Just why is the BBC making layoffs, again?

Nate Elliot of JupiterResearch has an interesting take on the news that the BBC is to carry advertising on its web site for users outside the UK:

"The best part of the story is that the BBC’s competitors — namely The
Guardian, in the guise of the British Internet Publishers Alliance
(BIPA) — being upset by this decision. The Guardian also gets a decent
chunk of its online traffic from outside the UK,
so this move will bring them strong new competition. But BIPA claims
it’s not upset over the prospect of lost revenues, but rather that this
move will undermine the BBC’s "worldwide reputation for integrity and
impartiality." How sweet of them to look out for the Beeb like that."

This makes a point that I’ve made before quite succinctly: the BBC is constantly assailed by commercial companies which, having failed to compete by producing enough original quality content, think they can complain to the government that it’s all "not fair".

Of course, a decent, bullish BBC director general, being a leader (as opposed to manager) would be manning the ramparts and pointing this out. Nothing would give me greater pleasure than for a BBC DG to come out and say "Actually, ITV, The Grauniad et al have spent millions trying to get online right, and none of them have got within a light year of the work we do. Will someone please call them a waaaaahmbulance?" Sadly, Mark Thompson isn’t the man to do it.

One of Nate’s other comments, though, is well wide of the mark:

"The Beeb, of course, can’t run ads in the UK, where they already
collect a licence fee on every household with a TV. But despite
collecting I think 3 billion pounds in free money each year, the BBC
still claims it’s got a 2 billion pound shortfall, and they recently cut 2800 jobs. (This seems to be primarily the result of bad planning and silly, wasteful decisions. 18 million pounds last year to have Jonathan Ross lisp bad film reviews on Friday nights? Surely you’re joking.)"

Actually, it’s got a lot more to do with the fact that the government has shafted the BBC over its involvement in the switch over to digital TV. Not only does it have to bare its own costs (including launching flagship digital channels which it otherwise wouldn’t have to create), it also has to spend large amounts ensuring that every over-75 year old person in the UK can get digital TV; finance the body which is doing the marketing for the scheme (Digital UK); and actually build the DTV infrastructure country-wide. It is now even being forced to pay £14 million to cover the switchover costs of Channel 4, one of its main competitors. Channel 4 chief Andy Duncan was, unsurprisingly, "delighted" about this.

The whole lot comes to about £800 million over seven years, and amounts to about a 1% increase on the license fee. The BBC’s recent license fee settlement was for 3% in 2008 – which effectively means that the BBC has been given no increase at all once you account for digital switchover costs and inflation, while being expected to introduce new services like iPlayer, podcasts and so on. In future years, the picture actually looks even more grim, with 2% increases in 2009-11 and something between zero and 2% in 2012, depending on the final costs of digital switchover.

A 2% year-on-year increase in the element which provides the majority of your revenue would be viewed by any large commercial organisation as the kind of figure which is unsustainable if you want to grow the business. If inflation increases, it will wipe out that figure entirely – leaving the BBC with no money to fund pay increases, which in an organisation based on a model of collective yearly incremental increases with no money to fund them.

The BBC is, overall, not a great company to work for if you want money – virtually everyone I’ve known who has worked there has been paid quite a bit less than the commercial rate for their job – and if its pay rises fail to keep in touch with the rest of the industry, it will lose even more of its talent.

And I’m not talking about the Jonathan Ross’s of this world here, but the ordinary employees – the ones who have been producing the quality content which The Guardian and others have been complaining about.

  • http://www.digitalrightsmanifesto.com Michael Walsh

    It’s not just the digital switchover, there’s £400m for MediaCity:UK.

  • http://tvlicenceresistance.info John

    “The BBC is, overall, not a great company to work for if you want money”

    No doubt it is after all you forced the entire country to contribute towards your wages even though most people would do without the mighty BBC!

  • http://profile.typekey.com/ianbetteridge/ Ian Betteridge

    John: because you dislike one thing about an organisation, you seem to believe that everyone who works for it is “evil”. That is, of course, the mark of a zealot.

  • http://www.mawhitfield.com/ Mark A. Whitfield

    I thought Technovia readers might be interested to know the current status of the actual build for MediaCity:UK in Salford Quays.

    The site now consists of 6 cranes with a 7th on the way (crane base in place). Most of the concrete cores of the new BBC building look to be in place or started, rising to 9-10 stories (maybe more) for the highest cores.

    The land for the taller buildings off to the side of the main BBC building (right from the Lowry Centre side) is still being dug and prepared but more temporary cabins are in place off Broadway (the road that runs through the back of the Quays) presumably to house more MediaCIty:UK project staff and a contingent of the BBC (cameramen) looking at the latest articles across the internet.

    The current phase of the build occupies 35-40 acres (next to the City Lofts flats) with other phases planned across the water on the Imperial War Museum side.

    The overall site is something of the order of 200 acres but no visible signs of development has started outside the main phase 1 area currently. No doubt this will depend on discussions with other media companies being persuaded to join the MediaCity:UK estate.

    For a photographic timeline for November / December and beyond (and pictures back to June of this year), go to Google and search on ‘media city uk salford quays timeline q4′.

    Judging be the pace of the development, there is a big push on to meet the 2010/11 date for the first phase completion.

    Those currently thinking about a career in the media by way of a chosen degree (media studies, photography etc.) might be one of the 15,500 new jobs to be created between now and 2011 in the first phase of this build. Also, the price of properties (and especially flats) in the area will almost certainly rise as a result of the considerable development occuring in this location with new flats being built currently.

    I have worked as an IT Manager in Salford Quays for 12 years and live in North Bolton. When I first came here, the skyline of the Quays area was relatively flat but now houses such buildings as The Designer Outlet (80 outlet stores), The iconic Lowry and Imperial War Museum Buildings and new flat developments which continue to be built in anticipation of the BBC move and general growth in this area.