Examination of Witnesses
(Questions 150 - 159)
THURSDAY 22 OCTOBER 1998
SIR GEORGE
RUSSELL
Chairman
150. Sir George, you have been extremely patient
and the Committee is grateful to you not only for appearing, but
for the fact that you have gone to very great personal inconvenience
in order to be present today and we do appreciate that. You were
the Chairman of the ITC when ITV last September asked to move
News at Ten and the ITC decided to permit that. We would
be very interested to hear from you today your assessment of the
current situation.
(Sir George Russell) Many thanks for
inviting me. I have to make it very clear that I am not speaking
on behalf of anyone, not my old company, the ITN, or through my
old chairmanship of the ITC; they have each got their own roles
to play and I have deliberately not been in touch with them to
find out what I should say. That is my first point. The second
one is that I am stuck with the same dilemma that you appear to
be stuck with that, firstly, and I should make my point very clear,
I believe that News at Ten should stay where it is and
I will give my reasons, but I am very willing to listen to reasons
why change should occur, so it is not a closed mind situation,
and I can see a few years from now when the new television pattern
emerges that there may be a very good case to review this. To
me, the time is not right at the moment, but there are things
which would help persuade me. The first one is this: that in all
my working life, I have been taught, and television is no different,
that the concept of a pilot plant before you go for the major
product is a good idea and if the pilot fails, so be it. In the
States there are an awful lot of pilots which fail. What we have
got here is a major change proposed which I think is of major
importance for a variety of reasons, which I will offer in a minute,
and it is nothing more than an assertion that these things are
necessary, that these are the things which will result from it
and there is no pilot to it. For example, I would have been more
interested if the organisation had come along and said, "The
6.30 news slot is a tremendous news slot. We are missing out on
it. The 5.40 is up against Neighbours, so it does not get
the viewings. ITC, could we move to a half-hour News at Ten-type
programme at 6.30 only for half an hour?" and then really
show that it picks up the viewing of 8 million, whatever it is,
AB ratings and then it makes a very good argument for saying,
and this is two or three years from now, "Well, is this News
at Ten the right thing to have and have we proved it the other
way round?" If it is proved the other way round, it is a
much harder argument for somebody like me to say, "This is
a nonsense. It should stay", so I just make the point that
there is no pilot plan here and it is all assertion. I think the
ITC would have been in a very interesting position if they were
just told, not asked, "We are going to put a half-hour news
programme on and drop the 5.40" because that is an improvement
in the whole licence situation, not a reduction, so this could
have been done and instead of assertion, there would be facts
and figures of the sort you were quoting earlier of what has been
happening around that time. The second thing is that when it last
happened, I made the point at that time, and there is nothing
changed in this, there are between about 110 and 115 days a year,
and I do not have the access now to the information, when News
at Ten does not appear and I think this is a very important
time. What have people been doing with this time? Have they been
running programmes from nine o'clock to eleven? Well, if you look
at the Sundays when it occurs, it does seem that something happens
at ten o'clock most Sunday nights that changes the schedule at
that time and quite often on Saturdays you find somebody puts
the news on at ten and you never know when it is going to be,
but quite often it turns up at ten, so there is no proof in the
120 days a year when you can really say, "This is what happens.
This is when we really put big American movies on and swing it
through" to say that this is fact and not assertion. I do
not think these 120 days have been used through this past four
years to prove anything other than they are running a schedule.
They run it well, but it does not prove the News at Ten argument
to me, so I think those are the first points I would make. Going
back to the franchise, because it is rather important, the three
companies that dominate commercial television, which are Granada,
Carlton and the United Media organisation, are also the three
companies which are the majority owners of ITN, and all three
won on a lower bid. It is important, this, to me because they
offered things more than just a high commercial price; they offered
a lower commercial price and offered other things, one of which
was that they were going with the News at Ten concept.
