Examination of Witnesses (Questions 500
- 504)
TUESDAY 13 FEBRUARY 2001
SIR MICHAEL
CHECKLAND AND
MS PATRICIA
HODGSON
500. We have seen the opening of E4 whose target
is 100,000 viewers, on which Channel 4 appears to believe it can
make money if it reaches its target of a youth audience. We are
about to get a new movie channel from Universal Studios called
Studio. More and more of that kind of niche broadcasting is developing
and is subject, under your regulation, to proper commercial pressures.
It is very different from the kind of services that Mr Maxton
has been talking about, whereby the BBC can simply afford, because
of this £2.5 billion it has got whatever happens and rising,
to experiment with whatever it likes whether anybody is viewing
or not. I was very interested indeed to hear the response of Patricia
Hodgson to what Mr Maxton has been running, which is a very valuable
theme of these hearings, namely the ultimate potential desirability
to distribute free digital boxes. I was very interested to hear
Patricia Hodgson say she believes that something like this is
inevitable. If it is then who is to do it? Mr Dyke last week appeared
to indicate that the BBC might. We shall have Mr Smith tomorrow,
and maybe he will tell us that the Government might. But the people
who are mainly profiting from digital television—and I do
not in any way belittle that potential for profit—the commercial
broadcasters, particularly BSkyB and ONdigital, what about them
doing it?
(Ms Hodgson) I was very struck by how Britain managed
to move itself into digital television in a very early and impressive
way. My observation was that the operators all went into it for
defensive reasons. That is to say, there was no real need for
BSkyB to switch off that wonderful flow of funds it was getting
from its analogue subscribers and switch to digital, with all
the investment that was required, until and unless somebody else
looked as though they were going to do it. The BBC was very strong
about the switch to digital. That caused the commercial television
people and Michael Green's visionary commitment to ONdigital.
We saw broadcasters, possibly not in their own interests, realising
they had to stake out a place in this new world, and they got
Britain into digital television ahead of really anyone else in
the world, and a great success it was. At some stage, I think
quite late on—because, as we were saying earlier, nobody
wants to destroy what is currently still a quite fragile commercial
success (we are not making money out of this switch to digital)—the
same kind of defensive move will be necessary. You can imagine
cable, for example, seeing a great deal of benefit in supplying
a combination of Telecom, Internet and programme services and
seeing a proper business model that will give it a return on giving
away free boxes. Sky, although quite reasonably charging an installation
fee, gives away free boxes. One can begin to see the parts of
the jigsaw coming together, but not quite what the tip-over point
will be from the current model to such a model. There will be
spectrum freed up that can be part of the incentives. There is
money in the system which currently goes to the Treasury. There
are a number of things in place that will help us to get there.
Mr Keen
501. Could I just touch briefly on the news.
ITC had no alternative but to step in when the news was shifted
to 11. If that had not been your duty would you have said, "Just
let it happen", because people should be allowed to watch
the news if they want to or not, or if they do not want to watch
it to switch to News 24. Would you really have stepped in?
(Ms Hodgson) It is impossible to answer that question,
is it not, if you have a statutory duty in terms of access to
news, and a real matter of debate for this House when the new
Bill is before it. At present there is a fair amount of support
for the idea of easy access to news when people are still up to
watch it, and a habit of news viewing is quite good for our democracy.
About 80 per cent. of people say they get most of their national
and international news from television. What is striking is what
has been happening since the two news programmes have been head
to head; which is that combined viewing figures for the late evening
news used to be round about 7.5 million and now they are 10 million—a
really significant increase in news viewing which, depending upon
your subjective value judgment, may well be a good thing for democracy
and not bad in an Election year, I think.
502. I strongly support the changes you seem
to be making. It sounds as if you are consulting the public, rather
than the ITC acting as individuals and thinking, "This is
how it should be done". I support that very strongly. On
the BBC, I have put this argument to this inquiry: obviously big
decisions have to be taken over the next few years, but is there
not a case for regarding the BBC just as a different way of raising
money: an organisation which raises money in a different way from
normal businesses and, therefore, not treated as having a duty
to do certain things, although I believe it should be regulated—I
am not saying it should not be regulated. I am not saying it should
not have certain duties to provide things that other people do
not provide. Should it not have the freedom to provide other things,
even if they are being provided; but give it some freedom and
do not think of it as the old BBC but let it use its enterprise
and go into whatever field it wants to and compete with the private
sector. Some of the people you regulate, and others you do not
have to regulate, seem to think it should be severely restricted.
