The review, by culture secretary John Whittingdale, will look into what the BBC does and the way it is funded. He said the scale and scope of the BBC has grown exponentially in the past decade and the time is right to “question whether this particular range of services best services licence fee payers”.
Up for debate is the licence fee, which Whittingdale described as “regressive”. The review will look into whether a reformed licence fee, a household levy or a hybrid funding model that could include subscriptions would be best in the future.
“One key task is to assess whether the idea of universality still holds water. With so much more choice, we must at least question whether the BBC should try to be all things to all people,” said Whittingdale.
The value of the BBC brand
The BBC brand remains one of the most valuable in the UK. According to Brand Finance’s annual brand directory, the BBC was valued at $6bn in January this year. That is up from $5bn in 2014 and $3.8bn in 2012.
The branding firm also gave the BBC an AAA- rating in terms of the strength of the brand, a rating that no other media brand in the UK managed to better.
David Haigh, the CEO of Brand Finance said the BBC is the eight most valuable media brand in the world with those that beat it all American media corporations such as Disney and ESPN.
“The BBC has a very strong brand and a very valuable brand and that has increased significantly over the last few years. This is because the BBC is very good at what it does, it makes extremely good programmes in every category and has an environment in which artists and writers can thrive.
“If you go abroad, to places in Asia, Africa, the Middle East, everyone knows the BBC and respects it. It is famous for its global news coverage and programmes like Top Gear and Doctor Who,” he said.
Stats from YouGov’s BrandIndex back this up. In a list of the UK’s 54 biggest TV and radio brands, BBC-owned properties such as BBC One, BBC Two and BBC Radio 4 make up seven of the top 10 in terms of Index, a measure of a range of metrics such as quality, impression and reputation.
The BBC masterbrand comes in at fourth with a score of 29.8. It also scores in the top five in terms of Impression, Quality and Reputation, beaten only by its own products.
Its turnover is also rising fast. For the year ending 2014 it turned over £5.2bn, of which £3.7bn came from the licence fee and £1.5bn from its commercial efforts, such as DVD sales.
Haigh believes that such is the strength of the brand that any review will have little impact on it. Despite the Conservatives “fighting talk”, Haigh says it would be a brave politican that is prepared to take on the BBC and the UK people’s affinity to it.
“People have a vast affinity for the BBC. It is a bit like the Post Office and the Royal Mail in that people like to moan about the queues in the Post Office but the loyalty and regard for them still remains amazing,” he explained.
The advantages of a strong BBC
Haigh also believes a weaker BBC isn’t in the best interests of Britain. The brand is one of our most successful exports, he says, and has been critical in building up what he calls “soft power”.
“The way the British nation is expressed in [Visit Britain’s] ‘Great’ campaign is extending Britain’s soft power in the world, the BBC is a significant part of that. People watching BBC programming abroad think about the UK and aspire to what we stand for. It would be rather strange to undermine that,” he said.
He compared the BBC to the monarchy, saying that a lot of people, while they don’t agree with the principles behind it, understand that it works and is good for Britain.
“The BBC has a weird and anachronistic heritage, you wouldn’t invent it in that way now in the current environment but it works. You don’t mess with an institution,” he said.
Could advertising work?
Haigh doesn’t expect much of a change to how the BBC is funded but says even if there is the BBC has learnt a lot in the past about how to license content so it can generate revenues on its own. The best example of this is Top Gear, which now generates millions of pounds a year for the BBC.
“The BBC would still be successful as a private company, although I don’t see it going that far,” he said. “It has learnt from the private sector how to brand its properties, register property and image rights to exploit them – it has a merchandising and syndicating business that is hugely successful,” he said.
One area that Whittingdale appears to have ruled out is an advertising model. But that could be a mistake, according to research from TubeMogul.
The firm recently conducted a survey of almost 1,500 consumers on the future of the BBC. It found that 61.67% of people believe the UK should do away with the licence fee and introduce advertising.
Just 23.82% thought the current system should continue while the rest advocated the introduction of a licence fee and extra subscription for online services.
Nick Reid, UK MD of TubeMogul says the survey suggests that despite talk in the media about the BBC’s independence, the majority of the UK population “don’t really care about this issue”. In fact just a third (36.76%) would be against advertising appearing on the BBC.
Reid believes the results show the impact the changing way people are viewing TV is having. Young people in particular are watching less traditional TV and see value in being shown advertising in exchange for free content.
“This is not against the BBC, it is a part of this country’s heritage. It is more a reflection of how consumers are engaging with content. In that context it raises questions over whether the licence fee is a viable solution,” he said.
Reid suggests the BBC could be hugely successful in attracting advertisers because it creates content that brands want to be associated with.
He concludes: “There is a huge appetite from advertisers to be within that content. The BBC has great content and can use viewer data to create great context. That would be a compelling solution for brands.”