The media and creative arts are now a huge part of the UK and international economy. In this country they account for over 2.5 per cent of GDP and millions of jobs. Huge conglomerates bestride the globe: Vodafone’s market capitalisation is greater than BP’s and Facebook just floated for $100bn. The BBC is world renowned and the English language is a major national asset.
We want these industries to flourish, for consumers to be well served, not ripped-off and for start-ups to benefit from skilled workers and access to finance. At the same time our concern goes beyond the economic into the quality of our cultural life and to the heart and health of our democracy.
That’s why the crisis in the newspaper industry and the scale of the scandals bared in the Leveson inquiry have been so alarming. Ed Miliband was the first to call for a public inquiry after the hacking of Milly Dowler’s mobile was uncovered last year, but the systematic abuse of power and weakness of those individuals and institutions – police and politicians – whose responsibility it is to defend ordinary citizens has been lamentable over the past 20 years.
This is why we need a new PCC, one which is independent of both media moguls and politicians, covers all the large media outlets and is easy for the citizen to access. It looks as if only statutory backing on the Irish model can achieve these objectives. At the same time it’s hard to believe that the sense of impunity, let alone the curse of dumbing down, would have occurred without significant market concentrations and domination. This is why we need tighter limits on ownership within individual markets, for national newspapers or television say, and across media.
But this isn’t the only set of problems facing the printed press. At local level, newspapers are folding rapidly – more than 240 have closed in recent years. The industry claims that this is because readers and advertisers are fleeing to the internet. There is a trend in this direction, but it is very far from being the whole truth.
Last year Trinity Mirror made a £36m operating profit on their regional operations and Johnston Press made an operating profit of over £60m. So why isn’t this enough to keep our local press going? It is because a few years ago they had returns of 30 per cent and they borrowed from the banks at comparable interest rates to finance acquisitions and build their chains. But this was never going to be sustainable. So now the first call on operating profits is interest rate payments to banks and journalists are sacked to finance these, as well as offices closed and papers folded. All at the expense of local news and accountability. It’s a text book case of predator capitalism.
So what could a Labour government do? Given that the underlying businesses are sound, this isn’t about rescuing lame ducks. We don’t need new subsidies but new forms of ownership – co-ops, social enterprises, journalist-management, long-outs and even designation of local papers as local assets under the Localism Act. All of these things should all be tried before any more local papers close.
And what about the BBC – under attack from Murdoch and the right who see it as a a tax payer feather bedded giant. Should the Beeb be challenged? Of course the BBC can improve – it must tackle stratospheric top pay and improve on the diversity of presenters, for example. In its own defence it says that it is publicly accountable but it could do more. For example, why not involve the public in commissioning new work? With new technology it would be easy for us to nominate and choose those subjects we want to learn about or see more of.
The fundamentals of a licence fee funded national broadcaster are worth defending because in the whole ecology of the British media scene the BBC, which is more tightly regulated than others, raises standards and reputations. British television exports are built on this. It’s an example of regulation supporting economics as well as culture.
Meanwhile in the private sector we are seeing the growth of vertically integrated corporations who make television content, distribute it and sell the gizmos people use to watch and hear the content. The distribution networks are physically limited (there is only so much spectrum) and expensive (which is why government is subsidising mobile and broadband networks). So how are we going to prevent operators from using their gizmos and market power to privilege their content, limit access to others and dominate not just the markets but also the cultural life of the country?
Well, we could toughen up our regulation. Ofcom is constantly being sued by those who it regulates over the rules it sets – a tactic designed to delay and frustrate its ring-holding function. We could require the break-up of those conglomerates so that no-one could operate in both the content and device ends of the market. Or we could rely on technological innovation – YouView (a company owned by the BBC, C4 and BT among others) have just spent £70m developing a set top box to widen freeview choices on new TV sets, which are integrated into the internet.
This brings us to the tricky issue of how we are going to protect children online, prevent defamation on the internet and ensure citizens’ privacy is defended. Currently the internet is a bit like the forest in the 13th century at the time of Robin Hood – totally outside the law. For some this anarchy is fun and for others it is dangerous. But surely it is reasonable that we seek to reproduce the same rights and responsibilities in the virtual world as we have developed in the real world. This is complicated given the international nature of the world wide web. But this is not unique. We’ve developed the international law of the sea to deal with pirates in ships; we need an international approach to the net too.
All these issues require a government prepared and able to tackle big problems, to think strategically and to engage constructively with our international partners. The coalition is failing on every count: failing to deliver nationwide broadband, refusing to engage fully with our EU partners and Jeremy Hunt has failed even to draft a green paper.
Technological change means that we cannot stand still and as we move forward we will continue to put access for individuals first, both as consumers and citizens, so that everyone can reap the benefits of the phenomenal new opportunities.