Music Business Forum (MBF) response to the DCMS Green Paper: “Review of the BBC’s Royal Charter: A strong BBC, independent of Government”
31st May 2005
Introduction: The Music Business Forum (MBF) - see note 1 - welcomes the opportunity to respond to the Green Paper on the BBC Royal Charter. We have followed this Charter Review process very closely and made submissions at each stage of the process through both individual members and through collective MBF responses. We have made written submissions to the DCMS; presented written and oral evidence to the House of Commons Culture, Media and Sport Select Committee; participated in the seminars held by Lord Burns and his Independent Panel; made representations on each of the individual aspects of the BBC’s own internal review; and responded to the House of Lords Select Committee currently considering this review. Executive Summary: We broadly support the proposals in the Green Paper, designed to ensure a strong, independent BBC whose watchwords are quality and excellence. In particular, we welcome the proposals to: The Green Paper is however light on detail as to what the high level public purposes mean in practice and fails to tackle the tensions of a public service broadcaster operating in a converged commercial environment. Our proposals for the White Paper therefore focus on delivering the very broad objectives in a digital world and creating a distinctive role for the BBC. We propose that the White Paper provides for the following: Whilst we remain supporters of the BBC we would also like to draw attention to the following concerns: 1. Music and the BBC Music is a cultural language of Britain. It has the ability to transcend social barriers and can be used as a key vehicle for greatly enhancing civil society. British music is pre-eminent on the world stage and there is a great range in the choice available which can further be reflected in BBC programming. We strongly welcome the specific commitments of the BBC to stimulate creativity and cultural excellence. The BBC has a key role in promoting distinctive and original programming and should encourage engagement and participation in cultural activities amongst new audiences. We trust that the BBC’s commitment to fostering creativity and nurturing talent will ensure the UK retains its place as a major centre of cultural excellence reflecting the diversity of its people. We look forward to the BBC proposals to build upon its success to date on radio across all genres by growing and nurturing music on this platform. To complement such offering we would like to see a much stronger presentation of music on mainstream television, as reflected by examples such as ‘Later with Jools Holland’, music videos, and until recently, Top of the Pops, and we expect the BBC to be creative in order to address this challenge. To reflect this, music (television and radio) programming needs to be properly accounted for in the forthcoming licence fee funding settlement. However, despite the recent announcement with respect to a £61m increase in programming spend across its TV, radio, online and interactive services for the year ahead we remain cautious about the BBC’s ability to be able to sustain quality programming in light of the cost cutting measures implemented across the board. The MBF supports the BBC’s role in music learning with Music For All and we look forward to seeing the BBC’s proposals with respect to extending this initiative further. 2. Promoting Respect for Rights We also believe that the BBC has a duty to act as a beacon of best practice in terms of respecting the rights of creators and contributors. Rights owners and contributors to the BBC programmes and ancillary works commissioned by the BBC must be able to negotiate fair terms for the use of their work on a free market commercial basis. This commitment to respect rights should be enshrined in the Charter to cement the relationship between the BBC and the rest of the creative industries. Respect for rights entails clearing rights before launching a service, paying fair market rates and accounting properly to creators and contributors. We welcome the public purpose role of the BBC in promoting learning and believe that the BBC has an important role to play helping to present and use the rich diversity of work that is available. It can also perform the valuable purpose of educating the creators and the creative entrepreneurs of the future about the importance of creative people being able to earn a living from the use of their work. The educational role of the BBC should also embrace the ways in which young people can learn to appreciate how creators of, and investors in, music and other copyright works are able to build and maintain careers and businesses in the creative industries. We believe that the BBC should promote an understanding of copyright awareness through media literacy programmes, where appropriate, in partnership with the music industry and other areas of the creative industries. Furthermore, the BBC has a central role to play as a copyright education facilitator because of its unparalleled access to audiences on a variety of levels and in a multiplicity of ways. We welcome the statement in the BBC’s response to the Green Paper that, "in future, the BBC also plans to build value by engaging the wider population in media training through initiatives that will support media literacy and develop creative skills. This will be done, wherever possible, in partnership with other organisations and institutions." However, the Green Paper is light in detail and we would expect further information on these proposals by the time the White Paper has been published. 