The BBC is adamant: the public-service broadcasting review is not a binary matter.
Translation: although there is an escalating conflict about who should pay commercial television companies to make uncommercial programmes because the government says they are good for UK society, please don’t interpret it as being just a two-way fight between struggling Channel 4 (estimated losses £150m by 2012) and Auntie Beeb (known revenues £3.2bn every year till at least 2013).
The essence of the upset is that everyone in terrestrial broadcasting (Sky, of course, is above such matters) agrees that there should be PSB. Public-service broadcasting helps educate the masses and provides guaranteed high-brow-smoothing matter for those who already count themselves as educated. Whether or not you believe that an active market could just as well satisfy those two purposes (and why shouldn’t the government be a “sponsor” of educational television and radio programming in a wholly commercial market, maybe with a bit of Shakespearian product-placement on Corrie?), that premise is unlikely to be shaken.
But nobody has yet managed to make programmes that broaden both the mind and the profit margin. Hence the complaints from Channel 4 and ITV that it isn’t fair to expect them to make pro bono telly. It undercuts their ability to make money. In ITV’s case, this is a clear disadvantage to shareholders; for C4, it’s the taxpayer who will suffer, because the company, while commercially-funded, is state-owned and is not allowed to make a loss. (Channel) Five, the RTL-owned minnow of terrestrial television, seems to be adopting a wait-and-see policy on the whole issue.
The process is exacerbated by digital switchover, the commercial broadcasters argue. ITV is particularly strident on this point: “If only we had known, they say, that by 2012 everyone would be watching television provided by digital signals rather than analogue, maybe we wouldn’t have wanted this PSB stuff tied into our licence. Compensate us! At least, let us change the rules of engagement! There’s too much competition out there now. It’s not fair.”
Let us put aside for a moment the fact that both ITV and C4 must have seen digital switchover coming. After all, they operate in a sector where looking into the future is a necessary factor for survival.
There is still a basic question here: do they actually deserve to be compensated for a market development? Did BT or Cable & Wireless demand recompense because somebody invented the mobile phone? Did the merchant fleets of mid-19th century Britain scream for government cash when the first steam engines were put on board ships? Presupposing that they do deserve help is part of the spin machine’s approach to the complex issues of a fast-changing media panorama.
Still, if you want to see real spin in action, the BBC is the master.
Its 88-page contribution to the PSB review that the broadcasting regulator Ofcom can be summarised in four words: don’t make us pay.
Mark Thompson, the director general, laid out a series of ways in which the BBC could help “other PSBs” (trans: usually C4, but occasionally ITV). Solutions involved helping C4 and ITV to save money by a) implementing the same sort of efficiency cuts the Beeb has gone through and b) using all this clever, hush-hush techno stuff that BBC boffins have dreamed up recently. So keen was Mr Thompson for readers of the submission to concentrate on his generous scheme, that he had the two pages of his ideas – called “the power of partnership” – coloured blue in case we missed them. It’s enough to make a cynical journalist study the other 86 pages especially hard.
After publication of this submission, the sound of spluttering from the HQs of the respective commercial broadcasters was audible across London. The idea that, say, ITN, ITV’s news provider, has anything to learn on efficiency from a BBC operation that normally sends four camera crews to cover any breaking story, is quite humorous, to put it mildly. Moreover, in typical ivory tower fashion, the Beeb overestimates its technological advantages: C4 is at least as far down the road to “tapeless” production using digital technology as the BBC is.
But the strongest message shining through the BBC’s paper was its coded language suggesting that there is no need for C4 to get public money, especially not from the licence-fee pot. If C4 took government money, Mr Thompson argued, it would have to make sacrifices that would wreck its essential creative nature.
Does Mr Thompson believe this?
Of course he does, just as sincerely as the author of the following statements believed them too: “Channel 4 should always aim to pay its own way. But if changes in the broadcasting landscape mean we have to choose between financial survival and our public service remit, then the case for public support will be overwhelming. I’m confident that we can win that argument because I’m confident we can deliver on the promise of creativity.”
The author? Step forward one Mark Thompson, then chief executive of Channel 4, writing in 2002.
Maybe it is all binary after all.

