Select Committee on Culture, Media and Sport Minutes of Evidence

Examination of Witnesses (Questions 160 - 180)



  160. But the BBC will be the first to do it, as soon as they can be given permission to do it; they are very, very interested indeed in having subscription channels?
  (Mr Lennon) Our understanding of the BBC's plans is that they are fully committed to maintaining the existing free-to-air channels and are not going to be talking about subscription, certainly on the two main channels which are free-to-air at the moment.

  161. And as that great lady, Mandy Rice-Davies, might say, "They would, wouldn't they?" Two other questions on what you say in your document. You oppose the removal of the 20:20 cross-media restriction. Again, in this day and age, with so many different kinds of outlets, including online newspapers, and everything, ought we to be, again, to use that adjective, so neurotic about cross-media ownership? After all, I was assailed by a journalist on a newspaper, which I prefer not to mention, because I refused to support a House of Lords Amendment about what was called `predatory pricing'. If you look at what was alleged to be predatory pricing by News International, what it has amounted to is that News International's newspapers have not become a disproportionately dominant force in the newspaper market since what was alleged to be predatory pricing, The Times has got a circulation of around three-quarters of a million, which is very respectable, for, in many ways, an admirable newspaper, but it is not exactly controlling the market, is it? The Sun, which is the other big newspaper of News International, has been losing circulation, though it is still the largest. So this predatory pricing did not grab all the readers, did it, people did actually choose? So do we really need to be that worried about that, in this huge environment of choice?
  (Mr Lennon) Our concerns about cross-media ownership go well beyond issues of pricing, and rather than comment on the newspaper industry can I perhaps ask my colleague to explain precisely our fears about the impact on broadcasting, the relaxation of the limits we have had.
  (Mr Egan) Are there justifications for retaining limits on cross-media ownership? We think, still, yes. It has been said by many witnesses, by yourselves, that there is going to be an explosion of different channels, so that restriction on spectrum is no longer a problem. But we do not think that means therefore you can depart from any concerns about ownership, because we think, although there will be many, many channels, the economies of scale are such that, and the White Paper acknowledges this, it may be relatively few big players that control a lot of that new broadcasting market-place. Therefore, we think there is still a justification for ownership restrictions on grounds of limiting concentration of ownership. And if we look at the 20:20 provision, you could be looking at a situation where, given what the White Paper says about ITV, and you could, in theory, if that all happens, move to a single ITV company, if that company were also to be owned by or linked with BSkyB, which itself is linked to News International with its newspaper interests, you would have a very significant player indeed, and we think to the point where it would be unhealthy to stand back and just let that happen. If the ethos is diversity, that would seem to go precisely in the opposite direction. Therefore, already we might be having one ITV company, is it unreasonable to say, well, at least let us make sure that company is not owned by someone else who is a very big player in the newspaper industry.
  (Mr Lennon) If I can just add to that, Chair, our concern is that the main casualty in terms of ITV would be the regional diversity of news output, in particular, and, to some extent, their own unique local programming, if the industry fell into the hands of newspaper companies or global publishers, where the tendency, we have seen already, is to cut out, or reduce, the size of newsrooms in regional centres and to centralise programme-making, which extracts from it the sort of unique local flavour that programmes have from being made in a locale.
  (Mr Egan) That is an additional point that we would just make, that there has been talk about local television, but we are rather worried about what kind of a fist we are making of regional television, which was supposedly the distinctive feature of ITV. And, although there is still much regional production around the ITV network, there are some companies, in recent years, that have not produced a single hour of programming for the network; we think that is a trend that should be discouraged, and we would like to see a much stronger commitment to regional programme production by those ITV companies, in particular.

