THE B.B.C.

Auckland Star, Volume LXV, Issue 9, 11 January 1934, Page 13

THE 8.8.C.

OVERFLOWING FUNDS.: CENTRALISED FINANCING. LICENSE AND OTHER PROFITS. (By a Special Correspondent.) (II.) . LONDON, December 4. 111 the financing of any national scheme of broadcasting the experience of Great Britain demonstrates that one of the primary essentials for success is that the people who directly receive and benefit irom services rendered should be its sole financial mainstay. And those people are the radio fans themselves—the listeners—but not the taxpayers. Insistence on this fundamental can immediately produce a psychological reaction liable to have far-reaching beneficial results. All dependence for the development of the service given, the organisation of programmes, and the determination of their character —what part shall be educational, what part musical, what part instructional, what part light entertainment, and so on—moves from those who would exploit broadcasting for their own personal and financial ends into the hands of an administration whoso whole outlook on the problems to be solved can be best summed up in this manner: How best can we cater for the desires of our listeners while promoting the musical and educational uplift of the nation as a whole? And-so motivated it may tend to become a little autocratic, yet amenable to reasoned criticism and responsive to demand. This is the impression one gets after reviewing not only all financial and administrative aspects of the British broadcasting scheme, but also the whole of European systems. The secret of it all is centralised control. Tlio British Postmaster General in 1921 approached problems involved with traditional caution. All over the world was muddle, and the situation in England provided no exception. Harmony that was air-borne clashed with advertising propaganda and propaganda with harmony. How best could one be eradicated, the other developed? He objected to the air being laden with advertising, blaring into the privacy of homes, where it was not wanted. National sentiment was behind him. He also objected to State'financing for any broadcasting scheme. He figured out it was a trade concern. Therein was the snag.. Trade and advertising were interdependent. Trade Co-operates. Conferences were held. A bargain was struck. The trade got together and evolved a scheme under which all manufacturers agreed to make proportional contributions to a fund for broadcasting. It took the shape of a royalty schedule. Every set, or part of a set, was to carry a royalty surcharge to be paid into the fund. Against this the PostmasterGencral undertook to issue radio receiving licenses only in respect of authorised sets. A charge of ten shillings .would be made for each license, one-half of which he would keep to cover coUec- j tion costs, and the other half hii would pay to the Broadcasting Company incor-1 porated by the trade. Behind "this financial arrangement lay the bargain made, and it found expression in the first public wireless broadcasting license ever issued in England: "The company shall not without the consent in writing of the PostmasterGeneral.receive moijey or other valuable consideration from any person in respect of the transmission of messages by means of the licensed apparatus, or send messages or music constituting broadcast matter provided or paid for by any person." As a consequence broadcasting m England was ushered in under a scheme which kept the sponsored programme completely outside all administrative curriculum. The sale of receiving sets began on November 1, 1922, and at the end of 1923 the total number issued was 580,380. Ever since sales have continued to expand. . During the first eighteen months the Broadcasting Company received from the Post Office the sum of £170,000. For the year ending March 31, 1925, it received £490,000. The next year, ending March 31. 1920, the total was £500,000. Nine months later —on December 31, 1920, the company's broadcast license expired and for these nine months it received approximately £550,000. This license money, which it had been receiving from the Post Office, was increased to 75 per cent of the total as and from April 1, 1923; that is to say 7/10 instead of 5/2J of every 10/ received for each license. The Postmaster-General had ascertained that the expenses of collection did not amount to more than 25 per cent of the total collected, so by agreement the remainder was paid over to the Broadcasting Company. This revenue from the sale of licenses proved to be the sole revenue the company received owing to the complete breakdown of the elaborate trade royalty contribution scheme. Growth of Profits. By this time ample experience had been obtained with regard to the working of the national radio scheme. It had given satisfaction. Programmes were steadily improved and new ideas incorporated. Listeners conceded that for their annual license fee of 10/ they were getting good value. But more important Still, it was discovered that the money so obtained was more than adequate to meet all the financial demands of operating a national service and still leave substantial sums available to carry on unhampered both the experimental and development side of broadcasting. At this stage it is important to remember that on December 31, 1920, the total number of receiving licenses issued by the Post Office was only 2,178,447. When the present British Broadcasting Corporation was founded and "iv-en a Royal Charter at the end of 1926,° to take * over and continue the development of broadcasting in succession to the original company which was wound up, it was realised that the revenue that would be received from the sale of licenses would presently exceed all financial requirements. So a new financial arrangement was worked out, and a graduated finance scheme based on the aggregate of licenses issued agreed. The financial arrangement under which the British Broadcasting Corporation operates to-day is as follows: The Postmaster-General charges a sum of 10/ a year for each wireless receiving license issued. From the total sum collected a deduction of 12J per cent is made on account of the cost of collection and administration. Out of the total remaining the 8.8.C. is paid the following amounts': Per. cent. From the first million licenses .... 90 From tlic second million licenses ... SO From the third million .licenses 70 From tlic fourth, million licenses ... CO From the fifth million licenses .... 00

