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5 September 2020

An Open Letter to the New Director-General of the BBC

Tag(s): Business, Marketing, Languages & Culture
Tim Davie
Director General
British Broadcasting Corporation
Broadcasting House
London W1

Dear Tim

As a fellow Procter & Gamble old boy may I congratulate you on your appointment as Director-General of the BBC. I have known several of your predecessors. I had dinner with Mark Thompson, lunch with John Birt and hosted Greg Dyke at a Spurs v Manchester United game as we’re both United fans.

 We have met when you hosted a group of P&G Old Boys to show us round Broadcasting House and discuss the issues of the day. I asked you about the Licence fee. I find it odd that the BBC does not only get the advantage of a guaranteed income from its customers enforceable by law but this is usually inflation protected as well. Furthermore you get the benefit of household growth and so I challenged you on this point. How was it justifiable? Your answer seemed to show that you had not really thought about it before. You said my question had made you think that as Marketing Director you should also be responsible for the whole issue of the License Fee. Well, now you are.
 
I have read the speech that you delivered in Cardiff this week and believe that it is a very fine start in your new position. It clearly shows the signs of someone with a genuine understanding of business and the markets in which you operate. Most of your recent predecessors lacked such experience and understanding. This I believe has led the BBC to the crisis that it now faces. You set out a clear vision and I wish you well in this endeavour because like you I agree that a universal BBC really matters and that the alternative of simply moving to a subscription base would mean that you lost any characteristics of the BBC as a public service broadcaster and you would not have the deep pockets of your established competitors like Netflix and would simply lose in that war. Netflix has no commitment to public service broadcasting in any shape or form anywhere in the world. It is simply out to dominate television and obviously makes no attempt to inform and educate as well as entertain.

You’re also right to say that the BBC has no inherent inalienable right to exist and that the future of a universal BBC can no longer be taken for granted. As you say you are only as good as the value you deliver your audiences, your customers. You must grow that value. A subscription BBC would only serve the few rather than the whole of the country as you are setting out to do.
You have set out four priorities:
  • you will renew your commitment to impartiality
  • you will focus on unique, high impact content
  • you will extract more from online
  • and you will build commercial income
You’re absolutely right to renew the commitment to impartiality. You quote research carried out by Ipsos Mori that shows that over 60% of people in the UK turn to the BBC first as a source of trusted news. The next nearest source gets 8%. This trust extends across the world and in a recent study you quote the BBC is the most trusted news brand for Americans, ahead of all major US news brands. In an age of fake news, social media campaigns, echo chambers opinion, noisy partisan media outlets, this is surely the best time for the BBC. But many of your own news reporters have shown their bias. I do not think this is institutional bias but rather that the BBC tends to recruit from the same metropolitan bubble and does not reflect the views of the wider community. This became particularly apparent at the time of the exit referendum. The BBC was scrupulously fair during the referendum as an active policy but immediately the result was in the policy was dropped and the true views of BBC commentators emerged.

Alistair Stewart, the distinguished ITV news presenter, recently gave an interview where he said that when he first joined Southern TV as a young graduate having been vice president of the students union, the person who recruited him said “ I imagine you’re somewhat to the left” which Stewart confirmed. “Right” said his new boss. “You leave all that at the door right now. From now on your political views are a matter for your conscience but not your profession.” And that was a commercial station.

You clearly get this. In your speech you say “If you want to be an opinionated columnist or a partisan campaigner on social media then that is a valid choice; but you should not be working at the BBC”. Quite right.

The second priority is to focus on the content which delivers the best value for licence fee payers. You say that the BBC has tried to cope with increasing competition by making more and spreading themselves too thinly and you talk about duplicating work between different parts of the organisation. At Procter & Gamble you will have learnt the importance of productivity and I’m sure that you will bring this commercial edge to the BBC’s work.

Your third priority is extracting more value from online. I believe the BBC website is outstanding and I use it nearly every day but I’ll come back later to a relevant commercial point touching on the website.

Your final priority is to build your commercial business and this is something that you have been personally responsible for in the last few years and I am confident that as Director-General you can only make this more successful as a way of earning revenue from the excellent content the BBC can produce.

You are looking to make changes in the organisation and commit to making a better culture and avoid the bureaucracy and internal politics. I believe that much of this set in under one of your predecessors John Birt who seems to have brought rather odd ideas of cultural management which have persisted in the organisation. You also want your organisation to be more representative of the UK as a whole. Here I think you need to tread carefully. You state that you want at least 20% Black, Asian and Minority Ethnic employees reflecting the UK population. But this vastly overstates the proportion of Black, Asian and Minority Ethnic people which according to government figures was less than 13% in 2019. And that includes the whole population including children. You will not be employing any children and so the figure for adults would be nearer 10%. On the other hand you say that you should employ at least 12% disabled people.  According to government figures there are 13.9 million disabled people in the UK representing 22% of the population so you seem to have both these figures the wrong way round.

In general I think you have made a good start but I think there are three things you could do to go even further and have even greater success

!. At some point in the not too distant future you will be negotiating a new licence fee with the government.  I think you should offer to reduce it while maintaining free licenses for those aged over 75. This would then provide not only political cover with the government, media and the population at large but also give you discipline to enforce reductions in expense and improvements in efficiency.

2. I said that I would come back to the online position. The BBC has an excellent website which it should maintain but it is in a unique and completely unfair position. Its income is guaranteed by virtue of the licence fee enforced by criminal law and with the benefit of household growth. The population has grown by over 10 million in the last 12 years. That’s approximately 3 million new households, most of which are paying you the licence fee. No other business probably in the world has the benefit of guaranteed income with regular increases and the ability to use the criminal law to collect from defaulters. Your competitors all have to fund their websites through advertising or subscription or both. It is simply unfair competition and you should as part of your licence negotiations say that while you are willing to see a reduction in the licence fee you’re also willing to charge subscriptions for those who want to access your website. One of your predecessors Mark Thompson has made a huge success at the New York Times doing just this.

3. I wrote an open letter to your predecessor some three years ago [i]when the BBC got into difficulties over the difference in pay for men and women, some of which has since been corrected. My point was not this but that how absurd these pay scales were. They were staggeringly high but also all over the place with no obvious rationale. There was a time when the BBC paid its stars a reasonable salary and was quite happy for them to earn additional money in the commercial markets. Now they are paid absurdly high salaries and are still able to earn additional money in the commercial markets. Fiona Bruce is paid £350,000 a year for reading an autocue and for fronting programmes like the Antiques Roadshow, where it is the expertise of the experts that we are interested in, but I understand she also earns very high fees for outside work. Why not pay her £50,000 a year for what it’s worth and let her earn those high commercial fees outside?

Tim, I wish you well in your endeavours and believe that you will be a great success but I hope you won’t hold back.

Keep safe & cheerful

David


[i] An Open Letter to the BBC 14th October 2017 https://davidcpearson.co.uk/blog.cfm?blogID=541
 
 




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