The stagnant home economy is taking its toll across many industrial and service sectors. Given its high public profile the impact of necessary fiscal consolidation is perhaps most apparent at the BBC. As part of its cost-saving initiatives it has revealed that it will be sharing its 'free-to-air' transmission rights to Formula One in the UK with NewsCorp BSkyB's own subscription and 'pay-to-see' services.
Whilst negotiations about the matter had been ongoing for some years - to the apparent previous chagrin of Bernie Ecclestone's Formula One Management company which notionally prefers 'free-to-air' - it looks as if the tumultuous drop in BSkyB's share price, which came as an effect of the NewsCorp scandal, necessitated a positive news story to support a new price-floor for the stock.
[NB BSkyB's share price averaged 830p from early March to the beginning of July, peaking at 850p before plummeting to 695p, generating gains to 740p before once again falling to 694p (as of mid-day on 03.08.2011)].
This intimates that James Murdoch at BSkyB has tried to creating a critical new price floor at 700p.
As a commercially driven entity BSkyB of course has a responsibility to its shareholders, and as part of the conglomerate holding that is NewsCorp may have a ripple-effect upon perceptions of its parent, even though NewsCorp was disallowed from expanding its own stake in the TV operator. Nevertheless, even with a smaller share-holding than it would ideally like, this good news story at BSkyB may be counted by investors as part of the ultimate necessary re-stabalisation effort, something needed given the recent general global 'sell-off' generated by the USA's QE3 action.
The news that BSkyB has indeed gained access to UK TV transmission rights for F1 will be welcome news to the Saudi Arabian Prince Alwaleed bin Talal. A majority shareholder in NewsCorp, an avid motor-sports fan and a (non-political) interests in F1 helping to develop alternative business streams in Saudi Arabia, he will enjoy viewing the synergies between personal investment and personal hobby become ever more integrated.
investment-auto-motives previously published an essay titled 'Gordon Bennett Steering Rupert Murdoch's Legacy'. It set the hypothesis that the latter modern multi-media baron may wish to replicate the efforts of the former Edwardian newspaper baron, by shaking-up the then new and now re-emerging automotive sector through the sponsorship / 'ownership'. A process of global TV rights capture - region by region – would then put BSkyB in the sports 'driving seat', effectively replacing Ecclestone and FOM.
It would also mean that Murdoch-Sky could then, with FIA co-operation, play an effective role in moulding the sports future technology strategy, where new tech prove-out and vital entertainment value can be mated, the successful elements of which – as as historically been the case – trickle-down to production supercars and beyond. This in turn creates a broader automotive-centric investment network for informed investors such as Prince Alwaleed bin Talal, which in turn creates an investment template for the those growing institutionals, private equity and individual investors across MENA and other EM regions, giving them access to 'progressive capitalism'.
To the present, and the deal struck between BSkyB and the BBC (having held exclusive rights since 2009) was one which appears to be in BSkyB's favour. From 2012 it would broadcast all the F1 Grand Prix events from across the world, including practice sessions and qualifying session. The BBC would schedule only half of the actual races, but cover practice and qualifying – with of course coverage of the British GP 'non-negotiable'.
This then creates the fundamentals for a 'switch-over' consumer pattern. Those already with Sky will watch all aspects through Sky, but those GP fans who have been BBC loyalists will watch practice and qualifying for all races as is the case now, but will be foced to 'switch-over' to Sky Sports to watch an 'uncovered' races.
For the two TV channels this 'switch-over' model then both allows Sky Sports to attract viewers directly from the BBC for a notionally steady growth of subscribers and viewers. Equally this approach creates a 'over-lap' business model at the operational level; whereby GP event specific staffing costs 'on site' internationally can be shared, a co-ordinated 'ramp-down' of personnel and costs for the BBC and 'ramp-up' for Sky Sports.
[NB Though nation specific broadcasters have in EM regions have much improved their abilities and coverage of GP events, previous reliance by the BBC on external broadcasters has been patchy, hence its retention of its own international O/B (outside broadcast) section].
