Examination of Witness (Questions 500
- 524)
THURSDAY 2 DECEMBER 1999
MR KELVIN
MACKENZIE
500 Again, you are talking about the damage to
you as a commercial player. What about the interests of the country
and listeners and viewers? Do you not think that they are entitled
to have broad sections of news, programmes, and all the rest of
it, that perhaps Talk Radio or indeed any one individual commercial
station cannot provide?
(Mr MacKenzie) I am not saying, shut
down the network.
501 I am sure they would be very pleased to hear
that!
(Mr MacKenzie) I am saying, privatise
it, but do not let us go back over that. The issue of how it affects
me is the only way that I can speak. I am saying it, and I know
it may be painful to listen to all this stuff, but when you lose
as much money as I do because of oppressive behaviour, you would
be bad tempered as well.
Mr Faber
502 May I go back to sports rights because a
lot of the BBC's defence of their loss of sports rights over the
past few years has been based purely on financial grounds. Indeed,
Greg Dyke sat in front of us last week and effectively said that
the BBC would have to ration the sports which it had applied for,
which it had bid for in the future.
(Mr MacKenzie) I hope they do in radio
but go on.
503 I was going to come on to radio. Is not the
truth that in many instances they have lost rights in the past,
as much because of attitude as because of pure financial bidding?
I am thinking of test match cricket, Channel 4 in particular.
Maybe you could give us a feeling of how the bidding went when
Talk Radio got the overseas tests.
(Mr MacKenzie) Just move that to one
side. We compete with them cheek by jowl in relation to sports
rights. Remember, we do not have television style revenues. When
the BBC TV turn up to buy something, they are just one of five
in a line. They may be one of seven or eight, including BT, in
the years out.
504 They are now but in the old days they were
not.
(Mr MacKenzie) Therefore, they lose things.
When I turn up for a radio it is just me—a loss making national
station trying to put a stake in the ground. Most of the times
they just whack us away, as it was with the South Africa bid.
We just basically got up earlier. That was all. I would like to
claim it was a great, huge piece of intellectual negotiation.
In fact, it was more luck. The BBC lost it. There is only me.
What I am saying is, I do not care if Capital turn up, or Magic
turn up, or somebody else, LBC turn up, and they outbid us. That
is fine. Somebody has made a judgment, "I can make some money
out of this or create an audience for the future," something
like that. But when the BBC turn up with the taxpayers' money
I object.
505 Do you have audience figures for the first
test match?
(Mr MacKenzie) I do not, no.
506 How do you anticipate their coming back?
(Mr MacKenzie) After all, it sounded
great. Certainly the best thing we have done since I took over
the station. I would think we would have got an audience for it
but it is a difficult audience. Somebody is used to going to Radio
4 long wave and being involved in the Dogger Bank and various
other bizarre aspects of long-range weather forecasts, so it is
a bit of a shift to come to the AM network.
507 You mentioned that you were seeking to appeal
to an 18 to 45 year old male audience. A lot of women enjoy test
match cricket. There were high female figures for test matches
in the past.
(Mr MacKenzie) Okay, that is probably
fair.
Derek Wyatt
508 May I start by agreeing about the decriminalisation.
I think there are over 100,000 women in prison currently because
of not being able to pay their licence fee. That is a disgrace
but how we decriminalise it I am not sure.
(Mr MacKenzie) That is utterly fantastic.
If you decriminalised it you would never see the BBC again because
the BBC would disappear. I promise you that nobody pays that licence
fee because they want to. This is great, this! I am enjoying this!
509 Meanwhile, back at the ranch, may I ask you
about digital radio and digital radio plans. The key thing currently
with digital television is that, for once, two weekends ago there
were three programmes which were actually watchable on three channels.
There was Warriors, Have I Got News For You and
Rory Bremner; but digital failed to exploit digital because
you could not watch the other two programmes later in the day.
On radio, digital radio gives you the opportunity, (if you are
like me, a Charlton Athletics supporter), you would want a Charlton
Athletics option on Saturday afternoon, in the same way that David
would like Chelsea probably. Therefore, in what way will digital
radio give us what we would like rather than what you would like
to give us?
(Mr MacKenzie) First of all, also as
a Charlton Athletics supporter, (a former Millwall supporter),
I have Sky digital and I think it is utterly fantastic, but everybody's
thoughts of programmes are different. With digital radio you are
going to see great changes. For instance, we are going to start
on digital 1. My company, in partnership with Bloomberg, is starting
money stations—24-hour stocks, money, investment—which
will be the first in this country. There will be fresh offerings
to be had. Whether it will appeal to you, I do not know about
that.
