Networks and Governance in Broadcasting Stephen Pratten Department of Management King’s College London CBR Summit: 29-30 March 2006 Innovation and Governance
Motivation • Network forms of organisation have been identified within the UKTV programme production sector since the early 1980’s • These networks have been systematically promoted and protected via a series of regulatory interventions • The organisations that have traditionally dominated the industry have had to respond to these developments and have done so in ways that have ensured that they themselves have become increasingly enmeshed within these network forms • Aims here are to (i) provide context, (ii) briefly map out relevant aspects of the changing organisational and institutional landscape of UKTV and (iii) consider three alternative interpretations of the transformations that have characterised the sector CBR Summit: 29-30 March 2006 Innovation and Governance
Context Prior to the 1980’s • Public service broadcasting, however ill defined, was accepted as the central reference point for broadcasting policy debates. At the inception of broadcasting in the UK the remit for the new public service provider, the BBC, was not only to ‘educate, inform and entertain’ but importantly also to act as a patron for creative workers • The aim of providing programming that served to educate, inform and entertain was believed to be at risk if creative workers were exposed to working environments and requirements driven solely by market forces CBR Summit: 29-30 March 2006 Innovation and Governance
Context Prior to the 1980’s • The vertically integrated organisation - with controlled entry, stable long term employment contracts, extensive internal training programmes, etc - was recognised as the form best able to deliver Public Service Broadcasting and foster an appropriate environment for creative workers • The consensus regarding the goals and appropriate organisational form for broadcasting survived the demise of the BBC monopoly. The highly regulated commercial ITV companies that emerged in the early 1950’s mirrored the BBC in orientation and internal structures CBR Summit: 29-30 March 2006 Innovation and Governance
The Influence of the Market Critique on Broadcasting Policy in the 1980’s • The consensus concerning the aims and structure of UK broadcasting while broad and deep was not accepted universally. There always existed marginalised critics, the most notable amongst them being Ronald Coase, who insisted that there was no good reason why broadcasting should not be organised along competitive lines • By the 1980’s the neo-liberal critique was central to UK policy debates not least in broadcasting. Thus for many the Peacock Report into the funding of the BBC of 1986 marked a turning point in broadcasting policy and signaled a decisive shift toward the construction of a market framework for the delivery of broadcast services CBR Summit: 29-30 March 2006 Innovation and Governance
The Peacock Report and its Consequences • A market driven agenda can certainly be identified in parts of the Peacock Report • However the Peacock Report also found room for Public Service Broadcasting suggesting that consumers were willing to fund television production ‘in their capacity as voting taxpayers’ in order to achieve greater diversity and quality • Over the last twenty years we have witnessed the emergence in UK broadcasting of a complex ‘quasi market system’ – which can be understood as one variant of the broader network form. This system is characterised by a higher degree of vertical disintegration than had previously obtained and a BBC that has itself been transformed via a series of internal reforms CBR Summit: 29-30 March 2006 Innovation and Governance
Organisational and Institutional Change in UKTV • We have been studying the sector since the mid 1990’s, we conducted a first round of interviews with industry participants between 1996 and 1998 and completed a second set between 2002 and 2004. • We have been particularly concerned to track and evaluate two aspects of the institutional changes that have characterised the development of the industry – The Growth of the Independent Television Programme Production Sector – The internal market re-organisations of the BBC CBR Summit: 29-30 March 2006 Innovation and Governance
The Emergence of the Independent Sector • Channel Four as a Publisher Broadcaster – Channel 4 first transmitted in 1982 and introduced a new broadcasting model. It had no production capability itself but relied upon buying programmes in from independent production companies • Compulsory Outsourcing - The 1990 Broadcasting Act and the 25% Independent Quota – The independent sector was given a further boost by the 1990 Broadcasting Act which stipulated that all broadcasters had to source 25% of the volume of their output from the independent sector CBR Summit: 29-30 March 2006 Innovation and Governance
Trajectory of the Independent Sector • Cost plus contracting and the retention of rights by broadcasters – From the perspective of small independent producers cost plus contracting had some substantial advantages in terms of mitigating risks – From the perspective of larger more commercially ambitious independent firms the contracting regime represented a major constraint on growth and tended to discourage external finance – From the angle of Public Service Broadcasters the retention of rights had major advantages both in terms of expanded commercial opportunities but also in recent years for the imaginative public service use of the back catalogue of programmes on internet CBR Summit: 29-30 March 2006 Innovation and Governance
Trajectory of the Independent Sector • Increasing use of output deals between Broadcasters and key independent suppliers • Debate on terms of trade – By 2000 there was considerable variation in the contractual relations between independents and the different UK Broadcasters – Channel 4 and the BBC relying on a cost plus contract but the ITV system using a licensing model whereby it bought the right to first showing of programmes with the secondary rights retained by the independent production company – In 2002 the Independent Television Commission recommended that the adoption of the ITV model by other broadcasters would aid the development of an internationally competitive production sector – 2003 Communications Act incorporated the recommendations of the ITC report and empowered Ofcom to issue guidance notes for Codes of practice CBR Summit: 29-30 March 2006 Innovation and Governance
BBC Internal Re-organisations • The problems with the traditional BBC hierarchy ‘‘the BBC developed an administrative – not a managerial – ethos of safety and solidarity and this, at its worst, brought waste and bureaucracy… [the BBC] became a vast command economy; a series of entangled, integrated baronies, each providing internally most of its needs; all the many faceted inputs to the complex business of programme making; programme departments, resource facilities and support services, all separately and directly funded. Within this highly complicated machine, bureaucrats … allocated resources and services to programme makers. Territorialism often stifled initiative. Nothing was transparent, everything opaque. It was Byzantine in many of its structures … Creative freedom was frustrated.’ (Birt, cited in Spangenberg, 1998: 108.) CBR Summit: 29-30 March 2006 Innovation and Governance
BBC Internal Re-organisations • Producer Choice 1993 – Purchaser provider split between resources and programme production – The stated purpose was two-fold: to enable the BBC’s management to obtain information on the indirect, overhead costs of its programmes, in particular accommodation and capital depreciation, and to benchmark the costs of internal resource provision against those of external providers, so making it possible to carry out market testing. By these means, potential inefficiencies would be identified and costs brought under control. – Problems associated with the Producer Choice initiative CBR Summit: 29-30 March 2006 Innovation and Governance
BBC Internal Re-organisations • The 1996 Reorganisation – Introduction of a further purchaser provider split this time between Broadcast (Commissioning) and Programme Production – License fee income no longer went to production departments directly but was channelled via BBC Broadcast. – Commissioning was to be even handed. BBC Production had to fight for commissions with the independent sector and the share of output produced by BBC Production would be allowed to fluctuate without restriction – The 1996 reforms significantly undermined the position of BBC production. In particular the degree of creative autonomy enjoyed by production units was very significantly reduced – The problematic impact of the reforms were quickly identified and in response BBC production was provided with an informal output guarantee of 60% of BBC output. CBR Summit: 29-30 March 2006 Innovation and Governance
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