2007whenthe GuardianMediaGroupannouncedafundof1mfornewprogrammecommissionsfor broadcastonitscommercialradiostations.Itsaidthefundwouldbethebiggestsingle investmentincontentincommercialradioandwouldencouragenewprogrammemakers tothesector. 53 However,havingannounceditsinitialwaveofprogrammecommissionsin 2008,nofurtherannouncementsweremadeaboutsubsequentacquisitionsofindependent radioproductions. Thesetwoinitiativescreatedexpectationswithintheindependentradioproductionsector thatadditionalsourcesofcommissioningwouldfinallycomeonstreamalongsidetheBBC. ThelossoftheopportunitiespromisedbyChannel4remainsacontinuingtopicof conversationamongstindependentproductioncompaniesandwithintheBBC,wherethe entryofanewpublicserviceradiobroadcastermighthavealleviatedthepressureonthe BBCastheonlysignificantcommissionerofindependentradioprogrammes. TheBBCsownanalysisofthestructureofindependentradioproductionsectorconcluded that: Theindustryiscomprisedofasmallnumberofrelativelylargeplayers(turnoverof1m ormore)andalongtailofverysmallbusinesses Twothirdsofindiesreceivedanincomeoflessthan50,000fromtheBBCin2008/9 Thethreelargestplayersaccountedfor25%oftheBBCsspendonthesector This[25%]figurewillbesignificantlyhigherin2009/10,asoneindiefaredparticularly wellintheSpringcommissioningrounds 40%ofcontractsissued[are]worthlessthan8,000.54 Figure12:BBCNetworkRadioexpenditureonindependentlyproducedprogrammesby year(000perannum)
20,000 17,204 2008/9
13,814
13,608
12,762
10,000
5,000
actual ( '000)
11,603
12,363
14,211
15,412
16,202
15,000
16,517
source:BBCAudio&Music&GrantGoddard
53
22
BBCNetworkRadiospent17.2moncommissioningprogrammesfromtheindependent productionsectorin2008/9. 56 Additionally,smallersumswerespentonindependentradio productionsbyBBCEnglishRegionsandBBCNationsradiostations. ThevalueofNetworkRadioindependentradiocommissionshasincreasedoverthelastfive years.However,afteradjustmentforpriceinflation,NetworkRadioexpenditureon independentlycommissionedradiocontentin2008/9was0.7mlessinrealtermsthanit hadbeenin1999/2000. 57 Figure13:volumeofindependentlyproducedradioprogrammescommissionedbyBBC NetworkRadiobyyear(hoursperannum)
8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 2000/1 2001/2 2002/3 2003/4 2004/5 2005/6 2006/7 2007/8 1999/2000 2008/9 3,744 3,640 3,550 2,551 3,308 3,520 3,732 3,744 6,634 6,974
source:BBCAudio&Music
58
4,000
3,595
3,000
2,442
2,467
2,000
1,000
0 2000/1 2001/2 2002/3 2003/4 2004/5 2005/6 2006/7 2007/8 2008/9 1999/ 2000
source:BBCAudio&Music
60
56
23
source:BBCAudio&Music
62
0 2000/1 2001/2 2002/3 2003/4 2004/5 2005/6 2006/7 2007/8 1999/2000 2008/9
source:BBCAudio&Music
64
AsaproportionofBBCNetworkRadiototalbroadcasthours,independentproductions accountedfor8.9%in2008/9,asignificantincreasefrom4.0%in2002/3. 65
ibid. BBCAudio&Music,datasuppliedtotheauthor[thereductioninvolumein2002/3wasduetothevoluntaryliquidationof WiseBuddah] 63 ibid. 64 BBCAudio&Music,datasuppliedtotheauthor
62 61
24
Figure17:percentageofprogrammeexpenditureattributedtoindependentradio productionsbroadcastonBBCNetworkRadiobyyear(%)
12.5 12 10 8 6.2 6 4 2 0 2000/1 2001/2 2002/3 2003/4 2004/5 2005/6 2006/7 2007/8 1999/2000 2008/9 5.8 5.9 6.0 11.8 12.0 14 12.8
% of eligible ouput
66
source:BBCAudio&Music
65 66
Ibid. ibid.
25
26
abroaderstrategyforthecomedygenrehasresurfaced,thistimeintheformofacross mediaBBCComedyNetworkthatwouldprovideacoordinatedapproachto commissioningacrossalltelevisionandradiochannels. 70 [ ] Inthepresentcommissioningsystemsforindependentproductions,eachNetworkhas produceditsownsetofexplanatorydocuments,availablepubliclyfromtheBBC Commissioningwebsite,thatdescribetheindividualsystemsandprogrammeneeds,from whichthefollowingnarrativeissummarised. 71 Additionally,aStatementofOperationsforRadiohassetoutanoverviewoftheBBC commissioningsystemforradioprogrammes.Itincludesthefollowingexplanations: Eligiblehours: Notalltypesofoutputconstituteeligiblehours.Newsprogrammes,repeatsand continuityannouncements,forexample,arecurrentlyexcluded FromApril2006,the10%QuotaRequirementwasextendedtoeligiblehoursonthefive Nationsnetworksandalsotolivesportsprogramming From1stApril2007,eligiblehoursonthefivenationaldigitalnetworkswillalsobe subjecttoandincludedinthecalculationofthe10%QuotaRequirement TheQuotaRequirementmaybemetfromanywherewithintheeligiblehoursoftheradio portfolio.Inpractice,eachnetworkisgenerallyaskedtomeetorexceedthetarget percentage. 72 PrinciplesUnderpinningCommissioning: CommissionsseektobringaudiencesandtheLicenceFeepayergreatprogrammes whichrepresentthebestpossiblevalueformoney TheBBCbelievesthisisbestachievedbyacombinationofinhouseproductionsand IndependentProductions,withanelementofcompetitionbetweenthetwosectors Insomecases,theBBCwillcommissiondirectlyfromitsinhouseproductionbase TheBBCiscommittedtoafairandequaltreatmentofallpotentialbiddersanda transparentcommissioningprocess Alleligiblesupplierswillbetreatedequallyandprovidedwithequivalentinformation,so nonegainsanunfairadvantage Commissioningdecisionswillbebasedsolelyoncreativemeritoftheproposalandthe valueformoneyofferedtotheaudienceandtheLicenceFeepayer. 73 StatementofOperation: NetworksmayoperatealistofregisteredsuppliersfromwhomallIndependent Productionsarecommissioned Someprogrammesmaybecommissionedthroughaninvitationtotendertoanumberof suppliersselectedbyobjectivecriteria Theaimisalwaystofindthemostefficient,effectiveandfairwaytoidentifyand commissionthebestideas
70 71
27
CategoriesofCommissions: UniversalorOpenslots:opentoallandenablethecommissionertoseekproposals fromthewidestrangeofpotentialproducers OpentoExternalSuppliersOnly:inhousedepartmentsareexcluded.Inaddition,some stationsmaylimittheseslotstosuppliersonaregisteredsupplierlistortoselected suppliers(whereappropriateduetothespecificneeds/experienceofaproduction) LimitedtoSelectedSuppliers:itmaybedesirabletolimitbidstosupplierswhohave experienceofaparticulargenre,accesstokeytalentand/orotherspecialistskills. Proposalswillthenbeinvitedfromasuitablerangeofproducerswhomeetthe requirements TopicalCommissions:Networksinvolvedincurrentaffairsprogrammingroutinelyleave someslotsunfilleduntilclosetotransmission,againsttheneedtotransmittopical programmesatshortnotice.Networksmayapproachsupplierswithaknowncapacity orexpertiseinordertomeetprogrammerequirementswhichariseatshortnotice. 75 ThecommissioningproceduresforeachNetworkaresummarisedinturn: Radio4 AccordingtotheBBC,Radio4isthenetworkwiththemostprerecordedbuilt programmesandprovidesasignificantopportunityforthedevelopmentofcreativityand bestvaluethroughcompetition. 76 Radio4onlycommissionsprogrammesfromindependentproducersthatareincludedonits RegisteredSupplierList.Thefourpageapplicationformtobeconsideredforinclusionon thisListexplains: Pleasenotethatonlycompanieswithsignificantexperienceinproductionatnetworklevel canbeconsideredforregistration. 77 Infact,theListisnotasinglelist,butasetofsevenListsdelineatedbyprogrammegenre: generalfeatures,documentaries,scienceandnaturalhistory,drama,comedy,single voicereadingsandpoliticaltalks.Theapplicationformadvises: Withinthesupplierlist,wealsooperateaneligibilitylist,restrictingspecialistgenresto supplierswithrelevantexpertise. 78 Asaresult,anindependentradioproducercanbeeligibleforinclusionononeRadio4 SupplierList,butnotonanother,dependentuponwhetherRadio4considersthat,withina specificgenre,anindependentproducerhasdemonstrated: Relevantexpertise
74 75
28
Significantexperienceinproductionatnetworklevel. 79 Furthermore,acceptanceofasupplierontoaspecificLististimelimited: Ifasupplierfailstowinacommissionin3successiverounds,Radio4reservestherightto dropthemfromthelist. 80 AccordingtoRadio4,existingsuppliersandnewapplicantsareassessedagainstthe followingsetofcriteriathathavebeenagreedwiththeOfficeofFairTrading: Oureditorialandschedulerequirements Oureditorialjudgementonquality Provenabilitytodeliverthedesiredgenre Adegreeofinnovation AcompanysabilitytomeettheBBCsregulations,suchasonRightsandHealthand Safety Riskappraisal Trackrecordinbudgetmanagementandmeetingdeliverydeadlines Theappealoftalent. 81 ItisunderstoodthattheinvolvementoftheOfficeofFairTradingderivedfromasupplier complaintduringthe1990s.However,itisselfevidentthatthecriteriaandtheabilitytobe acceptedontoandtoremainonaSupplierListcontinuetobebaseduponconsiderably subjectivecriteria,exemplifiedbytheuseofphrasessuchasrelevantexpertise,significant experience,provenability,atrackrecordand,mostnotably,oureditorialjudgementon quality. Furthermore,therequirementthatanapplicantmusthavesignificantexperienceof productionatnetwork[radio]levelcouldappearakintoaCatch22condition.Aslongas Radio4continuestobetheonlyBBCNetworkbroadcastingsomeprogrammegenres,how woulditbepossibleforanewindependentsuppliertoofferpreviousproductionexperience inthatgenreatNetworkRadiolevelunlesstheyhaveexperienceasaformerRadio4 producer? Somestakeholdersintheindependentradioproductionsectorsuggested,duringthecourse ofconsultations,thatRadio4suseofSupplierListsdemonstratesthatconsiderableeffortis exercisedinthisgatekeeperrole,whichtheybelievedcouldbemoreproductively redirectedtowardsattractingtheUKsbestandcreativeideasforonairexecution. Inevitably,becausetheBBCistheonlybroadcasterofsomeradioprogrammegenres,itis notcompetingwithotherbroadcasterstoattractpotentialsuppliers.Asaresult,itis understandablethatmucheffortcouldbecomefocusedonlimitingtheinflowofcreative ideas,ratherthanonthepotentialopportunitycostofnothavingcommissioned programmeideasthat,iftheywerenotmadeforBBCradio,mightbeunlikelytobemadeat all. Radio4alsooffersadditionalopportunitiesforexternalprogrammecommissions:
79 80 81
29
Unlikeothernetworks,Radio4hasaformalcommitmenttoaminimumof10% independentproduction,coupledtoa10%WindowofCreativeCompetition(WoCC)whichis opentobothindependentandinhouseproducers. 82 Intotal,118suppliersarecurrentlylistedinRadio4sRegisterofIndependentProduction Companies,ofwhich71receivedcommissionsin2008/9. 83 Geographically,58%ofthe companiesontheRegisterarebasedinLondon,withafurther16%basedinSouthern England,12%intheremainderofEngland,7%inScotland,6%inWalesand1%inIreland. 84 WithinRadio4,decisionstocommissionexternalproducersaremadebyfour commissioners,eachworkingacrossagroupofgenres,whoalsohaveresponsibilitiesfor commissioninginhouseproductions.Thus,thereisnosingleexternalcommissioningtouch pointforRadio4,andindependentproducerswhoseworkcrossesseveralgenresare requiredtodealwithseparatedepartments. Registeredsuppliersaresentcopiesoftheguidelinesforeachcommissioninground,heldin SpringandAutumn. 85 BatchCommissioning FromApril2009,Radio4introducedabatchcommissioninginitiativewhichrepresenteda significantchangeforindependentproducers.AccordingtoRadio4,batchcommissioningis theprocessoftenderingvolumesofbusinessinsomeslots(batching),ratherthan commissioningnumerousindividualprogrammesonapiecemealbasis.Initsproposal document,Radio4arguedthatbatchcommissioningisnotanewidea,butrathera familiarandtestedsysteminthecommissioningofRadio4[book]readings. 86 PartoftheBBCrationaleforbatchcommissioningappearedtobeanattempttoreducethe numberofsupplierswhopitchideastoRadio4andwhoaresubsequentlycommissioned. Radio4noted: Asthenumberofsuppliersrisesandavailablebusinessisprogressivelysubdivided,even fewersupplierscanhopetowinasignificantshareofcommissions Weexpectbatchingwillgeneratemoreeffectiveeditorialfocusbyencouragingmore creativerelationshipswithkeysuppliers Reducetransactioneffort. 87 However,Radio4wassensitivetotheoutcomeofareductioninitsnumberofsuppliers: Thereisariskoflosingdiversityofoutput Therewillstillbelargeareasofoutputopentonormalcompetitionthrough commissioningrounds Wedonotseebatchingasawayofconcentratingallourbusinessinafewsuper indies. 88 Anotherpartoftherationalewastoreducethecostsofexternalcommissions,atatime whenRadio4programmebudgetsareevidentlybeingreducedyearonyear:
82 83
30
Radio4wasalsokeentostresstheadvantagesofbatchcommissioningforsuppliers: Morematureindependent[production]sector Moresecurebusinessplanning Abilitytocommittostaffandtraining Moreconstructive,creativeeditorialrelationshipwithRadio4 Alleditorsupplierconversationswillbefocusedandcreative Supplierswillsaveverysubstantialtimecurrentlyspentinfruitlessdevelopment. 90 Radio4sargumentforbatchcommissioningwassupportedbythecitationofselected data: Thegrowthofitsapprovedsupplierlistfrom71companiesin2001/2to125in2008/9 Thegrowthinindependentcommissioningfrom10%ofeligiblehoursin2001/2to13% on2008/9. 91 Figure18:valueofBBCRadio4commissionsfromindependentproducers(000per annum)andnumberofcompaniesonRadio4SupplierListbyyear
