Media: Taking liberties with the free market: The BBC's hunt for revenue abroad may damage its domestic output, says Jay G Blumler

A little-noticed feature of BBC policy is its aggressive determination to become a major player in the international television market- place. The keenness of BBC Enterprises to sell abroad a programme about the Princess of Wales and the Duchess of York, which the corporation is not screening in the UK, is the latest and most high-profile example.

Although debates about BBC finance assume that it is wholly funded by the licence fee, in reality its commercial earnings are steadily increasing, and policies are in place to boost them further. Two questions arise from this: in following international opportunity rather than domestic need, is the integrity of BBC programming decisions in jeopardy? And if so, can measures be devised to counter the threat?

In 1991-2, the turnover of all BBC commercial subsidiaries exceeded pounds 200m - or one seventh of the value of licence fee payments ( more than pounds 1,400m). In the same year, programme sales abroad earned pounds 47m and co-production finance brought in another pounds 25m. Combined, both sources of income have quadrupled since 1981, growing at more than 10 per cent annually.

In 1991 only about 7 per cent of the corporation's gross production costs were recovered by these resources. But the BBC is now resolved to plunge ever more deeply into international waters. In Extending Choice, its charter review manifesto, this is presented under the heading, 'Communicating between the UK and Abroad', as one of four main goals for the future (on a par with 'Informing the National Debate', 'Expressing British Culture and Entertainment' and 'Creating Opportunities for Education'). And in January, John Birt, the Director-General, announced measures designed 'to ensure that we have the maximum incentive to generate additional revenue'. Whereas, for example, earnings from programme sales have always gone directly into the corporation's central coffers, from April 1994 originating programme departments will hold and benefit from all ancillary rights for the first three years.

The bases of such a policy are readily understandable. Shifting expectations of BBC performance in the political arena, Thatcher-inspired and Peacock-endorsed, provide the backdrop. These include the belief that only through competing in the same market-place as other broadcasters will the corporation become an efficient prospect. The Government might also regard the BBC as Britain's champion in the expanding global media market-place - like Berlusconi in Italy, Bertelsmann in Germany and Hachette in France.

For its part, the BBC aims to assure British viewers that no stone will be left unturned in exploiting the earning power in secondary markets of programmes made possible by their licence fee payments. At a time when the economics of production is relentlessly pushing costs beyond conceivable increases in the licence fee, international revenues also offer help in filling the funding gap, sustaining standards of quality and enabling major projects to be realised that might not reach the screen without supplementary finance.

The BBC seems keen to present its commercial activities as both central and supplementary. It claims that the financial earnings it strenuously pursues top up but do not rival licence fee income, and that they will support, not distort its provision of a distinctive programming service, stamped by range and quality. But such a portrait may be overly sanguine.

Firstly, the prospect of even modest additional revenues may exert a greater influence on programming than the literal sums imply. Co-production finance can serve as crucial marginal money, able to make the difference between a green and red light for a major project.

Secondly, when gauging the potential impact of external business involvement on internal programme planning, the uneven participation of different programme areas in the international market-place must be kept in mind: for some, the resulting earnings may be little more than welcome gravy, but for others, dependence may already be a reality, even if this appears not to be the case for the organisation as a whole.

At present, for example, 50 per cent of BBC natural history budgets are said to be covered by foreign revenue. Major documentary and dramatic projects often need prior assurances of foreign support to secure production go-aheads. When recently conducting a study for the Broadcasting Standards Council called The Future of Children's Television in Britain, I found that its economy was 'increasingly becoming more dependent on international markets'.

Thirdly, far-reaching organisational pressures may be activated by the growing importance of the international market-place. A programmer's chances of winning a firm commitment from his channel controller for a production proposal will be stronger if its prospects of attracting international support appear favourable. Gaining a worldwide sale and presence may also change the way that individual programme-makers work; they may seek and prize international visibility as a mark of their professional standing.

It is difficult to condemn the BBC for its current business policy, whatever its tensions, even contradictions. It is valiantly striving to combine the vision of a fresh public service with a newly found entrepreneurial thrust. Nevertheless, several causes for concern arise from the growing commercialisation of the BBC.

There may be a point at which emphasis on programmes with international appeal will conflict with the needs of the British audience for material relevant to its domestic circumstances. Moreover, the international market-place is no natural supporter of programme range. Arguably, it is even structured against diversity - favouring, for example, longer series; programmes with more universal or immediate appeal, depending more on action, emotion, compelling scenes, sounds and pictures, rather than on words, ideas and analysis; and programmes featuring internationally known actors and celebrities.

On the subject of children's television, knowledgeable producers told me that animation of all kinds - puppetry and drama from culturally similar societies (such as Australia and Canada) - travel most easily across national boundaries, in contrast to much other drama and factual and magazine programmes.

Co-production carries the risk that creativity will be compromised to meet international partners' differing needs and demands.

Finally, the increasing involvement of the BBC in international deal-making may gradually transform its internal corporate culture. Along with other imperatives to run a tight financial ship, it could subtly, but in the long run decisively, inject a different set of priorities into the organisation's governing ethos.

In such mixed circumstances, three steps must be urged on the BBC. One is to frame guidelines, safeguards and boundary limits, intended to ensure that its international tail does not wave its domestic dog.

Certain ultra vires activities - to be avoided because they are in direct conflict with the essential principles and purposes of public service broadcasting - should also be specified and discussed. It is possible that had such a policy plank existed before, two recent BBC ventures might not have been pushed through without modification.

One is the deal whereby the Murdoch-owned satellite channel, Sky Sports, gained exclusive rights to live coverage of Premier League football matches on the strength of a BBC undertaking to screen edited excerpts in its Match of the Day round-up. Since this transaction deprived many sports fans of coverage that was hitherto freely available on a terrestrial service, it arguably violated a long-standing principle of public service: the universal access of viewers to widely valued programming.

The other is UK Gold, the joint BBC-Thames satellite channel, featuring popular programmes from both organisations' archives. This arguably conflicts with the BBC's long- standing refusal to countenance reliance on advertising revenue, since programmes that were originally transmitted without commercial breaks are now regularly interrupted by advertising spots.

The last step is to document and publish a fuller account of the BBC's commercial activities than is currently available. In its present form, the Annual Report is almost useless - both sketchy and self-promoting. Information should hereafter be provided on the scale of the BBC's commercial activities; their impact in the various programming areas; and their effects on the corporation's domestic programming pattern overall.

Jay G Blumler is emeritus professor of the social and political aspects of broadcasting at the University of Leeds. A longer version of this argument will be published on Friday by the British Film Institute in a series of essays on the BBC Charter Review.

(Photograph omitted)