For whom the Bill tolls

A US-owned ITV would be disastrous for public-service broadcasting, writes Tim Gardam, now stepping down as Channel 4's director of TV
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The Communications Bill has had an undignified few weeks. No one has apparently thought it odd that the future of television, arguably the most potent democratic medium in history, should be fought out, clause by clause, in the House of Lords. Yet it is in the Lords, not the Commons, that there has been the time and the energy for sustained scrutiny.

The passage of the Bill through the Lords has brought into focus the stress fractures in the Government's strategy for public-service broadcasting in the digital world. Lord Puttnam's Charge of the Aesthetic Brigade has pointed up the critical points: the possible future control of Five by BSkyB, and the future direction of ITV under an American owner. But he has opened up a far broader front. What does the Government expect us to be viewing on our television screens after all this is done?

At the same time as commercial television will be opened up to the bracing energy of global market competition, the Government intends that it should also maintain some public-service responsibilities: programmes should not be commodities designed simply to maximise shareholder profit. This applies to ITV, Channel 4 and Five, too, not just to the BBC. How are they to achieve this in future?

In the old world of analogue television, where technology ensured the limitation of channel choice, we got an extraordinary diversity of content. The commercial channels, through their control of the advertising market, produced a revenue surplus, which could be invested in programmes that did not have to squeeze every pound of revenue from their slots.

That world has vanished. Today, the public-service broadcasters' share of the market has fallen to close on 75 per cent. However, they make at least 95 per cent of British-made programming. By contrast, the digital channels almost universally trade in pre-sold products - sport, films, repeats, pre-branded programmes, or in a narrow range of surefire genres: sex, Nazis and pyramids.

In the digital world, it is becoming increasingly hard to launch a new programme and give it time to become noticed and established. Risk has become riskier. When the government switches off the analogue signal and we all become digital viewers, any incentives the commercial public-service channels once had to make programmes for any other reason than maximising audience share will have disappeared altogether. So what incentives can a regulated market provide to make programmes not simply driven by maximum return for minimum investment?

One simple litmus test may be the range of British-made programmes. It seems likely that ITV will be up for sale, possibly going to an American owner. Would that matter? The cultural pessimists say it will diminish British-made programming, while the Government believes that it will open up the British production market to dynamic commercial investment. No American broadcaster, it says, would be so foolish to risk its investment by replacing popular British programmes with alien American ones.

Here is a cautionary note. One hour of British-made drama costs £600,000-800,000 an hour. A popular drama can get an audience of 7 million on ITV. A reality show costs probably £180,000 an hour. It can get the same audience, or larger. However, an American series such as CSI on Channel 5 will cost around £150,000 an hour to acquire. On ITV, it would, perhaps, get five million viewers. To an American owner of ITV, it might be increasingly attractive to launch its best home-grown series on the British market. Its share may go down, but the profit per slot would increase and it would be getting the most out of its worldwide inventory, as its Los Angeles headquarters would expect it to.

A second cautionary note: some years ago, Channel 4 and Discovery, the most idealistic of the US commercial stations, co-produced the series Shanghai Vice. Both invested around £150,000 an episode. The series was acclaimed, but it had subtitles. To this day, I believe, it has not been shown on Discovery. It made more economic sense for Discovery to write off its investment and screen something guaranteed to give higher ratings than to take the risk with such demanding material.

The Ofcom economists promise all manner of data to measure the quality of British television, forgetting that if you measure quality, it rather inconveniently comes out as quantity. The Communications Bill sets Ofcom the hardest task of any regulator. Can it identify the economic incentives to encourage commercial enterprises to take creative risks that cannot be justified in solely commercial terms? If not, then commercial public-service competition for the BBC will disappear, and the fissure in the current Bill will break open and break with it the Bill's intention.