140 120 125 2008/9 120 100 80 60 40 20 0 1999/ 2000 2000/1 2001/2 2002/3 2003/4 2004/5 2005/6 2006/7 2007/8 0 71 95 135 8,000
6,000
4,000
2,000
num ber of Radio 4 approved suppliers [left axis] Radio 4 value of independent com m issions ( '000) [right axis]
source:BBCAudio&Music
92
31
68indiesgot328commissions=c.7m Top10bynumber=48%oftotalvalue 48got5orfewer 21companiesgotjust1 10gotlessthan10k. 94 Inevitably,theintroductionofbatchcommissioningwillconcentrateanevengreater proportionofthesecommissionsinthehandsoffewersuppliers,whichseemedtobeoneof thepolicyobjectives. Theinitialproposalwastoapplybatchcommissioningonlyto14%ofRadio4s independentprogrammecommissionsbyvalue(11%byhours). 95 However,infuture,ifthe initiativeweretobeextendedtoagreaterproportionoftheNetworksoutput,itwouldbe likelytofurtherreducethenumberofexternalsupplierstoRadio4.Atpresent,ofthe NationalNetworks,Radio4exhibitsthegreatestdiversityofsuppliersofindependently commissionedprogrammes. Radio3 Radio3operatestwocommissioningroundsannually,onefordrama(plustheseriesThe Wire)andtheotherforitsremaininggenres.ThereisnoSupplierListinoperation,and independentproducersregistertobesentcommissioningroundinformationandeditorial briefs. 96 Radio2 Radio2statedthat: Themajorityofprogrammesthecoreoutputarelongrunningstrandswhichare producedeitherbyRadio2producersorasmallgroupofIndependentcompanies.Whenthe strandsproducedbyIndependentscomeupforrenewal,theyareputoutfortenderusingthe processdescribedbelow.Commissioningroundstakeplacetwiceayeartocomplementthe coreoutput.Itiswithintheseroundsthatideasaresoughtforawiderangeof documentaries,specialistmusic,comedy,eventandotherprogramming.Readingsare commissionedalongsidespecialeventsorseasons. 97 CommissioningroundsareheldinSpringandearlyAutumn,forwhichinformationissentto prospectiveproducerswhoasktobeaddedtothemailinglist. Inadditiontoitsregularcommissions,Radio2hasintroducedaschemecalledIdeas Welcomewhich,itexplained: [is]designedtoallowforideasthatcarryanambitionthatworksbeyondthetraditional commissioningbriefformat[and]continuestoevolve,[so]welookforwardtoreceivingideas thatwillworkbeyondthetraditionalcommissioningparameters,whetheritbeanew season,alivemusicevent,orapanBBCorBBCAudio&Musicinitiative. 98
94 95
32
Radio1 Radio1explained: Themajorityofprogrammesthecoreoutputarelongrunningstrandswhichare producedeitherbyRadio1producersorasmallgroupofIndependentcompanieschosen throughcompetitivetenderwhenrequired.Thenetworkalsocommissionsweekly documentariesfromarangeofindependentproducersusuallythroughanannual commissioninground.Radio1alsowelcomesadhocproposalsfromestablishedprogramme makers.Thenetworkoperatesanannualcommissioningroundfortheproductionof documentaries. 99 Commissioningbriefsaremadeavailabletointerestedparties.Adhocproposalscanbe submittedtotheexecutiveproducer,accompaniedbyashortsynopsisoftheideaand treatment. Radio5Live Radio5Live(and5LiveSportsExtra)commissionacombinationoflongtermstrandsandad hocideas.Additionally,itsometimesoffersasmall,quickfirecommissioningroundin reactiontoaspecificeventoralateschedulechange.Accordingtothestation,thiswould followthesamestructure,butwouldmoveatafasterpace,ona'restrictedsupplier'basis (limitedtoindependentswhoalreadyproducefor5Live). 100 Digitalradiostations ThecommissioningprocessesoftheremainingBBCdigitalradiostationsfollowthesystems oftheirsisterstationsor,inthecaseoftheAsianNetwork,offerlimitedcommissions. BusinessAffairs IndependentproducersareprovidedwithpasswordstoaccesstheBBConlinesystem Proteusinordertoenterthedetailsoftheirproposalsandproductionbudgets. 101 Oncea programmehasbeencommissionedbyoneoftheNationalNetworks,thecontractand budgetsarenegotiatedwiththeBusinessAffairsteamwithinBBCAudio&Music. 102 At present,thebudgetforeachexternallycommissionedproductionisscrutinisedonalineby linebasis. TheTermsofTradeforindependentradioproductionswerenegotiatedcollectivelyin2005 andareimplementedintheformofastandardninepageagreement. 103 Additionally,there isa41pagedocumentthatsetsouttheGeneralTerms,a20pagesupplycontractanda fivepagecomplianceform. 104
99
http://www.bbc.co.uk/commissioning/radio/network/radio1.shtml http://www.bbc.co.uk/commissioning/radio/network/5live.shtml 101 http://www.bbc.co.uk/commissioning/radio/network/docs/proteus.pdf 102 http://www.bbc.co.uk/commissioning/radio/network/busaffairs.shtml 103 http://www.bbc.co.uk/commissioning/radio/network/docs/radio_terms_trade.pdf 104 http://www.bbc.co.uk/commissioning/radio/network/busaffairs.shtml
100
33
6.THERANGEOFCOSTSWITHINBBC RADIOINDEPENDENTCOMMISSIONS
Clause58oftheBBCAgreementrequirestheBBCTrusttohaveregardforasuitablerange anddiversityof[radio]programmestobemadebyproducersexternaltotheBBC,where rangerefersto,amongstothercharacteristics,thecostofacquisitionofthecontent. 105 TheobjectiveinthisSectionistoexaminetherangeofcostsofindependentradio programmescommissionedbytheBBC.Oneofthechallengesofsuchanexaminationisthe paucityofdataandempiricalevidenceinthepublicdomainthatanalysetheproduction costsofradioprogrammesintheUnitedKingdom.AfurtherchallengeisthattheBBCisthe onlyproducerwithinseveralgenresofradioprogrammesnotablydrama,documentaries, comedysothatthereislittlepotentialforcomparativeanalysisofproductioncosts. In2009,theNationalAuditOfficepublishedareportontheefficiencyofradioproduction withintheBBCwhichnotedthedifficultiesinvolvedincomparingproductioncosts,even betweenBBCNetworks: Thereisarangeofcostvariationsforsimilarclassificationsofprogrammes TheaveragecostperhourofmusicprogrammesonRadio2is54%higherthanthenext highestNetworkstation,Radio1,andmorethantwicethecostofRadio3 InhousedramasinLondonandinManchesterandtheNorthareover50%higherthan theotherEnglishregionsandWales,andoverthreetimesthoseinScotland WhilstRadio3paysalmost29%moreforanhourofinhouseproduceddramathanfor independentproductions,thecostofdramaproducedinhousebytheBBCforRadio4is similartothecostofdramaRadio4commissionsfromindependentproduction companies. 106 Thereportalsonotedthat: TheBBChasundertakenexercisestoinformtherevisionofguidepricesfor200910for Radio4sdramaandfactualprogrammesandRadio2scomedyprogrammes,although thesewerebasedonbudgetedratherthanactualcosts,andsuchanalysisisnot undertakenroutinelyacrossallstations. Thereislimiteddocumentaryevidence,however,that[theBBC]hassystematically assessedthepotentialimpactofsavingsonitsradiooutputandithasdonelimitedwork toexaminesignificantcostvariations. 107 TheNationalAuditOfficesanalysisexaminedthedifferencesinproductioncostsbetween BBCinhouseandexternallycommissioneddramaprogrammes,thoughitsresultswere largelyinconclusive: ThemediancostperhourofinhouseproductionsofplaysforRadio3andRadio4are 23,965and24,000respectively.Thisishigherthanprogrammescommissionedfrom independentproductioncompanies(forRadio3,by29%;forRadio4,by8%).Thecostof independentlyproducedplaysis20%higheronRadio4thanitisonRadio3.
105
34
ThereportbytheNationalAuditOfficeincludedrecommendationsthattheBBCshould: Comparethecostsofcomparableprogrammes Identifythereasonsforcostvariationsbetweenprogrammesandwhetherthesearedue todifferencesineditorialambitionorefficiency Informguidepricerangesforprogrammegenresbyanalysisofactualcostdata Explorewithcommercialradiostationsapossiblebenchmarkingarrangementfor programmeproductionefficiency. 109 TheBBCactedupontheserecommendationsbycommissioningaradioprogramme productioncostbenchmarkingexercisefromanexternalconsultant.Ittoofoundthat significantcostvariationsexistedbetweensimilarprogrammesandconcluded: Costsdifferwidelybygenre Evenwithingenres,therecanbesignificantvariation Programmedurationandserieslengthcanreducecostssignificantly Productionlocation(indieversusinhouse,regionalproduction)canalsoaffectcost, thoughnotalwaysinthesamedirection Numberofcontributorshasamarkedimpactoncosts Manyprogrammesshowunexplainedcosts. 110 TheconsultantsanalysischaracterisedasampleofBBCradioprogrammesintermsof14 variables,oneofwhichwaswhethertheprogrammewasproducedinhouseor commissionedexternally.Usingregressionanalysis,itconstructedamodeltopredict productioncostsofprogrammeswithvaryingcharacteristics.Amongstitsfindingswere: Productionlocation(indievsinhouse,regionalproduction)can[]affectcost,though notalwaysinthesamedirection WhileitmightseemlikeprogrammesproducedinLondonorIndieprogrammes[inthe musicgenre]arecheaper,itisratherthattheremainingprogrammesaremore expensive Thefourthmostimportantcostfactorinthegenreofdrama,playsandreadingswas whethertheprogrammewasanindependentproduction,theimpactofwhichreduced thepredictedcost Thesixthmostimportantcostfactorinthegenreofcomedyandentertainmentwas whethertheprogrammewasanindependentproduction,theimpactofwhichreduced thepredictedcost Radio2scostofacquiringanindependentlyproducedprogrammefromoverseaswas 56%lowerthanpredictedbythemodel. 111 Thesefindingssuggestedthataprogrammesstatusasanindependentproductioncould sometimesbeonefactorthatinfluencesitscostinsomegenres.TheBBChasacknowledged thatithasbeenabletoachievecostefficienciesintheindependentproductionsit commissions:
108 109
35
Profitincentivesshoulddriveindependent[radioproduction]companiestoseekcost efficiencies,particularlyinproducingongoingstrands.TheBBCsstrongbuyingpositionin theradioindustryhasmeantthatsubstantialcostsavingshavebeenachieved.. 112 However,theBBChasnotidentifiedsignificantcostdifferencesbetweeninhouse productionsandexternallycommissionedequivalents: .However,althoughwerecognisethesesavings,wehavenotbeenabletodemonstrate conclusivelythatindependentproductionsaremoreefficientthaninhouse[productions], onceallcostsareaccountedfor.Detailedbenchmarkingisunderway,whichisexpectedto providegreatertransparencyinthenearfuture. 113 Oneofthechallengesofanalysingdataforradioproductioncostsisthat,comparedto television,theperprogrammecostfortheradiomediumislowinabsolutetermsand, therefore,anyvariationcanappeartobeconsiderableinpercentageterms.The benchmarkingexercisecommissionedbytheBBChadtoconcludethat: Alotofthevariationin[production]costwithinthe[BBCradio]networksremains unexplained. 114 Anotheroutcomeoftherelativelylowcostsofradioproductionisthatdetailedcostcontrol proceduresmightsometimesnotbepresent.ABBCanalysisofitsradiodramaand documentaryproductioncostsnotedthat: OnlyLondonandScotlandcouldprovideabreakdownoftheiractualcosts.Detailedrecords ofactualcostsataprogrammelevelorevenproductionteamlevelarenotmaintained. 115 Oneoftheunderlyingissuesisthat,comparedtothetelevisionmedium,considerablyless technologyisrequiredforaradioproduction.Therearenosetsorstagesinradio productionbecausethelistenercreatesvisualinterpretationsoftheseintheirmind.Asa result,agreaterproportionoftheproductioncostsinradioarerelatedtothehiringoftalent andthelengthoftheproductionprocess.Forexample,aradiodramathatusestenactorsis likelytobealmosttwiceasexpensiveasanotherdramathatrequiresonlyfiveactors.The outcomeisthatthemajorityofthecostelementsofaradioproductionarevariablerather thanfixed,providinggreaterpotentialforsignificantvariationsincostsbetween programmesthatmaysuperficiallyappearquitesimilar. Thefollowinganalysisofthecostsofexternallyproducedradioprogrammescommissioned bytheBBCispresentedwiththeseissuesinmind. In2008/9,therangeofaveragecontentcostswithintheradiosectorwasvast,stretching from27perhourforcommercialradioto9,120perhourforBBCRadio4. 116
112 113
36
Figure19:averagecontentcostsbyradiostation(perhouroutput2008/9)
10,000 9,120
2,500 27 0 BBC local radio commercial radio 434 594 Radio 7 742 786
1,192 1,255
Radio 1
Radio 3
Radio 2
BBC Nations
6 Music
Asian Network
Radio 4
1Xtra
source:GrantGoddard
117
Furthermore,significantdifferenceswereevidentbetweentheaveragecostperhourof programmesmadeinhouseandthosecommissionedexternally.Withtheexceptionsof Radio4anditssisterstationRadio7,BBCNationalNetworksaveragecostperhourof externallycommissionedcontentwaslessthantheaveragecostperhourforinhouse contentin2008/9. ForsomeNetworks,thedifferencebetweeninhouseandexternallycommissioned programmecostsprovedtobeconsiderable.Externalcommissionswere77%cheaperfor Radio1and1Xtra,28%cheaperforRadio2,59%cheaperforRadio3and71%cheaperfor theAsianNetworkonanaverageperhourbasis. 119 Theseresultssuggestedthatexternally commissionedproductionsappear,onaverage,tobecheaperperhourthaninhouse productions,althoughadditionalfactorsmaybeinfluencingtheoutcomes.
