I left the following comment (that I have expanded slightly) on Natalie’s earlier post, in response to reader Alisa’s surprise at my observation in passing that other British television stations are owned by the government, besides the BBC. I have written about the weird history of British television before, but it is so weird that it deserves a small repeat
Roughly: The BBC had some experimental pre-war broadcasts but launched its permanent service in 1946. This was and is government owned and supported by the licence fee.
In 1955, a second, advertising funded television network came into being called ITV. This was supposedly not owned by the government but had a highly complex ownership structure. Britain was divided into a large number of regions, and the local television station was franchised to a different private owner in each place. (In larger cities, different companies had the right to broadcast on different days of the week and later different times of day). Much programming was national, but a government body was set up to decide which programming was allowed to be broadcast on a national basis. Private companies’ licenses were for seven years only, after which the government held a review and could and sometimes did take their licenses away if they did not satisfy a government defined “quality” threshold. In essence, the private companies controlled the sale of advertising but did not control their own programming.
This arrangement of two channels led to a peculiar piece of British English, in which people will talk about “switching to the other side” when they mean change the channel. TV was perceived as akin to an LP record, with the BBC on one side and ITV on another.
In 1964, the BBC gained a second channel, which was funded by the licence fee just like the first.
In 1982, Channel 4 (and the Welsh version S4C) were created. This channel was and is owned by the government, but is funded by advertising. The channel had an ambit not to cater to the largest audiences but to cater to audiences that were not adequately served (as defined by the government) by existing services. In order to not upset the existing ITV companies, the ITV companies got to sell the advertising for Channel 4, and if Channel 4’s advertising revenues exceeded a certain point as defined by (you guessed it) the government, the ITV companies and not Channel 4 kept the money.
Thus Britain managed to find two largely different models by which advertising funded television networks could be created that did not compete with the BBC and which were controlled by the government.
Rupert Murdoch launched Sky in 1989 (and almost sent himself bankrupt doing it), but it only really became successful in about 1994-5 when it got going with television rights to the English Premier League soccer. This was the first genuine competition that the BBC had ever faced. This, ultimately, is why the establishment in Britain hate Rupert Murdoch so much. He had the audacity to compete with the BBC and to succeed. They will never forgive him this.
As a brief summary of British television since. A fifth analogue terrestrial channel (Channel 5) launched in 1995, after the relevant government bureaucracy expressed great reluctance to issue the licence (refusing to do so the first time it was theoretically put out to tender). This was the first genuinely national and privately owned terrestrial television network in the UK. The various mid 1990s ITV companies were gradually allowed more control over their own businesses and to merge with each other (and the finite life of franchises eventually went away too), a process that finished with the merger of Carlton and Granada in 2004. So as of 2004, Britain had two, privately owned, national television networks, but (for various reasons) neither of them had any money. In a normal market, you would have large, well funded commercial terrestrial television networks that could compete with other companies, but the companies in Britain were so emaciated (deliberately) by the history of regulation that the only real competitor to the BBC was Sky.
A digital terrestrial platform (OnDigital, subsequently ITV digital) was launched in 1998. This featured various channels from ITV, Sky, and other commercial providers, but it went bust in 2002, due to a combination of restrictive regulation – Sky had initially been a co-owner of the consortium, but was forced out from it on supposed competition grounds after the consortium won the licence but before it started broadcasting, and was subsequently required to provide certain programming for it without being able to profit from it in a serious way – and (to be fair) terrible management. This was subsequently replaced by Freeview, which is run and controlled by the BBC, who were refused the licence to run digital terrestrial in 1998, but were allowed to do so in 2003 due to the failure of the previous private option, which was largely caused by BBC friendly regulators.
So non-BBC television is either owned by Rupert Murdoch, owned by the government, or doesn’t have any capital. such as ITV, Channel 5, and various other organisations who broadcast on Freeview.
On top of that, one must observe that S4C is a very weird beast, even in a world of weird beasts. It was set up as the “Welsh” television channel at the time that Channel 4 was introduced in the rest of the UK, and is funded by a mixture of advertising revenue, Welsh specific cultural subsidy, and indirectly via the BBC licence fee. (The BBC has an ambit to produce some Welsh language programming, which it does and then provides to S4C without charge). For many years Wales received this channel instead of the Britain wide Channel 4, whether the Welsh liked it or not. In these days of digital, all of Wales received both channels.
