Examination of Witnesses
(Questions 106 - 119)
THURSDAY 22 OCTOBER 1998
MR MARK
WOOD, MR
STEWART PURVIS,
AND MR
RICHARD TAIT
Chairman
106. Mr Wood, thank you for you and your colleagues
coming to see us. You have sent me a copy of a letter earlier
this week setting out your own views. If you have anything you
want to add to that in a brief opening statement we would be very
pleased to hear it.
(Mr Wood) Thank you, Mr Chairman. I would
like to introduce Stewart Purvis, who is the Chief Executive,
and Richard Tait, who is the Editor-in-Chief. I would just like
to say a few words in opening, if I may. That is, first of all,
to briefly explain what ITN does which is not irrelevant to the
debate here. ITN is a news supplier not just to ITV but of course
does the news programming for Channel 4 and for Channel 5, commercial
radio in this country. It operates EuroNews in Europe and today
we are very pleased to announced a deal to provide news to 40
American tv stations. It is in that context that our relationship
with ITV also has to be seen. We supply programmes to many outlets
and of course we discuss scheduling with our customers and we
listen very carefully to what they have to say on this subject.
We have been very carefully consulted by ITV. We have listened
to their concerns about the evening schedule and indeed we have
our own research which backs up some of their concerns. We have
understood the arguments for wanting to change the schedule. This
does not of course affect in any way our pride in News at Ten
which has been a tremendously successful programme for 30 years
and embodies a news culture of which we are very proud. Of course
we would naturally not want to do anything to change it but we
do understand that the environment in which News at Ten
is broadcast, the evening schedule, is changing. Our wish is to
work with ITV to develop a new compelling evening schedule, to
take those values and that news culture from News at Ten
and bring those to an earlier evening slot, 6.30, with the same
presenter, with Trevor McDonald, who is immensely popular and
to again embody those same news values. We have been very pleased
to note that in all our discussions with ITV there is no agenda
to trivialise the news and we think this is rather important.
Essentially the success of ITV is vital for us, for ITN. ITN must
be part of an exciting and compelling evening news schedule. It
is of concern to us if the changes in the competitive environment
taking place affect our main customer and if the changes in viewer
trends affect our main customer. The success of ITN must be based
upon its role in that evening schedule and we have seen many examples
in other parts of the world how failure to react quickly to decaying
audience figures can lead to an acceleration in audience decline.
We do understand the ITV approach. We have been very keen to work
with them. We have people in ITN now working very hard to develop
the concepts for the new news programming and who are highly motivated
and think that they will be successful in attracting a good strong
audience to the 6.30 programming. Bearing all these factors in
mind and, as I said, in particular noticing the radical changes
in the competitive environment which are now taking place, the
ITN board have listened very carefully and has come out with the
proposals in the response to the ITC which I sent to you earlier,
and in general the Board supports the approach being taken by
ITV. That is all I would like to say, thank you.
Mr Keen
107. Can you explain, first of all, for the
record, the relationship between ITN and ITV financially and how
you fit together where there are proposed changes taking place?
(Mr Wood) The overall relationship is that we are
a supplier of news programming to ITV and they pay us an annual
fee for those programmes, the programmes which have been mentioned.
Discussions on changes in the schedule, there is minute by minute
contact between the news programmers and the broadcasters and
of course there are longer strategic discussions which come on
from time to time which my colleagues here can talk about in more
detail.
108. I did not ask any questions of the representatives
from ITV because I presumed really that they would prefer not
to have to show any news at all because their duty, without any
doubt—there is nothing with this, it is quite legitimate—is
to make as much profit for their company. That is why they want
to get viewing figures up, they get more money from the advertisers.
That is why I did not ask any questions. I think they have to
produce as many viewers and therefore advertising revenue within
the restrictions that Government may put on them. That is what
we are talking about today basically. Do you think that they would
not show the news if they were not forced to or do you think there
is an attraction to the public of the news? What about digital
tv coming on, not having any conditions laid down to show the
news for the primarily entertaining television companies?
(Mr Wood) I think there is much experience that a
strong and popular news programme is a vital part of an evening
schedule. We have seen that again with Channel 4 and Channel 5,
not just with ITV. I detected no wish to move away from the news
agenda in the discussions I have had with the ITV companies. I
do think they regard it as an essential part of the evening schedule.
