UK TV

Two quick views of the UK broadcasting market.

First, on the subject the value and use of the licence fee versus advertising. According to a Guardian/ICM poll published today it appears viewers and listeners are rallying around the BBC and show rising levels of trust in the broadcaster and also support for the licence fee. The Murdoch Empire has taken many a swipe at the BBC and the latest was made last month by James Murdoch when he was highly critical of what he claimed was the "expansion of state-sponsored journalism". The Guardian report that an overwhelming majority, 77%, ‘think the BBC is an institution people should be proud of’ – up from 68% in an equivalent ICM poll carried out five years ago and that 63%, also think it ‘provides good value for money’ – up from 59% in 2004.

The licence fee as a means of funding is still backed by 43%, with 24% thinking advertising should foot the bill and 30% who think people should pay to subscribe to see BBC programmes. Interestingly only 31% backed the licence fee in a similar research in 2004.

To read more on this interesting survey ‘Public rejects Murdoch view of BBC, says ICM poll’

Second, the drop in advertising revenues and the state of ITV. The loss in advertising revenues is double edged as it can’t be compensated by increasing the charges for prime slots and drives down the available investment in new programmes which in turn drives down viewers and advertising. Unlike in the US, where advertising alongside the Super Bowl will cost a significant amount and is open to bidders, UK commercial companies like ITV charges are effectively capped. They are currently unable to fully exploit the earning potential of winners such as ‘X Factor’. ITV is effectively losing revenue because of commercial advertising agreements created before the digital explosion, recession and much more.

Channel 4 is at least bolstered with some licence fee, Sky has its subscriptions and others doesn’t have ITV’s overheads. In January the commercial advertising agreement is up for renegotiation and it will be interesting to see what happens and whether it changes the playing field. It will also be interesting to see if players like Sky in the meantime don’t go after ITV.