Now, there is no reason why it should not be changed because the
ITC did not agree to this. There is no doubt about it that if
the ITC takes the view that it is proper for them to change, they
can, but they did commit themselves to something more. They committed
themselves to more money, more quality to say, "We are going
to be a high-class, high-standard organisation", and ITN
and News at Ten is the flagship to that. Everyone uses
the phrase as though they believe in it. That is my general preamble.
There seem to be three arguments flying around which I have addressed
myself to in the last couple of days since I got back and the
first one is the democratic argument and we can home in on some
of the questions you were asking before as to what sort of political
influence goes on, in my time certainly. The first thing is that
the democratic argument, having two major news services which
are adequately financed to compete against each other, I am totally
sold on and I remain sold on it until such time as there is a
larger number of channels with a larger number of news services,
so nobody would be beholden to one news system in any country,
which is too dangerous. I still believe in it and where did I
learn this lesson? Well, it was through the 1980s when most politicians
I talked to were all rather adamant about this and anyone who
sat, as some of you did, through that Broadcasting Bill in the
1990 period will recall that this was a very major part of the
debate at that time, so you do take note of what Parliament says
and you do not need to take note of what any individual politician
says, and this is when you are assessing things. They have to
have adequate finance to do the job they have been given. There
is no doubt about it and you can say this and I think the companies
have behaved very honourably in terms of making sure that the
right amount of money was available whilst at the same time driving
them to efficiencies which they did not believe possible, and
they are now much more efficient than they ever were, certainly
in my time there. On the quality one, as you know, I took a very
fundamental stand on this myself at the time of the franchise
and the Broadcasting Bill and I argued that we have to have the
right to high quality in commercial television and it was not
just a straight rating situation. It could be a rating situation
and high quality because again in all my working life I have found
that usually high quality pays and you win with it, you really
win with it. I have heard today a lot of talk about scheduling
and the way the schedules are built up, but the strange thing
is that I do accept always that News at Ten lose audience
from a decent programme coming between nine and ten, it always
does, but it does not if it is an indecent programme coming between
nine and ten not in terms of sex and violence, but just poor quality,
and you will find that News at Ten will struggle to up
the ratings, but they will. The other side of the penny is that
we heard about Cracker, and if you schedule Cracker
on a two-hour run, well, you lose a tremendous amount of value,
but if you schedule it on two nights, one hour each, you will
swing to a news programme and probably 15 million viewers will
drop to 13, and this is what happens with News at Ten when
you go from a major, well thought out nine-to-ten schedule, which
has been ITV's strength for years, and you can go through the
ones, the Morses, the Minders, all these things
used to come through and Cracker is the most recent one,
so if you have that and spend a lot of money, you get an awful
lot of money back in AB ratings both with the news and what people
watch now. What is ITV short of? Is it youth viewing? My own view
is AB ratings. It is AB ratings in both the old and young. They
do not get that sort of rating. Your point was, I think, that
the BBC are picking up more of that area and they always have
which is why the advertisers have always wanted advertising on
the BBC because that is the ratings that they want. I think on
the quality thing, I believe in it fundamentally and I believe
that News at Ten is one of the biggest things of quality
that ITV can state publicly and I think they are rather rash to
throw it away on assertion. The last area I just want to comment
on is the commercial thing. I have obviously been brought up on
that all my life and I have given serious thought to what is the
benefit of this. Well, there may be some more money in it. I have
my doubts and that is all I can say. I really doubt whether there
will be a tremendous increase in revenue to the commercial television
system by this change. I think they will certainly lose on AB
ratings because they are unlikely to pick AB ratings up at the
6.30 time. They may pick up viewers, but they will not be the
same sort which led to the News at Ten slot being the most
expensive advertising slot on British television. Everybody wanted
that three-minute slot in the middle because that is carrying
the key viewers. So on the commercial side, I see the pressures
on the company and I see the loss of market share, but it has
been obvious that it was bound to happen both from change and
from tradition. The advertisers are putting pressure on them in
