The real game is global

WE ARE faced with a seismic shift in the global entertainment and communications industry, and all people in Britain want to do is to rabbit on about the BBC.

Unfair and unkind? Well yes, a bit, but only a bit. The British preoccupation with the BBC is understandable in the context of our culture. But it sometimes leads to bizarre results. Earlier this week, the highest circulation broadsheets put more words on their front pages about a TV sports anchor defecting to ITV than they did about hundreds of people being killed in an Indian train crash. A couple of months ago the choice of chief executive at a large-ish British company received similar front-page treatment, because that company happened to be the BBC. And now this week there is the blitz about the shift to digital television and the licence fee implications thereof. Again, this scrutiny is understandable. The BBC is the only company in the country that is able to force people to pay for its products even if they never use them. But the preoccupation misses the point that we are in the early stages of a transformation of communications industries as significant as the development of the car a century ago.

The question is whether this country can develop a group like Ford, Toyota or Daimler-Benz, or whether we will be lumbered with the equivalent of the British Motor Corporation (BMC) - or Jowett.

The communications industries face three gigantic changes, and which countries dominate global communications half a century from now will depend on how national corporations respond to each. They are, one, the explosion of delivery mechanisms for audio- visual products; two, the creation of giant global communications groups; and three, the development of entertainment and information products with global, rather than national, appeal.

The delivery mechanisms for audio-visual products will continue to be something resembling a television or a computer, but the way the signal gets to the screen is still up for grabs. The industry experts talk about the relative virtues of satellite and cable, but we don't actually know whether either will dominate in 20 years' time. The main communications link between the seller of the service and the buyer may be something entirely different: local wireless signals; the grandchildren of the present cell-phone networks, perhaps. The one thing which, it is generally accepted, will become less important, will be the one that has dominated radio and television for most of their life: broadcasting over the airwaves. The reason? Broadcasting is only one way: there is no return path. They can send signals to you, but you can't send any back.

Most probably, we won't care how we communicate with the providers of the service, any more than we care when someone calls us on a phone whether they are ringing on a land line or a mobile. Technically. all the systems will be immensely competent and very cheap. We won't even care much whether we are using a computer or a TV. If the technologies converge as much as some people expect, we may not even know which box is which: whether what we call our TV is really a TV or a computer.

What we can be sure of is that there will be an almost infinite variety of things to watch, so there will be profound, determined and ruthless competition for our time.

That competition will come from the emerging global media companies, the Fords of the media world. Who will they be? We really have little idea. Some of them will be American and I would bet on Time-Warner, among the existing media groups, as a likely winner, largely because it has CNN in its fold. But the winners may not be media groups at all: they may be telecommunications companies, like BT, or more probably Racal now it has bought a US mobile-phone group. The winners could equally have roots in software, like Microsoft, or in the Internet, like AOL.

The danger here is that we won't have any major UK groups that make it. BSkyB? Not really British, since it is, in effect, controlled by Rupert Murdoch's News International Group. Pearson (publisher of the Financial Times), which is making a big bet on the Internet services? Too small. BT? Too bureaucratic. Looked at objectively, the best shot the UK has to establish a global leader is the BBC. It has a wonderful brand name, recognised in most parts of the world and respected in a way that, say, the better-known names, like Disney, are not. But it has, of necessity, to devote much of its attention to the UK market, and therefore finds it difficult to build on its strengths internationally. A small example would be the way in which it is almost impossible to get its international TV service in US hotels. You have to make do with CNN instead.

The really big issue of national concern - the thing that today's report ought really to zero in on - is what should be done to the Beeb to make it one of those half-dozen media groups in the world that will dominate the next quarter-century. Get that right and everything else comes right. Get in wrong and it will be yet another crazy lost opportunity, thrown away because our politicians think local instead of thinking global.

But is it credible to think that Britain in general, and the Beeb in particular, could become global leaders? I think it is because of the third revolution noted above, the development of entertainment and information products with global, rather than national, appeal.

Mercifully, we speak English - I often think the country would be in serious trouble if we did not. As a result we have direct access to the world market for entertainment and information. In some respects the UK is even better placed than the US. While the US is the only country in the world to be able to export its popular culture, it cannot export its sport. We can. Manchester United is the world's most valuable sports club. Formula One is the single biggest television event, bigger, if you allow for its frequency, than even the World Cup or the Olympics. Add in pop music, video games and the traditional strengths of the written word. These islands (remember Ireland's disproportionate strengths too) really do have a shot at creating a large portion of the content that will be whisked around the world on the big electronic networks which are now being constructed.

The trick will be to use our strength as content-providers to offset any weakness in distribution mechanism. But if there is no global distributor based here, our talented content-providers will be forced to use US distribution channels and may well find themselves not getting the best shot as a result. Some bits of Britain are brilliant at thinking global. Look at the way the City (albeit largely foreign-owned) has increased its market share in international financial transactions in recent years. Look at the way Heathrow maintains its lead as the largest airport for international travellers. As individuals, many Britons are good at selling to the global entertainment and sports markets: think Posh and Becks. But when we start to talk about the BBC we suddenly look away from the world and narrow our focus to the small British market. The corrosive effect of the licence fee is to push the Beeb into looking at the home market when it ought to be looking at the world. It is not just a question of setting a licence fee; the whole structure of its revenues is wrong, based on assumptions which are already outdated and will seem absurd a decade hence.

It should be thinking of buying a large US media group, plus maybe something that will give it distribution in Europe and east Asia too. If that means splitting the Beeb into a relatively small UK service, funded by us through a lower fee, and a global group quoted on the stock exchange and relying on a variety of sources of revenue, then so be it. Do it now. Because if we dither there is a serious danger that, over the next 25 years, the BBC will indeed go the way of BMC and that now, as then, our political leaders, while meaning well, will blow it.