The BBC has hit the third rail by launching advertisements in the United Kingdom. But why?

100% Media 0% Nonsense

Everything about the BBC's decision to launch podcast adverts in the UK seems political, writes editor-in-chief.

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Social Security is the third pillar of American policy. Touch it and you die.
This is because the third rail is where all the energy is.

It's been 20 years since this exchange between President Bartlet (Martin Sheen) and his top advisor Toby Ziegler (Richard Schiff) aired in The west wingbut this remains just as true today.

Some things are so politically controversial that it takes an extremely brave politician to raise the issue in public, let alone try to do something about it.

The BBC, and the way it is mainly funded by an unusual form of British taxation called a license tax, is the British equivalent of a third railway problem. Even the current Conservative government and its revolving door of far-right, libertarian, anti-immigrant morons have not dared to legislate to remove license fees.

Likewise, the BBC has never dared to introduce advertising into its British funding model. Until now.

But why?

The BBC is desperate

The cliché remains true: desperate times call for desperate measures.

It's easy to forget how poorly the BBC has been treated in recent years, despite being one of the biggest in the UK. most used and trusted brands.

But since 2010, the Conservative government has constrained the organization to such an extent that highly paid talent has fled to the commercial sector, local radio stations have suffered heavy budget cuts, World Service television and radio broadcasts have been transferred only online and flagship programs like Newsnight have been heavily modified.

After a decade of salami-cutting, BBC funding has been cut by 25%, but that's still not enough for the hopelessly incompetent Culture Secretary Nadine Dorries, who has come closest to trying to abolish the fee. Luckily for us, she and her malevolent patron Boris Johnson were so useless as politicians that they quickly destroyed themselves and were kicked out of government.

Now, although chief executive Tim Davie recently said he welcomed the BBC's latest six-year deal, the corporation must find a further €500 million in annual savings after the license fee was frozen for two years and, starting this year, she will only benefit from a lower amount. -inflation increases.

So it's no surprise that the BBC has confirmed it is considering including adverts in its podcasts for UK listeners on the Apple and Spotify platforms.

The unthinkable has become quite understandable.

BBC's plan to commercialize podcasts 'could be catastrophic'

Is it time to adopt a new financing model?

Just listen to last week's episode The media leader's podcast to get an idea of ​​the polarization of the issue.

Columnist Nicola Kemp, with whom I generally agree, sees the issue quite differently.

The BBC needs to diversify its business model, Kemp said. We have seen strong pushback against licensing fees. I understand that we have, as a country, a pretty uncomfortable relationship with advertiser-funded content. But does this mean that advertising [and] Is BBC Studios' business model a bad thing for the industry? Absolutely not.

Kemp is right to point out that BBC Studios, its commercial division, is already a huge global advertising seller and an international media success story.

Over the past five years, BBC studios have doubled their revenues and profits, with the BBC's latest annual report showing record turnover in 2022/23 of 2.1 billion approximately double Channel 4's revenues and profits of 240 million. This is despite it being considered controversial to run adverts outside the UK when BBC Studios' predecessor, BBC Worldwide launched them on bbc.com in 2007.

The BBC has therefore already diversified its funding model and has more salespeople than ever before.

One step too far

However, launching ads in the UK, even in a very limited way and unlikely to generate huge revenue, is going too far.

By definition, this undermines the need for the license fee and is a perversion of the BBC's mission as set out in the charter: to act in the public interest, serving all audiences by providing impartial production and services, high quality and distinctive. that inform, educate and entertain.”

Or, as EssenceMediacom co-director of strategy Geoff de Burca puts it: One of the great strengths of the UK radio industry is the well-balanced contrast and competition between the public and commercial sectors. This risks disrupting the situation.

And this is precisely why the Daily Mail and the vitriolic campaign by Rupert Murdoch-owned newspapers against the BBC has been completely wrong in suggesting that the BBC is crowding out business opportunities in the UK.

I have spoken privately about this issue on numerous occasions with business executives from broadcasters like ITV, Channel 4, Sky, Global and Bauer, not to mention countless media agency executives, all of whom say much the same thing: the BBC is a wonderful creative engine whose presence makes broadcasting commercial better. Not only by increasing the quality of journalism and entertainment programming, but also by developing new formats that organizations obsessed with the bottom line would not have thought of.

A well-known radio executive couldn't believe the BBC's plan was true when it was first reported by Murdoch. The temperature. Sadly, she confides: “The BBC told us they thought they could do it. We think she's inadvertently opening a conversation she doesn't want to have about royalty.

But wait. Perhaps this conversation is precisely what the BBC wants right now.

Shock horror

We must never forget that the BBC is run by a former Conservative politician.

Davie was a Conservative Party councilor in the Hammersmith and Fulham London Borough Council elections in 1993 and 1994, and was vice-president of the Hammersmith and Fulham Conservative Association in the 1990s. while rising through the ranks as a brand marketer at Procter & Gamble and PepsiCo.

So it's not a huge suspicion that the BBC is using UK podcasts to “test the waters” and see what the reaction is.

From a cynical point of view, one could argue that this is a win-win strategy: either the British public clamor for a state-funded BBC and argue in favor of a larger increase in license fees, either the answer is silent and the marketing conservatives The leader confirms his place in history by becoming the first to fully market the BBC.

But none of these outcomes help to protect the long-term value of the BBC as an independent, multi-platform and distinctive media owner that adds so much creativity, professionalism and dynamism to our sector.

The problem with the “third rail” analogy is that you don't always die instantly after tackling the unattainable. The shock of last week's news has already worn off, but the long-term damage to the BBC from launching UK adverts could be terminal.

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Omar Oakes is editor-in-chief of The Media Leader

100% Media 0% Nonsenseis a weekly column on the state of media and advertising. Be sure to sign up forour daily newsletterto receive this column first in your inbox every Monday, along with key updates on what's happening at The Media Leader and our upcoming events.

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