The television industry is made up of many different companies, some publicly owned and some privately owned. The BBC is privately owned and is
funded by a license fee that is paid be every household that has a television. ‘The BBC used its income from the licence
fee to pay for its TV, radio and online services, plus other costs’.
This means it is guaranteed an income every year no matter the
quality of the products it produces. It also means that it is not allowed to
make any money from product placement like other TV channels can, as it says in
its editorial guidelines, ‘the BBC must not commission, produce or
co-produce output for its license fee funded services which contains product
placement’. There have recently been concerns
over how the money raised by the license fee is being spent with many people
raising the issue of how much BBC stars’ salaries are. The BBC has come under
pressure to reveal the salaries of their highest paid stars but have not done
this, citing the right to privacy of the stars. Some have called for the license fee to be scrapped so the BBC will not be funded by the public and then
it will only be funded by its profits. These ‘profits at BBC Worldwide, their
commercial arm, rose by 10.3% to £160.2 million’ in 2010 so
there is clearly a strong argument for this.
The funding of the BBC through
the license fee has many critics with people arguing it is just another tax
people are forced to pay and anti-competitive. Historically the BBC had a
monopoly over the television and radio industries in Britain, meaning it had
absolutely no competition and dominated the industries, but this was broken
with the ‘arrival, first of independent television
in 1955, then commercial radio in 1973’. Further
calls for the license fee to be scrapped were renewed with the introduction of
cable and satellite TV and particularly the increasing popularity of Sky in the
1990s.
However the funding of the BBC through the license fee
also has many supporters. Some argue ‘the BBC produces a lot of output that the
commercial sector wouldn't even consider. It is vital to the cultural health of
the nation’. The argument that the BBC has an
obligation to provide a public service and therefore to educate as well as
entertain means that it does not have to fight for ratings by bidding for the
most popular American shows and can afford to cater for niche audiences as well
as the mainstream.
On the other hand ‘Channel 4 is a publicly-owned,
commercially-funded public service broadcaster’.
This means that they do not make money from the license fee and
instead are funded from advertising and sponsorship. They are also allowed to
gain income from product placement which is where ‘is where a
company pays a TV channel or a programme-maker/production company to include
its products or brands in a programme’.
Channel 4 is a business not made for profit and can buy and sell programmes as
it sees fit in order to be a successful enterprise. It was set up (with aid
from the government) to be an alternative to the BBC and to feature more
cultural and ethnic diversity. All its profits go back into the business and it
is a rare example of a publicly owned business that does not sell shares in the
business.
Other television companies such as British Sky
Broadcasting are funded through subscription and pay-per-view means. BSkyB is
also a publicly owned company so it has shareholders that own shares in the
company and can be consulted in the decision making process and also share in
the profits and losses of the company. Sky operates a range of services and
subscriptions and these services start from above £20 per month. These services
are increasingly multimedia so people can have Sky TV, Broadband and Mobile apps. Their Sky
Box Office and internet TV services bring in further income by allowing viewers
to watch certain programmes for an extra pay per view fee. For example a recent
Rolling
Stones concert could be watched live by paying a one off charge and now Premier
League football matches are being offered on a pay per view basis whereas
before only those who subscribed to Sky Sports could watch them.
Many
have accused BSkyB of being too dominant in the TV market and having a
monopoly that means there is less chance of competition being able to thrive.
It has even been investigated by the Competition Commission for this reason but
the commission found that there is little that can be done in the face of
BSkyB’s market power. Competition has increased in the form of subscriber
streaming services for film and television shows such Netflix and LoveFilm but
these do not have the same market share as Sky.
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