Neoliberalism and the British Broadcasting Industry

Since the publication of the Annan report in 1977, the BBC has had to constantly defend its enviable status as public service broadcaster. Prior to the report, the BBC was considered a household name and a trustworthy institution. The report abandoned the principles of public service in favour of a liberalised market. Jean Seaton interprets this shift from public service as a move towards…

A free marketplace in which the balance could be achieved through the competition of multiplicity of independent voices”, (Seaton, 2010: P342).

The 1982 Hunt Report was also critical of public service ideals which it said should be relegated to the BBC and ITV, and that the new wave of cable television stations should be free from its constraints, leaving private broadcasters to compete openly amongst each other. These new technologies were introduced without any given thought to the consequences regarding “audiences, revenues and programmes on the television system as a whole”, (Seaton, 2010: P343). With a conservative government now well on the way to deregulating terrestrial broadcasting on par with cable television, the Independent Broadcasting Authority (founded in 1972 from the ITA), assigned available bandwidth to Channel 4. The new channel, which was set up as a publisher, was launched in 1982 in what could be interpreted as a further step in experimenting with the commercialisation of public service broadcasting (following the launch of ITV). New funding measures based on the taxation of ITV companies meant that the public service remit imposed on Channel 4 was free from any commercial constraints. In this new liberalised market, a whole new industry of independent production companies came to flourish.

At a time where a new technology was emerging in satellite television, and with the approval of a new consortium – the British Satellite Broadcasting, the 1986 Peacock report brought a renewed interest in public service broadcasting based on the success of Channel 4. The old public service model could support neoliberal consumer sovereignty and gain further independence from government censorship through the direct intervention of their regulatory bodies, therefore preserving rather than abolishing the “complex relationship between themselves, the state, their audiences, and their programme policy”, (Seaton, 2010: P344). This was established in time for the 1989 Broadcasting Bill and the 1990 Broadcasting Act to pass, which prompted a further shift towards commoditisation and with it, the auctioning of channels 3 and 5 to the highest bidder.

The new age of satellite technology would play a significant part in the deregulation of broadcasting, since key players in the market could in any case, legally bypass regulation by transmitting to homes in the UK from outside the country. With the highly commercial Sky Television taking over the former BSB in 1990, commercial radio licenses being issued, Channel 4 now collecting its own revenue, and the BBC tendering out a substantial part of their production, the new commercialised market had by then become truly liberalised, highly un-regulated, and was fast becoming the domain of global players who could ultimately dispense with public service tradition altogether. During the 1990s, and all the way up to present day, there were further technological developments leading to the creation of Freeview and the switch from analogue to digital terrestrial transmission, all of which added to the multiplicity of channels still available through cable television.

From this brief history we can derive the practical implications these developments have had on public service broadcasting, how its dissolution as a concept came about, and how they have had to reinvent themselves as competitors in this new commercial market. This was especially true for the BBC whose revenue was solely based on government funding, whilst ITV and Channel 4 were already generating income commercially through advertising. The BBC now operates commercially outside the UK, licensed its back catalogue to Gold (formerly UK Gold), and launched bbcworldwide.com as part of its international brand and marketing strategy. But specifically how this deregulation came about, the resulting market trend towards globalisation, and the impact that these developments have had on British television programming and on media diversity, is what will be discussed further.

Neoliberalism

Although the term ‘Neoliberalism’ was coined by Alexander Rustow in 1938, it was the work of the economics and free market thinkers in the ‘Mont Pelerin Society’, founded by Friedrich August von Hayek, that influenced Margaret Thatcher’s policies throughout the 1980s. Neoliberal thinkers such as Hayek believed in…

the free market’s spontaneous ability to function as a self regulating and knowledge generating engine of human freedom and ingenuity”, (Steger and Roy, 2010: P15).

What this in fact translated to in practice, was a deregulated open-market where government would set-up an infrastructure and then stand back to let market forces in the private sector, dictate its development and growth.

These ‘neoliberals’ subscribed to a common set of ideological and political principles dedicated to the worldwide spread of an economic model emphasising free markets and free trade”, (Steger and Roy, 2010 : P10).

This opened up opportunities for foreign global companies to come into the British broadcasting industry, as we have seen with the British Satellite Broadcasting takeover by Rupert Murdoch’s Sky: a brand that already enjoyed global recognition after having cornered other European liberalised markets.

