Thompson (pictured), giving the annual James MacTaggart lecture at the Edinburgh International Television festival, said that both the BBC and its commercial rivals needed to concentrate on UK-produced programming that could be exported to international markets. In that market place, UK television had to be fit to battle against companies such as Disney and Time Warner, he argued.
He said: “The total pot of money available in the UK to invest in original TV production is shrinking and may shrink further.
“It’s happening because the broadcasters who have traditionally been the biggest investors in original British TV beyond the BBC are fishing in a stagnant or declining pool of advertising.”
Thompson argued that recent debates on BBC funding and public service broadcasting (PSB) were based on an acceptance of a decline in the money available for quality television.
However, the “industry leaders and policy-makers” should now be “identifying the steps that would put that investment back on the path of growth.”
He even suggested that the competition authorities look again at Contract Rights Renewal, the mechanism that limits ITV’s ability to maximise ITV1 advertising revenues. In this, his view was echoed by Culture Secretary Jeremy Hunt, who was interviewed at the festival.
Thompson said that “radical and rapid change in the BBC is itself an essential part of the solution”. He defended the BBC licence fee and argued that the corporation was going to become “a smaller, more efficient, more distinctive” body and also pointed out that public support for the corporation is high, if not higher, than in the 80s before satellite television launched.
At last year’s festival chairman and chief executive of News Corporation Europe and Asia James Murdoch heavily criticised the BBC and its practices. While Thompson praised Sky’s innovation and risk-taking he pointed out that the company invested very little in homegrown UK production and that it was “already a far more powerful commercial counterweight to the BBC that ITV ever was.”
He also flagged up the fact that if News Corp’s plans to take total control of Sky are achieved, the broadcaster will be part of a company that is dominant in national newspapers and is one of the UK’s biggest publishers.
Hunt said that he would no rule out cuts to the BBC licence fee in negotiations next year, in a Guardian interview . He also said that the BBC needed to show a “much clearer understanding of its competitors” and “put red lines around its activities.”