Memorandum submitted by The Musician's Union
1. The Musicians' Union (MU) welcomes the opportunity to contribute to this inquiry.
2. The
MU has over 30,000 members who work as full or part-time professional musicians
and our interest in this inquiry comes as a result of our desire to protect
employment opportunities and income for professional musicians in the
3. The
BBC is the single biggest employer of MU members in the
4. Our response to this consultation touches on a number of the questions posed in the document, but focuses on the areas that may directly affect the professional activities of our members.
The benefits and opportunities offered
by the BBC undertaking a range of commercial activities in the
5. The BBC's commercial subsidiaries provide significant income for musical creators. In 2007-08 BBC Worldwide paid a total of £2.3 million to MU members, up from £1.7 million in 2006-07 and £1.5 million in 2005-06. BBC Worldwide has also helped to raise the profile of some of the BBC orchestras, for example the BBC Concert Orchestra, which was featured on the highly successful Blue Planet documentary series.
6. BBC Worldwide also provides additional income for music writers. A programme format which is sold abroad but retains the same signature tune means that the composer receives royalty payments from the overseas collecting societies. Examples of this include Dancing with the Stars and Top Gear.
7. Aside from the direct financial benefits to musicians, the BBC's commercial activities also help to secure the BBC's position. Since the BBC is such a major employer of musicians, it is vital to us that it should be financially stable. The BBC's commercial activities, therefore, are important because they provide an additional source of funding to the licence fee. It is also important to note that the profit that the BBC receives from BBC Worldwide is far greater than the profit that the BBC could expect to receive if it were to licence to third parties, who would take a much bigger cut.
8. These additional funds would help to make the BBC less vulnerable to a poor licence fee settlement, or a settlement that has been overtaken by economic developments.
9. This safety net is likely to be of real benefit to MU members employed by the BBC because it will protect BBC core funding, which provides so many opportunities for musicians. We believe that the BBC is and should remain the cornerstone of public service broadcasting and that its core funding should be protected in order for it to be able to continue to support original programme making.
10. It is also important to stress that if BBC Worldwide ever fell into financial difficulties, core BBC funding provided by the licence fee would not be affected, since BBC Worldwide is a stand alone company and could not be supported with licence fee payers' money.
11. Although it would be impossible for BBC Worldwide to be bailed out by core BBC money, the profits that it makes commercially are of direct benefit to the BBC. The BBC can decide how it wishes to spend this money. Essentially this means that BBC Worldwide's commercial activities allow for greater artistic ambition and higher budgets for programme making.
12. Not only does BBC Worldwide help to fund the making of programmes that the BBC on its own may not be able to finance, its existence might also give the BBC the confidence to be more ambitious in its programming. For example, if the BBC is confident that it will recoup a substantial sum from selling a flagship series abroad or from DVD sales etc, it may well decide that it can afford to increase the budget for that series. This may result in more work for MU members if, for example, the result is to employ a full orchestra rather than a few musicians for the soundtrack.
13. Since the BBC is such a major commissioner of the arts in the
14. Although
commercial subsidiaries such as BBC Worldwide are just one of the ways in which
the BBC can be supported financially, we believe that they are vital. As well as complementing the BBC's core
income, the existence of BBC Worldwide is in itself crucial to performing arts
in the
The potential risks to the BBC, licence fee payers and other stakeholders
15. It is possible that the
BBC's commercial activities could be seen to weaken the link between the
licence fee payer, the licence fee and the BBC.
Because of the unique way in which it is funded, the BBC's identity is
intrinsically linked to the licence fee payer and this makes it an important
and respected
16. Should the BBC's commercial activities expand, it is likely to exacerbate resentment amongst other producers and broadcasters, such as ITV and Channel 4, who do not benefit from the secure funding that the licence fee settlement provides for the BBC. They may well argue that if the BBC is making sufficient money from its commercial ventures then it should not retain sole use of the licence fee funds.
17. The MU believes, however, that the potential risk to the BBC, licence fee payers and other stakeholders is significantly reduced by the fact that BBC Worldwide is strongly regulated by the BBC Trust. This regulation ensures that any activity or expansion remains under control.
The future of BBC worldwide and other BBC commercial subsidiaries
18. We support BBC Worldwide in its current form and encourage its commercial activities with the caveat that at all times composers, performers and other freelance contributors should be correctly remunerated and their rights respected through fair and transparent contractual activities.
19. As long as it is conducted in a way which rewards the artists who have contributed, we would also support the expansion of BBC Worldwide, as this can only increase the worldwide audience for quality BBC programming. The BBC should, however, continue to export more finished British programmes and series, rather than selling programme formats and associated expertise, for example exporting the format for series such as Strictly Come Dancing and Top Gear.
20. UK-originated output is an important source of employment and income for MU members and other performers, and exporting the finished product is likely to bring them additional income. Exporting the programme format, on the other hand, will not.
21. The MU is concerned to note a move away from royalty payments for sales of BBC programmes worldwide towards a system of buyouts offered by the BBC. Whilst we appreciate that this reduces the BBC's administrative burden, it can have a potentially negative impact on musicians who have been engaged on BBC productions and agreed to 'share the risk' by accepting royalties for sales and further uses. If a programme does particularly well commercially and a buyout has taken place, the performers are unlikely to receive as much income as they would have done through royalty payments.
22. We do, however, accept that the sale of certain formats, for example Strictly Come Dancing which has been licensed to 40 different countries, brings in a significant amount of income for the BBC which can then be diverted back into funding quality programming. The MU would merely urge BBC Worldwide to prioritise the selling of finished British programmes and series wherever possible.
23. In addition to ensuring that the future of its commercial subsidiaries involves getting the best deal possible for the performers involved in its programme making, we would like the BBC to ensure that culture and the arts are at the centre of its commercial ventures.
How the money returned to the BBC by its commercial operations is invested
24. The MU believes that the
money returned to the BBC by its commercial operations should be invested in
bolder programming budgets, which engage more performers. It should be used to generate high quality content,
initially for the
25. We therefore hope that the money will go towards commissioning new series and programmes for BBC channels that BBC Worldwide can then take to the world. In theory, the use of this money for commissioning will reduce the burden on core licence fee funded BBC finance, since less of this funding will be required to create these new programmes. This would leave more of the licence fee payers' money available to maintain and expand the BBC's public service broadcasting activity.
Conclusion
26. It is the protection of the BBC's licence fee income which is the main concern of the MU, since it is the BBC's public service broadcasting activities which provide the bulk of employment for our members.
27. We also believe, however, that commercial ventures such as BBC Worldwide are vital, both for the added financial security that it gives the BBC and for its investment in the creative economy in its own right. It is essential that BBC Worldwide is allowed to be as successful a business as possible so that the maximum amount of profit goes back into quality BBC programme making and investment in talent.
28. The MU would be happy to give oral evidence to the committee if required.
October 2008 |