The introduction of neoliberal ideals to British broadcasting was something that came about gradually, from the initial 1953 white paper that advocated commercialisation to the 1977 Annan report that abandoned the principles of public service altogether in its favour. They had reached maturity by the time Margaret Thatcher was elected Prime Minister in 1979, and her neoliberal policies were soon put into effect.

Thatcher unleashed a comprehensive set of neoliberal reforms aimed at reducing taxes, liberalising exchange rates controls, reducing regulations, privatising national industries, and drastically diminishing the power of labour unions”, (Steger and Roy, 2010 : P38).

The most important of these policies can be categorised into four processes of deregulation that lay the foundation of the neoliberal market.

The first process would be that of ‘Commercialisation’, which led to the state owned public service institutions having to operate as private business organisations. With this emphasis on generating revenue comes an abandonment of “public interest, public service and related standards, such as universality”, in favour of “market standards that establish market regulation”, (Mosco, 2009: P176). With the BBC and ITV then having to operate as businesses, emphasis shifted from pure production to increasing audience numbers and hence advertising revenue, and from targeting a national audience to seeking out new revenue-generating markets outside the boundaries of the United Kingdom.

The second process that comes to be implemented is that of ‘Liberalisation’, which through state intervention, created competition in the market. In this phase of deregulation, legislation was passed to open up markets once monopolised by public service institutions, to private competitors. Those who support these principles argue that this new wave of competition “lowers prices, expands services and generally speeds up the process of innovation”, (Mosco, 2009: P177). But critics oppose liberalisation on the basis that it replaced a monopoly with an oligopoly, furthering the monetary interests of the few wealthy individuals owning global companies: this is particularly true in the media industry.

The third process of deregulation is that of ‘Privatisation’.  With the public service broadcasters then running as businesses, this process seems a natural step forward in a neoliberal agenda. Privatisation involves selling state owned organisations (or certain elements thereof), to private sector operators.

The belief in the superiority of the market to the state and of private property to public and social ownership, the major component of neoliberalism, is exemplified by the programme of privatisation”, (Arestis and Sawyer, 2005: P199).

Regulatory bodies were set up for such enterprises, allowing governments to still have some bearing on the operation of these organisations. Although privatisation generates revenues for the government, streamlines privatised institutions to operate more efficiently, and weakens the stronghold of trade unionism, there are still critics who call attention to the fact that privatisation has seen,

the elimination of the primary alternative to complete market regulation, the loss of sovereignty for nations selling of to foreign firms, and the consequent loss of local control over national policy”, (Mosco, 2009: P177).

This can be interpreted as capitalist hegemony which further translates to cultural hegemony in the culture industries such as broadcasting.

This final process in the implementation of neoliberal ideals was the creation of regional and global organisations to facilitate cross border trade by governments. One such example of ‘Internationalisation’ can be found in the World Trade Organisation (WTO), which formed as the successor to the General Agreement on Tariffs and Trade (GATT).

This process has been particularly important in the communication arena because the transnationalisation of communication networks requires some degree of interstate coordination”, (Mosco, 2009: P178).

This was a considerably significant process in securing the effectiveness of neoliberal ideals since it opened the doors to foreign investment in British national industries, but at the same time made possible the participation of British companies in international markets: it facilitated large media companies and conglomerates to become giant multinational companies and further develop into global powerhouses.

Globalisation

We have seen how global players came into the British television industry, and their contribution to the dilution of public service broadcasting through competition. In addition to neoliberal policies towards deregulation providing the political and legal framework required for companies to operate globally, there is also a technological evolution that is equally at the centre of this globalisation, a technology that has evolved as a result of, and sympathetically to the needs of capitalism. The development and improvement of transportation and communication technologies particularly, have had a direct bearing on the globalisation of the media industry. Spacialisation, or the flattening of time against distance, and the lowering costs of digital transmission and transportation of goods, allow companies to grow and reap bigger profits through a corporate shift that integrates these technologies into their business model. It is primarily through these bigger returns that companies can re-invest huge amounts of capital and increase their borrowing power, with the aim of acquiring complete control over their product, from production to consumption: a target that is achieved through ‘Vertical Integration’.

Vertical Integration describes the concentration of firms within the line of business that extends a company’s control over the process of production”, (Mosco, 2009: P160).

Further expansion can also be achieved by also investing in companies that operate outside the parent company’s line within the market, or even in a completely different market (such as transportation), where both will mutually benefit from this new conglomerate through trade, and reduced competition. This ‘Horizontal Integration’ can be described as…

one way an industry like newspaper publishing is able to remain profitable in the face of newer media forms”, (Mosco, 2009: P159).