  162. It seems to me that what we are doing here is clinging to shibboleths which, five years ago, might have been valid, but let me make it absolutely clear, before I proceed with my question, I hold absolutely no brief whatever for News International, I regard it simply as another media owner which wants to win markets, and there is no way I am going to act as an advocate for them. But if you look at their news provision, (a) at Sky News, it is a very good news provider, it does not misuse its place, it does not advance any policies whatsoever. It is also, if you look at digital TV, in competition with at least five other news providers, with BBC News 24, with the new ITN channel, with Bloomberg, with CNN, with CBS TV, if I want to watch the news, simply on round-the-clock news channels I have got six choices. So market domination is not playing some great significant effect there, and that is simply where we are now, before things expand again. And I would like to come on to your other point, about the potential removal of the requirement for a single ITV news provider; well, I would have got het up about that a couple of years ago. But, in view of the low priority that ITV itself gives to news now, and the way in which ITN itself has caved in to ITV, for fear of losing its place as the ITV news provider, are we still in that context where, say, five years ago large numbers of people would say, "ITN is the absolute paradigm on how to provide news, and therefore we have got to protect it at all costs"?
  (Mr Lennon) The audience figures speak for themselves. The first night of ITN running News at Ten, back at its old ten o'clock slot, achieved higher viewing figures than the BBC bulletin, which had been comfortably there.

  163. But there was a reason for that, was there not, they ran over "Who Wants to Be a Millionaire?" deliberately, in order to keep the audience?
  (Mr Lennon) It may well have assisted, but I think you can take that to mean that there is some support out there amongst the viewing audience for ITN as a news provider. I think, Chair, it is also significant that, of the organisations you listed competing with BSkyB, and quite palpably keeping up the standards of BSkyB news, we have not come to berate that company at all, but of the ones you listed there were two major UK organisations, both of which are publicly regulated, the BBC and ITN. And I think we would argue that responsibilities that are placed on those two broadcasters by content regulation have raised the game generally of TV news, and provides both BSkyB and other broadcasters with a benchmark to aim for.

  164. If you read Mr Michael Brunson, a highly respected TV journalist, on the first night of the alleged return of News at Ten to channel three, he pointed out that there were 17 minutes, as against the half hour of the BBC, and that the quality of the stories and the length of the stories were almost pitiful, if I am not paraphrasing him too crudely. Of course, you can win an audience through market manipulation, as it is alleged that ITV did, and a trade union like you, I would have hoped, would want to maintain such standards, if you are looking at the quality of news provision; it is a fact that cannot be denied that it has deteriorated sadly in peak hour on channel three. So why get so het up about it all, when there are lots of other choices? Now, of course, ITV would say, "Then why have you forced us to bring back News at Ten?" and the answer to that is, the law of the land.
  (Mr Lennon) Can we draw the comparison with newspapers, that was made earlier in this session. Whilst it is perfectly true that there is a range of newspapers available in the UK, from the most lightweight to some of the most journalistically admirable, at the two ends of the spectrum, some of the characteristics about the newspaper market that you cannot help noting are that it is highly politicised, with absolutely partisan political positions being adopted by—

  165. You mean all the attacks on the Government by The Guardian?
  (Mr Lennon) It is highly political, highly political, in a way that regulated broadcasters would not behave. It is also subject to the kind of predatory pricing that you were once asked to comment on, and, whilst it may be acceptable in the newspaper market, because people seem to survive and you do not have a public player in there, who would be accused of all sorts of misdoings if they engaged in predatory pricing, the broadcasting market that we have come to expect is very different from that. Yet the pricing wars, however they play it out within ITV, for example, I do not know what effect they would have, would probably not be a good thing. I appreciate the tone of the questioning, which is, why are we advocating the continuance of the nanny state of regulation in the media. The reason we are doing it, I repeat, is that the British audience for radio and television has become attuned to a relatively high standard, by world comparisons, of programming, it is impartial, it is of good provenance, the broadcasters are trusted, and there are quality standards, which may not satisfy you in every respect, when you are watching News at Ten, but there are quality standards which we do not believe would be maintained in an entirely market system which was free of regulation.