this way, that they want better ratings, but it is the same advertisers
that lobbied all of you for several years, because I used to see
all the letters, to say, "Can we please have separate advertising
on Channel 4. Why? Because we want to have competition between
3 and 4 on price which keeps the advertising rates down. Can we
please have Channel 5", because that is another very important
advertising-led channel, "for the same reason?" But
the corollary which was pointed out at that time is that if you
do that, you are bound to reduce the market share on your prime
channel, which is ITV 3, and you cannot do other than lose market
share. If Channel 4 is going to get up to 10 or 12 per cent from
its 8 or 7 per cent, and Channel 5 picks up a 5 per cent share,
where do you think it is going to come from? It is certainly not
going to come from the BBC. It was always obvious that it would
be an advertising split and the advertisers are now uncomfortable,
and as I am, in another hat, representing one of the biggest advertisers
in Britain, so I do not speak for them, I just note what is happening,
there is no doubt in my mind that they would prefer to have the
ratings and less competition now, but they cannot have it both
ways. They have got what they asked for and this is the corollary
of it, this is what is happening, so the pressure comes around
to change the schedules into something that is absolutely unproven
and that is what worries me about it. For every big change in
American television, they put pilots on and they throw them out
after two shows, and they are very ruthless at this, but there
is no piloting here; it is just assertion and change. To conclude,
and I will answer all questions as to what would have happened
the last time if you want me to, especially within the political
context at the time, I see no proven commercial reason for this
move. I do not see any significant reason for moving it on quality
grounds either or adding benefits to the viewers in terms of more
people being able to watch the news, but I think it will be less
because the other thing which has not been mentioned today is
that there is a news programme which starts at seven, a very good
one, on Channel 4 which runs for 50 minutes and they struggle
like mad to get viewings of a million. That is what happens at
that time of night, so you cannot really say to yourself that
you are going to really make it at the 6.30 news slot. I think
the other thing that is interesting is that at the moment, and
this is why I am surprised that this has come up looking at it
from the outside, is why, when they are coming along to renew
their franchises, because everyone wants their franchise renewed
and we have heard that today and certainly everybody wants the
price reduced of those franchises and I am sure they are not coming
along offering more, but I have not been party to what has been
said, they come along and say, "You must do this, you must
change it as this will give us commercial benefits" because
the logic of that is that you have got to say, "Well, the
price ought then to go up for the franchises and not down".
I am sure that has not been offered at this time, but it is one
of the questions which has to be asked, that if there are significant
commercial benefits, why should not the price of the franchise
go up to an organisation, a good organisation, which is making
very large profits at the end of the day. I can see they are going
to lose some of it because they are having to hand over Channel
4's money from now on and I can see that digital decisions are
being taken, and that is part of being in this business, but there
have been good profits made. My memory tells me that it was about
a 25 per cent mark-up on sales which is a fairly high return and
I do not see that that is going to be jeopardised or added to
much by News at Ten being usurped. As a separate situation,
I feel very strongly about it for one other reason which is that
at the moment about 70 per cent of the population gets their news
from television news. There are more people watching News at
Ten than read all the major newspapers in Britain in a day,
so it is unwise to start saying, "We are going to take away
one of the two major sources of the news", which are the
BBC at nine o'clock, which will not be moved of course, and News
at Ten because you are really taking something massive away
from viewers when, as yet, we have not got the new type of television
in which will say, "This is no longer needed" and I
think that is several years away, so my conclusion is that that
is when it should be reviewed.
Chairman: That is very helpful and thank
you very much indeed.
Mr Maxton
151. Can I take that point because I have just
been looking again through the evidence from the last time we
had this issue raised which was 1993, five years ago, right at
the beginning of the licences where I think the case you were
making about the licences had much more strength than it does
now because of course then the companies were literally talking
about changing it six months after they had been given a licence,
but if you read this, there is no mention of digital television
at all. It is not even raised.
(Sir George Russell) No.