510 What I am saying is that digital radio gives
us the opportunity to have a much wider choice.
(Mr MacKenzie) So does digital television.
511 Indeed. But, at the moment, the emphasis
is all television. Even the Secretary of State's speech yesterday
morning just got radio in as one word. We have not had much discussion
about the impact of digital radio. You have talked about the BBC
Radio. My view is that you could privatise 1 and 2, maybe 5, and
then pay, as a result of that, for 3 and 4. This would reduce
a £300 or £400 million spend for the licence fee. But
that does not pay for digital radio of the BBC. There is a public
service element that I would wish to retain on digital radio.
So how do you expect the BBC to pay for it?
(Mr MacKenzie) I honestly do not care.
I could say it is great to have public service broadcasting, but
I do not buy it. If what you are saying is 1, 2, 5 privatised
and, therefore, our licence fee comes down or goes up slightly
to give them extra money to invest in digital television, I would
accept that because the licence fee would be coming down and so
there would be an extra £30 in my pocket and I would be delighted.
But I do not worry about the BBC. I worry about myself and the
effect it has on me.
Chairman
512 I can see your arguments and to some degree
I sympathise, but let us take Radio 3. Would you not agree that
there is a case for public funding of Radio 3 in the way that
there is a case for public funding of museums and art galleries,
namely as a cultural resource?
(Mr MacKenzie) I do not know. Classic
do a great job and I think if you privatised 3, seeing those two
guys slug it out for the buck, it would do it great(sic).
I do not think it would be bad. In fact, the bizarre aspect is
that thanks to the EBU cartel, Radio 3 is entitled to a whole
series of musical extravaganzas across Europe, because of the
crooked way that the EBU operates with public service broadcasters,
all bidding between, and Classic are denied the right to play
out that same piece of music. There is an infrastructure of public
service broadcasters across Europe all doing each other a favour.
It is an absolute bloody scandal. I am very pleased to have this
moment to expose it. Thank you.
Chairman: I will not divert the questioning
that particular way. Perhaps we can have an argument about this
on another occasion.
Derek Wyatt
513 This week OFTEL announced that the local
loop is going to be finally privatised in July next year. This
will give utility companies, and local authorities even, the chance
to have a go to provide their own. What it will give to us is
the chance, (as Chelsea already does), of going to the net and
listening to the radio on the actual PC, because it will be on
a local loop. Will that not take the whole digital radio away,
the whole need for it?
(Mr MacKenzie) What it will prove, as
most people in media businesses know, is that content is king
and that distribution can be almost anything. The South African
Tests or anything you like, there is never going to be a moment
in the world we are going into, where you can be absolutely sure
that one form of distribution is going to be the dominant form.
I agree with you about the PC. There will be a lot of people starting
to develop radio and television stations aimed completely at the
Internet and in that direction. The network, as we know it in
30 years' time, may not exist, but there are lots of experts out
there who have different views on it.
Mr Keen
514 Claire Ward said she was more sympathetic
before you came in. It did worry me when you said you switched
support from Millwall to Charlton! It reminded me of David Mellor.
You said that people would not pay their licence fee but they
have to, and that they would not pay unless it gave the wonderful
service that it gives. I agree with you. I pay and my constituents
are very happy to pay £2 a week for all the services we get
from the BBC. Do you not think that £2 a week is good value?
(Mr MacKenzie) No. I do not like propping
up somebody who causes me a lot of financial panic. No, I do not.
I am not in favour of it. I do not accept the argument. Everybody
says to me that everybody would be quite happy to carry on paying
their licence fee. I think from the moment you did not see those
vans making their way round, or a tap at the door, or a letter,
or using their own networks to encourage you what great value
the BBC is, I think it would just collapse. It would collapse
overnight. It would not be something which would take years to
collapse.
515 I made that point earlier. People still want
BBC.
(Mr MacKenzie) I get your point. I do
not care.
516 I know you do not care.
(Mr MacKenzie) I tell you what, in America
all the great cable channels are grown at the high end and not
at the low end. So Discovery or National Geographic, we have now
got three or four 24-hour news channels, they know that people
want high end stuff. There is no question that the hole would
be filled by (I have nothing against them myself) wall-to-wall
soaps; the hole would be filled with quality television. It would
not be paid for by the taxpayer. I would be delighted.
