Patrick Barwise: People will pay more for BBC license fee

Today’s MediaGuardian reports the findings of research conducted by Professor Patrick Barwise into public attitudes about the BBC license fee. Barwise concludes–surprisingly in his view–that: ‘[t]he public remains strongly supportive of the BBC and willing to pay more for it to ensure it remains a broadcasting force.’ The article further claims that Professor Barwise is able to pin down willingness-to-pay (WTP) for the BBC’s services to a 5% high/low range as far out as the year 2013/2014.

However, later in the same article, the professor claims that due to the upredictable nature of the business, it makes no sense to require the BBC to make Soviet-style plans for its future. Barwise states: ‘The marketplace is just too unpredictable to make those kind of projections’.

You can read the full report here. The methodology is not that robust in my opinion. Some experts have said that such WTP surveys—often used to justify public expenditures—are virtually useless unless performed with great care. That methodology (sometimes called a contingent valuation method) relies on people’s reported opinions and attitudes and is prone to all kinds of reporting bias and similar problems, particularly when a proposed expenditure is isolated from others and sounds ‘good’. It’s a simple fact: people tend to overstate their WTP for good-sounding things like saving a rare species of owl or better television.

Based on the foregoing, not only do I think Professor Barwise cannot state within a 5% range what people are WTP for BBC services in 2013/14, I think he cannot do it today. As John Whittingdale said in our recent interview with him, it’s hard to say what the value of something is to people when you force them to pay for it whether they want it or not.

To Professor Barwise’s credit, his report notes some of these weaknesses, but of course the much wider-read MediaGuardian story, also authored by Barwise, sounds more confident. Here’s what Barwise says on Page 5 of his report to the BBC:

[E]ven with good question wording, consumers cannot reliably tell us:

* how much they will use and value a radically new product or service with which they are unfamiliar; or even quality improvements in an existing service such as BBC1

* their willingness to pay for the BBC in seven or eight years’ time.

So, this is at least the second significant measurement problem we have faced with the BBC. First, how do we measure if what the BBC is doing is distinctive or of higher quality than commercial broadcasters? Second, how do we measure what the BBC is worth to society?