  166. Mr Lennon, I am not understanding you, because if you are talking about the politicisation of the press, the press has been politicised ever since I have been reading the newspapers, all newspapers have got a political point of view, and they have got a right to it. And, speaking from my own point of view, as a Labour Member of Parliament, I have seen an-anti-Labour press ever since I have sat in this House. On the whole, I do not believe it affects the way people vote, I believe people do not vote the way the press tells them to but the way they have decided to vote; and I think it is quite insulting, actually, to voters, to say that a newspaper is going to tell them which way to vote. But the fact that the press is politicised is irrelevant, is it not, the press has always been politicised, ever since the foundation of The Times newspaper? The fact is, we are looking at a TV environment, with news, in which it is not politicised. Labour people will accuse the BBC of being biased against the Labour Party, and Conservatives will accuse them of being biased against the Conservative Party, and maybe they are both right.
  (Mr Lennon) The reason that TV and radio are not overtly politicised in that way is, in part, due to the inheritance, that has been referred to, of many, many years of public service ethics, and also, in part, to the fact that there is legislation and regulation in position which proscribes that kind of political partisanship. The White Paper acknowledges the need for regulation at that level, because the bottom tier that is proposed, which will cover all broadcasters, includes, quite specifically, impartiality, on political matters and others, as a requirement that all broadcasters will have to meet.

  167. But what about the environment for employment of your members, as we advance, (a) towards the analogue switch-off, and (b) towards convergence; how do you see that as an area in which you can enhance the employment of your members? Presumably, among other things, independent production, which, in my view, very rightly, you are anxious to promote, will have greater scope than before?
  (Mr Lennon) I will speak very quickly about the employment prospects that convergence will bring, and then perhaps ask Andy to touch on the second question, of independent quotas. In terms of employment in this industry, there are a number of factors that you need to bear in mind. One is the constant pressure, mostly through low pricing, for broadcasters to accept non-UK material, much of it produced in the United States, some of it produced in other English-speaking countries; and that is a simple economic fact, it is cheaper for them, in many cases, to buy in English-language programming than to make their own. So, obviously, that is a factor for the future. I think the second factor will be the extent to which the audience demands and the regulator demands proper standards of quality, in other words, professional standards, artistically, editorially, ethically, of the programmes that they view. Now assuming we are not deluged by a wave of non-UK programming and assuming that the standards are maintained then there should be employment in the future for people who make TV and radio programmes, admittedly not on the secure basis that many of them used to expect, and we would foresee that there is scope for a fairly dynamic production market to continue to grow in the UK. And, obviously, this extends into the world of film, where we are seeing record numbers of people on seats in cinemas and a renewed interest from American producers in making films in the UK. So convergence in itself, provided there is content and provided that content is of a traditional and good standard, is not going to destroy employment at all in the audio-visual production area. I think, on the independent quota, a very detailed specific, I will ask Andy to comment on that.

  (Mr Egan) Just to amplify it, because we gave you the one line, calling for a review of the independent production quota, the 25 per cent quota, and certainly, as you said yourself, Mr Kaufman, we are keen to promote a healthy independent production sector, many, many of our members get most of their work in that sector. But we do face, increasingly, I think, a problem in how the 25 per cent quota actually works; the ethos of it, way back in the early eighties, was kind of let a thousand flowers bloom, let creativity bloom in the industry, open up broadcasting to a multitude of smaller, perhaps more creatively-driven production companies. It does not look like that now; there are two things that have happened. One is, many independent producers are owned now by broadcasters, or have a stake by broadcasters, so to what extent are they independent any more; and, secondly, within the sector, there has been a concentration of ownership itself, so that there is a small group of very big players, who get a huge chunk of the commissions, and then it trails off into not so many smaller companies. So we think the original aims are not quite working out in practice; we would like there to be a review, and please do not read into that we are anti independent production, we would just like to have a look at where we are now compared with where we might have wanted to be. One factor we would pick up on is that we have got a concern, as has the White Paper, about so-called cultural diversity, about opening up the media to a spread of ethnic minority contributions, and we do feel that ethnic minority producers perhaps do not get a fair shake, in terms of access, to the independent production quota, partly because it is so concentrated now.

  168. In that case, I had better send you a copy of a document sent to me by a young Asian film-maker in my constituency, which I have sent round the broadcasting organisations, and which does deal with ethnic diversity. I will make sure I send you a copy.
  (Mr Egan) Please do.