What do you think about regarding it in the future as just letting
it get on with it and be thrusting?
(Sir Michael Checkland) Publicly-funded organisations
have a clear responsibility and different responsibility to commercially-funded
broadcasters. The BBC does have a responsibility across radio
and television for core activities—BBC1, BBC2 and the radio
networks—which are different, I think. The whole strength
of public service broadcasting will depend on how good a job the
BBC does. In the end, what happens on BBC1 does affect the rest
of broadcasting, there is no question about that. Therefore, what
has to happen, I think, is that the core funding has to be protected.
One of the concerns has been that some of the core funding has
not been protected because of moves into some of the digital services
which have been not well funded but have diverted resources. I
think there really is a responsibility on the BBC to be the public
service broadcaster. It used to be called the cornerstone of British
broadcasting; I do not think that responsibility has changed at
all. It will impact on how all the rest of broadcasting behaves.
Therefore, I would certainly like to see, and the ITC would like
to see, support for the BBC as this cornerstone of broadcasting.
What has been a concern over the past few years is that the consensus,
which used to be in support of the BBC, has slowly been eroded;
because people have been worried about the BBC trying to get involved
in everything and I think that has caused concern. When I was
Director General the first speech I gave to the BBC staff was
to say the BBC should stop its imperial march. I am afraid it
is on a bigger march than was ever done in the 1980s. I think
the BBC, as a public funded broadcaster, has to decide what its
responsibilities are: and they are, strong channels BBC1 and BBC2;
strong channels if they move into digital services, at an appropriate
time, BBC3 and BBC4, which would help switchover—but at
the appropriate time when they can be well funded. I think there
is a difference. The BBC should not be allowed to run riot in
every area because I think it is destroying the consensus which
I think has been very important for British broadcasting, and
it has also led to the quality. The BBC should be involved in
commercial activities, of course it should. I started UK Gold
when I was in the BBC and that was using archive material to benefit
in a flow-back of programmes in the way Patricia has described
Channel 4 are doing. You go into commercial activities in order
to make money and put it back into services. But the responsibility
for licence fee funding is that core services should be strong:
strong original production and strong quality production.
503. I agree with everything you said apart
from the fact you do seem to be saying that the BBC should not
risk and it should not be allowed to try funding. If they grew
they would put more funding in. You seem to be wanting to restrict
the BBC's freedom?
(Sir Michael Checkland) The BBC has certainly taken
risks in going into online in a very effective way. It has certainly
taken risks in going into some of its commercial activities. Remember,
some of the commercial channels, the Flextech channels which are
now taken over by Telewest, there are a whole range of commercial
channels available as niche broadcasting using the archives—and
therefore the BBC is a risk-taker. One of the great sayings in
the BBC is that you have the opportunity to fail at the BBC, and
sometimes we used to do it too often. But risk is essential, and
risks commercially, but the core activities must not be threatened
by the risk; in the same way that Channel 4's core activities
must not be threatened by its commercial activities either.
504. Finally, I was pleased with what Patricia
said about consulting the public and, in a way, the BBC could
learn from that, could it not? The BBC is governed by the funding,
and the Government has to justify the increases in the licence
fee. The BBC has to justify itself through its listening and viewing
figures and it is governed by a Board which has certain duties
but it does not have any means of consulting the public, does
it, not directly and does lack some democracy, does it not?
(Ms Hodgson) It does; I recall quite a lot of consulting.
One of the things the ITC can bring now, and OFCOM can bring in
the future, is neutrality, objectivity and an obligation to create
a state of the art consultation across the industry. We have been
talking to the National Consumer Council about how we might do
this. We will build on all the research we have done last year
to try and develop it. People want to know you have no axe to
grind. It is easier for an independent body, and I hope that might
be of value to all broadcasters across the industry.
Chairman: Thank you very much indeed.
It has been most informative and helpful.
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