A couple of weeks ago James Murdoch made a speech condemning the BBC as a state owned organisation which discourages pluralism in journalism by “dumping” free news on the market.
The argument is appealing as conventional market theory would imply that if you are giving something away free then nobody is going to pay for it.
Mr. Murdoch’s attack has come in the wake of two factors: The Internet boom and the global recession. Prior to these factors, commercial media organisations were awash with advertising revenues and did not see the BBC as serious competition. But with the rise of The Internet, advertising revenues are now spread more thinly over many more media suppliers. The current recession has put further pressure on commercial organisations.
First seen as a lame duck, the BBC modernised and expanded its services. The modern BBC provides many services online but, as it does not rely on advertising revenue, it is not directly affected by the recession. So it is only now that commercial media companies are struggling that they attack the BBC.
Are they right? Should the BBC be cut back or abolished?
Mr. Murdoch’s argument is predicated on the idea the all things should be left to the market which, through the mechanism of competition, will supply variety. In this case this means a plurality of programming and opinion.
Market theory is real and underpins much of the success of the western world. However, Mr. Murdoch’s claims for market forces are flawed. Market forces can produce a plurality of suppliers but this does not mean a plurality of services or opinion. On the contrary, market forces use competition to evolve a monoculture of services and opinion.
This has happened again and again in history from telephone systems to television. VHS won out over the superior Betamax format and Blue Ray has recently won out over HD DVD for high definition television recording. This is classic free market operation. Multiple ideas emerge and one wins out, sometimes through an innate superiority, but often due to superior management, marketing or any number of other factors. For TV formats this does not matter, but for news, which is essentially the battle of ideas, a monoculture is positively dangerous.
If it were true that a pluralistic news media would emerge from a purely commercial medium then this would have occurred in The United States. It has not. The news media in The United States have many positive qualities but diversity is not their strength. Further, commercial media companies will all have an natural bias in favour of free market capitalism to the detriment of the reporting of other systems.
Mr. Murdoch’s is not attacking the BBC because he favours pluralism. He has no real interest in diversity of opinion and makes the arguments for selfish purposes. News Corporation has always been a rapacious free market company striving to defeat its competition. A monoculture is acceptable for a mature industry that makes widgets but not for an industry that reports events.
BBC TV news reported Mr. Murdoch’s speech and asked the question: If the BBC did not exist, would we consider creating a news service which was owned and run by the state. At first blush this does not sound a good idea and has the resonance of totalitarianism but in the same TV program, Greg Dyke, ex director General of the BBC, made the point that the BBC is not a state run organisation. It is an organisation funded by a license fee and controlled by a trust. This is not the same as state control.
Shareholder capitalism and state ownership are not the only models possible for organisations. The United States savings and loans and the British mutual building societies are other examples of a middle way.
Of course the BBC can be leaned on by the British government and this has happened. But is this very different from the shameful behaviour of the United States media in the wake of 9/11 when they overlooked illegal and ignominious activities of the United States government and armed forces?
The United States is a country with a strong basis in free market capitalism and an understandable mistrust of the state. Great Britain has a long history of laissez-faire capitalism but also a solid foundation in pragmatism. We should use markets when they are useful, not out of an ideological obsession.
The BBC provides a useful counterbalance to commercial organisations and is respected throughout the world. Its lack of reliance on advertising allows greater freedom from lobby groups than its commercial competitors. One only has to watch a few minutes of CNN to realise that commercial organisations rely on BBC reporters throughout the world. Even the leader of the Soviet Union found the BBCs reporting independent enough to rely on during the military coup in 1991.
Mr. Murdoc’s speech has been given great attention because his father, Rupert Murdoch, made a similar speech some years ago but whereas Rupert Murdoh recognised an technological shift that would inevitably force change on a media industry which had stagnated, James Murdoch is appealing for change to protect a vested interest.
Mr. Muroch claims that the BBC is an obstacle to pluralistic media – It isn’t. The BBC has proved itself over the years as a defender of objective journalism and should not be sacrificed to support the profits of the Murdoch empire.