And as for Murdoch, he became powerful because it took as ferocious a competitor as he to find a place within the ferociously anti-competition regulatory framework of the UK. He bet everything to do this and almost lost the bet – in the early 1990s his banks were at one point in the weeks away from calling in receivers. Having won a place inside that regulatory framework, he benefits from the way in which it repels further competitors. One can only console oneself with the thought that the BBC media establishment has the competitor that it deserves. One can also note that Sky’s customers pay a significantly larger sum in total subscription fees than do the BBCs licence fee holders.
Also Sky’s subscribers pay their subscription fees voluntarily, whereas the BBC’s have the money extracted from them by force. (Plus of course, one must pay the BBC’s fee as well before one is allowed to buy Sky’s channels). I won’t comment on which of these things may be more moral.
Yes, but what the public really want to know is- who owns Doctor Who?
Yes, that’s really the only thing the BBC is good for. I am quite confident that its foreign and DVD sales and merchandising revenues are high enough that it is a net revenue source for the BBC, however. So I would support the Doctor’s privatisation, if the question came up.
ITV has been rubbish ever since it stupidly merged into one broadcaster. This, surely, must rank as the dumbest decision in broadcasting history.
So instead of Granada, Thames, Yorkshire TV, Grampian, LWT, etc, each making distinctive programs shaped and fueled by regional cultures and styles, ITV is now a London-centric, bland, creatively bankrupt waste of space.
Where there was variety there is now the same metropolitan blandness across the entire channel. All difference has been eliminated, Borg-style.
They way the BBC are going it won’t be long before they are ‘regulated’. They break the Charter every day and are certainly guilty of bias by omission, also every day. Be it climate change, financial crisis, Leverson, I/P conflict, EU etc.
Very interesting commentary on the history of broadcasting in the UK. I was aware of some of it, having worked in IT at Channel 4 during the 1990’s.
From my perspective, the BBC are the absolute epitome of everything that libertarians stand for.
They distort all contrary viewpoints within the UK as well as overseas through their propaganda organ BBC Worldwide.
Despite all of this, the UK public at large is forced (upon pain of imprisonment) to give £145.50 of their tax paid income to allow these propagandists, watermelons and Marxists to live lives of affluent luxury while they pour the poison of treason into the very ears of those who are forced to pay for it.
I will oppose the BBC and the unique way it is funded until the day I die (or preferably the BBC is forced into the real world of subscription and/or advertising based broadcasting)
The BBC is the enemy within…
—Moby-Dick
Now, perhaps, you’d care to explain the rules of cricket . . . Mind you, that’s a game that both sides choose to play and usually without duress.
Thanks – fascinating analysis, especially when taken with the earlier piece.
However, I am surprised at the absence of some key facts and players.
1. The TV transmitter network was always government owned and operated. ITV program makers/broadcasters had to lease transmitter time.
2. Government interference in technological development – Lew Grade wanted to use a modified NTSC system to begin color transmission in the 1950’s (and again in the early 60’s) but HM Government (via the Post Office – the senior regulator) wouldn’t let him.
3. Broadcast Relay Services Ltd – founded in 1928 and later trading as ‘Rediffusion’ – had cable TV services from the get-go but were only allowed to offer existing free-to-air content. This situation remained unchanged until the 1970’s.
4. Lew Grade (again) was the Murdoch of his time. His Associated Communications Corp. had a production arm (Incorporated Television) which produced high-quality programming for overseas sales as a means of generating non-advertising revenue. They also had a broadcast arm (Associated Television – ATV) that finally lost its franchise in 1981/2.
Fascinating topic.
To me, anyway.
Only to add the the fragmenting and bizarre structuring of ITV in the early days (different broadcasters at different times in different places) was a deliberate policy, fostered by the BBC, to ensure that no ITV broadcaster would have enough capacity, or enough money, to start producing content to seriously rival what the BBC could do with its bottomless well of license-paying serfs. It worked for more than 40 years.
For a broadcaster chartered to be ‘in the public interest’, it’s hard to imagine how the BBC could have been more savage in its ruthless protection of its own institutional interest above all other concerns.
llater,
llamas
Eddie Willers wrote:
“4. Lew Grade (again) was the Murdoch of his time. His Associated Communications Corp. had a production arm (Incorporated Television) which produced high-quality programming for overseas sales as a means of generating non-advertising revenue. They also had a broadcast arm (Associated Television – ATV) that finally lost its franchise in 1981/2.”