This then appears a good example of medium-term 'co-opetition', both commercial organisations able to share costs during the 2012-2018 time-frame, with presumably the BBC abdicating its role far sooner than 2018.
Reports indicate that the BBC pays £40m per year for transmittal rights to FOM, excluding the costs of BBC Sport's O/B units. One report indicates that “£25m will be saved” from the 'co-opetition', though whether on an annual basis (one presumes so) or lifetime basis is not made clear.
The agreement though must have had had the endorsement of Ecclestone's FOM in order to proceed. As stated he much preferred the idea of a 'free-to-air' system of F1 coverage, but no doubt also well recognises the trend that western viewers themselves have been heavily effected by demographic,lifestyle, interests and viewing changes.
Thus whilst the BBC as the UK's national TV champion could command a certain level of viewing figures for the Sunday events - though domestically weather dependent and so periodically volatile at 6-10m viewers - a paid-for system by Sky will attract a smaller number of viewers but with greater consistency and regulatory given their 'sunk cost' subscription fee and 'inelastic' demand generated by their GP loyalty.
Thus for BSkyB and James Murdoch, this long-awaited conquest over the BBC substantiates his 'cause' to break the still strong stranglehold the corporation has over UK radio and television.
The loosening of its stranglehold over F1 however should raise questions about exactly how it now goes about offering “information, education and entertainment” in this sports sphere- one that has so much influence on the UK's own automotive sector.
Without doubt and for obvious reasons, the bias of Formula One coverage has been typically event specific, with more general website commentary via navigation of the BBC (Sport) portal and access to its 'iplayer' re-play function.
Yet over the years Formula One has also inadvertently also helped to underpin one of the BBC's 21st century success stories: that of its reborn Top Gear programme over the last 10 years or so. Top Gear's car-fanaticism includes direct commentary and celebrity invitation links with the Formula One world, indeed its old and new incarnations of the mythical 'Stig' is based on the notion of the anonymous yet super-heroic race-driver. The glass top coffee-table positioned between seats on the studio-stage is the polished block of an old Renault F1 engine. The studio itself housed inside a hanger on a race-track.
In short the relationship between F1 and the BBC is inalienable. And it is something that the BBC must continue to recognise and support for the good of the UK economy.
[NB When the then new 2002 Top Gear programme initially 'stalled' during the very first 3 episodes Turan Ahmed advised its Executive Producer by informal letter that it must add a more diverse studio audience, far greater number of women and people of multi-cultural backgrounds as opposed to the heavily biased 'boys club' presentation. That was put into practice and the show grew to have massive female and international appeal, since spun off for international viewing and international licensing].
Top Gear then was moulded as an automotive entertainment programme, yet it also recognised that it must serve the informational and educational remit of the BBC, hence its adaptation of the 'Scrapheap Challenge' format (from competitor Channel 4) into its own engineering challenge excerpts. Indeed Top Gear itself became an effective BBC spring-board, using 2 of its 3 presenters - Hammond and May - to front other programmes with a technical bent, hobby, engineering and science related aimed at youngsters and families.
These then both serves, and draws from, a fascination with the technical and its accordant paraphernalia, generating a subtle yet powerful feed-back loop between Formula One and broader 'STEM' subjects personal learning. One example is that of Hammond's exploration into the use of exotic materials, specifically the use of magnesium alloy as a central element of light and strong F1 car wheels, highlighting its pros and cons.
Today then Top Gear and its presenter enabled spin-off programmes acts as the philosophical intermediary between the ethereal world of F1 glamour & competition and the mundane reality of being sat in motorway traffic jam. It is in part a manufactured psychological world by which the 'race-track grid' meets 'urban gridlock'.Yet it is also of major influence on real world of driving aspirations and habits – the 'cool wall' highly symbolic to the suburban masses - and thus part of the 'social motor' that propels the UK motor industry at a retail level, partly at a production level and thus eventually at the supplier level.
