Memorandum submitted by the Musicians'
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 UK.
3. The BBC is the single biggest employer
of MU members in the UK and is in the unique position of supporting
five full-time orchestras. The BBC orchestras alone employ 382
contract musicians and many hundreds more on a free-lance basis.
Virtually all MU members will work for the BBC at one stage of
their career. Any reduction in the scope or funding of the BBC
would therefore be likely to impact negatively on the employment
of musicians and on their income. The BBC's commercial activities
provide additional income for musicians.
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 UK and
abroad
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 UK, its role would be undermined if it had
any reduction in its current level of commercial activity. The
BBC is also by far the main primary commissioner of new music
in the UK and has a strong tradition of investing in talent. It
is vital that it retains the funds to be able to do so, and we
believe that its commercial activities, particularly BBC Worldwide,
help to secure these funds.
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 UK, both financially
and in terms of exposure.
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 UK institution. Its commercial activities could
therefore, if uncontrolled, damage the BBC's case for its unique
funding, through the licence fee, for public service broadcasting.
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 UK
licence fee payer, but also potentially for a worldwide audience.
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
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