A well made point – only to add not to overlook AP Films, another of Lew Grade’s enterprises (even if taken over as a going concern) that sought to develop TV content much-more along reasonable commercial lines.
llater,
llamas
One of the reasons. Don’t forget Wapping. And Sky’s rescue of the failed, state-backed, British Satellite Broadcasting (which really provided the foundation for its success: before the merger, Sky didn’t have its own sports channel).
I won’t argue, but it hasn’t quite been. STV has so far managed to stay out of ITV plc’s grasp, buying Grampian (and turning it into “STV North”) in the process, and UTV is still independent. But of all the ITV companies you’d want to still be around, those three are pretty close to the bottom of the list. STV famously refused to take some of the most popular primetime ITV shows a couple of years ago, “to save money”. Cost them a fortune.
“to start producing content to seriously rival what the BBC could do with its bottomless well of license-paying serfs. It worked for more than 40 years.”
Ahem….The Prisoner? Shat on anything the Beeb has ever made
It was us electrical engineers who actually created the BBC at the IEE (now the IET) headquarters at Savoy Place, Waterloo, London. For the history see link:
(Link)
John Galt said: From my perspective, the BBC are the absolute epitome of everything that libertarians stand for.
… I’m assuming you meant “stand against”?
Or “antithesis” instead of “epitome”?
On the plus side, the Internet should hopefully let anyone produce any programming they feel like and can fund, and let anyone see it, undermining the entire horrible edifice of State Media.
@ Makajazmonkee, who wrote:
‘Ahem….The Prisoner? Shat on anything the Beeb has ever made’
Kamerad!
But, of course, ‘The Prisoner’ was made by Lew Grade specifically to a business model that pivoted on selling it to CBS, leveraging it (in part) on the prior US sucess of “Danger Man’.
ITC couldn’t possibly have made ‘The Prisoner’ solely for the UK ITV market – not and make a profit, anyway.
As I said – fascinating – to me. And about 4 other people worldwide, I suspect.
llater,
llamas
Interesting post. The parts about the gradual introduction of extra channels in the early days reminded me of the times when upgrades in our TV and ariel meant that we could receive ITV from other areas. Our local channel was Yorkshire TV, but with better equipment we could get Tyne-Tees and Anglia. Anglia introduced me to a tune from Handel’s Water Music which I have loved ever since and I even learned to play it on the piano.
Regarding the TV licence. I think that it would be really good if I had a window cleaning business. Anyone who wants to have their windows cleaned has to pay me the going rate for cleaning windows. For this payment, I clean people’s windows. If you wish to use a different window cleaner that is fine, you can pay them the going rate to clean your windows, but if you do that, you still have to pay me as well. If you want to clean your own windows, you can do that as well, but you still have to pay me. The only way that you can avoid my window cleaning fees is by not cleaning your windows at all. If you do this though, I will refuse to believe that you don’t ever clean your windows and then spy on you and harrass you for payment anyway.
The comparison of Lew Grade to Murdoch is a very good one. Highly regulated but not entirely closed markets like this (particularly in places like the UK where the judiciary is generally honest) do provide opportunities for particularly determined people who learn how to play by the rules of the system. Once they are in, the regulations then help protect them from further competition as much as they protect the people who were intended to be protected. Rupert Murdoch is one person who has used the British system in such a way, and Lew Grade was definitely another.
Only to add the the fragmenting and bizarre structuring of ITV in the early days (different broadcasters at different times in different places) was a deliberate policy, fostered by the BBC, to ensure that no ITV broadcaster would have enough capacity, or enough money, to start producing content to seriously rival what the BBC could do with its bottomless well of license-paying serfs. It worked for more than 40 years.
This is absolutely, entirely true, and I hope that I at least implied this in the longer article I linked to, if not the shorter one. The bizarre structure of ITV was designed to prevent it from competing with the BBC. The later, equally bizarre (but different) early structure of Channel 4 was once again to prevent the new entrant from competing with the BBC in a serious way.
In countries such as the US and Australia, large nationwide, advertising funded television networks came into being. Such environments – particularly in Australia, in which these private networks have been very successful in lobbying governments that *they* be protected from further competition – are not necessarily healthy either, but at the moment when television sporting rights became lucrative, expensive, and crucial to the success of television networks, existing rich, free to air television networks existed in order to bid for the rights. Many of the most desirable sports programming ended up on private, free to air television, whereas in the UK it ended up on private, pay satellite and cable channels, because the Satellite operator Sky had vastly more money than anyone else bidding for the rights.