517 I sympathise with you. I am 55 and I worked
in the private sector all the time. There are large companies
and you are trying to compete against them. I understand that.
But if you went to a bank and said, "I want to set up this
business, I want to borrow money from you," and the bank
said, "Is there another industry, is there anybody you are
going to be competing with if we are lending you this money? and
you said," There is the BBC which is going to wreck my business,"would
not the bank be mad to lend you that money?" Why come now
and complain about business if they have been in business for
65 or 70 years?"
(Mr MacKenzie) Good point. I think I
was naive, in one sense, when I got the company. I did not understand
how unearned money could be used against a commercial company.
It is the same argument constantly—I know you do not find
this very comfortable to listen to—but it is a problem for
me.
518 You are saying you are affected by the BBC,
but if you got your wish and the BBC was privatised, you would
then be hitting a tremendous number of other companies who use
the limited amount of pool of advertising revenue from companies
who themselves sell products.
(Mr MacKenzie) The advertising community
would shout "alleluia!" if the BBC were privatised because
it would affect the scandalously high rates of the ITV network.
It looks as if they are going to go higher shortly. But everyone
should win out of that. Prices would come down. More competition.
Fresh people would be able to get national network advertising.
There is no downside. I say that radio advertising would probably
double. The only thing that is at risk in all this—and this
is a form of snobbery—is that the quality which takes the
place of what the BBC does today would not be as high. That is
the real issue that everybody is concerned about. What they see
will not be what they perceive now. There are two aspects of that.
Your judgment is clouded by the fact that one side, one network
has commercials and the other one does not, which I think is a
strange sort of British thing. The second thing is that you do
not have belief in the amount of quality programmes around who
work outside the BBC. I do not buy that argument either.
519 That is not my argument. I just think the
public get wonderful value for £2 a week for all the services.
Would the commercial sector be able to beat that? They are happy
to compete with you despite the difference you say in the BBC
exists already. We would not get a very good road system if we
did not all have to pay for it. I think that is a good analogy.
Do you not agree: what would the world be like without the BBC?
(Mr MacKenzie) It does not seem to affect
America very much, does it? It does not affect Canada or Australia.
We have this peculiarly large force of public television and production
and I think now, as we go into the next Millennium, is the time
to address that issue of whether we should have it any more.
Miss Kirkbride
520 Mr MacKenzie has pretty much answered all
the questions I wanted to ask him, but referring to the answer
to Mr Keen there, most of the private media broadcasters that
have come before us are absolutely horrified by the idea of privatisation
of the BBC because of the collapse in the rate cap. Is that something
where radio has a lot more to gain than TV?
(Mr MacKenzie) I do not think we should
have anything to fear. They should just take it on the chin. They
should not have to pay a licence fee for themselves. They should
not have to send the Government £30 or £40 million a
year. They should have to compete against like for like programming
across another two channels, that is all. My heart does not bleed
for the ITV guys. They take it away in wheelbarrows.
521 I accept this is a rather patrician question
and therefore there may be a fair amount of scorn from you. Nevertheless,
I will ask it anyway. You say there is no problem in America and
that there are quality channels in America.
(Mr MacKenzie) Television.
522 Cable channels. I presume you pay quite a
lot of money for them. Therefore, in term of equal access to people
who cannot afford to pay for the nature programmes and the high
drama programmes, is it not a tiny bit of merit for the BBC to
be able to produce, with access to all, without paying money that
you could not afford, among the low income groups?
(Mr MacKenzie) The difference in cable
television is that you decide whether you are going to buy these
things or not. You have a look at your wallet and you say, "Can
I afford it? Yes, I will take that bundle." Obviously with
the BBC, you are given the choice that you are off to gaol if
you do not pay it.
Chairman
523 So what you are saying, in answer to Mr Keen,
was that ITV support for a BBC licence regime is not due to their
respect for BBC as a revered role model, but if the BBC were to
go into the commercial market Channel 3 would, for the first time,
face real commercial competition?
(Mr MacKenzie) Which would be a good
thing. So together, those two big companies, I would say advertisers
are just putting their heads in their hands and wondering what
the hell of a price they are going to have to pay. By the way,
you cannot buy round the ITV network. You cannot buy 4, 5 and
a bit of Sky to get value. Anyway, that is my job at Carlton just
gone as well!
524 Thank you very much. It was nice to see you.
(Mr MacKenzie) I will see you next time.
Internet next time, eh?
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