In an age of global media abundance, the notion that public broadcasting is a mechanism to address “market failure” is beguiling. It is also fundamentally wrong.
Public broadcasters have a unique national responsibility to provide a public good to citizens, rather than the more narrowly defined and easily measured mission of commercial broadcasters, to engage consumers and maximise the return to shareholders.
Public broadcasters provide a return that is more complex to measure, but with the increasing sophistication of “impact measurement”, not impossible. The exact nature of the outputs and outcomes varies from one country to another, but includes providing platforms for news, entertainment and education that foster a shared sense of national coherence.
Public broadcasters — including the BBC in the UK, ABC and SBS in Australia, CBC in Canada among others — do this by providing a non-partisan information base, which in turn creates opportunities for political, cultural and local engagement. By committing resources to producing news, drama and entertainment, they not only foster professional skills and output, but the scope and sustainability of the production industry. The BBC and ABC have also often been important sources of technological innovation in both platforms and content, and talent development, which over time benefits both the sector and enriches the lives of citizens.
Commercial broadcasters also contribute to this mix, of course. In every country local content makes sense, and in most, licensing regulation requires it. But the primary responsibility is to profit, to make money by maximising audiences. Inevitably some content will overlap, for instance, both the public and commercial broadcasters have invested heavily in news and drama. Depending on the funding model that underpins the sector, some public broadcasters mirror the commercial industry more closely than others.
The fundamental “public good” rationale, which has implicitly defined public broadcasting for nearly a century, grew out of scarcity – of spectrum, capital and content. Domestic regulation addressed this with codes of practice, quotas and licence fees.
This model has been thrown into sharp relief in a globalised media world characterised by abundance, audience fragmentation and life-threatening challenges to the business models of companies that grew rich in the era of mass media. The declining numbers of journalists and newspapers is comparable in countries with and without strong public broadcasters – the business model is not threatened by public broadcasting, but by its own dynamic.
Rather than making public broadcasting irrelevant, this context makes it arguably more important than ever. Without the public broadcasters continuing to employ large numbers of journalists, local coverage would be even weaker. No other media organisation has a primary responsibility to citizens, as a nationally defined group.
Addressing this need is not just a matter of compensating for any market failure, which will inevitably occur at a time of rapid technological and economic change, but goes further.
Public broadcasting is not just “another business”. Indeed it must operate with greater efficiency and effectiveness, with more transparency, and address the cultural and political needs of a society that expects world’s best entertainment and news services, because it is provided by public funds.
As BBC strategist James Purnell said:
You can squeeze a very ambitious version of the BBC into the argument that it is an organisation that exists to correct market failure. Arguably, it might be more persuasive. But it’s not true. This is clearly a life-enhancing service that meets public goals we have as a society.
What Is The Market?
Market failure is a technical economic term which, like many phrases from that lexicon, seems to have a commonsense meaning – that when a market fails to operate efficiently or deliver the expected goods and services, steps can be taken to address the shortcoming.
This raises the question: what is the market? In the media industry, assessments of market inevitably revolve around advertising. Attempts to define markets for content, or national culture, are much more problematic and have done little to prevent monopolies.
Commercial broadcasters engage with an audience of consumers, seeking to maximise their numbers and the profits that can be derived by successfully entertaining and informing them. Public broadcasters are required to provide a universal service to fulfil their responsibility to citizens.
There are areas that do not make commercial sense – but this is a rapidly changing field. Once, for instance, it was public broadcasters who covered sport, until the money chased them out. Simply filling the gaps before they become profitable is not a firm institutional basis.
As the cultural deficits become clear public broadcasters have evolved to address them – in Australia this included the creation of SBS as a multicultural broadcaster and National Indigenous TV to address the limited representation of the First Australians. Other areas of national cultural deficit are emerging in response to the globalisation.
Public broadcasters therefore provide a service that is both universal and particular, according to the framing of national charters, but which also implicitly or explicitly also address other public purposes. As a result the standards of public accountability, are also higher and the contest over ideas is more robust. Independence and trust are essential – hard won and cherished.
ABC Annual Report 2013
Not surprisingly at a time when audiences are fragmenting as choice proliferates, there are commercial operators ready to argue that pubic broadcasters should retreat to the niches and specialist gaps and leave the mass to them, there are also emerging areas of cultural deficit as fragmentation and globalisation take their toll.
Public broadcasters need to have a universal reach to provide a shared resource funded by all citizens and available to them all. This goes to the heart of the bedrock of a national culture – identity, meaning, shared experience – which requires investment in both platforms and content. In these times public broadcasters uniquely have both the capacity and authority to act as an institution when the commercial media is less able and willing to fulfil this role. As a result they retain a much higher level of public trust than the commercial media. In a fragmenting environment they are able to continue to exercise an institutional role that profitability alone cannot guarantee.
The House of Lords inquiry into the BBC’s licence fee is focusing on the public purposes of the national broadcaster: its capacity to sustain citizenship and civil society, promote education and learning, stimulate creativity and cultural excellence, represent the full range of regions, bring the UK to the world and back and help deliver the benefit for emerging technologies. Defining these purposes is a useful adjunct to the charter – addressing outcomes as well as outputs – and help explain why public broadcasting continues to be more than a mechanism to address market failure.
Charlotte Higgins has argued that the UK without the BBC would “no longer be Britain as we know it” – the same applies for the ABC in Australia. Public broadcasters continue to have a unique role of challenging, informing and entertaining a citizenry that is defined by national boundaries.