117
37
Analysisofaveragecontentcostsperhouroverthelastthreeyearsfoundthat,forthe analogueradioNetworks,thecostofallcontentincreased,whilstthecomparablecostfor externallycommissionedcontentdecreased.TheexceptionwasRadio4,whereaverage contentcostsofinhouseproductionsdecreased,althoughtheNetworkstillremainedbyfar andawaythemostexpensiveBBCradiostationoverallforcontent. TheBBCdecisionin2007toextendexternallycommissionedcontenttoitsdigitalstations hasprovidedtheindependentradioproductionsectorwithasubstantialvolumeof additionalcommissions,thoughatconsiderablylowerpricesthancommissionsfromthe analogueNetworks.Atthesametime,theuseofexternallycommissionedcontentonthe digitalNetworksappearstohaveenabledtheBBCtoreducesomeofthoseNetworks contentcosts.Forexample,externalcommissionsfor1Xtrawere76%perhourcheaperthan itsaveragecontentcost,andfortheAsianNetworkwere69%cheaperin2008/9.122 Figure22:BBCNetworkRadioindependentprogrammecommissionsbyvolume,by Networkandbyyear(hoursperannum)
1,600 1,400 1,200 1,000 800 454 600 400 21 200 0 1,047 1,260 1,054
830
999
Radio 1 Radio 2 Radio 3 Radio 4 Radio 5 1Xtra 6 Music Radio 7 Asian Live + Netw ork Extra 1999/2000 2000/1 2001/2 2002/3 2003/4 2004/5 2005/6 2006/7 2007/8 2008/9
625
684
38
source:BBCAudio&Music[datalabelsreferto2008/9]
123
Byitssecondyearofexternalcommissions,BBC1Xtrawascommissioningagreatervolume ofindependentlyproducedprogrammesperannumthanRadio1,albeitatanhourlyrate thatwas94%cheaperperhourthanRadio1. 124 Accordingtocommentsreceivedfromthe independentradioproductionsector,theBBCdigitalstationshaveproventobebotha blessingandacursetothesector.Ontheonehand,theyhavesucceededinsignificantly expandingtheopportunitiesforcommissions.Ontheotherhand,thehourlyratesaresolow thatithasprovenachallengetoderiveasignificantprofitfromtheresultantcommissions. TheproposalswithinthecurrentBBCStrategyReviewtoclosedigitalstations6Musicand theAsianNetworkbyyearend2011wouldhaveasubstantialimpactontheindependent radioproductionsector.Atastroke,24%ofBBCNetworkRadiosvolumeofexternal programmecommissionswouldbelost.However,intermsofvalue,thelosswould representonly5%oftotalBBCNetworkRadiocommissions. 125 NeitheristheBBCStrategyReviewsproposaltostrengthentheeditoriallinksbetween theremainingdigitalstationsandtheexistinganalogueNetworksparticularlyencouraging fortheindependentproductionsector. 126 Thedangervoicedbyindependentproducerswas thatthiscouldleadtoagreatervolumeofprogrammessharedbetweeneachpairof Networksor,usingthesuccessfulRadioFiveLivemodel,itmighttransformthedigital stationsintoparttimeadjunctsoftheiranaloguepartners.Eithercourseofactionwouldbe likelytoleadtoareducedvolumeoforiginaloutputand,therefore,toareducedvolumeof independentprogrammecommissions. Figure23:BBCNetworkRadioindependentprogrammecommissionsbyvalue,byNetwork andbyyear(000perannum)
8,000 7,274 4,320 4,000 1,645 1,851 950 2,000
6,000
611
201
0 Radio 1 Radio 2 Radio 3 Radio 4 Radio 5 1Xtra Live + Extra 1999/2000 2000/1 2001/2 2002/3 2005/6 2006/7 2007/8 2008/9
6 Music Radio 7
100
2003/4
2004/5
252
source:BBCAudio&Music[datalabelsreferto2008/9]
127
39
15,000
907
1,982
5,000
Radio 1 Radio 2 Radio 3 Radio 4 Radio 5 1Xtra 6 Music Radio 7 Asian Netw ork Live + Extra 1999/2000 2000/1 2001/2 2002/3 2003/4 2004/5 2005/6 2006/7 2007/8 2008/9
191
368
source:BBCAudio&Music[datalabelsreferto2008/9]
129
TheattractiontotheindependentradioproductionsectorofsupplyingcontenttoRadio4is thatitsaveragehourlycommissioningrateismuchhigherthantheothernationalNetworks, areflectionofthemorecomplexproductions(particularlydrama,comediesand documentaries)thatitbroadcasts.Thedisadvantageisthatthecompetitiontoachieve Radio4commissionsisintense,fortheveryreasonthattheyarelikelytoofferabetter profitmargintotheindependentproducerthanthosefromotherBBCNetworks. Theprecedinganalysisexploredtherangeofcostsofexternallycommissionedradio programmesacrosstheBBCNationalNetworks.Next,therangeofcostsofcommissioned programmeswithineachBBCNationalNetworkwasanalysed.Datawasmadeavailableby theBBCforanalysisofasingleyearscommissions(2008/9)althoughthisdatasethad alreadybeenaggregated: Firstly,byNetwork Secondly,withinthat,byprogrammegenre Thirdly,withinthat,bysupplier. Consequently,thefollowinganalysisreferstoneitherthenumberofindividualcontracts, nortothenumberofindividualsuppliers.Itreferstothenumberofsupplierswithineach programmegenrewithineachNationalNetwork.Hence,asuppliercan(anddoes)supply programmesinseveralgenrestoaparticularNetwork,andthosesuppliesarecounted discretelyinthedataset.Commissionsbythesamesupplierinthesamegenrehadalready beenaggregatedinthedataset.Withintheselimitations,thefollowinganalysisexploredthe rangeofcommissioningcostswithineachNationalNetwork.Programmesuppliernames havebeenomittedforconfidentialityreasons. [ ]
128 129
BBCAudio&Music,datasuppliedtotheauthor ibid.
40
60%
20%
source:BBCAudio&Music
130
ItisevidentthatindependentradiocommissionsfromBBCNetworkRadiocomprisedalarge numberoflowvaluecommissions,combinedwithasmallnumberofhighvaluecontracts. Themediancontractvaluewas7,827.Justoveraquarterofcontractswerevaluedunder 5,000,whilstthreequarterswerevaluedunder16,000.However,therewereasignificant numberofoutliers,with5%ofcontractsvaluedatmorethan50,000and,attheother extreme,8%ofcontractsvaluedatlessthan1,000. 131 Thelongtailofthe570independentradioproductioncontractscommissionedbyBBC NetworkRadioin2007/8and2008/9appearstobeverylong.However,itmustbenoted thatthisdatasethasaggregatedtheoutcomesofseveraldifferentcommissioningsystems withindifferentNetworks,eachofwhichreflectsthedifferingneedsofindividual programmestrands.Asaresult,theaggregateddatawaslikelytohaveincluded: Continuingseries,someofwhichrun52weeksperyearonmusicstations Shortserieswhichmightcomprise,forexample,13episodesforacomedyshow Batchcommissioningwherebyanumberofdiscreteprogrammes(suchasoneoff dramas)arecommissionedinasinglecontractfromonesupplier,thougharenot intendedforbroadcastasanintrinsicseries Adhoccommissions,wherebyindividualdocumentaries,dramasoreventsaresupplied forschedulingasstandaloneprogrammes. Thismixtureofcommissioningsystemshasmadethedataparticularlydifficulttointerpretin ameaningfulway.Itisselfevidentthatthecontractcostfora52weekseriesoftwohour musicshowsonRadio1islikelytobeconsiderablygreaterthanthecontractcostofone
130 131
ibid. ibid.
41
42
7,465 76
34 4
91 325 67
2,405 431 1,314 2,109 741 285 265 210 25 239 1,395 9,419
6,435 2,119 55
104 14 9,048
133
366 88 8,760
56 704 8,784
104 7 8,656
130 7,721
source:BBCAudio&Music
40,146 12,793 3,716 1,808 3,853 891 1,326 1,706 1,051 0 753 9,344 2,364 79,751
93 3 0 1
81 4 0 6 0 1 1 2
85 1
0 0
1 4 1
26 5 14 22 8 3 3 2 0 3 15 100
73 24 1
89 10 100
87 5 4 0
25 24 1 15 0 7 18 7
0 8 91 100
1 0 100
134
4 1 100
1 8 100
2 100 100
1 0 100
2 2 100
2 100
source:BBCAudio&Music
132
50 16 5 2 5 1 2 2 1 0 1 12 3 100
43
ThesamedatasetisrepresentedinFigure31asapercentageofeachNetworksannual output. ItwouldhavebeenusefultocomparethetotalvolumeofoutputoftheBBCNational Networksbygenrewiththevolumeofindependentlycommissionedprogrammesbygenre onthoseNetworks.ThisdatawasrequestedandtheBBCrespondedthat: TheBBCmanagesandmonitorsindependentcommissioningdatabasedonnetworksandis notrequiredtotrackindependentspendbygenre. 135 Figure32:BBCNetworkRadioexpenditureonindependentlycommissionedprogrammes bygenreandbyNetwork(in2008/9)
Radio 1 Music News & weather Sport Factual Current affairs Drama Arts Entertainment Religion Schools Children's Presentation Other TOTAL Radio 2 Radio 3 Radio 4 Five Live + Extra 1Xtra 6 Music Radio 7 Asian Network TOTAL
973,324 2,656,928 1,176,803 246,000 1,414,000 17,106 602,129 10,764 32,000 1,113,845 100,992 2,045,791 463,579 329,883 2,805,979 221,081 341,255 1,263,353
100,100
628,507
109,000
556
169,260 48,333
64,344
99,455
200,111
797,767
48,333
source:BBCAudio&Music
5,644,662 246,000 1,414,000 2,834,842 463,579 3,194,959 758,135 2,377,198 160,000 260,992 0 0 0 34,932 269,000 17,229,299
92
59
68 15 85
50
79
41
13 0 1 25 2 19 13
29 7 40 5 18
21 100
50 59
0 100
137
100
100
0 100
100
100
100
100
100
source:BBCAudio&Music
33 1 8 16 3 19 4 14 2 0 0 0 0 100
134 135
44
ThesamedataarerepresentedinFigure33asapercentageofeachNetworks independentlycommissionedprogrammes. Thefollowinganalysisexplorestherangeofindependentlyproducedprogrammesacquired byBBCNetworkRadiowithineachgenre. [ ] ThedatasetsuppliedbytheBBCincludedafurtherfourgenresknowledgebuilding, news,religionandsportwhichcomprisedonlythree,one,twoandtwodatapoints respectively.Additionally,thesupplierlabelforthemajorityofindependentcommissionsfor RadioFiveLivewasSeveral.TheBBCinformedthatthissuppliernamewasusedto aggregateanumberofindependentradioproducersthatwerenotseparatelyitemised.Asa result,thesedatacouldnotusefullybeanalysed.
45
46
TheWorkFoundationresearchhasidentifiedorganiseddiversityasacrucialdriverof creativity,whichinturnisakeydeterminantoforganisationalhighperformance. 140 TheBBCisasignatorytotheDiversityPledgeproducedbytheCulturalDiversityNetwork, anallianceofUKpublicandcommercialbroadcasters.TheNetworklaunchedin2000when allBritainsmajortelevisionbroadcastersjoinedforces,butitsremitwassubsequently extendedtoradio,multimediaandnewdigitalmedia,aswellasthecreativeindustries supplychainsuchascraft,technicalandpostproductionbusinesses. 141 LaunchedinApril2009,theDiversityPledgerequiredfromitssignatoriesthattheymadea commitmentto: Recruitfairlyandfromaswideabaseaspossibleandencourageindustryentrantsand productionstafffromdiversebackgrounds Encouragediversityinoutput Encouragediversityatseniordecisionmakinglevel Takepartinorruneventsthatpromotediversity. 142 TheDiversityPledgealsostated: Channel4,BBC,Sky,andITVwillexpectalltheirsuppliersandproductionpartnerstosign uptothisPledge,anditisexpectedthatotherCulturalDiversityNetworkmemberswilldo thesame. 143 EachbroadcastersignatorypresentedtheirownDiversityActionPlantotheCultural StrategyNetworkinFebruary2009,andtheBBCsstatementrelatedspecificallytoethnic diversity,promisingactionsfor2009/10thatincluded: Introduceanonlinesystemtotrackthediversityofwhoworksonproductions,bothin houseandonindieteamssupplyingtheBBC BBCsignsuptoanddeliversonCulturalDiversityNetworkDiversityPledgeandmonitors inhouseandindiedeliveryagainstcommitments RegularmonitoringofsnapshotsofBBCoutputandcontent. 144 However,itappearedthatthesepolicieshavenotbeenimplementedforBBCradiooutput. Asaresult,theBBCinformedthatnomonitoringwasinprogresstomeasure: ThediversityofindependentradioproducerssupplyingtheBBC ThediversityofcontentsuppliedbyindependentradioproducerstotheBBC. Theoutputsofsuchmonitoringwouldhaveassistedinassessingthediversityof independentradioproductionssuppliedtotheBBCandcouldalsohaveprovideda benchmarkfortotalBBCradiooutput. WithinitscurrentDiversityStrategy,theBBCsprioritiesfortheperiod20092012included: Tocontinuetomakeprogrammesthatreflecttherealityofdiverseaudiences,including currentlyunderservedaudiencesandwhichdeliverontheBBCsresponsibilitytoinform, educateandentertain. 145
140 141
TheWorkFoundation&BBC,Thetippingpoint:Howmuchisbroadcastcreativityatrisk?,July2005,p.5 CulturalDiversityNetwork,DiversityPledge,p.2 142 ibid.,pp.45 143 ibid.,p.3 144 BBC,BBCplannedactionstotackleethnicdiversity(20092010), http://www.culturaldiversitynetwork.co.uk/downloads/BBC%20_ethnic_%20Diversity%20Action%20Plan%20landscape.pdf 145 BBC,TheBBCsDiversityStrategy200912,p.3
47
TheactionpointswithintheBBCDiversityStrategyincluded: Workingtoincreasediverseportrayalacrossallplatforms EngagingandencouragingChannelControllersandCommissionerstothinkabout diversityinthecommissioningandinhouseproductionprocess. 146 Additionally,theBBCmadeanumberofcommitmentstodiversityinitsPoliciesand Guidelinesthatincluded: DiversityfortheBBCisacreativeopportunitytoengagethetotalityoftheUKaudience. Thatincludesdiversecommunitiesofinterest,aswellasgender,age,ethnicity,religion andfaith,socialbackground,sexualorientation,politicalaffiliationandsoon. Deliveringonourcommitmenttoequalopportunitiesanddiversityisimportanttothe BBCforanumberofreasons.Forexample,theaudiencesthatweserveareincreasingly diverse.TheBBCisalsoapublicservicebroadcasterfundedbyalicencefeepaidbyall sectionsofUKsociety. TheBBCiscommittedtoreflectingthediversityoftheUKaudienceinitsworkforce,as wellasinitsoutputonTV,onradioandonline. 147 InitsStatementsofProgrammingPolicy,theBBCadoptedcommitmentstodiversitywhich, itstated,applyacrossservices: TheBBCaimstoreflecttherealityofdiversitywithintheUKinitsoutputandthroughits television,radioandotherservicestooffersomethingforeveryoneintheUK. Allnewlysubmittedprogrammeproposalshaveadiversitystatementattached highlightinghow,whereappropriate,theprogrammewillfulfiltheBBC'scommitmentto reflectingthediversityofthelicencefeepayingpublic,bothonandoffscreen. TheBBCwillcontinuetoassesstheimpactofthiscommitmentandwillcontinueto developadditionalmechanismsforimprovingdiversityinbothoutputand employment. 148 EachdivisionwithintheBBChasitsownspecificDiversityActionPlanandreportsquarterly ontheprogressmade.ThecurrentBBCAudio&MusicDiversityActionPlanincludesan actionpointforoutput: Eachservicetodevelopitsownplanstoaddressrespectiverepresentationgaps(e.g. moretargeteduseofOutsideBroadcaststoreachsociallyexcludedareas;ethnic minoritypresentersinmainstreamstrands;moreeffectivemonitoringofcontributors andsharingofinformation). 149 However,recentlyreportedprogressonthisactionpointhasapparentlynotreferred explicitlytodiversitywithintheradiocommissioningprocess,eitherinhouseorexternal. Radio4wasreportedtobeconductinganethnicminoritytalentauditforsuccession planning,whileFiveLiveplannedtobasetwoOutsideBroadcastsperannuminadiverse community,reflectingitsissuesandconcerns. 150 EachindividualBBCradioNetworkscurrentStatementofProgrammePolicyandService Licenceincludesexplicitandimplicitcommitmentstodiversity,asfollows.
