BBC in the 1990s: Implications for Public Broadcasting in an Era of Industry Restructuring (1)

Throughout the 1980s and 1990s, broadcasting industries have been undergoing a tumultuous and unparalleled change. Especially, a series of tremors, such as the interwoven new developments ranging from the digitization of information to the globalization of electronic networks, have triggered the beginning of an industry restructuring. Consequently, these developments have altered the landscape of television broadcasting and made for a new environment for television broadcasters. The new environment then has inevitably changed the working practice of most television broadcasters across the world, both public and commercial broadcasting services, even including those role models of public broadcasters such as the BBC.

During the last two decades or so, British broadcasting system has been evolving from a "controlled" competition into a much freer market competition. Particularly since the early 1990s, because of the swift development of new broadcasting technologies of cable, satellite and digital broadcasting, the BBC has been facing an increasingly competitive world and has encountered various unprecedented challenges. One of the major challenges was the battle with BskyB, whose emergence as the rise of satellite television was not only viewed as a new wave of television, but was also considered as having had an enormous impact on various aspects of television broadcasting and having symbolized important dimensions of the development of British broadcasting.

The New Wave of Television

When satellite broadcasting just emerged, many people thought terrestrial broadcasting enjoys enormous advantages over its new rivals, especially in the United Kingdom's environment where license fees must be paid along with satellite television subscriptions, as well as the initial hardware investment. An audience research conducted in the early 1990s found that the majority of UK households did not intend to become satellite households: 77 percent of the respondents did not intend to purchase a satellite dish and 33 percent of those rejected satellites mainly because `the BBC and ITV provide enough channels for them.'

Therefore, satellite television was outside the mainstream of UK television—to the majority people, satellite television was too expensive, too far-fetched, and too unnecessary. Especially for Murdoch's satellite Sky Television, most observers concluded that it would be gone overnight. Yet, just several years later, many media experts began to acknowledge that satellite TV was to stay and things indeed changed quickly. Despite that the Independent Broadcasting Authority (IBA) issued what was viewed as a monopoly license to British Satellite Broadcasting (BSB), Murdoch's Sky Television emerged in Europe anyway. As soon as Sky Television appeared, it immediately secured a direct-to-home viewer population more than ten times greater than had BSB. In November 1990, BskyB was formed from the merger of the two companies of Sky Television and BSB and Murdoch became the principal shareholder of BskyB.

Although the overall market share for BSkyB was only two percent in 1991, satellite television viewing accounted for about a third of the viewing time in UK homes with access to it. Although BSkyB's competion against the existing broadcasters during the first few years was difficult—for nearly a decade, the new comer lost hundreds of millions of pounds—things were starting to change. Gradually, satellite broadcasting survived the initial difficulties and bit by bit quietly seized more market shares. The BBC's audience shares declined from 100 percent before ITV first aired in 1955, to 51 percent in 1980, and to less than 38 percent in 2000. Particularly, during the last few years the competition was basically between the BBC and BskyB and other cable and satellite broadcasting, in which the BBC's market shares have dropped more than 13 percent, more than a quarter of the corporation's total market shares at the beginning of the 1980s.

In the contrast, satellite and cable TV growth had a steady climb. `Better' choices for viewers, technological improvements in dish size, reception quality and lower costs were having an obvious impact. Despite that in 1991 the combined market shares of cable and satellite television broadcasting in Britain were only four percent, by 1993, cable, Sky channels, RTE and Ulster TV already commanded six percent of the total audience viewing, with BSkyB alone serving 3.5 million households. A study analyzed that satellite broadcasting offers increasing freedom of choice for its viewers and identification with being European and helps one travel to new places and to reimagine the boundaries of the community.

BBC's Competition Strategies

Since the early 1990s, the BBC has responded to the fierce competition in a number of ways ranging from institutional and structural reform, redesigning of service orientation and programming theme, and re-direction of business management and corporation affairs, to setting up new goals of overseas expansion. In other words, the competition or surviving strategies included financial, managerial, technological, and media philosophy and concept related responses.

