Josh Martin
For over two decades, Pop Master has captured the hearts and minds of music enthusiasts across the UK. For those not familiar, Pop Master is a music quiz which, until recently, was broadcast every weekday morning on BBC Radio 2 by the charismatic host Ken Bruce. After over 40 years of service to the BBC, Ken moved to Greatest Hits Radio and, to the surprise of many, took Pop Master with him! This offers an interesting (and light-hearted) case study on intangible assets and intellectual property.
Background
Pop Master is a radio-based music quiz show. Listeners dial in to become contestants, and the two selected play head-to-head, answering 10 questions each. Each question scores 3 points, except for 3 bonus questions which score 6 each, for a total possible score of 39. The category of bonus questions is chosen by the contestant from two options before the start. Questions cover a range of eras and genres of music, and involve knowledge-based questions, listening to music and answering related questions, and the famous ‘guess the year’ questions (where contestants are sometimes “one year out”). Listeners play along at home.
When Ken Bruce moved from the BBC to Greatest Hits Radio, I was surprised to see Pop Master move with him. I had presumed that the BBC owned the show, although I hadn’t thought about intellectual property. In fact, Pop Master is a registered trademark, which is owned by Ken Bruce and co-creators: Philip Swern and Colin Martin (no relation).
The trademark was filed in 1998, around when Pop Master was first featured on Ken Bruce’s morning show on BBC Radio 2. Bruce had developed the idea with colleagues while employees at the BBC, but reportedly the BBC was not interested in filing the trademark, and encouraged Bruce to do so himself. Often the work of an employee is by default ‘owned’ by the employer, but clearly legal protection surpasses any corporate norms.
Filing a trademark is neither free nor effortless – paperwork must be filed, and registration and renewal fees apply. These costs are clearly part of the investment, along with the costs of developing the idea in the first place.
The move to Greatest Hits Radio
While the name, the format, and the lingo are the same, the jingles have changed since the move to Greatest Hits Radio. Perhaps the BBC owned the jingles, or perhaps Bruce just wanted to update them. Of course, it is not the jingles that bring in the audience – the format, and Bruce’s amiable hosting style, are what the loyal fan base tunes in for.
With the show’s transition to a new platform, listener loyalty becomes a crucial factor in its continued success. Will the fans of Pop Master follow Ken Bruce to Greatest Hits Radio? Or will BBC Radio 2 manage to retain the audience through the introduction of a new host and music quiz of their own? The replacement is “Ten To The Top”, a rival music quiz played at the same time as Pop Master used to, but with a different format and name. Audience loyalty is clearly important to the value of media assets such as this.
What has all of this got to do with economic measurement?
Clearly Pop Master is a piece of intellectual property, an intangible asset. But of what sort? At first listen it might sound like an “entertainment, literary and artistic originals” asset category in the National Accounts parlance, but it does not appear to meet the definition. Entertainment originals relate to original music recordings, TV programs, films, stories and shows. Instead, Pop Master is an idea, a format, and a brand. The asset is not a single radio show, but the format for thousands of radio shows over time.
We don’t know much about the development of Pop Master, and whether it would meet the criteria for R&D investment (as defined in the Frascati Manual). If it doesn’t, it seems unlikely it would be recorded as an asset in the National Accounts at all, under current guidance.
But it does seem to fit the bill of a design asset, one of a broader set of intangible assets in a framework popularised by economists including Carol Corrado and Jonathan Haskel. The ONS produces estimates of investment in this wider set of intangible assets, including design. For design, as for other intangibles, this includes purchases of investment-like services by businesses, and creation of design assets within businesses based on an estimate of the costs of producing such assets (so called own-account investment).
There is also clearly a brand associated with Pop Master – not only is the name trademarked, but it also has a recognisable sound and set of lingo, and a loyal fan base. I suspect that it would still be popular even with small changes in format, suggesting that there is significant value in the brand, as well as in the specifics of the quiz itself. How the value of the asset divides between the design and the brand is unclear.
How long does an intangible asset last?
It is also interesting to reflect on other aspects of the economic measurement question. In National Accounting, capital stocks are typically estimated by the Perpetual Inventory Method, which cumulates investments and discounts them according to a depreciation schedule over the assumed service life of an asset. Useful lives of intangible assets are usually assumed to be short – a 2010 survey by the ONS put the average for design at just 4 years, and of branding at less than 3 years. Yet Pop Master has been on air for now 25 years and going strong. Clearly there is significant heterogeneity here, which assumptions on asset lives of intangible assets should account for.
It might even be said that the value of the asset has increased over time. Intangible assets do not physically wear, so depreciation is due only to obsolescence as consumer trends change and ideas become out of fashion. The format of Pop Master does not seem to have become outdated, with the radio show still popular and a new TV version launching soon. If anything, the history and tradition of the show, and the growth in following over time, might suggest the value has increased. This could suggest an unusual pattern for the value of the capital stock over time.
Who benefits from the asset?
From a productivity perspective it is also interesting to consider which entity benefits from the capital services (the flow of productive services from the asset). Clearly the BBC made use of the asset while Ken Bruce hosted on BBC Radio 2. When Bruce was unavailable, other radio presenters would sometimes host the quiz, suggesting that Bruce allowed the BBC to use his trademark, and the BBC benefitted from the capital services. Whether they paid for this or not is unclear, I suspect not.
Now that Bruce has moved to Greatest Hits Radio (GHR), clearly they are now benefitting from the capital services. In real terms, this means more listeners for GHR, at least for half an hour on weekday mornings. That said, GHR also benefits from Bruce’s human capital, as his hosting style might also attract fans – if they had acquired the rights to run Pop Master, without Bruce as host, I suspect it would not have been so successful.
Over the years, the Pop Master brand has generated additional capital services in the form of merchandise – a quiz book and board game, and plenty of unofficial mugs, t-shirts, and the like. A new TV adaptation of the quiz offers a new stream of income.
Clearly Ken Bruce was onto something when he and colleagues trademarked the idea and name of Pop Master in 1998. I’m sure they didn’t think it would still be top of the charts a quarter of a century later. But intangible assets can have tremendous value in the modern economy – we aren’t living in a material world any longer (sorry Madonna). We might benefit from more case studies like this in future.
The views expressed here are those of the authors, and should not be taken as the views of the Bank of England or any of its committees.
ESCoE blogs are published to further debate. Any views expressed are solely those of the author(s) and so cannot be taken to represent those of the ESCoE, its partner institutions or the Office for National Statistics.