146 147
48
Radio1: 60hoursofspecialistmusicperweek 40newdocumentaries 200hoursoforiginaloptoutsfromScotland,WalesandNorthernIreland Radio1sprogrammesshouldexhibitsomeorallofthefollowingcharacteristics:high quality,original,challenging,innovativeandengaging,anditshouldnurtureUKtalent. Theserviceshoulddeliveritsremitbyproducingawiderangeofprogrammesthat exposelistenerstonewandsometimeschallengingmaterialtheymaynototherwise experience. Radio1shouldcontributetoBBCRadioscommitmenttocommissionsomeoutputfrom outsidetheM25areaandfromindependentproducers. Radio1shouldcontributetoBBCRadioscommitmenttocommissionatleast10%of eligiblehoursofoutputfromindependentproducers. 151 Radio2: >1,100hoursofspecialistmusicprogrammes >100hoursofartsprogramming 16hoursaweekofnewsandcurrentaffairsprogramming,includingregularnews bulletins 170hoursofreligiousoutputcoveringabroadrangeoffaiths Radio2sprogrammesshouldexhibitsomeorallofthefollowingcharacteristics:high quality,original,challenging,innovativeandengaging,anditshouldnurtureUKtalent. Radio2shouldextendtherangeofmusicavailabletothepublicthroughboth mainstreamandspecialistprogrammesthatenableaudiencestoenjoyfamiliarmusic andalsotoexplorearangeofspecialistmusicgenres. Radio2shouldcontributetoBBCRadioscommitmenttocommissionsomeoutputfrom outsidetheM25areaandfromindependentproducers. Radio2shouldcontributetoBBCRadioscommitmenttocommissionatleast10%of eligiblehoursofoutputfromindependentproducers. 152 Radio3: 35newdramaproductionsbroadcast(excludingrepeatsandacquisitions) 30newdocumentariesbroadcastonartsandculturaltopics(excludingrepeatsand acquisitions) 40%ofrelevantspendincurredoutsidetheM25 Radio3sprogrammesshouldexhibitsomeorallofthefollowingcharacteristics:high quality,original,challenging,innovativeandengaging,anditshouldnurtureUKtalent. Radio3shouldplaceaspecialemphasisonliveandspeciallyrecordedmusic.The scheduleshouldalsofeaturecommerciallyrecordedmusic,includinghistoricrecordings. Radio3shouldcontributetoBBCRadioscommitmenttocommissionsomeoutputfrom outsidetheM25areaandfromindependentproducers. Radio3shouldcontributetoBBCRadioscommitmenttocommissionatleast10%of eligibleprogrammesfromindependentproducers. 153
151
49
Radio4: 2,500hoursofnewsandcurrentaffairsprogrammes 600hoursoforiginaldramaandreadings(excludingrepeats) 180hoursoforiginalcomedy(excludingrepeats) 200hoursoforiginaldocumentaries(excludingrepeats) 200hoursoforiginalreligiousprogramming(excludingrepeats) Radio4programmesshouldexhibitsomeorallofthefollowingcharacteristics:high quality,original,challenging,innovativeandengaging,anditshouldnurtureUKtalent. Radio4shoulddeliveritsremitbyprovidingindepthnewsandcurrentaffairs,strongly supportedbyawiderangeofotherspeechprogrammesincludingpolitics,religionand ethics,history,science,documentaries,arts,literature,dramaandreadings,sports (subjecttorightsownership)andcomedy. Radio4shouldcontributetoBBCRadioscommitmenttocommissionsomeoutputfrom outsidetheM25areaandfromindependentproducers. Radio4shouldcontributetoBBCRadioscommitmenttocommissionatleast10%of eligiblehoursofoutputfromindependentproducers. Radio4shouldcontributetoBBCRadioscommitmenttoensurethatatleastonethirdof relevantexpenditureisincurredoutsidetheM25areaeachyear.Eachweektheschedule willincludeprogrammesfromoneormoreoftheEnglishregions,Scotland,Walesand NorthernIreland.Itshouldalsocommissionoutputfromindependentcompaniesbased throughouttheUK. 154 Radio5Live: BBCRadioFiveLiveprogrammesshouldexhibitsomeorallofthefollowing characteristics:highquality,original,challenging,innovativeandengaging,anditshould nurtureUKtalent.BBCRadioFiveLiveshouldprovideawiderangeofnewsandsport programming,includingrollingnewswheneverabignewsstorybreaks,livecommentary onmajorsportingevents(subjecttorights),andarangeofotherprogrammesthat informandentertainitslisteners. BBCRadioFiveLiveshouldcontributetoBBCRadioscommitmenttocommissionsome outputfromoutsidetheM25areaandfromindependentproducers. BBCRadioFiveLiveshouldcontributetoBBCRadioscommitmenttocommissionatleast 10%ofeligiblehoursofoutputfromindependentproducers. 155 Radio5LiveSportsExtra: BBCFiveLiveSportsExtraprogrammesshouldexhibitsomeorallofthefollowing characteristics:highquality,original,challenging,innovativeandengaging,anditshould nurtureUKtalent. BBCFiveLiveSportsExtrashouldcontributetoBBCRadioscommitmenttocommission atleast10%ofeligiblehoursofoutputfromindependentproducers. 156
BBC,StatementsofProgrammePolicy2009/10,pp.4041 http://downloads.bbc.co.uk/aboutthebbc/statements2009/pdf/BBC_SoPPs_200910.pdf BBCTrust,Radio3ServiceLicence,7April2008, http://www.bbc.co.uk/bbctrust/assets/files/pdf/regulatory_framework/service_licences/radio/2008/radio3_Apr08.pdf 154 BBC,StatementsofProgrammePolicy2009/10,pp.4243 http://downloads.bbc.co.uk/aboutthebbc/statements2009/pdf/BBC_SoPPs_200910.pdf BBCTrust,Radio4ServiceLicence,7April2008, http://www.bbc.co.uk/bbctrust/assets/files/pdf/regulatory_framework/service_licences/radio/2008/radio4_Apr08.pdf 155 BBCTrust,RadioFiveLiveServiceLicence,7April2008, http://www.bbc.co.uk/bbctrust/assets/files/pdf/regulatory_framework/service_licences/radio/2008/five_live_Apr08.pdf
153
50
1Xtra: c.20%ofspeechbasedoutputeachweek c.10%ofweeklyoutputdedicatedtonews,documentariesandsocialaction programming 1Xtraprogrammesshouldexhibitsomeorallofthefollowingcharacteristics:high quality,original,challenging,innovativeandengaging,andtheyshouldnurtureUK talent.1Xtrashoulddeliveritsremitbybringingtogetherthefullrangeofcontemporary blackmusicandculture,asdrivenbytheneedsofitstargetaudience. 1XtrashouldcontributetoBBCRadioscommitmenttocommissionatleast10%of eligiblehoursofoutputfromindependentproducers. 157 6Music 10hoursofspeechbasedfeatures,documentariesandessayseachweek BBC6Musicprogrammesshouldexhibitsomeorallofthefollowingcharacteristics: highquality,original,challenging,innovativeandengaging,anditshouldnurtureUK talent.BBC6Musicshoulddeliveritsremitbyengagingpeoplewhoareinterestedin musicandwhowanttolearnmoreaboutit.Itsmusicshouldfocusonmajorartistsand materialwhichdonotreceivemuchsupportfromotherradiostations. BBC6MusicshouldcontributetoBBCRadioscommitmenttocommissionatleast10% ofeligiblehoursofoutputfromindependentproducers. 158 Radio7 50hoursofcomedyeachweek 50hoursofdramaeachweek 1,400hoursofchildrensprogramming. 159 AsianNetwork 50:50proportionofspeechtomusic 35hoursonaverageoflanguageprogrammingeachday BBCAsianNetworkprogrammesshouldexhibitsomeorallofthefollowing characteristics:highquality,original,challenging,innovativeandengaging,anditshould nurtureUKtalent.BBCAsianNetworkshoulddeliveritsremitthroughanapproximately 50:50splitofmusicandspeech,withtheprecisebalancevaryingoverthecourseofthe week. BBCAsianNetworkshouldcontributetoBBCRadioscommitmenttocommissionat least10%ofeligiblehoursofoutputfromindependentproducers. 160
156
BBCTrust,BBCFiveLiveSportsExtraServiceLicence,10July2008, http://www.bbc.co.uk/bbctrust/assets/files/pdf/regulatory_framework/service_licences/radio/2008/five_live_sports_extra_jul 08.pdf 157 BBC,StatementsofProgrammePolicy2009/10,pp.4748 http://downloads.bbc.co.uk/aboutthebbc/statements2009/pdf/BBC_SoPPs_200910.pdf BBCTrust,1XtraServiceLicence,July2009, http://www.bbc.co.uk/bbctrust/assets/files/pdf/regulatory_framework/service_licences/radio/2009/1xtra_aug09.pdf 158 BBC,StatementsofProgrammePolicy2009/10,pp.4950 http://downloads.bbc.co.uk/aboutthebbc/statements2009/pdf/BBC_SoPPs_200910.pdf BBCTrust,BBC6MusicServiceLicence,7April2008, http://www.bbc.co.uk/bbctrust/assets/files/pdf/regulatory_framework/service_licences/radio/2008/6music_Apr08.pdf 159 BBC,StatementsofProgrammePolicy2009/10,pp.5152 http://downloads.bbc.co.uk/aboutthebbc/statements2009/pdf/BBC_SoPPs_200910.pdf 160 BBC,StatementsofProgrammePolicy2009/10,pp.5354 http://downloads.bbc.co.uk/aboutthebbc/statements2009/pdf/BBC_SoPPs_200910.pdf BBCTrust,BBCAsianNetworkServiceLicence,7April2008, http://www.bbc.co.uk/bbctrust/assets/files/pdf/regulatory_framework/service_licences/radio/2008/asian_network_Apr08.pdf
51
Thesecommitmentsprovideaframeworkagainstwhichthecommissioningofexternally producedradiocontentcouldbemeasuredforeachNetwork.However,theBBCwasunable toprovidedataregardingindividualBBCNetworkRadiocommissionsbecause,itexplained, ofthewayitsaccountingsystemsforexternallycommissionedprogrammesaremaintained. Asaresult,thisreportsabilitytoestablishthatdiversityexistsintheBBCsacquisitionsof externallyproducedradiocontenthasremainedlimited. Thefollowinganalysisisconfinedtoexaminingthediversityinthevolumeofsuppliersof independentradioproductionstoBBCNetworkRadio.Suppliernameshavebeen anonymised. Figure40:numberofcontractorssupplyingBBCNetworkRadiowithindependent productionsin2008/9
120 100 80 60 40 20 0 Radio 1 Radio 2 Radio 3 Radio 4 Five Live + Extra 6 Music Radio 7 TOTAL 1Xtra Asian Network 14 3 37 23 13 6 3 1 71 110
source:BBCAudio&Music
161
Therewere110differentsuppliersofexternallyproducedcontenttoBBCNetworkRadioin 2008/9. 162 ManysupplierswerecommissionedbymorethanoneNetwork. Theconcentrationofasignificantproportionofcommissionsamongstasmallnumberof independentproducersisillustratedinFigure41,whichranksthetwentyleadingsuppliers toBBCNetworkRadiobycontractvaluefor2008/9.Theseresultsdifferedslightlyfromthe BBCsanalysisbecausedataforcoownedproducershavebeenaggregated.Thetoptwo producersaccountedfor28%ofBBCNetworkRadioexternalcommissionsbyvalue,andthe topfouraccountedfor35%. 163
161
52
Figure41:totalpaymentsfromBBCNetworkRadiotoits20largestcontractorsfor independentproductionsin2008/9(%oftotalpayments)
TOTAL NETWORK RADIO Radio 1 Radio 2 % of total value of commissions (2008/9) 5 Live + Sports Radio 3 Radio 4 Extra 1Xtra 6Music Radio 7 Asian Network
[production company] [production company] [production company] [production company] [production company] [production company] [production company] [production company] [talent-led production supplier] [production company] [production company] [talent-led production supplier] [production company] [talent-led production supplier] [production company] [production company] [production company] [production company] [production company] [production company] TOTAL
17 11 3 3 3 3 3 2 2 2 2 2 2 1 1 1 1 1 1 1 66
0 53 0 0 0 1 0 0 36 0 0 0 5 0 0 0 0 0 0 0 96
43 4 0 0 0 10 0 0 0 3 0 8 0 6 4 1 0 5 1 0 84
15 23 33 2 0 0 0 0 0 0 0 0 0 0 0 2 0 0 2 0 76
8 3 0 8 8 0 7 6 0 3 5 0 0 0 1 2 3 0 2 3 61
0 0 0 0 0 0 0 0 0 0 0 0 15 0 0 0 0 0 0 0 15
20 6 0 0 0 0 0 0 0 0 0 0 2 0 0 0 0 0 0 0 28
13 57 0 0 0 6 0 0 0 0 0 0 0 0 0 0 0 0 0 0 76
0 69 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 69
0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
source:BBCAudio&Music
164
[production company] [talent-led production supplier] [production company] [production company] [production company] [production company] [production company] [production company] [production company] [production company] TOTAL
11 2 2 0 3 0 0 1 0 3 23
53 36 5 2 1 1 0 0 0 0 99
4 0 0 0 10 0 0 0 0 0 15
23 0 0 0 0 0 0 0 0 0 23
3 0 0 0 0 0 0 0 1 8 12
0 0 15 0 0 0 0 0 0 0 15
6 0 2 0 0 2 0 0 2 0 12
57 0 0 0 6 0 0 16 0 0 79
69 0 0 0 0 0 0 0 0 0 69
0 0 0 0 0 0 0 0 0 0 0
source:BBCAudio&Music
165
53
Figure43:totalpaymentsfromBBCRadio2toits10largestcontractorsforindependent productionsin2008/9(%oftotalpayments)
TOTAL NETWORK RADIO Radio 1 Radio 2 % of total value of commissions (2008/9) 5 Live + Sports Radio 3 Radio 4 Extra 1Xtra 6Music Radio 7 Asian Network
[production company] [production company] [talent-led production supplier] [talent-led production supplier] [production company] [production company] [production company] [production company] [production company] [production company] TOTAL
17 3 2 1 1 11 1 2 1 1 41
0 1 0 0 0 53 0 0 0 0 54
43 10 8 6 5 4 4 3 3 2 87
15 0 0 0 0 23 0 0 0 0 37
8 0 0 0 0 3 1 3 0 0 16
0 0 0 0 0 0 0 0 0 0 0
20 0 0 0 0 6 0 0 0 0 26
13 6 0 0 0 57 0 0 0 0 76
0 0 0 0 0 69 0 0 0 0 69
0 0 0 0 0 0 0 0 0 0 0
source:BBCAudio&Music
167
[production company] [production company] [production company] [production company] [production company] [production company] [production company] [production company] [production company] [production company] TOTAL
3 11 17 1 1 1 0 0 1 1 37
169
0 53 0 0 0 0 0 0 0 0 53
0 4 43 0 0 0 0 0 1 1 49
33 23 15 5 3 3 3 2 2 2 91
0 3 8 0 1 2 0 0 2 2 19
0 0 0 0 0 0 0 0 0 0 0
0 6 20 0 2 0 0 0 0 0 28
0 57 13 0 0 0 0 0 0 0 70
0 69 0 0 0 0 0 0 0 0 69
0 0 0 0 0 0 0 0 0 0 0
source:BBCAudio&Music
[production company] [production company] [production company] [production company] [production company] [production company] [production company] [production company] [production company] [production company] TOTAL
3 17 3 3 2 2 2 1 11 1 47
171
0 0 0 0 0 0 0 0 53 0 54
0 43 0 0 0 0 3 0 4 0 50
2 15 0 0 0 0 0 0 23 0 39
8 8 8 7 6 5 3 3 3 3 55
0 0 0 0 0 0 0 0 0 0 0
0 20 0 0 0 0 0 0 6 0 26
0 13 0 0 0 0 0 0 57 0 70
0 0 0 0 0 0 0 0 69 0 69
0 0 0 0 0 0 0 0 0 0 0
source:BBCAudio&Music
167 168
54
[production company] [production company] [production company] [production company] [production company] [production company] [production company] [production company] [production company] [production company] TOTAL
1 17 0 11 0 1 0 2 0 0 32
173
0 0 0 53 0 0 0 5 1 2 62
0 43 0 4 0 0 0 0 0 0 47
0 15 0 23 0 3 0 0 0 0 41
0 8 0 3 0 1 1 0 0 0 13
0 0 0 0 0 0 0 15 0 0 15
53 20 9 6 4 2 2 2 2 0 100
0 13 0 57 0 0 0 0 0 0 70
0 0 0 69 0 0 0 0 0 0 69
0 0 0 0 0 0 0 0 0 0 0
source:BBCAudio&Music
[production company] [production company] [production company] [production company] [production company] [production company] TOTAL
11 1 17 1 3 0 32
175
53 0 0 0 1 0 55
4 0 43 1 10 0 58
23 0 15 0 0 0 37
3 0 8 0 0 0 11
0 0 0 0 0 0 0
6 0 20 0 0 0 26
57 16 13 8 6 0 100
69 0 0 0 0 0 69
0 0 0 0 0 0 0
source:BBCAudio&Music
171 172
ibid. ibid. 173 ibid. 174 ibid. 175 ibid. 176 ibid.
