Select Committee on Culture, Media and Sport Minutes of Evidence

Examination of Witnesses (Questions 500 - 504)



  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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Prepared 26 February 2001