By: Russ
Oxford seminar on Ofcom public service publisher (PSP) idea
I attended Tuesday’s seminar in Oxford about whether anyone has made the case for a state subsidy public intervention in the new media sphere. Hosted by David Levy, the seminar mainly explored whether there are any ‘gaps’ in the marketplace provision of new media content that would warrant a 50 - 100 million GBP government outlay.
William Garrood made the case for Ofcom’s public service publisher (PSP) as the model for public intervention. It was an interesting presentation: He outlined some of the changes taking place in the market. The weaker part of the Ofcom chain of logic dealt with what particular gaps a PSP would actually cover. Several commenters pointed out that’s a part of the debate where Ofcom’s sales pitch falls somewhat short. Sure, everyone knows that the online world may not be perfect, but what particular things won’t be covered such that a 50-100 million GBP outlay is necessary.
Robin Foster (Human Capital / London Business School) followed Garrood and offered a roadmap for Ofcom. He said Ofcom need to bring this along by:
*Â Reviewing current funding of new media initiatives;
*Â Running a pilot scheme; and
*Â Conducting more analysis of likely market failures.
Finally, Steve Folwell of the Guardian Media Group spoke and basically poured cold water on the entire concept of a state-funded PSP. Not that he voiced active opposition to the idea — it’s just that he gave an overview of GMG as an existing (and successful) PSP-type entity that of course receives no funding. There are of course others, such as Global Voices.
My take: Putting aside whether the case for a PSP has been made or not (I think it has not), my concern for Ofcom really has to do with the regulator’s core mission and reputation: Why take on such a risky, thankless task?Â
Ofcom should be careful what it wishes for. Assume for a moment that a future government allocates 100 million GBP and permits Ofcom to create a PSP. Ofcom would then presumably create a PSP entity and regulate it. And then the trouble starts. That PSP pot-of-gold would be coveted and watched by everyone. Tenders would be disputed, the Daily Mail would periodically slam Ofcom for new media flops it had funded, and the entire project would probably ultimately be criticised when it is demonstrated to not really have any discernible effect on the wider market, which is global in nature. Unlike Channel4 or the BBC, where hits and misses offset each other because of the scale of the operation, the PSP’s funding choices would be very exposed to scrutiny.Â
It’s the fabled curse:Â May you get what you wish for.Â
By the way, an interesting example of a PSP-type entity: In the U.S., the earned interest on deposits for spectrum auctions is — by law — conveyed to the Telecommunications Development Fund (TDF) a government-owned venture capital fund. I’ve not studied the TDF in detail, but the overall vibe is that it has fallen short of what was expected.
Stay tuned…
May 1st 2007
I attended the seminar too and i do agree with all the points you made. I was a useful event that highlighted the weakness of the argument for a PSP. The greatest fallacy of all is the government and OfCom’s, obsession if I may say, with the market failures in the UK media landscape. William Garrood repeatedly reffered to those market failures but when asked by one of the delegates, could not give an example.
It is unclear why the government thinks it is necessary to establish a new publicly-funded media entity at a time when the argument surounding the BBC’s funding model becomes even more important for the broadcaster’s ability to sustain itself. More importantly Channel 4 is aspiring to become a mini-BBC, with its chief executive Andy Duncan asking for part of the BBC’s budget collected through the TV licence fees.
Many economists have argued for the abolition of the TV licence fee, and the establishment of a PSP that would be publicly funded by taxpayers’ money would only infuriate the media industry, the taxpayers and would further distort the media market.
There is no doubt that the BBC, with the government’s backing, has had a tremendous impact upon the UK media market, nevermind its decisions being reviewed by OfCom, and going through a Market Impact Assessment. The matter of the fact is that the main PSB in the UK, the BBC, in its attempt to fulfill its public service remit, has gone well beyond in competing head to head with the rest of the media that operate in market conditions, thus the argument about ‘dumbing down’ that critics have used to attack the BBC in the past.
The BBC and Channel 4 as PSB’s publish content in a variety of platforms, analoge and digital broadcasting, online, print (through BBC worldwide), therefore there aren’t any gaps that a PSP is required to fill.
I suggested during the seminar, after seeing the perfectly balanced argument made by Steve Folwell (Guardian’s Head of Strategy) , that the market has the ability to provide public service content, no only through not-for profit, Trust owned, private companies, such as the Guardian, but also by other media. The digital challenge presents the media with the opportunity to serve niche markets that were ignored before, and give them quality content that could also be marked as ‘public service content’ (PSC). I am not an economist, but I do believe there are ways to encourage private media to offer PSC, if not through PSB-private media synergies, supported by both public and private funds, maybe through tax incentives etc.
The point is to avoid further market distruption, and bring media companies to work together collaboratively and provide the market with the PSC required. Who said that providing PSC cannot be done profitably.