Examination of Witnesses (Questions 700
- 719)
TUESDAY 7 DECEMBER 1999
SIR CHRISTOPHER
BLAND, SIR
JOHN BIRT,
MR GREG
DYKE, MR
JOHN SMITH
AND MR
DOMINIC MORRIS
700. Which is the more likely to increase its
audience, perhaps exponentially: BBC Online or BBC News 24?
(Sir Christopher Bland) I think you know the answer
to that question, Chairman. Indeed, I suspect you ask few questions
to which you do not know the answer.
701. It is safer.
(Sir Christopher Bland) It is absolutely clear at
the moment that it is Online, but that is the new service. It
does not mean we should not be in News 24.
(Sir John Birt) It is helpful to remind ourselves
of the big picture. The BBC is the best resourced news provider
anywhere in the world. A massive investment in bureaus around
the world, a massive investment in expertise and specialism in
the UK. We have the biggest audience of any news broadcaster in
the world if you aggregate television, radio and Online. We have
the biggest share of news in the UK. About 70 per cent of broadcast
news consumption in the UK is to the BBC. This is an argument
about how people will consume their news in the future. Chairman,
people will want a choice. Quite a lot of people for a very long
time will want a 24-hour news service. It is perfectly clear,
because of what has happened in the American market, that for
at least ten years it will be a very important way for people
to consume their news: but, you are right, they will also want
it online. If you take a very, very long view over 20 years one
would guess that Online would predominate; but in the mid term
24-hour news will remain important. Just around the corner is
news on demand. The issue for the BBC (we discussed that last
time and, indeed, news to mobile devices) as well resourced as
we are in the UK and around the world, is to be sure we deliver
news in the many different ways our audiences in the UK and around
the world will want to receive it.
702. You do confirm that you have put a ceiling
of 1 per cent of licence income on funding BBC Online?
(Sir John Birt) It is not necessarily a ceiling. We
do not rule out further investment.
703. That means "Yes". Your answer
to my question is that yes, at present there is a 1 per cent licence
funding limit on BBC Online?
(Sir John Birt) I cannot do the arithmetic in my head.
(Mr Smith) Yes.
Derek Wyatt
704. We heard "Yes" here.
(Sir Christopher Bland) We review the budget annually.
We have not reviewed the budget for the year 2000/2001. The ceiling
at the moment is the same as the budgetary ceiling for every other
department of the BBC, something which cannot be exceeded.
(Mr Smith) May I add two points of clarification,
if it will help. One is that yes, the answer for the moment is
that about 1 per cent of our total budget is spent on BBC Online,
which is about £22 million, so it is quite a substantial
amount, as you suggest. However, the economics of the Internet
world are quite different to the economics of the television world,
and to get the same kind of service costs a lot more on the provision
side. The most useful response we can make is that in our proposal
for further funding—the plans we outlined the other day,
Mr Chairman—we commented that very significant extra investment
would be needed over the period in the Internet world and rather
less would be needed in terms of extra investment in BBC News
24 which is already in place.
Ms Ward
705. I do think that the BBC are a very good
news-gathering service. My problem is about priorities and where
you put the money. I do not think that the priority is a 24-hour
news service by which you are spending almost £9 per head
or per viewer on this service, when the large number of people
who are tuning into News 24 are tuning into it on BBC services
where they might expect to have other programmes or other services.
The figure you are giving me is 6 million viewers, as if this
is a large number. This is 6 million viewers over a whole week.
This is not like a comparison with Wives and Daughters
which is 7½ million viewers for a two-hour period; this is
6 million viewers over 116 hours. How can you give the impression
that this is good and this is worth nearly £54 million?
(Sir Christopher Bland) Chairman, I do not believe
we are going to convince Claire Ward that this is good, but in
five years' time, just as two years ago you would have had no
difficulty statistically in proving that Online was very expensive,
this will be seen as a wise investment.
706. At the expense of maybe other news programmes.
How much do you put into Newsnight or sport?
(Sir Christopher Bland) As you point out, it was not
at the expense of Wives and Daughters, and I am glad that
you have managed to see it. It is not at the expense of sport,
because while we put money into News 24 and into Online, we have
exceeded our sport budget by 7 per cent above the real rate of
inflation, at a time when our overall income has been effectively
indexed. So we have found additional resources from within the
BBC, and it is a question of juggling and balancing priorities.