News that Virgin Media has become the first ISP to agree to sending letters to customers suspected of downloading illegally shows that at least some in the industry are willing to try something new.

It may be that other companies will watch the reaction of Virgin Media customers before deciding to join them. Let’s face it, in recent years, those particular customers have been portrayed as a much put-upon bunch and if they can swallow this kind of Big Brother like behaviour, surely the others can.

However, if it becomes a matter of one ISP breaking ranks and the rest ostracising it, positions are likely to become entrenched even further.

It’s not often that Charles Sinclair, the veteran chief executive of Daily Mail & General Trust, breaks cover. Said by those few who know him to be one of the most pleasant of all FTSE-100 CEOs, Mr Sinclair does not give interviews and has rarely even been quoted “live” (as opposed to from a prepared statement) in his 20 years at the top of the company.

So perhaps the FT should take it as a compliment that Mr Sinclair troubled to put pen to paper this week to complain about our reporting of the DMGT appearance before the House of Lords select committee on communications. Their Lordships and Ladyships have been gathering evidence on media ownership from a panoply of the great names of the newspaper world. They have travelled the Atlantic in order to interview American witnesses, including Rupert Murdoch, and have paid particular attention to the question of interference in editorial decision-making by proprietors. Mr Murdoch shrugged his shoulders and said “Sure, why not?” (I paraphrase) when asked if he influenced the editorial line of his tabloid papers.

But there is no such Murdochian attitude at DMGT, apparently.

Editorial independence at the company which publishes the Daily Mail, its Sunday sister title and the Evening Standard in London, is an absolute. Nothing would induce Viscount Rothermere (the 4th holder of that title to chair the board and controller of the majority shareholding) to tell Paul Dacre, (editor in chief of those three papers) what to put in them. And you’d better believe it.

The Financial Times made the elementary mistake of reporting Lord Rothermere’s jocular admission that if Mr Dacre brought the Daily Mail out in support of the Labour Party it would be an action “extreme enough” to justify interference by the board of DMGT. The remark was made in the middle of scenes that could almost be described as merry in Committee Room 2a of the House of Lords. It was clearly a jovial moment, and was reported as such in the People section of the FT last week.

But there are some jokes that should not be repeated, it seems. Mr Sinclair broke his self-imposed purdah to write a letter to the editor. Some FT reporters, he said, needed to work on their sense of humour for they had failed to realise that this remark was not meant to be taken seriously.

Locked away for 20 years in Derry Street, it seems, Mr Sinclair himself may have lost sight of what is and what is not intended to be humorous. Most people know that the tongue of our People section is more often than not to be found in its cheek. The report of Lord Rothermere’s remarks was followed by a clearly ironic cast-off line that it was “nice to know there are limits”.

But Mr Sinclair insisted that the record be set straight, that the jokiness of the proprietor’s joke be explained at some length to we humourless hacks, and that it be made inescapably clear that Mr Dacre’s independence was inviolate. The editor could, if he wished, urge Daily Mail viewers to vote for George Galloway’s Respect, the yogis of the Natural Law Party or the BNP if he saw fit. (I should hurriedly explain that I am joking here, that Mr Sinclair did not write this, but it was the implication of his remarks. I hope that clears up the matter.)

What the letter showed to anyone familiar with the odd internal politics of Mail-world, is that nerves may be getting a little worn. Mr Dacre is said by people with a closer ear to the political ground than I to have formed a counterintuitive mutual admiration society with Gordon Brown; not so with David Cameron. Perhaps when he read People’s accurate report of the Lords’ committee hearing, Britain’s most powerful editor felt his freedom of maneouvre to be threatened and demanded that DMGT act to correct the situation.

Perhaps, and here’s a scoop for you, the Daily Mail IS going to endorse Labour whenever the next election is called and Mr Dacre doesn’t want anyone to be able to cite the authority of the FT to show that he will be trumped by Lord Rothermere as a result.

If that does happen, then please remember that you read it here first. And if it doesn’t then please remember to tell Mr Sinclair that I was only joking.

