Examination of Witnesses (Questions 470
TUESDAY 13 FEBRUARY 2001
Chairman: Sir Michael, I would like to
welcome you two here today. Sir Robin Biggam has explained to
us why he cannot be here. Ms Hodgson, I welcome you for the first
time in your new capacity. You are an old hand in a new glove.
It is very nice to see you.
470. Good morning. You are conducting a survey
of "what consumers expect from public service broadcasting".
To what extent is it realistic for regulation and funding of public
service broadcasting to be based on such expectations?
(Ms Hodgson) We conducted about the most
exhaustive survey that has ever been conductedboth in terms
of citizens' juries, public meetings and interviews with opinion-formers,
who of course would address particularly the question that you
have asked, and a quantitative surveyand we found that
the public was very realistic in answer to your question. Their
views of what they want had changed over time. They recognised
that the market was supplying a very great deal of choice. That
it was unrealistic to expect public service broadcasters to stand
still in such an environment. They did say very clearly, and there
was agreement across all the different types of survey that we
did, that there were still some things they felt that the market
alone was not at present delivering as they would wish. They particularly
emphasised the need for competition between the publicly funded
and the commercial public service broadcastersa competition
that tended to set quality and improve quality. I was impressed
by the realism, and I think the underlying reason is the economics
of television at the moment: which is that landmark-type programmesthe
Survival series, Simon Schama's History of Britain, the big dramascost
anything from half a million to a million pounds an hour to make.
With the economics of the market as such, that at present cross
the newcomer channels, there is no way of recovering that sort
of investment, and you need the large established networks with
their established brands (the privileges of reaching a universal
audience; of being well promoted on programme guides, whether
they are in print or electronic) to generate the audience interest
that justifies that kind of investment. While that is the case,
there is some value in it, I think.
471. Did you say half a million to a million
pounds per hour?
(Ms Hodgson) Yes. The average that niche channels
at present can afford is very small. The BBC/ITV will spend, on
average, £120,000-£130,000 an hour on programming, and
that is not the landmark stuff. The niche channels will be single
figure thousands. That is the difference in the current state
of the market.
472. What do you mean by a "quantitative
(Ms Hodgson) We asked the Audience Research Panel,
that is 6,000 people; and you test, by that sort of quantitative
survey, what you get from citizens' juries where you talk to people
over a day or two days and allow them to debate and develop their
understanding. What was interesting was we were getting the same
kind of responses from both types of survey.
473. Are there any particular changes you wish
to see in Channel 4's remit?
(Ms Hodgson) I am sympathetic to Channel 4's approach
to the challenge of continuing to be a major player in an exponentially
expanding market, and their idea of operating a fully commercial
service alongside their public service Channel 4. If they are
going to do that, I think audiences and the public would want
a number of safeguards. That their remit is strengthened a little;
that they commit to maintaining (and one hopes increasing) the
investment that goes into Channel 4 because that, after all, is
the purpose of trying to run a successful commercial operation.
When you do not have shareholders, you are not a profit-making
organisation and the dividends go back into programming on the
public service channels for the viewers. I think if that is clear,
and there are separate accounts so that you are clearly not cross-subsidising
the other way from the public service to the commercial, it ought
to be a beneficial development for Channel 4.
474. Are there any balance figures that we see?
Is there a balance sheet produced that we actually see? You talk
about how much goes in.
(Ms Hodgson) Channel 4's current annual accounts conflate
their businesses. We have been talking to them about that; and
they will move this year to start to separate them; and by next
year they are committed to having separate accounts.
475. When the BBC was set up in the Home Office
in the mid Twenties part of its job was to set up the infrastructure
for radio and television. Given that that is now done, what is
the role of public service television if it does not own any infrastructure
any more and has sold it off?
(Ms Hodgson) I think a really critical mass of investment
in standard-setting programmes, making sure that those are available
to everybody in the nation. I suppose "programmes" ought
to be defined very widely in the current environment (because
we are not in the heritage industry; we are in one of the most
dynamic developing industries) to include new media. The BBC has
been very successful online, and I think one of its roles going
forward should be to address the problem of the information-rich
and the information-poor; and indeed to drive new services and
make sure we do not have that kind of divide in the nation.
476. That sounds like a lot of platitudes to
me. The BBC has refused to have an education channel on digital.
It says its third arm of broadcasting is the Net; but the Net
is not broadcasting, but it has used that to camouflage investment
on the Internet larger than any other commercial organisation
in the world.
(Ms Hodgson) Is this a question that ought to be addressed
to the BBC?
(Sir Michael Checkland) I am not sure that is an ITC
477. In the OFCOM regulation, which we will
come to, you have run an investigation into what "public
service" means and what it is. What does it say about the
(Ms Hodgson) A good deal of support for the services
that were on the Net and, as I have said, a very strong view from
the public that the free-to-air broadcasters in all their manifestations,
including interactivity and new media, provided a very important
service in ensuring that everybody in the nation had access to
a basic quality and range of information.
478. Do you feel in the White Paper that basically
we have put the BBC in aspic within it, and we have not really
given a level playing field for the rest of the broadcasters,
Internet service providers and content providers in the country?
(Sir Michael Checkland) Not in aspic, I do not think;
but certainly the time to review properly the role of the BBC
will be more in the Charter rather than now, which means from
2004. At the moment we are heading towards a parliamentary bill
and the setting up of OFCOM. OFCOM will take some time to establish
itself; and I think review of the role of the BBC is going to
be more appropriate in looking at the Charter than it is at this
particular moment in the history of broadcasting.
479. Do you think it is a fudge that the regulator
will not have a remit over the BBC?
(Sir Michael Checkland) I think in some senses it
does have a remit. The first tier of public service broadcasting
does include the BBC for the first timean overall code
of community standards, or however you like to describe itthat
will be new. The BBC will be answerable to that and complaints
will be dealt with through there as well. The BBC will be answerable
for the first time to a body about its investment in regional
production, for example; that has never been the case before.
There are other areas where, when OFCOM is asked to look at new
services, the BBC will certainly be within the remit of OFCOM
in advising the Secretary of State.