If we did not spend the money on News 24, could we spend it somewhere
else? Yes, we could, but that is true of any area of expenditure.
In the end, it is about setting the right priorities. We disagree,
obviously fundamentally, about whether that is the right priority.
707. Do you have figures from America as to
how many people tune into CNN?
(Sir John Birt) Again, I do not have them in my mind,
but I can tell you what broadly has happened in the American market
place. That is, that CNN over time has developed high reach. The
characteristic of these 24-hour services around the world is relatively
low share, because people do not keep watching them for hour after
hour, but what they do is they turn to them for their convenience,
so over time CNN has become arguably the news provider of highest
prestige and standing in America because people have got used
to the idea of turning to it for news at their convenience. That,
at the heart of it, is what News 24 is designed for, for people
to turn to at any moment to get an update on the news. That is
what people are doing, particularly at important moments like
the action in Kosovo, or important days like the Mitchell talks
and so on, or the Paddington rail crash; people are turning to
News 24 to find out what is happening.
708. The figures for CNN are still comparatively
low in comparison with other channels in America, are they not?
(Sir Christopher Bland) Yes, they are, but CNN now
is seen, particularly domestically, as a thoroughly successful
venture. That was not true in its early days. It very nearly brought
down the man who started it. He had to sell half his stations
in order to fund CNN. It now makes money domestically at least
and is seen as a long-term strategic and wise investment. We think
the same will be true of News 24.
709. You are quite right, we have a fundamental
disagreement on this, on the basis of the figures which I have
seen and the costing relating to this service. In comparison with
other news services, you spend about £30,000 per edition
on a BBC news bulletin, is that right? Would that be fair?
(Sir John Birt) Again, I do not know. Would anybody
argue that BBC News is under-resourced? As I said earlier, it
is the best resourced broadcast news capability anywhere in the
world, at home and abroad.
710. News itself. What I am saying is that if
you were not putting money into News 24 at this rate, you would
be able to service better the existing news programmes on terrestrial
television, which people are watching in far greater numbers and
which have far greater support than News 24.
(Sir Christopher Bland) This is true of any area of
expenditure, though. There is an opportunity cost if you spend
money on X at the expense of Y. The question is, is there overall
balance of priorities, and is there strategic justification, which
Claire Ward and I do not share. If the strategic justification
is right, then it is a sensible thing to do. If your assessment
of the strategic value is correct, then we have made the wrong
decision—and the BBC is capable of making mistakes, it frequently
does—but on Online, our major strategic change in investment,
we got it right. We are quite encouraged by that.
711. I am very pleased about BBC Online services,
but if your argument is that the future will change in any case
in terms of service provision, and that people will want to tune
into news on demand, then surely there will be such a whole range
of providers that News 24 will be squeezed even more than it is
at the moment?
(Sir John Birt) I doubt that very much indeed. I think
it is much more likely that News 24 will be a very, very important
part of the BBC's future over ten years, as we see people gradually,
slowly and incrementally move from linear channels through to
channels which offer great convenience, to services which offer
on demand, and different people will make that journey.
712. They are not doing it.
(Sir John Birt) We are.
713. But viewers are not doing that. The vast
majority—three-quarters—of those who view News 24
are tuning onto BBC 1 or BBC 2 outside peak hours and watching
whatever is on. Many Members of Parliament, I am sure, when they
finally get back to their homes at night, put on the television—BBC
1—after 12.30, and you have News 24. That is not a choice
that I make. It is not that I particularly want to watch News
24 at that time; it is all that you are allowing me to watch on
BBC 1 or, early in the morning, on BBC 2.
(Sir Christopher Bland) That is extrapolating today
to five or ten years' time and assuming it will be the same. Of
course it will be vastly different. First of all you will have,
if you do not have it already, a digital set. You will probably
have a telephone device capable of downloading news on demand.
You will have many different kinds of mechanisms, not all of which
are able to be forecast or in the market now, of taking news on
demand. That is why News 24 is critical.
714. That is precisely my point. Why should
I tune into a News 24 service when I can indeed tune into a whole
range of news programmes? That is my point.