(Mr Purvis) I think when ITN moved from being the
news department of one network into a company supplying a range
of networks we did it in the belief that news was a good business
to be in. I think that has been fulfilled. If you look at the
ITV lunchtime news, for instance, it has a dramatic increase on
the preceding programmes so there is an appetite for news. If
you look at Channel 5, which has actually exceeded its licence
requirements by having a lunchtime news which it did not have
to have, yes there is a good argument for good quality news in
a commercial schedule.
109. It is not surprising you have a higher
audience for news at lunchtime than programmes preceding. It is
not a time when people have the time to sit and be entertained,
even people not working, they have household jobs to get on with
in their normal life. Do you think Government should try to educate
the public by forcing them to watch some news and current affairs
programmes in the middle of entertaining themselves? Do you think
the Government has a duty to do that? We educate people for their
lives and we want education throughout life but should the Government
really force people to watch current affairs? We can give people
tests when they go to pick benefits up, we could give them ten
questions about what has been going on. For every question you
fail ten per cent is knocked off the benefit. You could go to
that extent or you could have programmes like Russia used to have,
nobody wanted to watch them at all. I am talking about the philosophy.
What do you say about that?
(Mr Purvis) The Broadcasting Act set out a framework
for commercial television in this country of a mixed schedule
and television news and current affairs and documentaries are
essential parts of that. Indeed I think perhaps what has not been
mentioned before this morning is ITV's commitment to factual programmes
overall, not just news and the new schedule. I think a mixture
is the way forward. I think it has worked well in the past, it
will continue to work well, and of course there are people—to
pick up Mr Maxton's point earlier—who will get their news
in different ways. There is an enormous body of people, you are
talking about over 10 million people a night, who choose a prime
time evening news to brief themselves on the events of the day
to an agenda which we as broadcasters, or news producers, have
taken responsibility to compile for them. That is an important
responsibility. That is different kind of service from surfing
the web looking at different kinds of items which may be of specific
interest. As long as there is that requirement—I think that
will always exist—for people to trust us to provide them
with a proper precis of the day's news there is a role for mainstream
television news in a mixed schedule.
110. I am not disagreeing with what you are
saying, we are peculiar individuals, politicians.
(Mr Purvis) I think my answer would be that politicians
actually drafted the Bill or passed the Bill which said this should
happen. You have had your say and we are doing it.
111. Why should politicians force other people
to watch it? If the whole country was made up of politicians you
would probably have to have conditions laid down such as: "You
have to show half an hour of Coronation Street in between
all the news programmes which would force people to laugh now
and again". Should politicians try to force people to watch
it? I am coming on to Mr Maxton's point that with digital tv would
it not be better to wipe out these conditions altogether and let
people choose news programmes? That is how I watch the news. I
come in and switch to the programme which has the news.
(Mr Purvis) I think we would always argue that there
is a need for it. On the research that we have done—I do
not in any way want to denigrate the news channels—at ten
o'clock at night people have a choice of which one they turn on.
Even with the growth of cable and satellite in this country nearly
six million turn on an ITV news at ten o'clock. The number of
people watching news channels is barely over 50,000. There is
a choice that people have made and in a sense that seems a logical
position to continue with.
112. Should we not let the market decide, let
people make their own decisions? Why have conditions laid down
on ITV to have to show two half hour news programmes in that peak
time? Why have conditions, why not let the market decide and then
your news programmes would be watched by people and ITV would
put your news programme on because six million people wanted to
watch it? At the moment they seem to be saying that they do not
want your news programme on because millions of people switch
off. I do not think we are all being really honest. You have to
adhere to the condition. If we sweep all of that aside are we
not being dishonest and are ITV not just answering the questions,
saying the news is better at 11, it is better for everybody at
11 o'clock? Are we not being dishonest? Are they not really saying
that because they want more people to watch the premium programmes?
(Mr Wood) Essentially the main drivers are going to
be commercial. There is absolutely no point having legislation
saying: "You have to have news programmes at a certain time"
if the audience disappears. Of course, the audience is not disappearing,
we are retaining a very good audience, but the trends are of obvious
concern. I think the main drivers for us and obviously for ITV
are how do you retain that strong audience and audience retention
during an evening, as I understand it. That really is an important
aspect here and we all benefit. All components of that evening
schedule benefit if one can keep that audience from start to finish,
if you like. I think, therefore, those are the most important
drivers. It is understandable for politicians to have concerns
that political issues are reported well to the population, the
broad mass of viewers, and I think in some respects possibly we
are victims of our own success here because I think ITN does this
extremely well. I think we have built up a good track record of
reporting and conveying political issues as well, so I can understand
your concern.
