It’s open season on public broadcasters as ABC joins hunt for cuts

The BBC, like the ABC, has faced significant pressure to change in response to repeated debates over how it should be funded. EPA/Andy Rain

2014 is turning into a grim year for public broadcasting. In June, Hubert Lacroix, the president of Canada’s public broadcaster CBC, announced an unprecedented series of job cuts. One-quarter of the staff will go by 2020. This week, ABC managing director Mark Scott told his staff that 10% of them would have to go.

Also this week, the BBC’s finance and operations chief, Anne Bulford, said that although Britain’s public broadcaster had found £1.1 billion in savings since 2004, it would have to find another £400 million in cuts in the last two years of the current licence fee deal.

All three broadcasters are under severe political pressure. Right-of-centre governments with further wider public spending cuts in their sights are unlikely to accept the argument that broadcasting is somehow different.

Politicians are also listening to the commercial voices – led in Australia and the UK by the Murdoch press – saying that public broadcasting is unnecessary, anti-competitive and is crowding out the private sector, particularly in digital markets where broadcasters and newspapers find themselves competing for audiences.

In the UK, the political consensus which, despite regular fallings out between the governments of the day and the BBC, recognised that the BBC needed to be well-funded as a key part of the fabric of British society, has evaporated. In 2006, the Labour government refused to index the licence fee to inflation as in the past.

The rushed 2010 licence fee deal the BBC did with the incoming Conservative-led coalition government was probably the best it could have hoped for. However, it froze the BBC’s income for six years and loaded the BBC with a whole range of new costs – the World Service, the Welsh language service S4C and subsidising what has turned out to be a very unsuccessful experiment in commercial local TV.

As the BBC tries to find the final £400 million of savings, it faces a negotiation next year on the licence fee from 2017 onwards. The Conservative culture secretary, Sajid Javid, has already suggested the fee could be cut from the current £145.50.

With a general election next May, there will be no serious negotiations about the licence, or the BBC’s new charter, until after the poll. Given the current state of British politics, the BBC has to prepare – like the rest of the UK – for a bewildering range of possible outcomes.

The BBC charter is renewed once every ten years; the licence fee is set once every five years. The system has its flaws. The pace of change in the media means that at the end of the current charter period there are new issues, technologies and players – such as the iPad, iPlayer and the rise of Google and Facebook – that transform viewing habits and change the market in ways that were not anticipated a decade ago.

But overall, the process of reviewing the role and the purpose of the BBC and setting its budget for a good length of time has protected its independence and allowed broadcasting policy in the UK to be a little more than the lobbying battle which it sometimes seems to be elsewhere.

In Australia, a change of government has meant a new, reduced budget for the ABC just one year into what had been a much more generous three-year deal. The cuts that have been announced, like those at the CBC, suggest that the ABC has reached a tipping point where it can no longer afford to run its existing services and fund the switch to digital distribution and platforms.

Although some commercial rivals can point to harsher cutbacks in the private sector as a result of economic disruption, the ABC’s announcement that it is cutting back regional news services – part of the core of any public broadcaster – is a big statement. It is also a warning that the next round of cuts could be even more damaging.

The ABC is cutting back on rural and regional services in response to cuts to its budget. AAP/Joel Carrett

At the BBC, such public pain has been avoided up to now. Mark Thompson, the BBC’s director-general from 2004 to 2012, pursued a policy of cost cutting and efficiency savings which preserved services but which his critics argued was “salami slicing” and had begun to hollow out key programs.

But when the BBC did try to close services in 2010 with proposals to shut down two digital radio stations, 6 Music and the Asian Network, the public reaction was such that the BBC Trust vetoed the idea of closing 6 Music. Management themselves also came round to the idea of keeping the Asian Network.

Now, the BBC is talking about both service closures and structural and cultural change on an unprecedented scale. The management want to turn BBC3, its youth-oriented television channel, into an online-only service. The BBC said this move would pioneer how channels work in the future as the BBC moves to a more targeted digital delivery of its programmes and content.

In an even more radical departure, director-general Tony Hall has suggested that much of BBC’s in-house production could be spun off into a separate operation, lose its guarantee of 50% of BBC output and compete with the independent sector.

If this happens – and works – it could be a model for other public service broadcasters who up to now have retained significant in-house production capacity. What is clear is that a very different BBC is emerging. This is one with an emphasis on a more personalised digital experience, on partnerships with other creative organisations and on a leaner, more focused structure. This could well have lessons for other public broadcasters around the world as they struggle to make the numbers add up.

As services close in the UK – as in Canada and Australia – the people, far too often excluded from any real role in the debate over the development of public broadcasting, have one last opportunity to make their feelings clear about what they value in their public broadcasters before it is too late.

Public broadcasters too have one last chance to implement the radical transformations that they will need to embrace if they are to be beneficiaries of the digital revolution – rather than the big losers.