Director of Television, Danny Cohen explains why BBC Three is not for sale in a letter to Jon Thoday and Jimmy Mulville who have proposed an alternative strategy for the channel.
Dear Jon and Jimmy,
Hope you are both well.
We are grateful for the passion you have for BBC Three. We have worked closely together over the years on shows for the channel, so I share this passion with you.
I've been part of making BBC Three what it is today. I put my heart in to it, but my head is telling me now that we should take the next step in the channel's journey of innovation.
The BBC Three that was launched earlier this century was pre-YouTube, pre-Facebook, pre-Instagram, pre-Netflix and pre-BBC iPlayer. Since then the world has changed profoundly and what young audiences expect is also changing rapidly. Our vision for BBC Three is one for the future, one that will deliver for young audiences in the long-term, one that will make the BBC relevant to young people today, tomorrow and in years to come.
You are right. We spent years building what BBC Three stands for - young audiences, new talent, fresh new ideas - and we are not throwing that away. We are building on it. We could stand still and be a legacy organisation, accept the status quo and ignore the direction of travel, but that would be to the long-term detriment of young audiences and the overall future of the BBC.
Young audiences and new talent are at the core of our business and are vital to our future strategy. The proposals we have put forward to the BBC Trust for decision have three simple goals: to put us at the forefront of creative and digital innovation, to continue to find new talent, and to give young audiences what they want, when and where they want it. Crucially, that talent can come from anywhere and at any time. An online BBC Three means we can find and develop new creative talent with more range and opportunity than ever before. And we will put them on BBC One and BBC Two to maximise awareness and universal access. Talent will be at the centre of what we do.
You are also right about our heritage. That is why we are not closing BBC Three and one of many reasons why we haven’t invited sales bids. We value what it stands for: the history it has and the investment made. But we must also plan for the future and not be afraid to take big risks in a rapidly changing world.
The BBC needs to make very substantial savings so it is true that this proposal is partly born out of financial necessity. We acknowledge it is earlier than we might have ideally planned. I have openly said that we would have waited a couple more years to make this move in an ideal world. But that does not change the fact that it is the right thing for young audiences in the long-term. Liberated from the need to fill a linear schedule, a move online means we can make content of all forms, of all durations and not just in traditional TV shapes.
We can make this content relevant to young people and give it to them at 10am and 4pm not just between the hours of 7pm and 4am.
We can also help grow the creative sector in the UK by engaging with new digital content makers as well as our brilliant existing suppliers. As a public service broadcaster we are excited by the idea of finding new partners, learning from them and helping to grow an emerging creative sector as the BBC has done in the past with the independent production sector.
There were dissenting voices when we pushed ahead with BBC iPlayer. Yet Netflix’s very own Reed Hastings said that BBC iPlayer “blazed the trail” for VOD services. I believe we can do the same with a new BBC Three. We can lead innovation, learn quickly and position ourselves for the future so we have the very best public service digital content offer for young people in the UK and hopefully the world.
There were similar passionate dissenting voices when the BBC's investment in online in the 1990's was possibly even more controversial. Television and radio in their current form were hugely dominant. Why try new things and make the change? And when we launched BBC Three, there were more passionate dissenting voices. Looking back, the BBC has benefited hugely from these controversial early decisions to invest in new technologies and changing audience behaviours.
We need to do the same now: take risks, invest in the future and embrace change.
There is no doubt that audience behaviour is changing, most rapidly amongst the young.
Channels are going to remain important, which is why we need to continue to invest in great programmes for linear transmission for audiences of all ages. Our output on BBC One and BBC Two is key to this – BBC One is the most popular television channel for young audiences in the UK, bar none. It contributes 1,199k unique reach to 16-34s compared to 113k for BBC Three today.
But it is also increasingly clear that children and teenagers are watching very differently. They expect to be able to watch what they want, when they want it and how they want it. A media universe in which programmes are not available for their immediate convenience makes increasingly little sense to them. And they often seem as happy watching on their tablets and mobile devices as the big screen.
Young people are also spending increasing amounts of time online on social media and YouTube as well as subscriptions services like Netflix. They want short-form as well as long-form; they want to discover their own generation of new stars online.
This is the media world we need to prepare for when it comes to young audiences - and our plans for BBC Three give us the opportunity to learn and experiment in exactly the way the BBC should as a public service broadcaster with an eye to the future and an appetite for risk and innovation.
The media behaviour of these 6 to 12 year-olds needs to shape the future of BBC Three. The BBC needs to change now so as to learn how to serve them best not just for the sake of BBC Three but to help secure the long-term relevance and strength of the BBC overall.
Whether it is Ofcom's recent and detailed Digital Day research, the BBC's own detailed studies or pieces like that in The Financial Times just this week which reported revenues for US networks are falling because of a shift to online consumption, the evidence of these shifts is apparent and accelerating. In my mind it won't be a total shift - linear will still remain important - but it's vital for the BBC's future to be as strong in digital content as it is on conventional linear channels. That means we need to take some risks, innovate and lead change in our industry as we did with BBC Online, the launch of BBC Three and then BBC iPlayer.