Mr Keen: I agree with that last point.
Chairman
113. Is it not a fact that all the television
we have in this country today has been decided by politicians
or by Mr Murdoch? Is it not a fact that it is politicians who
decided to have Channels 1, 2, 3, 4 and 5, Channels 1 and 2 through
the BBC charter, Channels 3 to 5 through Broadcasting Acts, and
it is politicians who decided to have commercial radio and the
only free market, quite an inadequate free market as well, is
Mr Murdoch and Mr Murdoch is the only person in this country today
who is providing television that politicians through Acts of Parliament
could not bestow or force upon people in this country?
(Mr Wood) That is a reasonable point in the existing
market but I would contend the market is beginning to change quite
quickly because the roll out of digital television, which will
accelerate quite quickly in the coming years, will allow more
vendors, more providers, to get into providing news to the home
and to business. I think that market will change and we are seeing
the beginnings of it now. You will have mixed views. Even when
you have news on demand or the availability of news channels people
will still want a packaged evening news bulletin presented by
people they trust and they like and they have confidence in to
hit the main points of the news. I think both work together.
Mr Wyatt
114. To go over Mr Keen's point, your share
of ownership is entirely Channel 3 companies?
(Mr Wood) No, it is not.
115. What is it?
(Mr Wood) The share ownership is there are five shareholders
in ITN and three are Channel 3 companies: Carlton, Granada and
United News & Media and the other two are Reuters and The
Daily Mail.
116. What percentage is The Daily Mail?
(Mr Wood) Each shareholder has 20 per cent.
117. So actually in the voting there is one
vote each. You are bound to side with Channel 3 so you are not
independent, you are not able to make an independent view about
whether the news should be moved or not.
(Mr Wood) I would make two points in response to that.
The first is I have been very impressed over the years. I have
sat on the ITN board for five years and I never cease to be impressed
by the way the ITV shareholders and ITV directors have managed
to maintain a tremendous neutrality in their commercial dealings
between ITN and ITV and have defended the interests of ITN rigorously
and on occasions against their own companies. So I think they
have behaved in an exemplary manner. The other factor is, no,
Reuters and The Daily Mail are not going to just agree
to any propositions. We have a vested interest in the commercial
success of ITN and in the success of its programmes and its output.
We know that News at Ten is a flagship. It is a very powerful
brand. We want to be convinced, and we have been convinced, that
the new schedule for the evening will retain that strength, that
flagship nature and that branding and take it to a new slot.
118. What would be the repercussions if Government
interfered and said: "Your share ownership must be non-Channel
3 for ITV"? What views would you have on that?
(Mr Wood) The current share ownership is partly as
a response to regulation. The 20 per cent limit is set by regulation.
I think ITN has proved itself as a viable, successful commercial
company. The shareholding is very satisfactory at present. I cannot
think why the Government would necessarily need to interfere with
it. We have customers such as Channel 4 and Channel 5 who are
not shareholders who, as far as I can tell, are very satisfied
with the service we give them and are not concerned about the
shareholders.
119. Let me just develop that argument with
you. We have currently CNN, which is Turner-Warner, Fox and Sky
and CBS and then there is NBC as the three world players. BBC
is trying to be a world player but failing. You have taken a different
view. You have taken the European base first before you project
yourself naturally I think to be a world player. Could you explain,
if you had a richer shareholder, more non Channel 3, would that
advance your decisions to go global?
(Mr Purvis) Can I just explain the strategy I pursue
as Chief Executive is as follows. First of all it is to try to
have as many customers in what I might call the non-BBC non-Sky
area of British broadcasting, that is Channels 3, 4, and 5 and
it is most of British commercial radio. Those are long term contracts.
It is a very solid base, a very good critical mass on which to
build an international base. We have built in three ways. First
of all, by becoming a leading shareholder in EuroNews, which is
a pan-european channel based in France. We now operate that channel
for a group of shareholders, mostly European public service broadcasters.
So that is our alliance with European public broadcasters. What
we are announcing in New York today is an alliance with American
public broadcasters, which gives us a much bigger reach into the
United States than the BBC; about double the reach the BBC News
will have as a result of the deal it has done. The third business
development is the archive, where the introduction of an archive
website which is available globally allows us with ITNARCHIVE.COM
and which also now manages the Reuters Archive, to have a truly
international business. So off a strong domestic base we have
taken a step by step process into international development, and
I think this is very well respected amongst international broadcasters.
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