Career Development: Task 1


Structure of Television in the UK and the Threat of Rupert Murdoch

Assessment Task 1 – (Criteria 1.1)

How is the television industry structured in the UK. Write a short illustrated report that critically reviews details of the structure and ownership.

Structure of Television in the UK and the ‘Threat’ of Rupert Murdoch

 

I will be looking into the funding and structure of television in the UK, including an in-depth look in to the BBC, Sky and the threat of Rupert Murdoch’s power in the media. The UK television industry is made up of major broadcasters, independent production companies and local community television. The major broadcasters in the UK are BBC, ITV and Sky with a combined view count of over 65 million. Independent production companies fill in the gaps that aren’t taken by major broadcasters; companies like Talkback Thames and Tiger Aspect are two of the most successful independent production companies in the UK. Talkback Thames is the production partner for both ITV and BBC on huge programmes with the likes of Simon Cowell and Sir Alan Sugar teaming up with the London based company for their respective shows.

Firstly, let’s look at the BBC. Uniquely funded by the public’s television licence fees, each household with a colour TV annually contributes £145.50 to the BBC, roughly 40p per day. Combined, this totals a yearly income of £3,656m for the BBC from licence payers alone. Commercial operations including BBC Worldwide, BBC Studios and Post Production create a £155m profit (before tax) and grant income such as funding for BBC Worldwide by the Foreign and Commonwealth office creates a £265m income. Adding all this together with various other sources of revenue such as royalties from overseas, it is estimated the BBC receives a total of £5,102,300,000 per year. Dividing this vast amount of money is a huge responsibility that is entrusted to the BBC Management Board, who shares out the money between all aspects of the BBC, including its television programming, online presence, radio and administrative departments. The BBCs cost per service can be seen in the diagram below:

Capture-BBC

The BBC boasts that an impressive 96% of the population use their services, with the average viewer/listener spending 19.5 hours with the BBC each week. I think these statistics show that the BBC is using the licence payer’s money effectively. More information on the BBC’s funding and how the money is distributed can be found in the BBC Annual Report.

The BBC is split into managerial departments, the Executive Directors Board and the Senior Staff Management Board. The Executive Board of Directors is responsible for the management of the BBC and ensuring that the BBC delivers the services that have been agreed with the BBC Trust. The Senior Staff Management Board meets three times a month to delegate issues from the Executive Board and ensure the organisation meets its objectives effectively.

BBC Management Board –

BBC-Management-Board

ITV is funded differently to the BBC. Instead of license fees funding programming, ITV uses advertising. Placing adverts in breaks and between shows brings in millions of pounds each year for ITV. Depending on when the advert is shown, an advert can cost a company hundreds of thousands of pounds to be shown on ITV, for example a 10 second advert being played at prime time will cost significantly more than it would if it were shown during daytime television because it is being shown to a much larger audience, however only big companies can afford this type of advertising. The money from these advertisements is mostly pumped back in to funding ITV television shows.

Both ITV’s and BBC’s television and radio programming is regulated by OfCom, an independent regulatory company whose legal duties include ensuring people who watch television and listen to the radio are protected from harmful or offensive material and people are protected from being treated unfairly in television and radio programmes or from having their privacy invaded. Ofcom are responsible for regulating all television programming in the UK, including ITV and Sky. This brings us on to Sky and the Rupert Murdoch ‘threat’.

Sky is also run very differently to the BBC. Instead of being publicly owned, Sky is part of a huge, privately owned company known as News Corporation, a multi-national conglomerate run by Rupert Murdoch. Sky TV is mainly funded by customer subscription charges and television advertising. With over ten million UK customers paying monthly subscriptions for TV, phone and broadband services combined with advertising and other sources of revenue, BSkyB brings in an estimated £6.791b in revenue each year, however instead of this being pumped back into the company, a lot of this is simply profit for Murdoch and his empire, but enough about Sky TV, let’s take a look at the man behind it, Rupert Murdoch.

Born Keith Rupert Murdoch in 1931, Murdoch is the founder and chairman of News Corporation along with chairman and CEO of Twentieth Century Fox, making him the most powerful man in media. Owning a string of the world’s largest and most read newspapers, television companies with hundreds of millions of viewers and various other companies worth millions, you can’t look too far without seeing something that is at least partly owned by Mr Murdoch. This domination in the media industry is why it is estimated that Murdoch is today worth over $8.3 billion. So why is he being called a ‘threat’ to the industry he is so involved with? The concern stems from Murdoch owning a vast amount of the media that we see and read every day and being able to influence what we think. Whilst it is true that Mr Murdoch’s media empire controls a big percentage of the information we see on the television and read in the newspapers, the thought of him being a ‘threat’ is a notion with which I don’t entirely agree. The fact that I am writing a piece on his so called ‘threat’ is proof enough that just because he has control over what is printed in papers, does not mean that he can control what people think. I do agree that some people are influenced by what they read and see in the press, but there are people who aren’t as easily influenced. There will always be people who have a mind of their own and won’t take what is printed in The Sun, for example, as fact. With modern technology, it is easier than ever for anybody to express their opinions online, so I don’t think anybody can control the entire world’s media to the extent of it being a threat. Another thing to consider is that Mr Murdoch is not the one writing the articles and the news, news is simply reported. So is Rupert Murdoch really the evil, mind controlling super-villain that the press paint him out to be? If he was then why would we even be discussing it? Surely if this was the case then we wouldn’t even be aware of the phone hacking scandal that caused such uproar in the media.

So to conclude, no I do not think Rupert Murdoch is a threat to the moving image industry. The BBC controls the majority of media in the UK and Rupert Murdoch is simply competition.

News Corp - Media Reach UK

 

This graph shows News Corporation’s reach in the UK. As you can see, BBC has a significant lead in TV and Online compared to Murdoch’s companies.