James Murdoch, head of News International and son of media mogul Rupert, strongly criticised the BBC in his speech at MediaGuardian's Edinburgh International Television Festival on Friday and during a Q&A session the following day, calling for the corporation licence fee funding to be significantly reduced. His attack on the BBC was accompanied by extensive criticism of the way the British media industry is regulated.

Murdoch described the "chilling" hold that the BBC has over the media landscape, stressing that its news channels and website were inhibiting the ability of commercial competitors to invest in news and implying that it would put newspapers out of business. He emphasised the size and extent of the corporation, which publishes material that he thinks a state-supported institution should not, referring to "Orwellian" state control.

It is not the first time that the presence of the BBC has been highlighted as distorting the online news market and more specifically as an obstacle to charging for online news. The BBC news website provides thorough global news coverage and charging its readers would not be an option given its status. Hence, as the Murdoch empire moves towards charging readers online at all its newspapers, the BBC poses more of a threat than usual.

Amongst many strongly worded reactions, Guardian director of digital content Emily Bell's response to Murdoch Jr's speech highlighted a point that Robert Peston, the BBC's business editor made, pondering whether it is desirable to have news available only to those who will pay directly for it. Most newspaper executives would keenly uphold the importance of news to a democracy, and surely, therefore, free online news has increased news' democratic value.

Bell has made no secret of her opposition to paid online content. As an alternative way to make money online, she suggests putting content in as many places as possible at no immediate cost, as the Guardian and New York Times have done by opening up all of their content to developers who can take and distribute it. She believes that this approach will make it easier "to find a model from which money can be made." She sees a successful future for those media companies who rely on multiple parallel revenue streams rather than just one or two, and who embrace widespread distribution of their content. The BBC is not the problem, Bell insists.

The BBC has come under much criticism in recent months for issues such as high salaries and the idea of reducing its license fee has come under consideration by the government. In attempts to put off the latter eventuality, the BBC has been taking steps to assist its commercial rivals. It announced plans in April to share resources with other local news providers, and a video sharing deal with newspapers was recently agreed, although this was met with some opposition.

The BBC's budget may well be excessively inflated; however, discussions of the BBC's future should not just be focussed on just what is best for the media industry but also what is best for the consumer. The BBC may pose problems for its competition, but the news that it provides is valued by millions, and cutting its funding could reduce the quality a key source of news. Arguably, the main problem that commercial media companies have with the BBC is that it is so good. If its news coverage was inadequate, it would not pose such a threat. Should something this good be stifled?

Source: Guardian (1), (2), Paid Content