It is tempting to tune out of the interminable saga of Vincent Bollore’s pursuit of Aegis. After all, he has just made his fifth tilt at the board at this week’s AGM, and a pretty limp affair it was too, with the smooth Frenchman deciding at the last minute not to show up and none of his deputies willing to speak on his behalf.

This might be the very moment that the story begins to get interesting, however. In an interview with the FT last month and again in a piece in this week’s Advertising Age, he and accolytes such as David Jones of Euro RSCG have been dropping not-so-subtle hints that he may have even bigger ambitions in the advertising business.

The Ad Age piece has its weaknesses (it talks about Bollore’s Aegis ambitions only in terms of a possible full takeover and does not really examine the very real creeping control concerns about his attempts to get board representation) but nicely highlights two important points.

First is the self-interest behind Sir Martin Sorrell’s own teasing interventions in the Aegis saga. WPP would be first in line to buy Aegis’ Synovate business should Bollore gain control – although this picture may be complicated by WPP’s separate pursuit of TNS, a larger rival in market research.

Second it brings out the nervousness at Interpublic about the chance that Bollore may shift his focus to a far, far bigger agency. The quote Michael Roth, IPG chairman and CEO, gave to Ad Age is worth reprinting:

“I agreed to see him at his request and purely as a personal courtesy,” he wrote in an e-mail. “We talked about the industry overall and some of the challenges he is facing with Aegis. IPG is totally focused on continuing to build on our improved performance and delivering against our 2008 targets. We won’t be distracted — nor are we concerned — by these types of far-fetched insinuations.”

If Bollore was right in telling the FT last month that he had EUR1bn-EUR2bn capacity for acquisitions, then a run at Interpublic, at a market cap of $4.6bn is indeed far-fetched. What, then, could be behind such “insinuations”? Given Interpublic’s troubled recent history, and the chances of a nasty advertising industry slowdown in 2009, Bollore may be calculating that it would be vulnerable to a break-up strategy. His own group could help things along by building up a stake, but that could alert other investors and force the price up. Bollore Group alone could not buy IPG. Could it be that he is hoping that Sir Martin might just be tempted to lend a hand?

A recent note by Citigroup’s advertising analysts (The Agency Provocateur, March 26) may pose another theory:

We view M&A as a by-product of slowing revenue growth and peaking margins in the agency sector. In light of this, and recent euro strength, we analyse the strategic/financial rationale of a combination of Havas/Aegis and Publicis/Interpublic. While much speculated, the Havas/Aegis combo makes limited sense – a deal would be dilutive and wouldn’t add much to the standalone story. Publicis/IPG, meanwhile, looks much more compelling.

There is not much love lost between Publicis’ Maurice Levy and the Bollore-chaired Havas. Hinting at an interest in IPG may be a cute way of causing trouble for Havas’ French rival.

Bertelsmann may be Europe’s largest media company, but with no outside investors or share price to worry about, its quarterly results rarely merit much attention. Today’s numbers are no exception – CFO Thomas Rabe had only this pithily upbeat message to add to figures showing a decent 9.6 per cent rise in operating profits:

“We have started the year well in an environment fraught with economic uncertainty. Bertelsmann confirms its full-year forecast for 2008.”

There are few divisional details for outsiders to get their teeth into, although RTL this week reported 8.7 per cent earnings growth. The statement says nothing about performance at Random House, the publishing house where Peter Olson is expected to be on the move imminently.

One detail does stand out, however. The 3.9 per cent decline in revenues in the quarter was due not only to “declines in sales of physical recordings” – no surprise, given the state of the recorded music industry to which its Sony BMG joint venture has the misfortune to be 100 per cent exposed – “and revenues at Direct Group in North America.”

Morgan Stanley has been appointed to sell the US book, DVD and music club business (incidentally now under Mr Olson’s control) after heavy writedowns of ill-advised acquisitions made since 2005. This may not make the bank’s task any easier, but according to a New York Times report, Ripplewood and a management team have both shown interest. The reputed EUR250m price, however, is a fraction of the EUR900m revenues Direct Group reported from the US last year.