Since capitalism knows no borders or boundaries, such corporate expansion and conglomeratisation has also proliferated internationally, which effectively brought about a division of world regions between those that are prosperous, and those which are not. This ‘Transnationalisation’ is therefore a selective process in which,

communications firms seek out new markets for products, low-cost labour, and areas with minimal government oversight and regulation”, (Mosco, 2009: P161).

Media companies are important players in this world market not only through the distribution of their media products, but also through advertising, which brings attention to commodities in general. However, corporate economic power is not limited to expansion: companies forming alliances or synergies play a major part in market control. It is through cross membership in corporate and executive boards that these alliances come about, where a board member might share responsibility to maximize profits for its investors in one company, whilst still obligated to honour executive responsibilities to his employer in another. This presents itself not just as an opportunity for cooperation, but as a responsibility to do so.

Concentration is thereby extended through the shared responsibilities for performance among companies that compete in some markets”, (Mosco, 2009: P164).

These synergies can bring about very successful cross-promotional arrangements of global proportions, as has been the case with Axel Springer and Time Warner, or more famously, McDonalds and Disney. Furthermore, companies can easily coordinate against any opposition, and share the benefits inherent to globalisation.

They also come together to lobby governments, for assistance to fight off what they perceive to be unfair competition, the theft of their intellectual property, or the need to import more low cost foreign workers”, (Mosco, 2009: P165).

Conclusion

With a steady progression towards a liberalised market in British broadcasting coming to fruition, where state owned organisations themselves need to compete internationally with now globalised media giants whose integration has accelerated to the point where ownership is shared amongst a select few, the question on media diversity is one of paramount importance. Subsequently, with media products relegated to the status of a commodity through this commercialisation of the market, and viewers now established as a significant part of a consumer society, the quality of television production also becomes an important consideration:

commoditisation homogenises value, while the essence of culture is discrimination, excessive commoditisation is anti-cultural, as indeed so many have perceived it or sensed it to be”, (Kopytoff, 1986: P73).

Roger Silverstone amongst others, argues that we not only consume television but that we also consume through television: that the dominant ideologies of capitalist market leaders are expressed through television programming is essentially what is being discussed, since the cultural product as a commodity reflects…

the ideological processes at work within those material and symbolic artifacts, work which defines them as the products and, in varying degrees, the expressions, of the dominant values and ideas of the societies that produce them”, (Silverstone, 1994: P124).

This is never more apparent than through advertising, which continuously blurs the lines between reality and its mediation in film…

The goods that are offered through it, that are represented through its images, tropes and metaphors, create a utopian discourse into which the potential and actual purchasers buy”, (Silverstone 1994: P125).

As already mentioned, corporate synergies interlock media giants with industries outside broadcasting, which benefit from extended advertising and product placement. The lines between reality and fiction are further broken down in this merger between advertising, entertainment and editorial content, and with most of the giant media corporations originating from America, the media product is further relegated to a commodity that significantly reproduces American ideology. In one sentence: globalisation has come to be understood as Americanisation, and if seen through the capitalist framework from which it has emanated, one understands it to be an Americanisation that devours all cultures in its path.

However, there has been cultural and political resistance towards this domination in Europe. In 1994 the final round of international negotiations under the GATT banner, saw this very issue take centre stage.

While the US was calling, in the name of free trade and the free circulation of ideas, for the scrapping of quota restrictions, European interests were resolved to preserve them in order, as they saw it, to defend the cultural specificity and integrity of European civilisation”, (Morley and Robins, 2000: P188).

The fact remains that such resistance might not be enough to stop Americanisation from running its course in the UK. Television viewing figures are rising regardless of competition from new media such as video games and the internet, but the rise in numbers paint a bleak picture as regards British culture: research conducted by the Broadcasters’ Audience Research Board (BARB) suggest that up until the 2006,

viewing figures for television have actually increased in the last few years. The significant shift has been towards a greater viewing of channels other than the five networked ones (BBC1, BBC2, ITV, Channel 4, and Five) on digital, cable and satellite systems”, (Hesmondlalgh, 2007: P249).

Such commercial channels in their multitudes, transmitting 24hours a day, can struggle to fill their programming schedules. In addition to independent producers and celebrities, those who will benefit the most are organisations with a substantial back-catalogue of media.

Hollywood film companies, the USA’s TV networks and those at the centre of the all-powerful content creation business in the USA… will see their exports boom. On this basis, the various foundations of domination by the USA…look stronger than ever”, (Hesmondlalgh, 2007: P267).