3. Exports and Commercial Services The global public purpose role is greeted enthusiastically by the MBF. The reputation of the BBC as a respected broadcaster also allows it to act as a showcase demonstrating the diversity and the creativity of musicians and music to wider audiences around the world. We note that the Green Paper recognises that the BBC’s commercial services have an important supporting role to play in both promoting UK culture, talent and intellectual property overseas whilst generating additional value for the BBC licence fee payer and applaud these principles for future activity. Overseas broadcast of BBC material featuring music is often an excellent way of showcasing UK talent, under the recognised name of the BBC. However, granting rights should remain on commercial terms under fair trading commitments. These fair trade commitments should be scrutinised by an independent, external body to give the necessary confidence to the BBC’s competitors as to their probity. We would like to see further partnerships with the music industry and other key export stakeholders, such as the British Council in order to gain further leverage in important markets, such as USA and China, amongst others. 4. Digital Britain We welcome the new public purpose for the BBC in building digital Britain. We look to the BBC to develop new technology and encourage the take up of new services such as digital radio and broadband while allowing commercial services to develop. Music is a key driver in the take-up of new services and the BBC has a responsibility to ensure the value of creative content is maintained. We welcome the statement in the Green Paper that, in developing and promoting digital technologies, the BBC should aim to encourage audience groups to take full advantage of the technology and learning opportunities open to them, and drive media literacy amongst all social and age groups. Whilst the BBC is actively communicating the advantages and opportunities to listeners afforded by new technologies it must be conscious of the perils that sometimes accompany new technologies with respect to the potential infringement of intellectual property rights. One of our concerns relates to Digital Audio Broadcast ripping whereby digital radio receivers can record the digital stream as it is received and retain a copy of the broadcast sufficient to allow pausing and rewinding. A copy may also be retained. The next generation receiver will contain a more ‘intelligent’ recording facility which will allow recording, retention and labelling of individual tracks. The software for this functionality is already available on PC. In effect, this automatically creates a catalogue of recordings for no payment. The BBC has a duty to play a key role in working with all partners, such as the radio, music, and advertising industries to collectively formulate a solution to ensure creative content is not devalued and the knowledge economy subsequently threatened, as it presently stands. Further to the aforementioned comments concerning the Creative Archive project, we recognise that this is a great opportunity for the BBC (and other organisations) to attain real public value whilst fulfilling broader policy objectives. However, the Creative Archive project, as currently constructed does not support a BBC digital strategy which values creative content and the proposed licensing arrangements for Creative Archive would undermine the creative content both of creators and of the BBC. The Green Paper concurs with Select Committee recommendation that "the BBC should balance the interest of the rights holders with those of the wider public in developing new proposals for the distribution of archived material." Accordingly, we agree that any proposal should be subject to a full public value test, including a market impact assessment, before any decision to grant approval is taken. We look forward to working with the BBC with respect to both its licence and accompanying supporting campaign to help create a better understanding of, and appreciation for, copyright. The BBC must recognise that developing media literacy programmes goes well beyond encouraging more people to use their creative skills and produce their own content. Such work streams should ensure that the public and audiences alike have a deeper respect for, and understanding of, copyright awareness. 5. Empowering Local and Regional Creativity At a local and regional level, music-based programming plays a vital role in enabling new talent to be heard, local creative economies to be sustained and regional culture to be supported. Diversity and access are key and the BBC has a pivotal role to play. We want to see both radio and television community level programming being given an opportunity to be picked up and introduced to the mainstream, so that the mainstream itself can evolve to embrace more diverse influences. It is culturally, socially, and politically vital that the wealth of talent and diversity that exists at all levels of the UK music community be made available to as wide an audience as possible and it is clearly the role of a properly publicly funded broadcast service to make sure it is. We believe that the BBC needs a clear strategy in terms of its effectiveness in other regional centres beyond Manchester. Whilst we recognise the transfer of staff to the nations and regions is a necessary ingredient, this achievement in itself should not constitute the totality of the commitment needed. The BBC should ensure structural remedies are in place and organically grow the local talent base. This becomes even more pertinent given the varied and in some cases diminishing contribution and commitment of the commercial sector in this area. We welcome the BBC’s contribution to date to empowering local people to actively release their creativity and facilitate the showcasing of regional talent but also recognise that more resource and investment are needed in this area. We look forward to the BBC’s forthcoming music strategy to build upon this foundation, again in partnership with industry. Music Business Forum (MBF) response to the DCMS consultation questions 1: Do you think it is helpful to define the BBC’s purposes in this way? 2: Are these the right purposes? 