152. The Internet very largely did not exist
and yet in those five years broadcasting and news information
has been transformed. Now, what you are almost suggesting is that
we really have to wait another five years before we change the
News at Ten situation. Now, to be honest, five years from
now, I do not know what is going to be happening. I can try and
make some guesses, but they obviously are guesses, but if the
same changes are going to take place over those five years as
have taken place over the last five years, and the evidence would
suggest that they are likely to be faster rather than slower,
then your argument that we really should just hang on to the next
licence round just does not hold water.
(Sir George Russell) Sorry, it is not the next licence
round because the next licence round is now and something has
got to be signed right now. All I am saying is that there was
no mention of this at the time because we barely got at it. It
was the ITC which developed the digital situation and they launched
it in my last month in the job, we launched the digital applications,
so there is a good gap, but, you are quite right, we were not
aware of this. In the same way, just around or just before that
time, the whole Sky/BSB merger took place, if you remember, so
change is rapid in this industry. The change is equally rapid
because, you may remember, one of the things that I was quite
strong about was that I very clearly believed that acquisitions
were the right way to resolve what should be the ownership as
long as those acquisitions had to honour the obligations of the
licences, and that is what has happened. That is how change was
effected in that sense. I did ask for a moratorium for two years
just to allow the thing to settle down first before they changed,
so you will see my thinking does not really deviate from saying,
"If you want to make a change like this, prove it".
The pilot can soon prove what has been said here and I do not
believe you will see a change that affects the news programmes
as opposed to the news gathering as quickly as you think. I think
the news gathering situation will be very rapid in change, but
making a programme which is an entertainment programme out of
news will take a lot longer to change.
153. Let me switch a little bit then and ask
you another thing. Is not really the major problem that if they
want to stay at ten and the ITV companies want to show a film
right the way through, is not the best way of doing that and the
simplest way of doing that to get rid of the watershed so that
they can put on a major film at eight o'clock rather than nine
o'clock and just say that in the modern world people have a right
to choose what they watch and what their children watch and that
it is not for us to say, "You can't watch this and you can't
watch that", but people should take that decision themselves,
and if we did that and got rid of the watershed, you would not
have to worry about ITV because you could still leave the news
at ten?
(Sir George Russell) I would hate to throw the watershed
away because it took the same 30 years to establish that in every
viewer's mind as it did to establish News at Ten and it
has been a very good checkpoint for people to ask, "What
are we really doing when children are present?" We have always
taken the view in ITV that we are looking after you until nine
o'clock and you have got to look after your children after nine,
and that has been the sort of statement which has been made regularly
and I think it is a fair one. I do accept that the watershed could
be at ten o'clock these days because children watch for a lot
longer and parents are always complaining about stuff that is
on at five past nine, and that always will happen, but we have
not yet found a way of convincing American film-makers to make
a programme or a film which starts off for the first half-hour
as bland with no sex and really moves into it for the next hour,
but they always start off in the first five minutes to get every
viewer's attention.
154. So instead of watching some bland programme
at eight o'clock, the 14-year-old and the 15-year-old are upstairs
with their computers surfing the Net and what they can find on
the Net, no film that you are likely to put on ITV is going to
match.
(Sir George Russell) I accept that. It is just that
I do not think we should give in.