And so, with this newly created oligopoly operating within a commodities market that grows exponentially, in which television serves as “both object and promoter of consumption” (Silverstone, 1994: P114) in its double articulation, the predominantly one-way flow of media commodities that, as has been established, are significantly homogenised and high in hegemonic and ideological content, can furthermore be understood in political, economic and symbolic terms. Since all media products consist of information of a given type (or symbolic in nature), they inherently transmit knowledge. The old saying ‘knowledge is power’ comes to the fore in this context. Political and economic control of such knowledge directly equates to power, when considering the vast amount of recipients for such messages.

Power is the ability to act in pursuit of one’s aims and interests, the ability to intervene in the course of events and to affect their outcome”, (Thompson, 1995: P13).

The findings of the Euromedia research group published in 1998 by McQuail and Siune suggest amongst other things, that market power expands to political power; media concentration policy operates in favour of a few highly integrated media corporations; and that the public policy concept is marginalised in media policy and public discourse, therefore sidelining the effects of ownership on editorial freedom and media freedom.

The concentration of media power through global expansion and integration has been seen to restrict communications and the flow of information, in that they limit plurality and diversity of products in favour of commodities that generate the highest possible capital return on their material investment. There are however, some Nordic countries from North-Western Europe where empirical evidence supports the ‘Diversity Hypothesis’ rather than the ‘Convergence Hypothesis’, (McQuail and Siune, 1998: P29). But for the most part, these restrictions remain the fundamental aims and interests of the key players in this commercial market, and the responsibility of the states that regulate it – it is after all, an industry.

Christian Gadd (2936 words).

Semester 4 (January – May 2015) : Media and Economy

Bibliography

Arestis, P., Sawyer, M., (2005), “The Neoliberal Experience of the United Kingdom”, in “Neoliberalism – A Critical Reader”, ed. Saad-Filho, A., Johnston, D., (2005), Pluto Press: London.

Channel 4, “About C4”, [Accessed 05/04/15]. 

http://www.channel4.com/info/corporate/about

Hesmondlalgh, David, (2007), “The Cultural Industries” SE, London: Sage.

Hollis, Christopher, (1953), “Ending the Monopoly in Television – The Government’s White Paper”, in The Tablet, Vol. 202, No.5922. [Accessed 04/04/15].

http://archive.thetablet.co.uk/article/21st-november-1953/5/ending-the-monopoly-in-television-the-governments-

ITV PLC, “History”, [Accessed 05/04/15].

http://www.itvplc.com/about/history

Kopytoff, Igor, (1986), “The Cultural Biography of Things: Commodification as Process”, in “The Social Life of Things: Commodities in Cultural Perspective”, ed. Appadurai, Arjun, (1986), Cambridge: Cambridge University Press.

Mander, Jerry, (1978) “Four Arguments for the Elimination of Television”, New York: HarperCollins.

McQuail, D., Siune, K., (1998), “Media Policy – Convergence, Concentration and Commerce”, London: Sage.

Milord, Joseph, “The World’s 10 Largest Media Conglomerates” in Elite Daily, 2nd July 2013 [Accessed 06/04/15].

http://elitedaily.com/money/the-worlds-10-largest-media-conglomerates/

Morley, D., Robins, K., (2000), “The Global Media Order“, in “Globalisation: The Reader”, ed. Beynon, J., Dunkerley, D., (2000), New York: Routledge.

Mosco, Vincent, (2009), “Spatialisation: Space, Time and Communications”, in “The Political Economy of Communication”, SE, Chapter 8. London: Sage.

Report of the Committee on Broadcasting (Pilkington Report, 1962) [Cmnd 1755], IV, 259, para.23. in Seaton, Jean (2010), “Broadcasting and the theory of Public Service” from Curran, James, “Power Without Responsibility: Press, Broadcasting and the Internet in Britain”, pp. 341-354, London: Routledge.

Seaton, Jean, (2010), “Broadcasting and the theory of Public Service” in Curran, James, “Power Without Responsibility: Press, Broadcasting and the Internet in Britain”, pp. 341-354, London: Routledge.

Silverstone, Roger, (1994), “Television and Everyday Life”, London: Routledge.

Steger, M. B., Roy, R. K., (2010), “Neoliberalism – A Very Short Introduction”, Oxford University Press: New York.

Thompson, John, B., (1995) “Media and Modernity”, Cambridge: Polity Press.

About Christian Gadd

Christian Gadd
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