If you want to watch television in Britain you must pay 139 pounds (~$227) per year to the government (enforced by criminal law) for a license to receive a broadcast. However, they do give you a discount if you own a black and white TV. The BBC receives over 3.3 billion pounds (~$5.4B) from these mandated license fees. Fox News, CNN and MSNBC revenues (not profits) combined is less than half the money the BBC is given for free. Proponents of a government run media service would state the high quality journalism, like this gem, are worth the citizen’s money. Interestingly, I listen to BBC Urdu every now and then and find it strange how many interest stories they do on American lifestyles for a Pakistani audience. Guess in a way, I’m happy British taxpayers are subsidizing this instead of Americans.
If strictly observing advertising revenue, both BBC and CNN are roughly the same. So what is the opportunity cost of a government subsidized media? With declining revenues from print media and increased convergence of the internet and television, news organizations are looking for new ways to capitalize with their online audience. While a select few websites, such as the Wall Street Journal, have successfully convinced their customers to pay for online content, the vast majority are trying to survive on decreased advertising revenue in a weak economy. A major obstacle to charging customers for content online is the competition in conjunction with the prisoner’s dilemma. While eventually the trend may change and consumers may actually pay a fee for a subscription to their favorite newspaper or news channel, entities such as the BBC which are subsidized by the government and are providing content for free, essentially will eliminate many viable news organizations from surviving. Speaking to a media executive, he explained, “it is a larger leap for the consumer to go from free to $1 than it is to go from $5 to $7.” This presents a unique challenge for news agencies trying to survive the current economy coupled with government subsidized media.
So what is the price we are paying? James Murdoch, CEO of News Corporation, who is challenging the BBC funding lines says “In this all-media marketplace, the expansion of state-sponsored journalism is a threat to the plurality and independence of news provision, which are so important for our democracy”. As much as most Americans hate either Fox News or the New York Times, do we not all want a choice in what we listen to? If the alternative was “free” state-run media used as a tool to push the agenda of whichever Administration was in power, how much resistance to the war in Iraq would we have heard of? Would the demonstrations at the healthcare town hall meetings received any coverage? Would Twitter get overwhelmed every time there was an election? And would Bearing Drift become the most popular site on the Internet?