(Sir Christopher Bland) You cannot tune into a service
from, we believe, one of the best news-broadcasting organisations
in the world, which is the BBC. If you are content to leave news
provision to Sky and CNN in the United Kingdom, then that is fine,
but we would regard that as a very bizarre reaction.
715. The point is, though, that people are already
tuning into Sky News more than they are tuning into BBC News 24.
You argue that, but the figures you gave clearly show that that
is not the case. These are your figures which you have handed
in to us.
(Sir Christopher Bland) I have studied them with great
care. Like the Devil and the Bible, you can pick figures to advance
your case.
716. I am not picking figures to advance my
case, I am picking figures which you gave me.
(Sir Christopher Bland) The real question is the strategic
importance of News 24. It is not today's figures which decide
whether News 24 is a good investment for the BBC, it is what the
figures and the news environment will be like in five and ten
years' time. That is what we are trying to forecast and to respond
to, not to today but to the future.
Mr Keen
717. This shows what a wonderful divergence
of opinion we have here in this Committee, because if I had been
answering Claire Ward's questions there I would have said that
BBC News 24 is the essence of public service broadcasting. One
of the commercial channels carries some wonderful adverts parodying
government announcements during the 1930s or during the war, and
I think one of our previous witnesses wanted the BBC restricted
to that sort of broadcast. The restriction on the commercial companies
as to what they produce is their profitability, and they have
to be viable companies. The restriction on the BBC is the amount
of licence fee that we can extract from people and that they will
accept. Within those, would it not be better just to give the
BBC complete freedom in the revenue they can raise and let the
BBC do exactly what they wish to do, bearing in mind what the
BBC already does? Can you not have complete freedom? Would that
not take away this problem of trying to define public-service
broadcasting?
(Sir Christopher Bland) I think it is tempting to
say yes, but I think that the BBC needs to be accountable to Parliament,
to this Committee, to the Secretary of State and accountable,
through various and increasingly numerous mechanisms, to its public.
The idea of a BBC, for example, which did not have to ask permission
to start new services, if that was the implication, would be perhaps
in the short term attractive, but in the long term would not give
the right form of accountability and responsiveness. So I do not
think a completely free, untrammelled, unregulated BBC is the
direction in which the BBC should go. I think the BBC needs more
than just the Governors' interpretation of its Charter responsibilities;
it needs checks and balances, just as Parliament has checks and
balances, within the structure of broadcasting.
718. Do you think that when there is a complete
review of the BBC, that review would be incomplete without looking
at democracy, at whether there should be more direct democracy
and whether the BBC should be more arm's length from the Government
or completely separate?
(Sir Christopher Bland) Yes, I certainly think that
ought to be part of the review. I think that the role of the Governors,
inevitably and appropriately, will be part of the review of the
whole regulatory procedure for the broadcasting market, covering
both content and technical issues. Those are arguments which it
is entirely appropriate to have in anticipation of a new Charter.
One of the strengths of the BBC and the strengths of the universal
licence fee is the feeling of ownership it gives to our viewers
and listeners. I think that is reflected in the passions which
the BBC's triumphs and disasters arouse. I think that the hundreds
of thousands of letters and phone calls a year, the attendance
at public meetings, the interest of the press in the BBC, the
parliamentary interest in the BBC, reflect the reality that this
is a public service broadcasting organisation which has this inestimable
privilege of a licence fee. Any mechanisms which improve the accountability
for that privilege should be properly examined and put forward,
and if they work, the BBC at the moment is doing its best to embrace
them. We do a lot of things now which three years ago we did not
do.
719. Finally, have you any idea as to how the
democracy of the BBC could be improved?
(Sir Christopher Bland) I think some of the things
we are doing show what you can do. We are using Online increasingly,
both for questioning and putting the annual report online, having
question and answer sessions between me and others and the listeners,
public meetings, reviews by genre, using external panels to assess
our output. There is a myriad of things happening. There is no
one single answer, I think, that says, "That's all we need
to do." There are things like the publication of far more
detail in our annual reports, our appearance in front of this
Select Committee which is now an annual event and, although deferred
by this session, is going to take place, we understand, in January;
the presentation of our report and accounts to MPs and Peers in
both Houses; the public meeting at which we present our annual
report and accounts. All those are just examples—and there
may be others which we do not do and should do—but we have
moved a lot in three years.
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