Chairman
155. Is it not interesting that both of the
arguments which have been put forward by Mr Maxton have very strong
validity, but they are not the arguments which are being put forward
by ITV to request the change? It would be open to ITV to say,
"The entire scenario has changed. We have got the Internet
which is going to expand enormously and you can get news that
way. We have got the extra- or non-terrestrial channels and you
can get news that way. We have got digital and you can get news
that way", but they are not saying that. They are asking
for the change assuming an unchanged environment of television,
the present set-up, and what they are seeking to do is abandon
the conditions which they volunteer without offering either of
the arguments that Mr Maxton has offered, both of which are very
strongly tenable arguments, so if we were to go by Mr Maxton's
criteria, which I certainly hope this Committee would hold and
we said so in our report on the multimedia revolution, then there
could be an argument for saying, "Let's scrap all of this",
but ITV are saying, "It is like this, it is fixed. We just
don't like the way it is working out, so shift the goalposts on
the present playing field", but they are not saying there
is a new playing field. Therefore, it would seem to me that the
failure of ITV to come to terms with the changing environment
of electronic communications has led to them trying to shift it
around a bit in order to rescue a position which would lead, as
you say, to a deterioration of the quality of what they are putting
out without affecting their competitive position which, as Mr
Maxton pointed out, has been eroded not by such things as the
loss of audience for News at Ten, but because the non-terrestrial
is taking part of their audience away.
(Sir George Russell) Yes, I do not disagree. I think
they have been caught between a left and a right hook here. The
left hook is the three new channels that came in, whether it be
Sky growth, football going on to Sky which they could not do much
about, Channel 4 going independent and really getting its ratings
up and Channel 5 turning up, so that is the left hook, and the
right hook is the whole of the new digital situation which is
coming in and the Net which hardly any of us understand any more,
and that is coming in at the same time and they are trying to
struggle with all of this and, funnily enough, you always go back
to scheduling to solve it.
156. It is true that the Committee is extremely
satisfied, but whether they are totally convinced by what you
have said, we will find out in our deliberative session.
(Sir George Russell) Could I answer a question which
was raised, which I thought was a very important one, earlier.
This was the question of what political pressures have been applied.
I do not know at this time because I have not been a party to
it.
Mr Fraser
157. I was going to ask you, but I thought everyone
else was getting bored with it, so what political pressures have
been applied?
(Sir George Russell) It is funny you should ask that
question! Through all my time in commercial television regulation,
I had no political pressure on a one-to-one from anybody. I have
had organisations write to me, all sorts of organisations write
to me to try and convince us to do certain things, but no straightforward
political pressure, even when I had to wrap up the most awful
one of all which was Death on the Rock. That came at the
beginning of my career and I had somehow to conclude that one,
but I still did not get anyone `phone me up and say, "You
have got to do this, that and t'other". When this strange
episode of News at Ten came about, I moved very fast because
it struck me at the time that it is far better to let people know
that if they make a request, it is likely not to be accepted than
have to deal with the request for a change. A massive ITV conference
took place which was leaked widely to the press and we were aware
of it the next morning and we called a meeting about what are
we going to do and say. We took our decision as to what we were
going to do and say and we drafted what we were putting out, at
which point letters arrived from John Major, two from Lady Thatcher,
one from John Smith and there were links with, I think, Ted Heath
who got involved and the Leader of the Liberal Party at the time.
All we were able to say, and what I can assure you of, was that
we had taken the decision before we got them. What it did do,
there are two things. When you know you are into a situation where
it is hostile to you in an ITC role, you work very hard to present
unpalatable statements in the best way you can. If, on the other
hand, you realise that everybody thinks it is a great idea, it
is much easier to sell, but the decisions were taken before these
letters arrived, of that I can assure you, but that was the only
time I received any formal senior political letters in nearly
ten years.
Chairman
158. So you are saying that you were directly
communicated to by politicians last time, including the then Prime
Minister, a former Prime Minister and someone who hoped to be
Prime Minister?
(Sir George Russell) And, if you remember, half of
Parliament got together to form a committee to argue the case
as well.
159. And we had a go of course, Sir George.
Perhaps the Clerk can find out whether in fact any political leaders
in government or in opposition have written to the ITC on this
matter. It would be useful for us to have that information for
our deliberations. That is very valuable indeed and I am most
grateful to you for responding to the implicit question which
Mr Fraser put to you.
(Sir George Russell) It struck me as
a very important area and we have got to really hit on it because
I do not believe people spend all their time from here trying
to convince some member to do something they should not.
Chairman: Thanks very much indeed, Sir
George.
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