Mr Fearn

  169. Mr Egan, you did mention, during the course of some of the answers to the Chairman, the fact that ITV should be strengthening regional production. Is it not unrealistic to seek an increase in ITV's public service obligations, when at the moment their economic position is very much weaker, and going weaker?
  (Mr Egan) It is not so much a question of ITV being weak, it is how ITV deploys the resources that it has got. And what we have observed is, although there is regional news production throughout the ITV network, an increasing amount of network production, which is where most of the programme investment goes, is centralised, it is not being done particularly in the smaller ITV companies any more; some of them either bid but are not successful in getting network commissions, some of them perhaps do not even bid so much to produce network programming. And also we have observed a trend, in terms of our own members, that productions that are called regional, in ITV, sometimes are only notionally regional, sometimes the freelances they use are actually based in London, sometimes they will have an address in Leeds, Newcastle, wherever it may be, but actually much of the production is run from London. So, if the White Paper is going to allow even more, potentially, concentration of ownership in ITV, we would like to put a strong commitment in there to keep a regional flavour to that network. I acknowledge what you say, there is increased competition in the market-place, but, of the resources that ITV has, we think more should be earmarked to regionally-based productions. And they need not be productions that only address their region, it means just using the infrastructure that is there so that even companies like Ulster, which in one recent year did not produce any network programming, perhaps should be doing so and should be encouraged to do so, as the quid pro quo of keeping their licence.

  170. You also argue, looking at the brief, that the BBC should have a tighter PSB remit and that the Governors should be more accountable; could this not be an objective for OFCOM, if they have more powers in relation to the BBC?
  (Mr Lennon) Certainly, in terms of the accountability of people appointed to bodies like that, in our longer submission, which we had hoped to make available to you, we will be arguing that not only should BBC Governors be scrutinised by this Committee, in fact, prior to appointment, but that their affairs should be transparent, and we would like to see proper reporting of their proceedings. We are applying exactly the same philosophy to those who are appointed to the governing body of OFCOM.


  171. Is there any reason why they should not meet in public?
  (Mr Lennon) I cannot think of a reason; if that satisfies the need for them to operate in a transparent way then I cannot see any objections, from our point of view, to those bodies meeting in public, OFCOM, BBC Board of Governors, and anybody else at that level.

Mr Fearn

  172. The Government should insist that that is done?
  (Mr Lennon) We are going to advocate that any Bill will include a requirement for both BBC Governors, members of the OFCOM Board, and anybody else covered by the White Paper, to be scrutinised before appointment and to conduct their business in a transparent way. So I do not think we would object to more public meetings.

Derek Wyatt

  173. Good morning. I am sorry you feel that the indie thing might have to go down, I would like it to go up, the creative talents are not in the BBC any more, and I would like it to go to BBC3 and BBC4 and across the Internet platform and the radio. There is huge talent out there that cannot get access, because the BBC is a stuffy old company; but we can disagree on that. Nine per cent of our population are from ethnic minorities, but there is not an ethnic public service channel; instead, there is going to be an arts channel, which less than 2 per cent of the population will watch. So it is clear to me the public service remit in the BBC is completely confused; would you agree with that?
  (Mr Lennon) No; and you have anticipated we might disagree with you, just in some small way, on what you have said. On the question of talent, I do not think we have made any comment about the ratio of talent in the independent sector as compared with any of the larger, more institutional broadcasters, we accept that there is talent across the field. If you go back to the points we made about training, however, it is apparent to us that the mainstream, larger broadcasters are still a nurturing ground for that talent, in a way the independent sector finds very difficult to achieve, because of the way it is financed, and the relatively short-term nature of many of the projects that they receive funding for. So you may have your views about people like the BBC being stuffy, but, when it comes to talent entering the industry, the BBC and many ITV companies remain a conduit through which imaginative and creative people can find a way in and then move off, and do all the other activities that you referred to. In terms of the public service remit of the BBC, very specifically, which you referred to, the Committee is no doubt aware that the BBC intends to expand its free-to-air output, with the provision of four new TV channels, many of which are rebranding the kind of additional channels that exist at the moment,—