55
Figure48:tenlargestsuppliersofindependentradioproductionstoanalogueBBC Networksin2008/9rankedbypercentageoftotalpaymentsbyNetwork(%)
100 90 80 70 60 50 40 30 20 10 0 TOTAL NETWORK RADIO Radio 1 Radio 2 Radio 3 Radio 4 17 11 3 5 36 10 8 15 23 8 8 8 53 43 33
source:BBCAudio&Music
177
177 178
ibid. ibid.
56
9.OPINIONSFROMTHEINDEPENDENT RADIOPRODUCTIONSECTOR
ThisSectiondocumentstheopinionsoftheindependentradioproductionsectorconcerning theexternalcommissioningofradioprogrammesbytheBBC.First,theopinionsofthe sectortradebodyareconsidered;followedbytheopinionsofindividualradioproducers whohaveprovidedinputtotheBBCTrustconsultation. RadioIndependentsGroup TheRadioIndependentsGroupwasformedin2004andcurrentlyhasamembershipof around100companiesactiveintheindependentradioproductionsector,includingthe majorityofsupplierstoBBCNetworkRadio.In2005,itnegotiatednewTermsofTradewith theBBCforitsmembers,anditsexecutivemeetsregularlywithseniorBBCradio management. TheformalsubmissionbytheRadioIndependentsGrouptotheBBCTrustconsultationin May2010representedanaggregationofitsmembersviewpointsandconcerns.Itsmain proposalswere: Theindependentradioproductionquotatobeincreasedfrom10%to25%overthree years AreductionoverthreeyearsoftheproportionofBBCradiooutputringfencedforin houseproductionfrom91.6%tonomorethan50% 25%ofallBBCradiooutputtobeopenedtocompetitionbetweenindependentandin houseproducersusingaWindowofCreativeCompetition Thequotatobeimplementedintermsofvalue,inadditiontothecurrentmetricthat referstothevolumeofeligiblehours NetworkRadiocommissionersofindependentproductionstohavenomanagerial responsibilityforBBCinhouseproduction GreatertransparencyinthereportingofBBCindependentradiocommissioning outcomes. 179 Theseproposalsareconsideredhere,precededbyanexaminationofthemoregeneral commentsonthesectormadebytheRadioIndependentsGroup.Someassertionsmadeby theRadioIndependentsGroupinitssubmissionmayappeartobeunsubstantiatedby evidentialdata,whichithasattributedtotheabsenceofdataprovidedbytheBBCregarding theoutcomesofitsradiocommissioningsystems.Somenumberscitedinthesubmission appeartobeestimates,perhapsbecauseBBCdataandreportsanalysedaspartofthis reporthadnotbeenmadeavailabletotheRadioIndependentsGroup. Initsoverviewofthesector,theRadioIndependentsGroupasserted: Independentradioproductionisnotcurrentlyinapositionwhereithassufficientaccess tothemarketinordertogrowandrealiseitsfullpotential
179
RadioIndependentsGroup,SubmissiontotheBBCTrustRadioNetworkSupplyReview,May2010,pp.56,para.17
57
AlthoughitisbeyondthescopeofthisreporttoexaminetheeditorialcharacteristicsofBBC radiocommissions,thenotionofameritocracyofideasisundeniablyimportantina situationwhereBBCNetworkRadioistheonlybroadcasterinmanysignificantprogramme genres.IndependentproducershavecommentedthattheBBCNetworkRadio commissioningsystems,particularlyforRadio4,canseemmoreconcernedwithlimitingthe inflowofcreativeideas,ratherthanensuringthatthisinflowisencouragedandsuccessfully evaluatedsothatitscreativepotentialisrealisedonair.Ifthiswerethecase,thenthe currentsystemmaynotbefunctioningtothemaximumbenefitoftheLicenceFeepayer. WithregardtotheassertionbytheRadioIndependentsGroupthatgreatervalueis potentiallyaddedtotheeconomybyindependentproductionsthanbyinhouse productions,therewouldappeartobeinsufficientdataontheflowoffundstoperformsuch ananalysis.Thisisanareathatcouldbegivenmoreattentioninfutureaspartofthefollow uptotheNationalAuditOffice2009reportonBBCradioproductioncosts.181 TheRadioIndependentsGroupoutlinedthecurrenteconomicpositionofthesector: Thereislimitedscopetoincrease[the]relationship[withcommercialradio]duetothe economicfactorsaffectingthecommercialradiosector Keentostandonitsownfeetandmaximiserevenuefromitsintellectualproperty,the sectorhasalsobeenlookingtoestablishnewwaysofdistributingtheircontentviadigital networks Duetothelackofsignificantothersourcesofcommissioning,thereisagrowing understandingoftheneedfortheBBCtoprovidethekeystimulustotheindependent radioproductionsector,aspartofitsremitandpurposes. 182 Empiricalevidencenotedearlierhasindicatedthat,fortheforeseeablefuture,theBBCis likelytocontinuetobetheonlycustomerofsizefortheindependentradioproduction sectorsoutputs. OntheissueoftheBBCcommissioningsystem,theRadioIndependentsGroupnoted: BBCRadioneedstomovemuchmoretowardstheuseofadiverserangeofindependent suppliers suitabletargets,setwithrealistictimetables,shouldbeintroduced[and]shouldbe enforcedbytheBBCTrust ThecurrentsizeoftheBBCsinhouseoperationneedstobeexamined,alongwith methodsusedtoarriveatthecurrentsplitbetweeninhouseandoutofhouse [production]
Iftheindependentradioandaudiosectorisabletoexpand,itwouldbeinapositionto achievethecriticalmassneededtosupportaviable,nationallydiverseradionetwork [and]createmuchgreaterintellectualpropertyvalue [BBC]moneyspentdirectlyonindependentproductionhasthepotentialtocreatemore moneyintheeconomythantheequivalentspendoninhouseproduction Thesectorsprimecustomer,theBBC,maintainsacommissioningsystemwhichdoesnot allowsufficientaccesstoitsscheduleandthereforedoesnotallowameritocracyofideas andtalenttoflourish TheBBChasyettomakeamajorshifttoworkingfullyinpartnershipwiththesector. 180
58
source:BBCAudio&Music&GrantGoddard
TheRadioIndependentsGroupproposaltomeasureindependentproductionssuppliedto theBBCbybothvalueandvolumeisillustratedbyrelevantdatainFigure49.Inrealterms (afteradjustmentforpriceinflation),thetotalvalueofBBCNetworkRadiosindependent radiocommissionshasremainedrelativelystableoverthelastdecade,whereasthevolume ofcommissionshasincreasedsignificantlyduringthelasttwoyears. AnalysisinthisreporthasconfirmedtheassertionbytheRadioIndependentsGroupthat programmescommissionedrecentlybyBBCNetworkRadiohavebeenofloweraverage value.DatademonstratedthatcommissionsfortheBBCsdigitalradiostationsinthelast twoyearshavebeencontractedatmuchloweraveragehourlyratesthancommissionsfor analoguestations.Additionally,theaveragecostofexternalcommissionsforanalogue stationshasdecreasedinrecentyears. Unfortunately,detaileddatawasnotsuppliedbytheBBCthatcouldhavedeterminedthe proportionofexternallycommissionedradiocontentthatwasscheduledforbroadcastin offpeakhours.Thisremainsanotherareaofinvestigationthatwouldhaveprovidedauseful
183 184
ibid.,pp.1214,para.37,39,4346 BBCAudio&Music,datasuppliedtotheauthor&OfficeforNationalStatistics,RetailPriceIndexRP02
59
analysis,similartothatwhichisroutinelycarriedoutbyOfcomfortheBBCsindependently commissionedtelevisionoutput. TheRadioIndependentsGroupproposalsforthequotanoted: ItisnotcleartoRIGwhythefigureof10%waschosenforradio UKgovernments,regulatorybodiesandindependentresearchsuchasthe[Philip]Graf Reporthavelongtakentheviewthat25%isanecessaryleveltostimulatetheright amountofactivityinthecreativesectorandallowagoodstartinglevelforaninfluxof innovation,newideasandtalent. 185 TheargumentmadebytheRadioIndependentsGroupwasthata25%quotafor independentcommissionshasworkedsuccessfullyinthetelevisionmarket,althoughit providednoevidencetosupportthenotionthatthesamesuccesswouldnecessarilyaccrue totheradiomarket.Itcouldbethatthemarketplaceswithinthetwomedia,radioand television,forindependentcommissionshavemoredifferencesthansimilarities. Forexample,areportcommissionedbytheBBCin2005hadidentifiedthattheindependent televisionproductionsectorbenefitsfromauniquesetofprivileges: GuaranteedrightsacrosstherangeofgenresfromanyBritishcommissioner Guaranteedaccessto25%oftheBBCsprogramming,withafurther25%availableunder theWindowofCreativeCompetition Apublicservicebroadcaster,Channel4,whichisconstitutionallyobligedtohavenoin houseproduction Exposuretolimitedriskwiththeseguaranteesonlyneedingtoputupdevelopment funding,endeventhatsometimesprovidedbythebroadcasters Theadvantageofatestmarket:inparticular,showcasingontheBBCgivesindependents brandedgeforinternationalmarkets. 186 However,intheradiomedium,itisevidentthatnoequivalentprivilegesexistbecause: TheBBCremainstheonlysignificantcommissioner CertainprogrammegenresareonlyproducedbytheBBCinhouse AWindowofCreativeCompetitionhasonlybeenappliedtoRadio4 Developmentcostsarelargelyselffundedbyindependents Therearenosignificantsecondaryoroverseasmarketsforradioproductions. Similarly,TheRadioIndependentGroupscitedthesuccessfuloperationoftheWindowof CreativeCompetitioninBBCtelevisiontosupportitsproposaltoextendthescopeofthe existingWindowinradio,presentlylimitedtoRadio4,toallNationalNetworksandto increaseitfrom10%to25%. 187 Again,theissuesmightbequitedifferentinthetwomedia, particularlyasthereisaconsiderablymorecompetitivemarketplaceforindependent productionsintelevision.Inthisrespect,itwouldproveusefultoconductadetailedanalysis oftheoutcomesoftheoperationofthecurrent,limitedWindowofCreativeCompetitionon Radio4commissions.Considerationcouldthenbegiventoitsextension,withthebenefitof empiricalevidencespecificallyfromtheradiomedium. TheRadioIndependentsGroupacknowledgedthattheimplementationofanincreased quotaandtheextensionoftheWindowofCreativeCompetitionwouldhaveimplicationsfor thecapacityoftheindependentproductionsectorandforinhouseBBCproduction:
185 186 187
60
TheIndependentSectorhassignificantcapacitytosupplyafargreateramountof qualitycosteffectivecontentforBBCradioservices thereisalready,intheoryatleast,asizeableamountofextracapacitythatcouldbe refocusedtoradioproductionifthedemandwaspresent Therearemanyskilledfreelancersintheradioproductionmarketwhoarereadyand abletotakeonmoreworkwithindependentproductioncompanies,eitherinafreelance, contractedorpermanentcapacity IncreasingtheindependentquotaisnotawayofforcingtheBBCtocommission programmesfromanyotherthanthebestqualified Itisnotunreasonabletospeculatethattheremaybeasignificantadditionalcontingent ofproductiontalentwithintheBBCthatwouldwelcometheopportunitytospreadtheir wingsinthewidercreativeenvironment,andinmorelocationsaroundtheUK,ifthey feltthattherewasamarketlargeenoughtosupportafurthergrowthinthesector. 188
EmpiricalevidencefromSkillsethasdemonstratedthattheworkforceintheUKradio industryisshrinkingasaresultofjoblossesinboththecommercialradiosectorandthe BBC. 189 Itwasalsoevidentthatagreaterproportionoftheremainingworkforceisbeing contractedonafreelancebasisratherthanasemployees.Severalindependentradio producersnoted,duringthepreparationofthisreport,thattheirbusinessesareregularly approachedbyastreamofskilledradiopersonnelseekingworkopportunities,whohaveto beturnedawaybecausethelowvolumesandlowprofitsofBBCcommissionspreclude businessexpansion.Theavailabledatasuggestthatthereisasignificantpoolofskilledradio productionstaffavailableiftheindependentradioproductionsectorwereofferedsufficient newbusinesstoexpand. TheRadioIndependentsGroupnotedthattheissueofcommissioningbudgetsneedstobe tackledasmuchasdoesthevolumeofcommissions: Wewouldcautionagainstprolongingtheregimeofblanketcutsthatpenalisethe efficientandtheunderfinancedasmuchastheinefficientandgenerouslyprovidedfor Bothinhouseandoutofhouse[BBC]productionbudgetshavebeensqueezedinrecent times RIGwould[]questiontheextenttowhichitisrightthattheburdenofbalancingthe BBCsbooksshouldfallonproductionbudgets Cutsinbudgetsareatacriticalpoint,arecounterproductiveandnotnecessarily mirroredbycutselsewherein[the]BBC.190 DatasuppliedbytheBBChavedemonstratedthattheaverageperhourcostofexternal radiocommissionshasdecreasedinrecentyears,whilstaverageinhouseperhour productioncostsmostlyincreasedoverthesameperiod. TheRadioIndependentsGroupraisedissuesabouttheBBCcommissioningprocesses: RIGproposesthattheTrustrequireBBCAudio&Musictointroduceacommissioning processthatensuresthatthereisnotaconflictofinterestbetweenmaking commissioningdecisionsandbeingresponsibleforinhousedepartments TheBBCneedstoensureitcommissionsarangeofexternalproducers,bothestablished companiesandnewbusinesses
61
Thesepointshighlightthepossibleproblemthatcommunicationissuesappeartobe impingingupontherelationshipbetweenthetwoparties.Itisapparentthatthe commissioningprocessesareasmuchanissuefortheindependentradioproductionsector asthevolumeandvalueofthecommissionsthemselves. TheremainingpointsmadebytheRadioIndependentsGroupconcernedspecificissues whicharenotedbelow. Productioncredits AccordingtotheRadioIndependentsGroup,independentproductionsbroadcastbytheBBC arenotsystematicallycreditedbeyondtheagreementintheTermsofTradeforanend credit. 192 Inthisrespect,in1992,theBBCRadioProgrammeReviewBoardhadagreeda policythateveryindependentlyproducednetworkradioprogrammeshouldbecreditedas suchbothonairandinRadioTimesbillings. 193 Information TheRadioIndependentsGroupnotedthatithasproveddifficulttoextractvariouskey typesofinformationfromtheBBCandthatrequestsundertheFreedomofInformationAct havebeenturneddown. 194 IndieChampion TheRadioIndependentsGroupproposedthatBBCNetworkRadioappointadedicated executiveforradiocommissioningtobuildandstrengthenrelationshipswiththesector, andactastroubleshooter. 195 EditorialCompliance TheRadioIndependentsGroupnotedthatthecostofadditionalcomplianceworkrequired asaresultofrevisedcommissioningprocedureshastobeabsorbedbyindependent producerswithintheirexistingprogrammebudgets,eventhoughthecostscanbesignificant forsomeprogrammes. 196 Training TheRadioIndependentsGroupproposedthattheissueoftraininginradioproductionbe examined. 197 Forthisreport,nodatacouldbesourcedfromagenciesregardingthetraining ofpersonnelwithintheradioindustryorintheindependentradioproductionsector.