The issue of radio receiving licenses lias steadily increased as the figures given for each year reveal: 1027" 2,300,174 1928 2,028,392 ' 1920 2,950,730 1930 3,411,190 1031 4,330,735 1032 .. ; 5.233,107 1033 to Sept. 30 . 5,720,500 The revenue; as far as it is acertainable, which the 8.8.C. received from the Postmaster-General during this period from the sale of licenses, is approximately : — 1927 £800,000 1028 £ 870,000 1020 £040,000 1030 £1.040,000 1031 £1,150,000 • 1032 £1,300,000 Radio Publications. License revenue is, however, by no means the only revenue from which the 8.8.C. reaps advantage. While the Government rigidly tabooed the corporation from making money out of advertising over the air, it was permitted within the terms of its constitution to publish whatsoever it might desire, "as may seem conducive to any of the objects of the corporation." This gave the corporation unlimited power to produce almost anything, and only a very rigid newspaper determination to keep the

-8.8.C. within bounds has "braked" it from expanding in this. direction more than it lias. Its chief weekly production, "The Radio Times," started in 1923, gives all programmes for the week. Its price is twopence and it has a weekly circulation of about 1,700,000. Next comes "World Radio," begun in 1926. This gives the programmes of more important European stations, etc. Its price is threepence a week and its circulation is about 270,000. Finally comes "The Listener," a threepenny weekly journal which reproduces lectures and talks, etc. It has a circulation of about 100.000. From these three publications, which command extensive advertising appropriation, the 8.8.C. is making a considerably increasing annual profit. Here are the figures of the net profits: — 1027 £94,000 1028 £120,000 1020 £140,000 3 030 £ 100,000 1031 £240,000 1032 £320,000 Some British concerns endeavour to get behind the British prohibition of advertising by radio by having advertising propaganda broadcast in English from Paris. Every Sunday morning, afternoon and evening listeners in England can hear persuasive speakers trying to sell them real estate, building

materials, silk stockings, etc., or to induce them to visit one or other of the smarter London restaurants and cinemas. Complaint lias been made against the activities of air advertisers from France in the House of Commons, but it ,is diflicult to know what steps, can be taken to prevent an Englishman going into the air in Paris to boom his goods. This is the only case in which publicity comes into the programmes of the average English radio listener. Taxing Loud Speakers. A financial issue attracting considerable interest in the British radio world just now hinges on the question whether hotels, restaurants, dancing and similar establishments, which make use of the radio through the medium of loud speakers, for the entertainment of their patrons, should be compelled to pay for royalty licenses in respect of all music broadcast. The 8.8.C. is not technically concerned, because it pays fees on all protected music radioed. But the right of the hotels, etc., to utilise broadcasting services in the manner they have is challenged, and a decision given in the High Courts has gone against them. The action was raised by the Performing Rights Society, which is the representative organisation of music pro-

ducers. It contended tliat all hotel? and such places eliould obtain a license from them to cover loud speaker performance in public before tliey installed loud speakers on their premises. ; Both the High Court and the Court of Appeal confirmed this view, and as so many places are affected by the judgment, the brewers, who control the public houses of the country, are contemplating taking the question for final decision to the House of Lords, the highest tribunal in the land. , Excluding altogether thousands of restaurants and dance places affected, there are 95,000 licensed premises (public houses) in England and Scotland concerned in the case, and of these it is estimated that at least half have been U6ing the radio for the benefit of their customers. —X.A.X.A.