All existing broadcasters need to develop a better balance between linear and digital and the BBC Three move begins to deliver that for the BBC.
Perhaps we will not be able to persuade you personally of the value and exciting creative potential of a move online, or of the strategic long-term benefits of a major BBC long-form content move in to the digital space. It may be something we will need to respectfully agree to disagree on - so we should also respond directly to your proposal to buy BBC Three.
Ever since we first met, the fundamental questions about your proposal have multiplied and deepened.
In summary, it is still not clear what you would be buying for £100m. We cannot sell you the BBC brand name, the EPG slot or the vast majority of rights to programmes. These are the key assets.
It is therefore very unclear what value you would be getting or why this purchase would make sense for the BBC or yourselves.
The BBC will not sell the BBC Three brand name. We are not willing to privatise a UK public service BBC-branded channel - a fully commercialised and independently run BBC branded channel is incompatible with our obligations under the Charter Agreement. Nor would the BBC be willing to allow a third party company to decide the editorial direction of a BBC branded channel in the UK.
We would also not wish to risk invalidating the BBC trademark by splitting it. And it is extremely unlikely that your proposal would meet the BBC's four commercial criteria for Commercial Trading Activity set out in the Fair Trading guidelines.
We would not be able to sell you the distribution capacity or the EPG slot. On DTT, this is granted to the BBC on the basis of its public service remit and is not in our gift to sell. Similarly, on cable, it is also not in the BBC's gift to sell the EPG slot if we chose not to redeploy it for other BBC purposes. We are therefore not able to sell you a coherent distribution plan and your proposed channel would not have the prominence in the EPG which is so important to success.
Your proposal also does not stack up when it comes to content rights.
With commissioned original series in comedy, factual, drama and entertainment that we would like to continue producing for audiences, we will commission these in large numbers for our new proposed digital BBC Three service from a range of suppliers, via our existing commissioning system.
We will move other programmes to BBC Two or BBC One. Indeed we have already done so with shows including 'Russell Howard's Good News' and 'Don't Tell The Bride'.
Repeats of BBC Three's previously commissioned originated programmes are already sold to UKTV or others in long-term deals. These deals have and continue to return very large value to the BBC, which goes back in to BBC programmes and we will continue with these partnerships. If BBC Three gets the digital go-ahead we will be working closely with UKTV and other commercial partners to ensure we maximise value for licence-fee players and rights-holders.
With repeats of other BBC previously commissioned programmes on BBC Three such as ‘EastEnders’ and ‘Doctor Who’, we will re-deploy these repeats on other BBC Channels and secondary rights will continue to be sold to UKTV or other partners.
We also have long-term deals in place with US studios for a small number of shows and movies and we want to keep these programmes on BBC-branded channels in the coming years.
Equally crucially in many cases, the BBC does not as the commissioner of independent producers' programmes own the rights and so we would not be a party to these commercial transactions. This means that for a large proportion of BBC Three's content the rights are not the BBC’s to sell.
BBC Three has also benefited significantly from being part of the BBC's portfolio of channels and services. Being part of a portfolio has been vital to the success of all UK broadcasters' digital portfolios. Your proposed service would not be able to enjoy this crucial benefit. The BBC's Fair Trading framework specifically prohibits cross-promotion of a commercial service in this way. It would offend against State Aid rules as the promotion would confer a selective commercial advantage on this version of BBC Three when not in BBC public service ownership.
In summary, given that your proposed new venture could not:
- use the BBC Three brand name as it is a commercial service
- would not have its EPG slot which is reserved for public service channels
- would not have access to a very large proportion of programme rights which are either owned by independent production companies and distributors, already licensed to digital channels such as UKTV or owned by US studios
- could not be cross-promoted on any BBC Service
...we do not believe that there is a viable sale to be made both practically or in the interests of licence fee payers.
Your proposal does not add up when all these elements are taken in to account. Essentially you would be buying a channel with a new non-BBC name, without an EPG slot on DTT and cable and without any rights to currently produced or archive BBC programmes. When you actually get in to the detail, we are not sure what you would be spending your money on.
There is of course nothing to stop you setting up a new TV Channel for young audiences if this is something you are passionate about doing. With your track records, we are sure that this would be a valuable new contribution to the UK creative industries. We would whole-heartedly welcome anyone who wants to invest in original British content - the production community in the UK and internationally would jump at the chance to compete for an additional £200m being pumped into original content alongside the £600m Sky has committed to this year.
I hope this sets out the BBC's position clearly.
Given that you have established a media campaign for your proposal, we plan to publish this response to ensure that the BBC's position is fully understood in the public domain. We are aware that you have also sent your proposal to the BBC Trust. They have asked for our assessment of your proposal. When we submit that, we may include additional considerations to those in this letter.
I also sincerely hope that we will continue to work together on a great range of programmes and content in the future as we have done with great results in the past. Perhaps you may even be willing to make programmes for a new digital BBC Three and we can enjoy some success there too.
With thanks and best wishes,
Danny