Not suprisingly, the suggestion is as welcome in media circles as Michael Heseltine would be in Grimethorpe. The BBC's discussion handbook, Paying for Broadcasting, published yesterday, carries a convincing argument against advertising on the Beeb, expounded by Brian Sturgess, fellow in financial economics at the University of Bradford.
Put simply, Mr Sturgess argues that advertising on the BBC will seriously affect the finances of the ITV network, Channel 4 and the yet to be launched Channel 5, and will do little to help the BBC's finances anyway.
Mr Sturgess says that allowing advertising on the BBC will not increase the size of the TV advertising market. He argues that the market is saturated, showing compound growth of 4 per cent a year up to 2000 compared with 7.1 per cent per annum during the 1980s.
He says that in 2000 the BBC could take over pounds 300m of advertising a year in current money, around a fifth of the expected budget. Most would come from ITV, leaving it with about pounds 1.3bn of advertising revenue, about pounds 200m less than it needs to make its programmes. Channel 4 would lose about pounds 40m of advertising, and if Channel 5 gets off the ground, its revenue would be cut by a crucial pounds 20m. The commercial sector already faces enough of a challenge from the introduction of satellite and cable TV. Even allowing a limited amount of advertising on to the BBC would tip the financial balance of ITV irrevocably into the red, and that would be wrong.Reuse content