(The formerly rich national free to air commercial networks in the US and Australia are presently in the process of having their advertising revenues collapse, and are at the moment finding out that their pockets are not as deep as they perhaps once were. Where this will lead is the subject of another post, however).
Since it is the season…
While shepherds washed their socks at night all watching ITV,
The angel of The Lord came down and switched to BBC.
Fair is fair- who pays for the american PBS?
Nuke, American PBS does indeed receive some money from the federal government (i.e., from our taxes). But that’s not a major part of its revenues. It also receives a lot of money from donations (both from private individuals and charitable foundations). And of course it makes money selling its product to local public TV stations and such (documentaries, Sesame Street, etc.). So it’s not entirely dependent upon a “license fee” as in the UK.
And, of course, there is a huge amount of competition for viewers; there are literally hundreds of channels available to me via my cable network, something to suit nearly any taste. And if you don’t like what the cable company has to offer you can opt for satellite TV. If I don’t like the political slant of a particular channel I can easily choose another. There’s an audience for both Fox News and MSNBC. I have lots of problems with our broadcast regulatory system (not the least of which is that in most areas the cable provider is a local monopoly granted by the city or county), but on balance I think it’s a far superior system to the UK one.
Conservatives complain about the bias of the BBC – but when in office, do not even end the television tax (the “license fee”).
It is like complaining about the European Union, but not leaving the vile organisation.
Demented.
Laird, don’t forget, it’s not funded by advertising, Companies like ford give them some money, get to show a nice shiny Ford vehicle driving down the road with a voiceover “Brought to you by Ford, Excellence in Motoring (or whatever)” but it isn’t advertising…
Richard, I never said that it was; I specifically used the word “donations”. However, in my humble opinion it would be more honest to call those commercial promos “advertising”, which is generally what they really are.
As to Ford, however, I don’t think I’ve ever heard them mentioned as contributors to public TV, although I suppose it’s possible. Mostly, though, I think it’s the Ford Foundation you’re thinking of, which is a wholly separate entity created by Henry Ford from his personal wealth. (The fact that he would be appalled at much of what they fund these days only goes to demonstrate the futility of trying to “do good” by setting up a foundation; they are always eventually hijacked by leftists, regardless of the political views or even the express directions of the founder. It’s also Exhibit A in my brief against perpetual life of such institutions, and against the “charitable trust” exception to the Rule Against Perpetuities, but now I’ve gotten seriously off topic so I’d better stop.)
To be fair, one can obtain quite literally hundreds and probably thousands of channels, many of them free, in Britain if one gets a satellite dish. Or at least, without paying the provider for them. One still has to pay the licence fee to the BBC in order to watch them. Cable television does exist but is a much less significant deal than in the US, due to a mixture of truly insidious regulation over the years and horrible management by the people who own the franchises. Not all of these channels are British in source, but there is a lot of choice if you make an effort to get that choice. Not everyone does. People aren’t really encouraged to. (For British based news, there is a choice of the BBC or Sky News, which is far more moderate than Fox News despite belonging to Rupert Murdoch. There are many foreign sourced news channels, but yes, less choice in Britain there).
Conservatives complain about the bias of the BBC – but when in office, do not even end the television tax (the “license fee”).
Oh, it’s much worse than that. The present Conservative government have been much more friendly to the BBC than the Labour government were in regulatory terms. Their commercial arm has been given a much freer reign to compete with private, less subsidised businesses than was the case previously. Something about the sorts of chaps who run the BBC and the sorts of chaps who run the government being the sorts of chaps who knew each other at public school and Oxford and knowing one another’s interests, I think.
Michael.
Fox News is far too “moderate” for me.
I really do not need Bill O’Reilly telling me that every offense with a firearm should be a Federal matter (all power to Obama is a conservative principle? and what about that pesky “Constitution gives no police power to the Feds” thing?).
Nor do I need him telling me that the way to prevent to prevent boom-bust events is to have the Feds “look out for the folks”….
Still at least he understands there is a government spending problem…
As for Shep Smith and the “journalists of Fox News” – they seem much the same as the journalists of ABC, CBS and NBC.
Of course there are good people on Fox – but not nearly enough of them.
As for Sky News.
As you say – the regulations castrate it.
I can not see the point of Sky News.
As for Mr Cameron – and Mr Osbourne (and ….).
I keep hopeing they are not real – that they are some bad dream I have had.