3: Are these the right characteristics? We broadly welcome the core public purposes outlined in the Green Paper and consequently agree with the scale and scope of obligations outlined. The BBC creates public value within the five areas outlined and should perform at all levels (regional, national, global) within the broadcasting ecology. The organisation should ensure that these public purposes can be harmoniously correlated to one another, where possible, to provide for wider and deeper public value. Accordingly, we believe that the BBC must be funded appropriately to be able to fulfil all the public purpose requirements outlined. Broadly, the objective of promoting a wide range of content, across genres, in order to reach a range of audiences is appropriate. In particular, we welcome the proposals to make stimulating creativity and cultural excellence one of the five core public purposes. Through fostering creativity, nurturing talent and using the licence fee as the venture capital for creativity the BBC should fulfil an active role in promoting interest and engagement in cultural activities amongst new audiences. We recognise that the BBC can stimulate creative enterprise in both cultural and economic senses and we welcome the statement in the Green Paper referring to the potential benefits offered by partnerships and, where appropriate, the BBC should be both accessible and transparent in its relationships. We agree with the ambitions of BBC programming being high quality, challenging, original, innovative, and engaging. These high-level aims or principles are, of course, desirable and the BBC should take the lead in standard setting across the broadcasting industry with the proviso that programming should display at least one of the purposes, as outlined in the Green Paper. 4: Do you agree that the BBC should be at the forefront of developments in technology, including digital television? The MBF believes that the BBC should play a significant role in the provision of digital services which offer tangible benefits for audiences. In this respect, the BBC should produce a coherent digital strategy that outlines its ambitions. This should include further considerations with respect to its partnering role with other industries and to harness the potential of new technologies. Within the BBC, the public purposes of catch-up TV need to be squared with the commercial potential of on demand content. Furthermore, the BBC role in promoting broadband should aim to encourage the development of commercial services, rather than foreclosing the market. Ultimately, whilst the infrastructural issues are inherently related to building digital Britain, the BBC’s core competence relates to its services and programming. Any comprehensive strategy must recognise that ultimately, compelling and quality content attracts audiences. 5: Do you support the proposal for a further review of alternative funding methods, before the end of the next Charter period? 6: Do you have a view on any aspect of the operation of the licence fee: concessions, its collection or its enforcement? The BBC is the cornerstone of public service broadcasting. We agree with the Government’s recommendation that the best way to give the BBC the independence, certainty, and flexibility it needs is through a Royal Charter, lasting for another ten years, for the reasons set out in the Green Paper. The MBF supports the licence fee – the direct connection between the source of funding and the content delivered on a universal basis. The funding review, currently setting the level of the licence fee from April 2007, must properly reflect the range of public purposes bestowed upon the BBC. We acknowledge that technology is changing the way that audiences consume broadcasting and media services. Whilst we understand the possible need for further reviews of alternative funding models as we look to the digital switchover, the licence fee is an integral component in constituting what the BBC is and what it does. Any further review must centrally place the BBC as the cornerstone of public service broadcasting. If anything, its role should be enhanced in light of audience fragmentation. We are concerned that the Government does not appear to have rejected the possibility of "top-slicing" or "sharing" the licence fee for the reasons outlined in the BBC’s response to the Green Paper. Moreover, we are somewhat apprehensive that the Government has indicated the future prospect of introducing a subscription model as a possible solution given this would jeopardise the concept of universality. 7: Have we defined the roles of the BBC Trust and the Executive Board sufficiently clearly? 8: Is this the right way to define the public interest remit of the BBC Trust? 9: How many of these options would you like to see adopted in the Trust’s statement of promises? Are there any other options that you would like to see considered? 10: Have you any views about how the BBC Trust should handle complaints? 11: How many members do you think the BBC Trust needs? 