Apple may have dominated recent headlines but, Adam Webb argues, let’s not lose focus on the equally-important BBC

26 June 2015 - Editorial

The unveiling of Apple Music on June 8th continues to dominate headlines, but the tech giant’s pivot towards streaming is not the music industry’s only challenge on the horizon. Arguably as significant is the long-term future of another multi-billion pound partner, and one much closer to home: the BBC. 

Indeed, with impeccable timing, mere days after Eddy Cue, Jimmy Iovine and Drake left the WWDC stage, a short letter from UK Music and associated members popped up in The Guardian - outlining the industry’s support for a “strong and well-funded” BBC and lauding its commitment to national and regional broadcasting.

Reading between the lines, the message here for Government (to whom the letter was presumably intended) seemed pretty clear: the UK music business is massively successful, and the BBC is an integral part of that success - so please don’t cut its funding.

This fear is well-justified. With an annual income in excess of £5bn (including £3.6bn collected from the TV Licence alone) and a wide-reaching public service remit, the BBC will always scratch places that commercial competitors cannot hope to reach. Similarly, the BBC’s role in supporting all forms of new talent (“In New Music We Trust”) is unrivalled - from the ground-up approach of BBC Introducing to Charlie Sloth’s Rap Up, Later…with Jools, or the hours of dedicated festival coverage. 

For some, Radio 1 and Radio 2 might be overly-focused on major label releases but, as evidenced by the then PRS for Music economist Will Page at the height of 2010’s Save 6 Music Campaign, overall BBC DJs play by far the widest selection of new music. 

Alongside the potential of digital platforms to break new acts, the BBC’s starmaking power remains hugely significant, even in an era of fragmented media and declining listener numbers. The playlists curated by Radios 1 & 2, 6 Music, 1Xtra and the Asian Network are still hallowed ground - and easily more potent than, say, Sean Parker’s Hipster International.

The BBC is also a pioneer in the online space - building enormous reach through its social media and adoption of digital channels, for instance via Playlister’s integration with Spotify and iTunes. To paraphrase Radio 1 controller Ben Cooper, it’s not radio anymore, but a “multi-platform brand for young people who love new music”.

The Corporation pays pretty well too. While certain artists question the economics of streaming services, few complain about royalties received from radio or TV broadcasts. Blanket licences with PPL and PRS for Music make the BBC one of the industry’s most valuable customers, helping to cosset disruption elsewhere.

To put it mildly, there’s a lot at stake.

However, while the BBC’s importance to British music is beyond doubt, how it will be funded in future decades is significantly less clear. Even thornier is the issue of ‘mission creep’ and whether Auntie Beeb is too frequently bypassing its Reithian commitments to “inform” and “educate” with an over-zealous chase for ratings. In terms of music, the perceived largesse of copycat programming like The Voice or the BBC Music Awards (an ITV programme in all but name) not to mention some lavish self-promotional adverts have all been grist to the mill for the Corporation’s critics.

And in the wake of the Savile scandal and much maligned Digital Media Initiative, there are no shortage of these. Especially so from media rivals unable to rely upon state coffers. The previous Government froze the £145.50 licence fee in 2010 for a duration of six years - a 16% budget cut in real terms - while the 2015 Conservative manifesto has committed to keeping it on ice, and diverting a top-slice of revenue towards roll-out of superfast broadband

With incoming culture secretary, John Whittingdale, drawing parallels between the TV Licence and the Poll Tax (ie it’s inherently regressive since everyone pays it, regardless of income) the upcoming Charter Review has taken on a heightened significance. Clearly, a decision to cut the licence fee or to further top-slice could have major repercussions for the music business. Any moves towards opt-in subscriptions or pre-bundling and these repercussions could be seismic. 

For some perspective here, the current Royal Charter and Agreement was granted in September 2006 - a month before Google purchased YouTube for $1.65bn, four months before Netflix started streaming video online, and more than a year before BBC iPlayer emerged from beta. Suffice to say, by the time it expires on 31st December 2016, consumer behaviour will have likely evolved even more dramatically. Reportedly, 1,000 households a day are now opting out from paying the licence fee, making do with catch-up or alternative on-demand services.

In short, to an increasing number of the population, the concept of a compulsory payment already feels outdated - especially with so much premier content (think: Breaking Bad, Game Of Thrones, True Detective) only available by subscription, and pretty much everything else hosted for free on YouTube. Likewise, the sanctions for watching TV without a licence appear like something from a bygone age, and far more draconian than anything proposed by the Digital Economy Act. In 2012, 10% of the UK’s criminal prosecutions were for non-payment of the TV Licence - with a handful of individuals going to prison each year.  

While some appear unwilling towards any modification - Chris Bryant, Labour’s shadow culture secretary has already appropriated the term “our cultural NHS”, while James Purnell, the BBC’s current director of strategy & digital (salary: £24,500 per month) has suggested decriminalisation would imperil the future of entire channels - even Tony Hall, the current Director General has conceded that BBC funding needs to “adapt, modernise and change”, albeit while arguing that the present licence fee has “10 years of life in it”.

Whittingdale too appears reconciled to this short term view, stating publicly that there is no “serious possibility” of the licence fee being “dismantled” over the next charter period (ie until 2026). However, further modifications have not been ruled out.

How the music industry chooses to position itself within this debate will be intriguing to note. Clearly, arguing for a retention of the status quo will be a challenge. But equally, a well-funded BBC, capable of supporting the widest spectrum of our business is, at the moment, pretty much essential. It’s a tough path to tread. But alongside the development of viable and transparent revenues around music streaming, the Charter Review’s outcome will arguably be equally influential in defining the shape of the industry ahead.