The BBC's first response was to reduce the operation costs. The corporation's topmost concern was its ability to compete financially — taking into consideration spiraling production costs, rights fees and the cost of constant technological improvements. The BBC began to streamline its workforce by cutting 4000 jobs, saving $465 million and pledging an additional 15 percent saving over five years in the late 1990s.

The second response was the restructuring of the company and the redesigning of its business strategies. In spite of strong criticism, the corporation merged its news operations—radio, television, and the World Service—into one operation. Also, in 1997 the broadcaster sold its transmission service to Castle Tower for $398 million, marking the first act of privatization of the BBC — something viewed either as a more bold step or as an even worse situation. In addition, the BBC began more aggressively to sell its programming overseas and to purchase programming from the United States for a cheaper cost. The corporation used those popular and profit-making U.S. programs, such as ER, NYPD, and X-Files, to fill its evening prime time. Despite that almost all of these steps were controversial, financially speaking, these restructuring and redesigning not only saved production costs but also attracted more viewers.

The third response was to seek cooperation with public broadcasting services in other countries and to expand the BBC's overseas market. The British public broadcaster strengthened its joint venture with the Public Broadcasting System (PBS) in the United States and increased programming to be viewed in both the UK and the U.S. In the mid-1990s, the BBC began new endeavors in cooperation with the U.S. Discovery Channel and the Flextech Channel in England. The two companies together launched BBC America and the World Service in the U.S. in early 1998. In 1999, BBC America reached 11 million subscribers, one million ahead of its target.

The BBC's fourth response was the technological innovation. The corporation has adopted new communication technologies to compete with those new communication technology based commercial broadcasting services. The BBC developed a $50 million satellite news channel, BBC News 24, a news service for UK viewers offered on a non-subscription basis, and started up four subscription channels. Moreover, in 1998 the BBC launched its much-anticipated digital broadcast service, BBC Choice, as the first new general channel for 34 years and available across all digital platforms. In so doing, BBC World Service, a 24-hour international news and information channel, has reached 60 million homes in 187 countries.

The fifth response was the BBC's adjustment of programming philosophy from `broadcasting to the overall audience with one set of programming' to `broadcasting to various segments of audiences with a number of choices.' The broadcasting service announced that it was changing its `long held' mixed programming philosophy and was moving toward a `themed approach'. The BBC is re-establishing its five channels into themes with major boosts in monies spent for programming. BBC 1 and 2 remain terrestrial, while BBC 3, 4 and 5 continue to be digital subscription based. And, while BBC 1 is repositioned as `the gold standard of mainstream television', BBC 2 moves toward `specialist factual programs' and yet remains a `test bed' for entertainment for young audiences. As BBC 5 remains BBC News 24 as before, BBC 3 (BBC Choice) and BBC 4 (BBC Knowledge) both offer more radical experiments in drama, comedy and music and unashamedly intellectual areas and current affairs programming respectively. Furthermore, the evening news is shifted to 10 pm from 9 pm in order to take up the void left after ITV vacated that spot when it moved to an 11 pm time slot in 1999.

Evaluation of Results

How to evaluate the results of those responses were sharply divided, though. Some experts thought the functions of those strategies were positive, effective, and fruitful, or even called that the BBC's course over the last two decades has provided public broadcasters across the world with a new model of how public broadcasting not only can survive the competition but may also be able to turn crises into opportunities to well reposition itself in a new, drastically changed global arena. But some others saw those responses have at most delayed or slowed the public broadcaster's shrink in the competition, which may just be a small "fortunate thing" within a big "unfortunate thing". Still, some experts looked those strategies very negatively, criticizing that what the BBC had done in fact reflected that public broadcasting service has been abandoning its missions and has been steering itself to a commercialism driven, rating-oriented direction.

■Junhao Hong
Associate Professor
Department of Communication,
State University of New York at Buffalo

■Lawrence Sherlick
Ph.D. Candidate
Department of Communication,
State University of New York at Buffalo
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