12: What skills and expertise do you think they need? 13: Are there any particular communities or interest groups that you think the Trust members should represent? In our previous responses in this area we stated that a Board of Governors should be equally free of influence from government and management in order for it to be successful and so encouraged the Government to re-examine their simultaneous role as both governors and regulators. We therefore welcome the proposal to replace the BBC Board of Governors with a BBC Trust with day to day operational management being devolved to an Executive (or Operating) Board. We also support the BBC’s own efforts to modernise its governance structures, such as the Governance Unit and the introduction of service licences and public value tests, as outlined in the BBC’s response to the Green Paper. Membership of the Trust is clearly of crucial importance, if it is to be truly accountable for the activity of the BBC and be an effective custodian of the licence fee. Naturally, we expect that the proposed Trust will need access to a wide range of expertise and believe that the membership of the Trust should be reflective of the public purposes of the BBC. Accordingly, we believe that there should be at least one representative on the Trust with specific musical expertise and creative industries experience in order to reflect the commitment to creativity and cultural excellence. We acknowledge that in the past, the BBC has experienced difficulties with respect to its public appointment process and we look to the organisation to pursue principles of best practice, based on the recommendations of the Nolan principles (honesty and openness amongst others) to ensure that the membership of the BBC Trust reflects the diversity of the UK. We recognise the importance awarded to the constituent nations and accordingly agree with the BBC that it would be sensible to retain representatives for these areas, as well as a further Trustee with allocated responsibility for international issues. Whilst not being prescriptive with respect to the number of Trustees required, we agree with the BBC that its constitution should probably not exceed twelve representatives. 14: Do you think a ‘window of creative competition’ can be made to work? If not, would you support a raised quota for independent production in BBC television? The BBC's role as a commissioner of music is extremely important to the UK’s communal, economic and cultural life given the key responsibility in the public service broadcasting ecology to foster and promote new talent. Making programmes is a key element of the BBC's role and a strong in-house production base must be retained for the sake of creative risk and experimentation, particularly given that the licence fee has been correctly perceived as "the venture capital for creativity". We agree with the BBC’s response to the DCMS consultation so far as they recognise the success of the BBC in terms of range of programming is very much based on the achievement of 'critical mass' in terms of the BBC's infrastructure. We therefore believe it to be vital that this 'critical mass' should not be overly challenged by allowing any in-house facility to dwindle to cover only those programmes that no independent company would be willing to attempt to produce. So in this respect, we are concerned by the BBC’s proposals to reduce in-house staffing levels of those on continuing contracts to below the in-house output guarantee. This places more reliance on short term contractors and this will ultimately have negative connotations for critical mass considerations in the long term. We also recognise that when it comes to regional and local programme production, the independent sector is only able to make a limited contribution because of the way it concentrations around a few major conurbations. Essentially, the BBC must take a pragmatic and sensible approach to how it sources its productions but the principle that content should be based on the best ideas and quality of programming must apply. Whichever remedial model – behavioural or structural - is ultimately applied, the recognition of excellence in creative input and content must continue to be recognised as vital in the value supply chain and a key part of the BBC’s public service broadcasting obligations. We recognise the value of the BBC’s commitment to training, diversity and the broad development of opportunities in comparison to some of the independent producers. We would like the BBC to encourage independent producers to share the same fair dealing contractual obligations when dealing with freelance creators’ and incorporate a commitment to training and the development of new creative talent. 15: Do you think a voluntary 10% quota for radio is sufficient? Or should the quota be increased or made mandatory? With respect to radio, the role of the BBC as a commissioner of music is vital, particularly with respect to Radio 3 – the world’s biggest commissioner of new classical music. The BBC plays a significant role so far as the independent radio production sector is concerned. We welcome the BBC’s proposals which aim to develop its relationship with this sector further and agree that the targets set in this area are kept under review as the sector matures. 16: Do you agree that the BBC should be able to propose changes to its range of services over the course of the next ten years? 17: Do you agree with our proposals for handling new services? The BBC has played a significant role in developing the digital market place. It should continue to do so in the second phase of digital. The MBF believes that the BBC should be equipped to respond to a changing broadcasting ecology if it is to continue to deliver public value in the digital age. We therefore agree with the BBC that it should retain the flexibility for its portfolio of services to evolve and be enhanced, subject to the proposed ‘public value test’ which will determine any positive or negative economic value and net impact. 