The BBC and Top Gear then have become a concomitant part of the UK's – and indeed international - economic hub.
The 'Beeb' still retains a Royal Charter remit to serve the British nation; (indeed via the World Service influence on a broader scale). Historic precedence demonstrates its lead role in educating the nation(s).
Of course the Open University has 'carried the torch' since 1971, allowing generations of otherwise 'educationally abandoned' people to improve their being, their contributional effect to society at large and improve their life prospects. Yet also in regular programming there have been old-generation self-styled technical educators such as Raymond Baxter who's time with the RAF lend an air of knowledge and authority, whilst today in the educational realms of BBC2 & BBC4 the 'amateur professor' has given way to truly learned Ph.D wielding presenters plucked from academia to provide insightful exposure of their fields.
Today's and tomorrow's teenagers are angst-ridden about the debt-cost of education – 'god' or otherwise – and so will increasingly seek-out more affordable 'distance learning' options offered by an ever broadening number of old and new players in this education-space.
It seems inevitable then that the BBC must seek to continue to develop a socially pro-active stance, especially regards learning, and must find meaningful avenues by which to do so to inter-link technical exposure, awareness, interest and aspiration amongst successive generations.
Yes the BBC faces headwinds such as a time-tabled stepped-shrinkage of its TV licence income, and faces strong competitors such as Pearson Education with its links to the Financial Times etc, yet it strategic re-shaping is enabled by the advent of multi-media devices and channels as well as the wealth of its archive and power of its brand.
Yet also because the massive project that is the 're-orientation' of the BBC is philosophically far harder to assess and execute than would be the case for say a start-up business (which would typically operate in only one, well targeted, media space) there is innate complexity to the process.
Viewing the decentralisation and commercialisation of the BBC, one would expect each of its cost-centre divisions – both outward 'client-facing' & inward 'operationally-facing' – to potentially be sold through private equity and possibly onto public stock markets; especially so educational units.
Hence, the organisation faces the challenge of balancing its social remit with that of a commercial remit: and this requires that it be very cognisant of the strategic choices it makes.
To date the BBC's 'monetisation' efforts started with 'Christmas Special' vinyl records in the 1970s, sales BBC Symphony Orchestra records, the packaged video and DVD availability of some of the 70+ years of TV, film & radio archive stock (sold via BBC Enterprises and its shops) and to a B2B client-base of other international TV broadcasters the contractual 'lease and license' contract successes of BBC Worldwide.
The greatest challenge for the BBC then is what content and offering to retain and what to divest. It must then endeavour “not to throw the baby out with the bath-water”, especially given its role “to inform...to educate...&...to entertain”. Content and associated programming – rightly remains – at the heart of the debate.
Yet as we – business-people, government, academia and the public – essentially look over 'Stagnant Britain' and in regions a 'Broken Britain', the role and power of the BBC with its powerful cultural influence and their links to very real socio-economic worlds should not be overlooked or under-estimated.
The Beeb certainly does not have the pseudo 'soft' Big-Brother hold over the country it once did, but with its 'care-taking' social role, it still serves as both a 'reflector', a 'dialogue forum' and a 'promoter' of 21st century Britain. A Britain which now desperately requires an economic 'kick-start' of sizeable historic proportions.
The BBC has links to Formula One which stretch back generations, and whilst it has seemingly necessarily seen fit to share and eventually divest its live Grand Prix broadcasting rights to BSkyB, it should nevertheless continue to 'show-case' the world of Formula One technology in order to create an education and knowledge trickle-down of its own.
As the Silverstone Racing Circuit becomes a 21st century educational hub for global F1 and motorsport, so the BBC will surely align its own course to become an increasingly 'tucked-in' and able to exploit the slip-stream. To do less than this would fail both its role and the UK at large given its necessary desire to grow its 'earning potential' from the global-wide 'learning potential'.