Dominic Midgley

Murdoch’s right: the BBC will destroy its news rivals

Dominic Midgley has just lost his job in the News Corp empire but still agrees with its young proprietor

issue 12 September 2009

A Guardian survey published last Friday showed that eight out of ten members of the public backed the BBC against its detractors. The opinion poll was commissioned in response to a wide-ranging attack on the corporation by James Murdoch, son of Rupert and chief executive of News Corporation for Europe and Asia. In his MacTaggart Lecture at the Edinburgh television festival at the end of last month, he had accused the BBC of a ‘land grab’, adding: ‘The scale and scope of its current activities and future ambitions is chilling.’

Now, I hold no brief for Mr Murdoch. And he holds no brief for me, as he effectively fired me last month when he approved the closure of thelondonpaper, the free newspaper on which I have worked for the past three years or so. But as the arguments provoked by his lecture ricochet around the media world, I find it hard not to agree with him. The Guardian poll put me in mind of a once well-known advertising slogan which ran: ‘Eight out of ten owners said their cats prefer Whiskas’.

The Whiskas brand — then as now — was owned by consumer-goods giant Procter & Gamble (global turnover last year: $83 billion), which regularly spent millions of pounds a year marketing its flagship catfood in the UK. It was easy to believe a slogan suggesting P&G had bludgeoned the market into submission. These days, however, things are different. The march of the supermarkets’ own-brand products and the rise of premium alternatives means that fewer cats are tucking into Whiskas. The relevance of Fluffy’s changing tastes to the status of the BBC is, of course, that while even the mighty P&G is subject to the laws of the market, dear old Auntie is not. As Mr Murdoch put it: ‘The BBC is dominant. Other organisations might rise and fall but the BBC’s income is guaranteed and growing.’

Backed to the tune of £3.4 billion a year by the biggest sugar daddy in town, the licence fee payer, the Beeb’s increasingly well-paid executives can afford to forge on regardless of the preferences of its audience or the interests of the nation as a whole. Two of the stated aims of the current BBC charter, framed in 2007, are: ‘sustaining citizenship and civil society’ and ‘stimulating creativity and cultural excellence’.

There are respectable arguments to be made on both sides about whether these aims are being achieved in the context of broadcasting — with Charles Moore eloquently leading the antis — but many observers would say the corporation still does a great deal to set standards in programme-making, in entertainment, documentaries and current affairs. At a time when television advertising revenues are under severe pressure, threatening to drive down standards in the commercial sector, that is all the more important. After all, despite the advances of technology, television and radio will remain part of all our lives for many years to come.

The situation is very different when it comes to the BBC and the internet — where the corporation’s role is largely predatory and destructive. For years, newspapers agonised over how much to invest in their internet presence, unsure how to make it pay. But as newspaper sales continued to decline, with more and more readers migrating to online news sites, it became clear that the internet would have to become a significant revenue contributor if the publishers’ quality of service was to be maintained. After all, how do you maintain spending on bureaux in foreign capitals, and customised coverage of international crises and disasters — let alone domestic news, politics and business — against a background of ever-shrinking revenues?

At first it was thought that internet advertising would be the answer, but it has signally failed to emerge as a major contributor. This is partly because response rates to static ads are poor and users have a tendency to vote with their feet — or, more accurately, their mouses — if site owners introduce more intrusive forms of advertising, such as pop-ups. And the site that appeals most to the British user who wants high-quality content in a fuss-free environment is bbc.co.uk.

According to the Alexa Traffic Rank system last year, BBC Online was the 27th most popular English-language website in the world. The corporation itself describes its online operation as ‘Europe’s most popular content-based site’, with 13.2 million UK visitors accessing the site each day.

This is all a far cry from the roots of a service that began life as a radio station. When the BBC was founded in 1922, Sir Tim Berners-Lee, the man who invented the World Wide Web (to all intents and purposes, the internet as we know it today), was not even a twinkle in his father’s eye; indeed, his old man was less than a year old.

And yet the BBC, protected by its historic ‘public service’ remit, has been allowed to metamorphose into the dominant force in cyberspace, making it extremely difficult for mainstream news competitors to charge for their content.

The likes of the Financial Times and the Wall Street Journal, and smaller specialist titles, may succeed in getting users to subscribe for premium content via password-protected parts of their sites. But what chance do mass-market contenders have when the vast resources of the Beeb are devoted to offering more than two million pages of content absolutely free, 24 hours a day?

With the newspapers’ decline set to continue — the bloodbath among London’s free titles is just one more symptom — this presents us with a worst-case scenario in which the only well-funded purveyor of hard news is, in effect, an organ of the state. There are those who argue that, out in the Wild West that is the internet, the only sensible course of action is to adjust to the conditions that persist, however anarchic or illogical they may be: it is folly to attempt to resist them.

But experience shows that chaos theory does not always win out. Take the example of file-sharing — teenagers (and others) downloading music without paying a penny. As this practice rapidly spread, many pundits said the movement was unstoppable and that the big labels and their star acts would have to resign themselves in future to making money out of concert tours and the sale of merchandise. But tell that to Spotify: following its deal with Apple announced this week, this Swedish company — which pays commission to copyright holders — is sweeping the globe with a new format that defeats the downloaders.

Nor can we rely upon citizen journalism to fill the gap left by newspapers that throw in the towel. Untrained, underfunded and often unreliable, they are no substitute for the staffs of properly backed media outlets.

When Greg Dyke was director-general of the BBC, he introduced one of the most fatuous and cringe-making corporate initiatives ever devised. If staff felt that creativity was being stifled in meetings, they were invited to flourish a yellow card bearing the words ‘Cut the crap, make it happen’. Mr Dyke is a rabid supporter of Manchester United and his card-flourishing idea was clearly meant to be the media equivalent of a booking. It could be argued, however, that what the BBC is up to now constitutes a sending-off offence. It’s time to show them the red card.

Dominic Midgley is associate editor of thelondon-paper (until it closes on 18 September).

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