ibid.,pp.3334,paras.140144 RadioIndependentsGroup,SubmissiontotheBBCTrustRadioNetworkSupplyReview,May2010,p.34,para.146 193 BillMorris,SpecialAssistanttoManagingDirector,BBCNetworkRadio,Credits/BillingsForIndependentProductions,memo, 28October1992 194 RadioIndependentsGroup,SubmissiontotheBBCTrustRadioNetworkSupplyReview,May2010,p.34,para.148 195 ibid.,p.35,para.151 196 ibid,pp.2930,paras.124128 197 ibid.,p.29,paras.119123
192 191
62
TosummarisetheRadioIndependentsGroupsubmission,initswords: Ultimately,thestructurewewouldliketoseewould,bycombininganenhancedquotaand WindowofCreativeCompetitionwiththeappropriateaccompanyingcommissioning practices,allowthebestideasandtalenttomakeitontheair,thusgivingtheLicenceFee payerthefullreturnontheirmoney. 198 IndependentRadioProducers Alargenumberofcommentsweremadebyindependentradioproducersinresponsetothe BBCTrustconsultationprocess.Duringtheoutreachworkforthisreport,itwasevidentthat similar,andequallyforthright,viewpointsweresharedbystakeholdersacrossthe independentradioproductionsector,regardlessofthesizeoftheirbusiness,theirlocation ortheirsuccessinachievingcommissionsfromtheBBC.Noissuesbecameapparentupon whichpartsofthesectorhadsignificantlydifferingopinions. BBCattitudes: Manyindependentproducersfeltthattheyexperiencedrathernegativeandpatronising attitudesfromthestaffwithwhomtheyhavetodealwithinBBCradio.Theyreportedthat, insomecases,theyfeltthatindependentproducersweremerelytolerated,ratherthan beingviewedasanimportantpartoftheBBCradioproductionfabric.Therewasfelttobe particularlystrongantipathywithintheBBCtoindependentproducerswhohadnot previouslyworkedasBBCstaff.Theseopinionswerenotlimitedtoexperienceswith LondonbasedNetworkRadio,butweresimilarlyreflectedincommentsfromtheNations andRegions.TherewasalsoafeelingthatindependentproducersbasednearertoLondon receivedpreferentialtreatmentfromNetworkRadio.Someindependentproducersbasedin theNationscommentedthatNationalNetworksseemeddisinterestedincontentwitha regionalslant. BBCCommissioningEditors: IneachBBCNetwork,theCommissioningEditorsarethetouchpointforindependentradio producers.Therewereanumberofissuesraised: DifficultiesexperiencedaccessingCommissioningEditorsonaninformalbasis ThedualresponsibilitiesofCommissioningEditorsforinhouseproductionsandexternal productionsareconsideredtobeantagonistic LackofawarenessamongstCommissioningEditorsofthetrackrecordofanindependent radioproducer PerceivedresistancefromCommissioningEditorstonewandcreativeideasfor programmes LackofcoordinationbetweenCommissioningEditorsworkingfordifferentBBC Networks LackoftransparencyinthebusinessrelationshipbetweenCommissioningEditorsand independentproducers LackofknowledgeamongstCommissioningEditorsoftheworkingmethodsof independentradioproducers
198
ibid.,p.21,para.83
63
BBCcommissioningprocesses: Theexistingsystemsforthecommissioningofprogrammescreateconsiderabletensions withindependentradioproducers,whoexpressedthefollowingconcerns: Meetingstopresentideasalreadyshortlistedaredesired,whereasmeetingspriorto shortlistingwereconsideredunproductive Blockquotasforgenressuchasreadingsappeartoofferpreferentialtreatmenttoin houseproducers Excessivelylongcommissioningtimeframes Insufficientfeedback Delaysinissuingcontractsforcommissions Theamountoftimerequiredtoprepareprogrammeproposals Lackofdevelopmentfunding Thecommissioningprocesslackscontinuityasitrestartseachyear Inflexibilityincommissioningprogrammesfromnewcompanies Insufficientvolumesofcommissionsoffered Nolistspublishedofwhichexternalprogrammeswerecommissionedfromwhich company Commissioningsystemnotseentobemeritocraticandlacksconsistency ProgrammetalentisoftencontracteddirectlybytheBBCwithinindependent productions. SupplierLists: ConcernswereexpressedabouttheoperationofSupplierLists: Startupsrequireatrackrecord NationalexperienceisrequiredbyBBCNetworks,evenifsuppliershaveprevious commissionsfromBBCNationsstations ThedifficultyofgettingontoaSupplierList RemovalfromaSupplierListifnoprogrammehasbeencommissioned Programmebudgets: Themainissuesconcerningbudgetswere: Theindependentproductionsectorslackofleverageinbudgetnegotiations Thetimeexpendedonlinebylinenegotiationofbudgetsaftercommissioning TheunrealisticallylowvaluesascribedbytheBBCtoindividuallybudgeteditems Thelowvaluesofindividualcommissions ThelowgrossprofitmarginallowedbytheBBCforeachcommission Reductionsovertimeincommissionvaluesandthegrossprofitmargin AdditionalcostsofnewBBCcomplianceproceduresthatcannotbeincludedinbudgets Situationswhereindependentproductioncompaniescanendupnotcoveringtheircosts ofcommissionsfromtheBBC. Independentradioproductionquota: Manycommentswerereceivedfromtheindependentradioproductionsectornotingthat thecurrentBBCquotaistoolow. Batchcommissioning: Radio4sbatchcommissioningsystemwasconsideredbysomeindependentradio producerstohaverestrictedtheiropportunitiesforcommissionsandtohavelimited potentialbidderstothosewithsufficientproductioncapacity.
64
Theindependentradioproductionbusinessmodel: Manyandvariedcommentswerereceived,including: Intensecompetitionforalimitednumberofcommissions ThelackofsignificantcustomersoutsideoftheBBC Theimpactoftherecessiononcommercialradio Thechallengesofoperatingasasoletrader Thelackofsecondarymarketsforexploitation Thelackofalternativebroadcastersinspeechradio Unusedcapacitywithinindependentproductionbusinesses ThepredominanceofchatandmusicshowsinNationsradiostations. Thesecomments,andmanyothers,provedinvaluableinshapingthediscoveryprocessesfor thisreport.Manyoftheanalysesoftheradiomarketplaceweretheoutcomeofconcerns expressedbystakeholdersintheindependentradioproductionsector.
65
10.THEBBCEXECUTIVEPROPOSALS
TheBBCExecutivesubmittedasetofproposalstotheBBCTrustregardingitsfuturestrategy forthecommissioningofindependentradioproductions.ThisSectionexaminesthose proposalsandoffersevidenceconcerningthepointsraised. ThemainproposalsoftheBBCExecutivewere: ThequotaforindependentradioproductionsbroadcastbyNationalNetworkstobe increasedfromthepresent10%ofeligibleoutputto12.5%ofeligibleoutputfrom 2010/11 TheminimumguaranteeforindependentradioproductionsbroadcastbyRadio4tobe increasedfromthepresent10%ofeligibleoutputto12.5%ofeligibleoutputoveratwo yearperiod,supplementedbycontinuedoperationofthe10%WindowofCreative Competition Separateconsiderationtobegiventoquotasforindependentradioproductions broadcastbytheNationsstations Significantimprovementstocommissioningpracticesandtransparencytosupportthe growthandsustainabilityofbusiness,andconsolidationinthesector. 199 TheBBCExecutiveidentifiedthreedistinctsourcesofvaluetheBBCderivesfromthe commissioningofindependentradioproductions: Developingtalentfromavarietyoflocationsandindustries Distinctiveinnovationdrivenbydifferencesintheproductionmodel Potentialefficiencysavings. 200 Atthesametime,theBBCExecutivenotedthat: Largescale[BBC]inhouseproductionisrequiredtomaintaingloballyunique programmemakingskills,toprotecteditorialcontrol;overeachstationssoundandto providetrainingwithintheindustry,andthatthisconstrainstheoverallpotentialgrowth ofindependentradioproductionintheUK. 201 TheissuesraisedbytheBBCExecutiveareconsideredinmoredetail,presentedintheform ofextractsfromtheBBCExecutivedocument,followedbyreferencestorelevantempirical evidence. Definitions&Governance TheBBCExecutivereportnotedthat: TheCharterAgreementrequirestheBBCtoensureithassecuredasuitablerangeand diversityofprogrammesprovidedbyexternalsuppliers Byvirtueofindividualrequirementsoneachnetwork,alevelofdiversityisguaranteed. Theproportionofeligiblespendwiththeindiesectorhasbeenconsistentlyabove10%in recentyears Thecurrentrequirementisbasedonhoursofoutput,ratherthanspend,whichisa simpleandtransparentapproachtomeasurement
199 200 201
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1999/2000 2000/1 2001/2 2002/3 2003/4 2004/5 2005/6 2006/7 2007/8 2008/9
13.9 13.8 13.3 9.6 12.4 13.4 14.2 13.5 12.7 13.7
203
source:BBCAudio&Music
Secondly,itisnotedthat: ThepercentageofBBCNetworkRadioeligibleoutputallocatedtoindependently producedprogrammeshasconsistentlybeenabove12%duringthelasttenyears[see footnoteregarding2002/3] Theproposedquotaincreasefrom10%to12.5%ofeligiblehourscouldresultinan increaseinthevolumeofcommissions,orthenewquotacouldbesatisfiedbythe volumeofprogrammescurrentlycommissioned Althoughthevolumeofindependentlycommissionedprogrammeshasincreased significantly(from4%in2002/3to9%in2008/9oftotalbroadcasthours),expenditure hasremainedsteadyatabout6%oftotalexpenditureonNetworkRadiocontent TheBBCExecutivepreferenceistomaintaintheindependentproductionquotaasa percentageofeligiblehoursratherthanasapercentageofexpenditure,possibly becauseexpenditurehasnotdemonstratedgrowthinlinewithincreasedvolumes. TheEffectivenessofIndependentSupply TheBBCExecutivedocumentproceededtoitemisethreesourcesofvaluederivedfrom commissioningindependentradioproductions. Developingtalent Thedocumentnotedthat: Thenascentindependent[radioproduction]sectorbeganwithalargeinfluxofexBBC staff
202
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Thesestatementsseemedtoemphasisethatthestructureoftheindependentradio productionsectorisinextricablylinkedtothestructureoftheBBC,itslargestcustomer. Indeed,thenarrativeoftheBBCExecutivedocumentnotedthatthe[independentradio production]industrysstructureisinparttheresultofthefracturednatureofBBC commissions. 205 DistinctiveInnovation TheBBCExecutivedocumentnotedthat: Independentproducershavegivenusexamplesofhowtheirbusinessmodelrequires producerstoworkflexiblyacrossmultiplegenresofoutput,aswellasacrossthe different[BBC]services Thispatternofworkingisrelativelyrarefor[BBC]inhouseproducerswhotypically specialiseinworkingforspecificnetworksorgenres Anumberofexampleswerecitedtoillustratehowspeechproductionmightbemixed withmusic,orfactualordrama,asadifferentiatorforanindependentproducerevenif theywereexBBCstaff Someofthesmaller[BBC]inhouseproductionteamsbasedoutsideofLondonalso indicatedthisflexibilityofworkisbenefitingtheiroutputcreativelytoo. 206 ItisapparentthatthesystemsforprogrammeproductionwithinBBCNetworkRadioare quitedifferentfromthosepractisedelsewhereinthesector.Flexibleworkingpatternsthat arecommonplaceincommercialradioandintheindependentradioproductionsectoronly appeartohavebeenimplementedinsomeBBCproductioncentres,particularlythose outsideofLondon. TheBBCExecutivedocumentacknowledgedtheexistenceofbarrierstoentryforsuppliers toBBCNetworkradio: Insomeareas,suchasdramaandlightfactualoutput,therearerelativelylowrisksto theBBCinvolved,providedthecompanyhasestablishedatrackrecordinrelatedtypesof output Radio4sregisteredsupplierlistsarespecifictocommissioningbriefsandcanposea barriertothegrowthofbusiness[sic]whomaybeononelistbutnotanother Existingindieswithanestablishedtrackrecordinadjacentareasfeelstronglythatthey shouldnotbepreventedfrombuildingnewareasofbusinesswhichhavethepotentialto strengthentheiroverallportfolioofwork Insomespecialistareas,particularlyinvestigativejournalismandhardedgednewsand currentaffairsstrands,theeditorialrisksarelargeandthebreadthofskillsneededis verydifficulttoobtain. 207
204 205