  174. Which they got wrong, fundamentally wrong, no-one is watching them. They have not got a clue in digital, they do not know what they are doing.
  (Mr Lennon) I think the BBC, in many public statements, have acknowledged that their digital channels, which I know have not met with universal support in this Committee, have actually been underfunded. And one of the reasons that they have not impressed a number of viewers is the fact that the programme budgets were not large enough to make the kind of quality programmes we have all taken for granted, over many years. But, if I can just deal with the ethnic broadcasting point, of the five new radio channels that the BBC intends to launch, these will be digital DAB radio channels, one will be a national version of the Asian programming, which is currently done by BBC Radio Leicester, another will be a black music channel, aimed very specifically at a black audience, but obviously of interest to a much wider one. And I think you have to appreciate the difficulty of schedulers and people running broadcasting channels when it comes to identifying the right audience to aim for. The BBC carried out a fairly large consultation exercise, which ended only a week or so ago; there was fairly wide support for the concept of four new TV channels, there was wide support for three of the new radio channels the BBC proposes, but the two that did not command a majority of respondents were those two channels aimed at an ethnic minority. So I think the public service—


  175. That is because they are minorities?
  (Mr Lennon) Yes, but as a public service broadcaster I think we appreciate that the BBC and others are often going to have to weigh off the interests of the bulk of the audience versus the needs, the very clear need, of minority sections.

Derek Wyatt

  176. Let me just interrupt you there. It is okay then on radio to have minority channels in digital radio—a tiny number of people have got digital radio—it is not alright to have a public service, ethnic television channel? Explain the difference.
  (Mr Lennon) I think the question is finding the resources and the bandwidth to do it in.

  177. Let me just go on. There is no educational channel; who decides that? The BBC do not want to put out a public service educational channel; what arrogance. We need to enable the skills of our people, and we need an education channel, across every single platform, not just BBC Online; they do not want to do it, they do not want to do a sports channel, a public service sports channel, they are happy to do a `pay-per-view' channel. It seems to me they have decided what they think is public service; we have not had a chance to define that and discuss it.
  (Mr Lennon) When it comes to educational broadcasting, I do not think you should assume our position would necessarily chime with the BBC. In the last three months, we have had a major argument, internally, with the BBC, as an employer, over their plans to disperse their current body of educational programme-makers to general programme-making, we took up a very aggressive stance on that, and believe that there is a serious risk that the BBC will dilute its educational output as a result. On the question of the sports channel, I think that really needs to be addressed to the BBC. However, aware of the BBC's budgets, we understand that with its restricted public income it cannot get into the kind of bidding—

  178. Restricted; £2.5 billion?
  (Mr Lennon) It has less money to spend on sport than an outfit like BSkyB

  Chairman: That is because it is spending it on other things. You say their digital programmes are underfunded. BBC News 24, with overheads spread, £60 million, costing far more than, say, Sky News; that is overfunded, they ought to close it down.

Derek Wyatt

  179. Let me agree and thank you for trying to do the education and the sport, because that is important. Can I just put something back to you, that, with ITV, I believe it is important we have one global player, and if the BBC is not allowed to do it we must allow ITV. I do not wish it to be AOL, Time Warner, or Bertelsmann, I would like there to be a British global player. But one way out of the regionalism, which you have mentioned, is, if ITV1 was allowed, then in that allowance they should have ITV2, which should be permanent regional, so there would be ITV2 Manchester, or ITV2 Maidstone, or ITV2 Newcastle, that the digital spectrum allows that; if we wrote that into the law, that would be a nice way out?
  (Mr Lennon) It would. We have not commented on that aspect of regionalism, our focus has been on the existing regional output, and we are urging a regulatory framework which at least maintains that level of regionalism. There is an interesting technical point though, since you have raised it. Whilst that regional digital programming would be available on the terrestrial platform, as I understand it, it would at the moment be difficult to offer it on a satellite platform; so there may be implications, therefore, about the availability of regional programmes to people, simply through technical limitations.


  180. Thank you very much. In a sense, we have made you defending counsel for clients who have not briefed you, and to that extent we have not been as fair to you as we might have; but we are very, very grateful indeed to you for your answers, and we quite understand and, certainly from my point of view, we support the work you do for your members. Thank you.
  (Mr Lennon) Thank you. Before we go, can I just apologise for the fact we have not provided you with the full length of our submission to the Minister; because we are democratic, it has gone through numerous consultations. It is not ready yet, but will be with you next week. And, on your last point about the BIPA, we may well be listening with interest to what they say, and include a number of observations on their testimony. Thank you very much.

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