Some commercial outfits could benefit from a smaller Beeb.
The BBC is a relic of an era when The Establishment knew best. Admittedly, it's a classy relic -- more the Elgin Marbles than your grandmother's fake pearls. Indeed, it's a measure of how much we love the BBC that its growing dominance of television, the airwaves, the Web and even the newsagents' shelf has been so tolerated.
Can you imagine if all that output was run by the schedulers at ITV or Channel 4? The nation would be at a gibbering standstill within weeks.
But quality costs. For a start, there's the £142.50 TV tax nearly all households pay, collected via the truly antique licence fee at enormous expense -- £123 million to gather £3.6 billion that could be just be sent from the Treasury at a keystroke.
Then there's the more subtle impact of the BBC's public-funded position on its commercial rivals. Well, subtle if you're an ordinary punter, not a media baron. "The scope of [the BBC's] activities and ambitions is chilling," said News Corporation's James Murdoch last year. Quite something from a man whose family crest could have the words 'With Chilling Ambition' emblazoned above a picture of a Bond villain stroking a cat.
Chilling ambitions on ice
It's hard to feel sorry for Murdoch, but it's easy to see his point.
Why should a commercial broadcaster have to fight a subsidised and fancy-free BBC for an audience for a talent show, a sports match, or a celebrity chat show? Why is it in the public interest for the BBC to spend £18 million paying Jonathan Ross to talk to Hollywood stars, when the commercial sector would happily provide the same at zero cost to taxpayers?
At the other end of the market, British online media companies have long claimed the BBC's websites are near-impossible to compete against. And who would relish pitching an unbranded gardening magazine against Gardener's World, with its 30-minute BBC 2 advertising slot every Friday night?
Commercial rivals may therefore be licking their lips in anticipation of the potential cuts announced by the BBC this week -- even as they call for more in public.
The BBC has signalled it's willing to curtail its activities in UK magazine publishing and local media, as well as some more niche radio output. It will also halve its web output.
Such a retreat seems tactical rather than logical. Surely ultra-commercial fodder like Radio 1 and Strictly Come Dancing should left to rivals, too, with the BBC concentrating on unglamorous but genuinely vital work such as global news reporting?
Every few million pounds saved in output means another chunk of expensive management can be lopped out, too. Nobody wants his or her taxes funding bureaucracy. A more radical rethink may yet come, given the public appetite for tax-funded largesse is at a 20-year low.
For now, here's a few publicly listed companies that might benefit from the first trimming of the BBC's wings, as well as a couple that probably won't.
ITV (LSE: ITV)
As fellow Fool Alan Oscroft said on Wednesday, ITV recently returned to profit -- but that's after a torturous period that has seen advertising revenues for ITV1 slump far below £1 billion. Two decades ago ITV's advertising income was double the BBC's licence fee income -- now it's less than one third.
Any more bums on couches would be warmly welcomed by ITV. That said, the BBC's plans to can the likes of 6 Music and Asian Network hardly plays to ITV's strengths. Such output is more the territory of Channel 4 -- another public-service broadcaster.
Trinity Mirror (LSE: TNI)
Besides the Daily Mirror, Britain's biggest newspaper group Trinity Mirror produces hundreds of local newspapers -- and even the long arm of the Beeb hasn't yet got inky fingers with a BBC masthead on a Macclesfield Echo.
Yet the mooted rollback is still significant for Trinity Mirror. In 2008, the BBC Trust rejected a network of local video news websites, which would have made local newspapers titles less essential, as well as crushing the hopes of any local Web publishers.
The long-term abatement of this sort of threat can only be good news for Trinity Mirror, which recently bought The Guardian group's local newspapers and is seeing the first signs of an advertising upturn. Its shares have risen 15% since Tuesday's announcement by the BBC.
Future (LSE: FUTR)
Future is one of the leading specialist magazine publishers in the UK, though you wouldn't guess it from their share price -- at 18p, it's down nearly 98% on its 2000 value, when the dotcom boom inflated the worth of Future's web empire.
Back then an ebullient Future Publishing might have relished the chance of filling the gaps left by a BBC retreat from the newsstand, but today's company has other things on its plate. The company sells four million magazines a month and attracts 27 million visitors to its websites, but the end of the fabulous economics of 1990s games magazine publishing has hit it hard. (Disclosure: I worked there back then!)
Future's speciality is in niches like games, needlework and digital cameras -- other publishers like Bauer (owner of the formerly-listed EMAP) are more likely to produce the mass circulation magazines that the BBC is arguably squeezing out.
Pearson (LSE: PSON)
Another huge listed media company unlikely to benefit from the proposed shift by the BBC is the Financial Times and Penguin books publisher Pearson. With its focus on quality journalism and publishing -- not to mention its massive educational business -- Pearson is strong in all the areas that most agree the BBC should stick with
I think it's very unlikely that the BBC will dial back on its business coverage, for instance -- so while the FT's website could have used BBC Business editor Robert Peston's little black book during the credit crisis, it's not likely to get it.
Shed Media (LSE: SHDP)
It's not all about cutbacks. In the strategic overview, the BBC said it will eventually redirect £600 million back to core programming.
Shed Media is the TV production company and distributor whose Wall to Wall wing created the hit genealogy documentary Who Do You Think You Are? for the BBC, as well as the likes of Supernanny for the commercial channels.
If the BBC spends less on foreign content and superstars and more on factual programming, Shed could benefit. However its shares have already seen good gains recently on takeover talks and strong revenues from its US operations.
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