18: How strictly should the BBC’s commercial services be restricted to those businesses that are linked to public purposes and public services? We note that the Green Paper recognises that the BBC’s commercial services have an important supporting role to play in both promoting UK culture, talent and intellectual property overseas whilst generating additional value for the BBC licence fee payer and applaud these principles for future activity. For the licence fee payer it is essential that profits made from the BBC brand be ploughed back into the BBC and that money invested in programmes should be maximised by commercial exploitation. These profits ensure that the licence fee level is set at an acceptable level. Commercial activity should be related in some way to the BBC’s public purposes and should have a direct connection to publicly-funded programmes or services. We recognise the proposal to make the BBC radio archive available to the commercial sector and to listeners through both the BBC and third parties and that the BBC will consult with the rest of industry to agree the way forward. This is potential a very valuable opportunity with the implicit proviso that all parties are aware of and respect the remuneration of rights holder works for future use at a market rate. The music industry should certainly be engaged in such discussions in this area. 19: Is the existing fair trading commitment a useful addition to the arrangements for regulating the BBC’s commercial services? If not, what option would you prefer? Although we recognise the stringent procedure undertaken by the BBC we acknowledge that in terms of Fair Trading Commitment there is a perception issue with respect to the BBC activities which brings into question the credibility of the current arrangements. The BBC has Fair Trading commitments purely for its commercial services. They are designed to ensure there is no hidden competitive advantage to the BBC. However, all decisions are taken internally by the BBC. Whether or not those decisions are fair, they are perceived to be biased or irrelevant. The MBF has previously stated that we believe the BBC needs to consider ways of effectively addressing this. We are pleased to see the proposals outlined in the BBC response to the Green Paper which go some way to acknowledging these concerns. However, we still recognise that scrutiny by an independent third party would ensure fairness and get round problems of confidentiality (complainants reluctant to pass sensitive information to the BBC itself). Overseas broadcast of BBC material featuring music is often an excellent way of showcasing UK talent, under the recognised name of the BBC. However, granting rights should remain on commercial terms under fair trading commitments. These fair trade commitments should be scrutinised by an independent, external body to give the necessary confidence to the BBC’s competitors as to their probity. We believe the BBC’s Fair Trading commitments should go wider than their applicable to BBC Worldwide. 20: Do you agree that the case for a plurality of publicly funded broadcasters should be kept under review? Plurality in PSB provision is also widely acknowledged as vital to drive higher quality and innovation and is supported both by the Government and Ofcom. The key questions are how best to safeguard this plurality in a digital age and (crucially) how to pay for it. We recognise that plurality of provision should not jeopardise the current funding arrangement in place with the BBC with regards to the licence fee. We reiterate our concern that the Government does not appear to have rejected the possibility of "top-slicing" or "sharing" the licence fee for the reasons outlined in the BBC’s response to the Green Paper. Annex 1: Music and the BBC Contact details for the Music Business Forum Fiona Harvey Membership details for the Music Business Forum • AIM (Association of Independent Music) • APRS (Association of Professional Recording Services) • AURA (Association of United Recording Artists) • British Academy of Composers & Songwriters • BARD (British Association of Record Dealers) • British Music Rights • BPI (British Phonographic Industry) • CM (Community Media) • Sound Connections • Equity • The MCPS-PRS Alliance • Music Education Council • (MIA) Music Industries Association • Music Managers Forum (MMF) • MPA - (Music Publishers Association) • Musicians’ Union • Music Producers' Guild • National Music Council • PPL (Phonographic Performance Ltd) • VPL (Video Performance Ltd) Annex 2: BBC TELEVISION AND RADIO (see note 2) Music is undeniably a central part of the BBC's core activity and an integral part of the BBC's scheduling across all its broadcasting platforms. Across the BBC television channels, radios 1, 2, 3 as well as 1 Xtra, 6 Music and on-line presence such as Collective and OneMusic, music is a consistent thread running through the whole of the BBC's programming. When one adds in the music content of regional and local radio stations the true importance of music to the BBC as a whole becomes even clearer. For instance it is estimated that of a total of 76,752 network radio broadcast hours in 2003/2004, there were 43,051 hours of music output on network radio. This means that almost 60% of BBC radio network content is made up of music. The importance of music supports the transmission of a significant number of hours of music and arts programmes broadcast on all the BBC television channels. In the BBC’s Annual Report and Accounts for 2003/2004 the hours of music and arts programmes broadcast were reported as: BBC One - 66 hours However, as stated in our response, the importance of music output continuing as a featured part of programming on both BBC One and BBC Two will remain key if the diversity of music included in the public television services offered by the BBC is to be appreciated by an effective audience reach. The BBC is also clearly a major employer of musicians. Further information is available upon request. Notes 1. The MBF is an informal group of music business organisations that, since its inception in the spring of 2002, has gained a reputation as an effective representation of the interests of the music business in its widest sense to Government. See page 11 for a full membership listing. 2. Extracts from 2003-2004 Annual Report and Accounts relating to music services and activities
MBF coordinator (covering maternity leave)
mbf@fjharvey.co.uk
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BBC Two - 289 hours
BBCThree/BBC Choice - 168 hours
BBC Four/BBC Knowledge - 1,213 hours