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Formalentrybarriersandgatekeepersystemsforsupplierscouldbeconsideredtobeno morethanprotectivestrategies.DuringthemostrecentCharterRenewalprocess,the governmentsGreenPaperhadidentifiedthatcompetitionforinhouseBBCproducersfrom anexternalradioproductionsectorwasinthebestinterestoftheLicenceFeepayer: WethinkthesameprincipleshouldapplytoradioproductionasinTVwherepossible,we wanttoencouragecompetition,becauseitislikelytobringthebestprogrammesto listeners. 208 Initswrittenresponse,theBBChadagreedthatgreatercompetitioncouldbenefit listeners. 209 Efficiency TheBBCExecutivedocumentnotedthat: Profitincentivesshoulddriveindependentcompaniestoseekcostefficiencies, particularlyinproducingongoingstrands TheBBCsstrongbuyingpositionintheradioindustryhasmeantthatsubstantialcost savingshavebeenachieved Wehavenotbeenabletodemonstratethatindependentproductionsaremoreefficient than[BBC]inhouse,onceallcostsareaccountedfor. 210 AnalysisofprogrammecostdatainSection6ofthisreportdemonstratedthat,ingeneral terms,thecharacteristicsofindependentlyproducedcommissionsresultedinlowercost outcomesformostNationalNetworksthaninhouseproductions.Thecaveatwasthat insufficientdatawassuppliedbytheBBCtobeabletomakelikeforlikeprogramme comparisonsintermsofgenresorperhourmetrics. TheBBCssignificantshareofthemarketforindependentradioproductionshashelpeditto makesubstantialcostsavingsinitsprogrammebudgets,butstakeholdersinthe independentradioproductionsectorhaveaskedatwhatpricetotheeconomicviabilityof theirindustry?Asthepartydeterminingthepricesofindependentradioproductionsinsuch alimitedmarketplace,theimpactoftheBBCextendsfarbeyondthatofaconventional buyerinacompetitive,commercialenvironment. BusinessEfficiency Commissioning&Development TheBBCExecutivedocumentnotedtheintensecompetitionforexternalradiocommissions: InarecentRadio4commissioninground,1,666preofferswerereceivedfromtheindie sector Muchofthedevelopmenttimecouldbereducedbylimitingthenumberofmainpitches requested,followingthepreoffersround
208
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AtissuehereisthevolumeofworkinvolvedintheBBCbeingtheonlysignificantbuyerof independentradioproductions.Duringthepreparationofthisreport,stakeholdersinthe independentradioproductionsectorsuggestedthattheBBC,asapublicbroadcaster,should developinternalsystemswithsufficientcapacitytodealwiththevolumeofexternalinputit receives. Staffing TheBBCExecutivedocumentnotedthedifferencesbetweenthestructuresoftheradioand televisiondivisionsoftheBBC: 94%ofAudio&Musicstaffareonpermanentcontracts,comparedto43%withinVision [BBCtelevision] Permanentstaffing[inBBCNetworkRadio]ismoreefficient Televisionhasamorediverseemploymentmarket,whereastheBBCistheonlyscale employerofradioproducerswiththespecificskillsrequiredtoproduceBBCoutput Amarketof[radio]freelancersisnotsustainable,aslimitedopportunitiesandjob instabilityleadsindividualstochangeindustry Permanencyisakeybenefitofradioworkovertelevisionproduction Significantchangestothecompositionofstaffarepracticallyimpossibletoachieve,and thisinflexibilitymeansthatthereisahighimplementationcostassociatedwithchanges inthelevelofindependentproduction,aswellasdifficultyinmanagingopencompetition efficiently. 212 Thekeywordsinthesestatementswouldseemtobepermanency,inflexibilityand impossible.WhereassignificantchangesinworkingpracticeshavebeenachievedinBBC televisionoveraperiodoftwodecades,stakeholdersintheindependentradioproduction sectorhavesuggestedthatlittlecomparablemodernisationhasoccurredwithinBBC NetworkRadio. StudioUtilisation TheBBCExecutivereportnotedthat: Theloadofinternal[BBC]studiosandassociatedstudiostaffisaffectedbytheuseof externalsuppliers Thefixedcostofemptystudioscannotberecovereduntilbuildingsaredisposedoforre fitted Itmaybepossibletoincreasetheleasingofstudiocapacityforprerecordedoutput,for example,inoffpeakperiods. 213 Severalindependentproducerscommentedforthisreportonthedifficultiesandcosts involvedinbookingandutilisingBBCradiostudiotimefortheirproductionwork.Most
211 212 213
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independentproducerspresentlyappeartousecommercialstudiosfortheirprerecorded productionsfortheBBC,whereasamoreflexibleapproachtothehireofBBCstudioscould benefitbothpartiesandwouldproducearevenuestreamfortheBBCtohelpamortiseits capitalinvestmentinstudios.Stakeholdersintheradioproductionsectornotedthatsucha systemalreadyoperatesforexternaltelevisionproductionswhichhirestudiofacilitiesfrom BBCVision. AppropriatenessoftheQuota GuaranteedLevel ThereportbytheBBCExecutivenotedanumberofreasonstomaintainalimitontheextent ofindependentproductions: [BBC]radioproductionteamsarelean,witheventhelargestspeechteaminAudio& Musicemployingfewerthan90peopleforover1,000hoursofoutput Intheintegratednetworks,theratiosareevenlarger,withanaverageofover100hours oforiginationsonRadio1perproductionstaff Eachradiostationrequiresacorehubofprogrammingtoprovidestrategiccontrolover thestationssound,brandandreputation Inhouse[BBC]experienceisalsocriticalforasmallnumberofproductionswhichare highlyeditoriallysensitive Someoutputisreliantonalargeinvestmentinspecialistskillsandequipment Theremaybetoolittleworkavailableinthe[programme]areatosupportacompetitive market Therearesituationsofnaturalmonopolyinsupply,andtheskillsshouldcontinuetobe providedbyinhouseteams Someprogrammingalsorequiresaccesstointernalresourcesandnetworks Thescaleofinhouseproductionsupportsahighqualitytraininginfrastructure Amixofinternalprogrammesisrequiredtoprovideinhouseproducerswithaclear internaldevelopmentpath Scopeis[]limitedforindependentproducerstooffercreativeandefficiencybenefits, giventhatprogrammesrelysoheavilyoncentralisedfunctions Inareaswhereindependentproductionmaybebeneficial,forexamplespecialistmusic programming,thereisastrongcaseforretainingaproportionofthisoutputinhouseto sustainproductioncapabilityandtraining. 214 TheconclusionoftheBBCExecutiveReportwasthat: ThelongtermscopeforfurthergrowthofindependentsupplytoBBCNetworkRadiois limitedbythecontinuedimportanceofstronginhouse[BBC]capability. 215 ItisevidentthatthechangesthattheBBChasimplementedinthetelevisionproduction mediumoverthelasttwodecades,whereithasconvertedthemajorityoftheworkforce frompermanenttofixedcontract,freelanceandcasual,havenotsimilarlybeen implementedinNetworkRadio. 216
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TheimpetusforinternalchangeinBBCradiowouldappeartobelessthaninthetelevision medium.Inradio,theBBCattractsthelargestshareoflistening,itenjoysrelativelysteady funding(atatimewhencommercialradiorevenuesarefalling)anditmakesmany programmesthathavenodirectcompetitors.Thereisnothreatfrompayradioorfrom importedcontent,asthereisinthetelevisionmedium,sincealmostallUKradiooutputis domesticallyproducedandisconsideredbyconsumerstobefreeatthepointofuse.Asa result,itmightseemthatthereissubstantiallylessexternalpressureonBBCradiofor internalreformsthantherehasbeeninthetelevisionmedium,particularlyasmarket researchhasdemonstratedconsistentlyhighlevelsofconsumersatisfactionwiththequality ofexistingradioservices.217 OpenCompetition TheBBCExecutivereportnoted: WehaveassessedwhetheritisappropriatetoextendtheWindowofCreative Competition,eitheronRadio4orbyapplicationtoothernetworks,butbelieveitwould havenegativeconsequencesforthesector TheWindowofCreativeCompetitioncreatesunseencoststotheindustrybyencouraging alargervolumeofdevelopmentworkandcreatingadditionalpressureoncommissioners inassessingoffersandprovidingfeedback Thedevelopmentburdenhasadirectimpactontheabilityofcompaniestosustain growth RigidityinthelabourmarketmeansthatasignificantchangetothescaleofRadio4s WindowofCreativeCompetitionwillhaveadirectimpactoninternalproduction efficiency,requiringbothareductionintheheadcountandincreaseduseoffixed contracts ExtensionoftheWindowofCreativeCompetitiontoothernetworkshasalsobeen considered,butitcannotbewidelyimplementedwithoutincurringsignificant incrementalcost,anditislikelytocauseundesirableeffects. 218 Inthetelevisionmedium,amoresubstantialWindowofCreativeCompetitionhasbeen implementedsuccessfullybytheBBC,althoughthereareevidentdifferencesbetweenthe televisionandradiomedia.TheextensionoftheWindowofCreativeCompetitiontoa greaterproportionofBBCNetworkRadiooutputisakeyproposaloftheRadio IndependentsGroup,theeffectofwhichwouldbetopromotegreatercompetitionbetween inhouseandexternalproducers.Atpresent,muchoftheoutputofferedtoexternal producersinvolvescompetitionamongstindependentproducersforacommission,butnot competitionbetweenthemandinhouseBBCproducers.Theindependentshaveargued thatincreasedcompetitionbetweenallpartiesshoulddeliverbetteroutcomesforthe LicenceFeepayer. Strategy&Recommendations Tosummarise,themainrecommendationsoftheBBCExecutiveReportwere: ThequotaforindependentradioproductionsbroadcastbyNationalNetworkstobe increasedfromthepresent10%ofeligibleoutputto12.5%ofeligibleoutputfrom 2010/11
217 218
Ofcom,RadioPreparingForTheFuture,AppendixB,15December2004,p.50,Table9. BBCAudiences&PerformanceCommittee,RadioSupplyReviewIndependentSupply,2December2009,p.13
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Thelastoftheseitemsincorporatedaseriesofsecondtierrecommendationsto: ImproveaccessforoutofLondonproductioncompaniestonetworkcommissioners Improvethestabilityofbusinessanddecreasedependencyonsmall,adhoc,oneoff commissions,forexampleusingbatchtendering,andensuringamixofshort series/strandsbusinessisavailable.Thiswillallowgreaterconsolidationandsupportthe sectorindevelopingitsownstaffbase Workwiththe[independentradioproduction]sectortoagreecosteffectiveinitiativesto supportskillbuildingintheindustry SimplifyRadio4registeredsupplierliststosupportbusinessdevelopmentamongst provensuppliers.Thiswouldpermithorizontalgrowth,withoutaffectingqualification requirementsfornewcompanies Coordinatethetimingsofcommissioningroundstoreduceoverlapindeadlines,thus providingproducerswithspacetopitchtomultiplenetworks [Publish]successratesofpreviouscommissioningroundstoprovidetransparencyand supportproducersdecisionmaking Capthenumberofpreofferspercompanyintoparticularlylowvolumeslots(e.g.<25) [Restrict]thenumberofpitchesfollowingapreoffersround Review[the]systemforevaluatingandprovidingfeedbackonproductionperformance Establish[a]workstreamtoreview[the]approachtostudiopricing. 220 Undoubtedly,manyoftheserecommendationswouldbelikelytoimprovetheefficiencyof theindependentradioprogrammecommissioningprocesseswithintheBBCandcould addresssomeoftheconcernsregardingthetransparencyofthecommissioningprocess raisedbytheRadioIndependentsGroup. However,thespecificrecommendationstocapthenumberofpreofferssubmittedby independentproducersandtorestrictthenumberofpitcheswouldhavetheimpactof diminishingthelevelofcompetitionforexternalcommissions.TheRadioIndependents GrouphasarguedthatthehighvolumeofpitchessubmittedtotheBBCforexternal commissionsisindicativeoftheirsectorscapacityforsupplywhich,theysuggest,hasnot beenrespondedtowithasufficientlyincreasedvolumeofdemandfromtheBBC. TheBBCExecutivesuggestionthattheindependentradioproductionsectorshouldundergo consolidationappearstoresultfromtheadministrativechallengeitfacesofdealingwitha largenumberofsmallindependentproductionsuppliers.However,theinclusionofsucha suggestionbegsthequestionofexactlyhowarmslengththerelationshipisbetweenthe BBCanditsexternalprogrammesuppliers.Howindependentcananindependentradio productionsectorbethatreliestosuchasignificantextentonasinglecustomertopurchase itsoutputs?
