For everyone’s sake, we can’t allow the BBC’s media monopoly to persist

Craig Barrett 6.00am

A few weeks ago I was reading the newspapers in my local pub when I noticed on one of the blackboards the message “Sunday papers - no Murdoch”. On departing, I took great care to leave behind my Sunday Times, prominently displayed for anyone else who wished to read it.

This was in the midst of the phone hacking scandal and after the closure of the News of the World, but the pub’s targeting came as something of a surprise. I had believed that most people in the real world were not interested because they were fairly certain that such tactics had been employed all along. The whole thing seemed a ploy by the media’s Murdoch-loathing elements to send the might News International army well and truly off course, so preventing the total takeover of BSkyB. The BBC and the Guardian certainly gave the story much more prominence than the rest.

Something still jarred me. The BBC complained about a potential media monopoly, conveniently ignoring its own near total dominance of news in this country. The BBC has 70 per cent of news viewers (up from 60 per cent in 2002), as compared to 18 per cent for ITV, 6 per cent for Sky and 4 per cent for Channel 4 (encouragingly, Ofcom is launching an investigation into this).

For all its claims of independence, the BBC has long propounded a left-leaning agenda and is swift to criticise anything done by the Conservative party or to downplay bad behaviour from the Labour party. Too often this is dismissed as mere hysteria but a quick scan of Peter Sissons’ memoirs shows that what many of us have always suspected is, in fact, correct.

I can also cite another former BBC employee caused total astonishment amongst her colleagues when she announced in 2008 that she was voting for Boris Johnson rather than Ken Livingstone.

The BBC claims to be independent but it manifestly is not. It complains about monopolies because of a dislike of one man yet revels in its own domination. It likes to behave like a commerical organisation but rests easy on the comfort of licence fee income.

The best recent example of this is the schedulers’ decision to screen the final series of Spooks at 9.00pm on a Sunday. If I recall correctly, Spooks had always aired on Monday evenings. Why the change? It cannot be mere coincedence that ITV’s flagship show, Downton Abbey, this weekend returned to its regular 9.00pm Sunday evening slot.

When there were three channels, ITV’s position as the terrestrial broadcaster with adverts was secure. The ‘market’ was such that it didn’t matter if there was a ratings war - advertisers only had one place to go. Nowadays, satellite and digital broadacsting have forced ITV into an increasingly weakened position. Too many channels are chasing too few advertisers. At one stage, ITV was in such a bad state that it was ripe for takeover (by BSkyB). If we believe City rumours, ITV put in place funding arrangements with its syndicate of banks to borrow enough to give shareholders a dividend, thus bribing them to reject any bid.

The BBC is immune to all these trials and tribulations because of its guaranteed income from licence fee payers and taxpayers. As Jeremy Paxman said in 2007:

"The idea of a tax on the ownership of a televsion belongs in the 1950s. Why not tax people for owning a washing machine to fund the manufacture of Persil?"

Last year, licence fee revenue comprised £3.513 billion out of the BBC’s total income of £4.993 billion, generating a surplus (what in the real world we call profit) of £483 million. ITV’s turnover was £2.064 billion, generating a pre-tax profit of £286 million. ITV has net debts of £188 million and its bonds are rated as sub-investment grade, which affects its ability to attract funding.

Needless to say, with billions of pounds of public money at its disposal the BBC has no such difficulties. Even the BBC’s “other income” is three-quarters of ITV’s total.

The BBC is happy to sell programmes abroad for hard cash. It is happy to have adverts on some of its channels (Dave, GOLD, Yesterday etc, which are all part-owned by the BBC). It is happy to make commerical sales and acquisitions (e.g. Radio Times and Lonely Planet). Yet the BBC insists on maintaining an antediluvian public service persona.

The BBC cannot have things both ways. Either it accepts that it is a commercial organisation and we remove the licence fee subsidy; or it accepts the fact that its special status skews and damages the competitive marketplace.

It does not have to screen its best programmes in the middle of the night but the BBC should avoid making calculated decisions to harm its less fortunate rivals. Every time the BBC sparks a ratings war, rivals are forced to work that bit harder to make up the ground. Each ratings fall makes it more difficult to attract advertising and funding for new content - all problems that the BBC doesn’t face.

If the BBC is permitted to abuse its position in this way, the result will be the crowding out of competition. Conservatives should be ensuring that the market is allowed to operate efficiently.

Sunday night’s ratings do suggest it was Spooks that lost out to Downton Abbey. Good news for ITV, but a rare battle won.

In a marketplace perverted by a publicly subsidised broadcaster, the longer war is one that commerical TV cannot win.

Follow Craig on Twitter @MrSteedUK