219 220
ibid.,p.0 ibid.,pp.7,8&10
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TheBBCsmarketpowerovertheindependentradioproductionsectorhasappearedto enableitto: Ensuresupplyofpreciselytheprogrammesithasdecidedneedtobeproducedforits Networks Makecostefficienciesthroughitsdetailedbudgetnegotiationsinthecommissioningof independentradioproductions Ensurethereisnobiddingwaragainstcompetitorsforradiocontent Influencetheorganisationalstructureofthesector Continuetoorganiseitsinhouseradioproductionwithlittlereferencetoexternalities. [ ] Theapparentparadoxisthatthecoststructuresoftheindependentradiosectorarelargely aresultofbudgetrestrictionsimposeduponitbytheBBCcommissioningprocess. Undoubtedly,ifindependentradioproducerscouldchargetheBBChigherpricesfortheir commissionedprogrammes,theywould.Oneofthemostcommoncomplaintsof independentproducers,largeandsmall,voicedduringthepreparationofthisreport,was thatthegrossmarginpermittedbytheBBCwithinthebudgetsofindependentradio commissionswastoolowtogeneratesufficientnetprofitstorunabusiness. AlthoughnotexplicitlydocumentedintheBBCscommissioningproceduresforradio,the budgetssubmittedbyproducersforprogrammepitchesincludealineforgrossprofitwhich, itwassaidbyindependentproducers,couldnotexceed10%ofthecommissionstotalcosts. ItwassaidthatthisgrossmarginhadbeenerodedovertimebytheBBCtoitscurrentlevel which,formanyindependentproducers,isprovinginsufficient. TheBBCExecutiveproposalsnotedthattwothirdsofindependentradioproducersreceived anincomeoflessthan50,000fromtheBBCin2008/9.221 Theinferencewasthat,ifthe grossprofitmarginwere10%,twothirdsofthesectorwasprovidedwithagrossprofit marginoflessthan5,000perannumfromtheBBCwithwhichtomaintaintheirbusinesses. Thisisobviouslyaninsufficientmarginforacommercialenterprisetobeagoingconcern, withoutadditionalrevenuesupport. ThecurrentsituationseemstobetheresultofthepresentBBCNetworkRadiosystemof negotiatingbudgetsforeachindependentradiocommissiononalinebylinebasis,an effectivewaytokeepitsprogrammecostscompetitive.Theparadoxremainsthatthecost controlsystemsthattheBBCnowwishestoemulateforitsinhouseproductionsare,infact, costcontrolsystemsthathavebeenimplementedbytheBBCunilaterallyuponthe independentproductionsector.Ifanexternalcommissionoverrunsitsbudget,the additionalcostshavetobeabsorbedbytheindependentproducer,notbytheBBC,under thetermsofthecontract. InhouseBBCradioproductionsdonotneedtoproduceagrossprofitwhereas,forthe independentproductionsector,grossprofitisanecessaryprerequisiteforitscommercial existence.Havingapparentlysqueezedtheprofitmarginsoftheindependentradio productionsectorinrecentyears,accordingtosectorstakeholders,theBBCcouldbein
221
BBCAudio&Music,RadioSupplyReviewIndependentSupply,2December2009,p.5,para.1.3
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dangerofstarvingtodeaththeveryindependentsectorwhoselowcostsitisnowkeento emulate. Itprovesdifficulttoevaluatetheaggregateprofitabilityoftheindependentradioproduction sectorbecauseitiscomprisedofalargenumberofverysmallenterprises.However,itis possibletohypothesisethat,ifa10%grossmarginhadbeenappliedtothebudgetofevery BBCNetworkRadioprogrammecommissionedfromindependentproducers,thegrossprofit oftheentiresectorwouldhavebeenapproximately1.7min2008/9.Splitbetweenthe110 companiesfromwhichtheBBCcommissionedcontent,theaveragegrossprofitwouldhave beenabout15,000percompanyin2008/9.Thisisaninsufficientmarginonwhichto maintainevenaonepersonbusiness.Additionally,thishypothesisignorestheremaining independentproducerswhoreceivednocommissionsfromBBCNetworkRadioin2008/9. Figure51:revenuesandprofits/lossesofthelargestindependentradioproduction supplierstoBBCNetworkRadioin2008/9
revenues 2008/9 2007/8 2006/7 net profit/loss (post-tax) 2008/9 2007/8 2006/7
[production company] [production company] [production company] [production company] [production company] [production company] [production company] [production company] [production company] [production company] [production company]
611,722
482,686
-501,591 -1,940,802 -174,876 -117,800 25,873 116,596 -72,483 6,380 1,895 -54,683 21,859 24,775 117,840 -46,114
124,870
source:CompaniesHouseaccounts
222
EvidencefromaccountsfiledatCompaniesHouseconfirmedthattheprofitabilityofthe independentradioproductionsectorappearstobeatrisk.Independentproduction companieslistedinFigure51arerankedbythevalueoftheirBBCNetworkRadio commissionsin2008/9.Excludedarecompanieswhosemainbusinesswastelevision productionorwhohadnotfiledaccounts.Notallofthesecompaniesrevenuesderived entirelyfromBBCcommissions,butthedataillustratedthatsomeofthelargestcompanies wereeithermarginallyprofitableorwerenotgeneratingnetprofits,evenhavingbeen awardedasignificantproportionofBBCradiocommissions. Themostrecentfiledaccountsofoneofthelargestcompaniesintheindependentradio productionsectornoted: Theradioprogrammesandtelevisionprogrammesmarketishighlycompetitiveand operatingmarginsneedtobemaintained Thetotalliabilities[ofthecompany]exceededtotalassetsby2,137,220 Thecompanyisforecasttogeneratecashtomeetitsobligationsastheyfalldue, however,suchsurpluswillnotbesufficienttoredeemtheconvertibleloannotes. 223 Thesedataillustratethattheindependentradioproductionsector,aspresentlystructured, maynotbeabletoexistcommerciallyasanythingmorethanacottageindustrythat continuestorequirecrosssubsidisationfromotherrevenuesources.Ifsomeofthelargest
222 223
CompaniesHousefiledaccounts[revenuesandprofitsdidnotderiveexclusivelyfromBBCradioprogrammecommissions] ibid.
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venturesinthesectorseemunabletogenerateanetprofit,thenitislikelythatthemajority ofmuchsmallerenterprisesinthesectoraresufferingasimilarfate. WiththeexpectationthattheBBCwillremain,byfarandaway,thelargestcustomerofthe independentradioproductionsectorfortheforeseeablefuture,thesectorsfuture commercialviabilitycouldbeaddressedbytacklingtheseissues: ThevolumeofindependentradiocommissionsavailablefromtheBBC Thegrossprofitmarginavailabletoexternalsuppliersofradioprogrammes ThedistributionofBBCcommissionsamongstavailableindependentradioproducers. Withoutattentiontotheseissues,thedangercouldbethattheindependentradio productionsectormightonlylimpalong,atbest.Sectoracquisitionsarelikelytobefuelled byinsolvencyratherthanprofitability.Consolidationwillresultfromdesperationratherthan fromstrategicopportunities.Someoperationscouldsimplydisappear. TheproposalsfromtheBBCExecutivedonotappeartohaveaddressedtheseissues.Some ofitsnewpractices,suchasbatchcommissioning,arelikelytoexacerbatethelackof commissions,andthereforeprofitability,formanystakeholdersintheindependentradio productionsector.Otherproposals,suchastheincreasedquotaof12.5%,inactuality,might leadtonomorethanthemaintenanceofthestatusquo.Thegrossprofitmarginofferedto independentsupplierswasnotaddressedbytheBBCExecutiveproposals. BBCNetworkRadiosstateddesiretoemulatethecoststructuresofexternalradio producersforitsinhouseproductionsisundoubtedlyintheinterestoftheLicenceFee payer.However,thosesametightlycontrolledcoststructures,whichhavebeenimposed upontheindependentradioproductionsectorbytheBBC,aretheverythingsthatcontinue toconfinethesectortobeingacottageindustrythatmightnevergeneratesufficientnet profitstogrowintoagenuinelycommercialcreativeindustry.
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11.CONCLUSION
Theindependentradioproductionsectorisarelativelysmall,butculturallysignificant,part oftheUnitedKingdommediaindustries.Thesectorsoutputsarevaluedfortheircreativity, havingwonmanyawards,bothathomeandoverseas,andseveralofitsprogrammesare householdnames,particularlyamongstBBCradiolisteners. Theturnoveroftheindependentradioproductionindustryisestimatedtobearound20m perannum,lessthan2%ofthetotalfundingoftheradiosector.TheBBCpurchasesmore than90%oftheindependentradioproductionsectorsoutputs,whileitsothercustomers aremainlycommercialradio,publishersandcorporateclients. The2006BBCCharterandAgreementrequirestheBBCTrusttoensurethattheBBC commissionsasuitableproportion,rangeanddiversityofradioprogrammesfromexternal producers.DataprovidedbytheBBCdemonstratedthatitscommissionsfromthe independentradioproductionsectorexceededtheagreed10%quotaineachofthelast tenyears.Itwasevidentthatthesecommissionscomprisedarangeofprogrammegenres andwereacquiredatarangeofacquisitioncosts,asisrequiredbyClause58oftheBBC Agreement. AlackofgranularityinthedataprovidedbytheBBCmadeitdifficulttoexplorethe diversityofexternalradiocommissionsindetail.Itisapparentthatasignificantproportion ofexternallymadeprogrammesarecommissionedfromarelativelysmallnumberof suppliers.Thisconcentrationinsupplyislikelytoincreasefurtherasaresultofthe introductionofabatchcommissioningsystemwithinBBCRadio4. Radio4scommissioningpoliciesaresignificantfortheindependentradioproduction becauseitoffersagreaternumberofpotentialcommissionstothesectorthanotherBBC Networks,andatahigheraveragevalue.ThedistributionofBBCcommissionsamongst suppliersisanimportantissueforthe150to200businessesintheindependentradio productionsectorwhichvaryinsizefromsoletraderstomultimillionpoundmedia enterprises.BBCcommissionsnotonlyprovidethemajorityoftheirrevenues,buttheBBCis alsotheonlybroadcasterinseveralsignificantradioprogrammesgenres,suchascomedy, documentaryanddrama.Thecommercialradiosectorisunlikelytoincreaseitsminimal commissioningofindependentradioproductionsasaresultoftheeconomicchallengesit faces. Otherissuesaboutwhichtheindependentradioproductionsectorhasexpressedconcern aretheBBCquotaforexternalcommissions,whichitstradebodyhasproposedberaised from10%to25%,andtheWindowofCreativeCompetitionwhichitrecommendsbe increasedfrom10%to25%andexpandedfromRadio4tootherBBCnetworks.Itisevident that,after18yearsofBBCexternalradiocommissions,theindependentradioproduction sectorstillsuffersfromanunderlyingeconomicweakness.ItsdependencyupontheBBChas givenitlittleleverageinnegotiations,thevaluesofitsindividualBBCcommissionsare relativelylow,andtherearenosignificantsecondarymarketstoexploit,asexistinthe televisionsector. Aspartofitspackageofrecommendations,theBBCExecutiveproposedthatthequotafor independentradioproductionsbeincreasedfrom10%to12.5%.Italsoproposedthatthe
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presentWindowofCreativeCompetitionremainatitspresentlevelandcontinuetobe limitedtoRadio4.EmpiricaldatademonstratedthatBBCNetworkRadiohasexceededits present10%quotabymorethan2%inallbutoneofthelasttenyears.TheBBCproposals wouldbeunlikelytoprecipitatetheincreaseinscaleofcommissionsdemandedbythe independentradioproductionsector. AlthoughtheBBCundoubtedlyvaluestheworkofindependentradioproducers,its proposalsdonotappeartohaveaddressedtheseriousunderlyingeconomicweaknessof thesector.Itisapparentthattheprofitabilityofsmallandlargeradioproductionbusinesses hasbeenerodedbyacombinationofdownwardpressureonthepricesofBBCexternal commissions(particularlythelowpricesofcommissionsbythedigitalNationalNetworks) anddownwardpressureonthegrossprofitmarginofferedforindividualcommissions. Thesefactorshaveensuredthatexternalradiocommissionsofferincreasingvaluefor moneyfortheLicenceFeepayer,thoughtheyhavealsosqueezedtheindependentradio productionsectortotheextentthatitseconomicviabilityasacommercialmediasubsector couldbeunderthreat. ThetwopartiestheBBCandtheindependentradioproductionsectorappeartosharea lackofunderstandingofeachotherspositions,apparentlyduetoanabsenceof constructivedialogueoverthemostfundamentalissues.Thetwopartiesshouldbeworking togetherwithinaconstructivepartnership,ensuringthattheinterestsoftheLicenceFee payerareplacedfirmlycentrestage.Bothpartiesneedtoensurethatthenecessarysystems existsothatthebestideasforprogrammes,fromwhateversourcetheyderive,canbe successfullytransformedintoradioprogrammesthatwillcontinuetomakeBBCradiothe envyoftheworld.Atthesametime,externalproducersneedtoberecompensed sufficientlyfortheircreativeendeavourssoastoensurethattheycanremaininbusiness andthrive.
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APPENDIXA:CONTRIBUTORS
ThankyoutothefollowingpartieswhogenerouslyofferedtheirassistanceduringtheBBC Trustconsultationandthepreparationofthisreport: Abundant:ShaneWall Acme:EurosWilliams AllOutProductions:JoMeek AlfiMedia:AlisonRusted AngelMediaProductions:JaneWhyatt Art&Adventure:RogerElsgood AssociationofIndependentsInRadio(US):ErinMishkin AssociationofIndependentRadioProducersofIreland:DarylMoorehouse,MaryOwens AthenaMedia:HelenShaw B19Media:LinciaDaniel BBCArchives:LouiseNorth,JeffWalden BBCAudio&Music:ChrisBurns,MichaelDavis,WillJackson,MelanieJones,DennisNolan, CarolineRaphael,MargoSwadley,SaraTan,AlisonWinter,JoWoods BBCDiversity:SueCaro BBCEnglishRegions:JudithByrne,ElonkaSoros BBCScotland:SharonMair,JenniMinto BBCTrust:GarethBarr,JonCowdock BecaTV:HelenWilliamEllis BFILibrary:NinaBishop,SeanDelaney BlueEggProductions:SarahDickins BournemouthUniversity(TheSirMichaelCobhamLibrary):SteveParton BroadcastTraining&SkillsRegulator:MagsNoble CampbellDavisonMedia:PatrickCampbell CatherineBaileyProductions:CatherineBailey,RobertHughes ChromeRadio:CatrionaOliphant CityBroadcasting:PhilipReevell ClassicArtsProductions:WendyThompson CPLProductions:LizAnstee Cread:StephenEdwards CrosslabProductions:MelanieHarris CSAWord:CliveStanhope,VictoriaWilliams CultureWise:MuktiJainCampion CurlewMedia:MaryColwell Damage:GethinThomas DemusProductions:NickLow DennisMarks EGW:EurwynWilliams EFSTVProduction:PeterWalton FallingTreeProductions:AlanHall FeistyProductions:LesleyRiddoch FestivalProductions:DanielNathan FloellaBenjaminProductions:FloellaBenjamin FocusProductions:RalphMaddern FoldbackMedia:DaveAylott
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FoldedWing:KarenPearson FreshAirProductions:NeilCowling GreenlightRadio:KathyFlower Greenpoint:AnnScott HeavyEntertainment:DavidRoper HolyMountain:BozTempleMorris HumanHorizons:ChrisTempleton IGAProductions:IvorGaber JaneMarshallProductions:JaneMarshall Jarvis&AyresProductions JoltProductions:SarahHarrison JustRadio:SusanMarling LyndonJonesMedia:LyndonJones MadeInManchester:AshleyByrne,PhilCollinge NewUniqueBroadcastingCompany:SimonCole,KerryLuter OdysseyProductions:BillyKay OneStopDigital:MikeThornton PacificusProductions:CliveBrill PaladinPictures:CliveSydall Parrog:CeriWynRichards PennineProductions:JanetGraves PerfectlyNormalProductions:DavidMorley PierProductions:PeterHoare PottonHallProductions:HelenHayes Presentable:MeganStuart PromenadeProductions:NicholasNewton PRX(US):JakeShapiro RadioIndependentsGroup:PhilCritchlow,MikeHally,TimWilson RandomEntertainment:JonNaismith RedbirdMedia:KarenGilchrist RosemaryHartill RuthEvansProductions:RuthEvans Skillset:AmyThomas,DanWilks SmoothOperations:VivAtkinson SomethinElse:NickyBirch,JezNelson SoundscapeProductions:AndyCartwright SquareDogRadio:MikeHally StLouisProductions:ConnieStLouis SueClarkProductions:SueClark SugarProductions:JohnSugar SweetTalkProductions:PeterNichols TBIMedia:PhilCritchlow TenAlpsRadio:DesShaw TerrierRadio:LlinosJones TestbedProductions:NickBaker TheComedyUnit:GusBeattie TheWatersCompany:JillWaters TimWilsonAssociates:TimWilson TinderboxProduction:SianPrice TinpotProductions:DarylMoorehouse TonyStaveacreProductions:TonyStaveacre
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APPENDIXB:ABOUTTHEAUTHOR
GrantGoddardisanindependentmediaanalystspecialisingintheradiobroadcastsector. Hehascontributedtopublicbroadcastingpolicythroughinvitationstopresentwrittenand oralevidencetotheHouseofLordsCommunicationsCommittee,DigitalBritainandthe CompetitionCommission,aswellasthroughhisworkfortheRadioAuthority/Ofcom. Granthasworkedasaseniormanagerandconsultantintheradioandmusicindustriessince 1980,withatrackrecordofhavingcreatedandexecutedsuccessfulstrategiesforthelaunch oflargescalecommercialradiostationsinmajormarketsintheUK,EuropeandAsia.Hehas writtenextensivelyabouttheradioindustryinCityanalystreportsandforconsumerand tradepublications,andregularlymakespresentationsatinternationalbroadcasting conferences.
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