Examination of Witnesses (Questions 40-59)
MR GAVYN
DAVIES, MR
GREG DYKE
MS JENNY
ABRAMSKY AND
MS CAROLINE
THOMSON
TUESDAY 22 JANUARY 2002
40. I just say that because you seem to be averse
to give us your view on switch off.
(Mr Dyke) Switch off is, in the end, a government
policy and a government responsibility. The last Government and
the current Government both took a decision that they wished to
move to a situation of at some stage switching off the analogue
signal and everybody going to digital and then being able to gain
the financial benefits from what is left of the analogue signal.
No-one is quite sure what those financial benefits are. They could
range between £2 billion and £15 billion, depending
on whether you were valuing them just after the 3G licences were
sold or now. There is clearly a value to that and therefore there
is a value to the society generally in having switch off. All
we are saying is that the free-to-air box moves you further towards
that because for the people who do not want pay or cannot afford
pay it gives them the opportunity to go digital and get all our
services and other free services that are available.
41. Can I ask Mr Davies whether he still stands
by his recommendation in his report to have the BBC subject to
the inquiry.
(Mr Davies) That is not for us to decide, Miss Kirkbride.
I think there are pros and cons in that debate. My panel by a
majority vote decided to make that recommendation.
42. Did you support it?
(Mr Davies) I was not the greatest enthusiast at the
time
43. You are less so now, surprisingly.
(Mr Davies) I am probably less so now.
44. Again on finance transparency, could you
clarify the position with regard to services supplied to British
Airways and whether or not they are purely commercial and paid
for by British Airways?
(Mr Davies) Yes, they are purely commercial and paid
for totally by British Airways.
45. My final point, News at Ten. Are
you happy with News at Ten news at 10?
(Mr Dyke) Let us take the figures before the new BARB
panel—because the measurement system changed three weeks
ago and is at the moment all over the place and no-one has any
confidence, I think, in any sorts of figures. If you take the
figures from last year, actually the movement of the Nine O'Clock
News to 10 o'clock in the first year saw a small increase
in the viewing for us and the second year another small increase.
That was in the period up until Christmas. In the second year,
remember, we had been through September 11, and that increased
news viewing generally. Are we happy with it? Yes, I think we
are. What is interesting about the figures is if you look at nights
when we are head to head with ITV at 10 o'clock, which, of course,
as you know is not every night of the week and we are never even
sure which night it is—but that is their problem, not ours—there
is actually, from the audience that we inherit and they inherit,
roughly a million people switch over to watch the BBC news—which
was not always the case with the BBC news. So we are happy we
took the decision. We always strive to improve the position. In
areas it needed to improve. One area, for instance, in business
reporting, Geoff Randall has made a big impact. But by and large,
yes, we are happy with the move. We think it was the right move.
46. You would dispute the claim that you have
gone down by 200,000 from 5.2 million to 5 million.
(Mr Dyke) I can provide you with all the figures if
you like. We have not gone down.
47. You would dispute those figures.
(Mr Dyke) Yes, they are not right. There had been
a decline every year in news viewing for the last five years.
Last year it stopped and there was a very small increase—and
when I say the year, I mean the year from when we moved, October
to October. In the period after October there was another slight
increase. The figures which we have not seen in detail, the figures
since January 1, are all over the place. If you ask Channel 4,
they have the same problems. None of us understand what is happened
to the rating figures. What is quite clear is that the present
BARB panel is not working effectively—or it is. But, I mean,
weird things happen. The range from one week to another is so
big it is not right.
Mr Doran
48. Can I add my congratulations to the BBC
for their services, particularly for BBC Scotland and Radio Scotland
which provide an excellent service—particularly for those
who do not have Scottish 6, and I have never been a supporter.
Can I also make a little plug for Rolf Harris. There were a few
sniggers around the room when his name was mentioned earlier and
they have come again. I have always seen it as the BBC's responsibility
to provide the high arts but also to make art successful and I
think he did a tremendous job in the programmes that you produced.
I do not think we should ignore that. I want to ask some questions
about your approach to the proposed legislation but I have just
one question on digital. It does seem to me that the BBC is able
to spend a lot of its money on producing new programmes, developing
small channels, but very little on the platform. I would like
to hear what you are doing in terms of the platform, but, prior
to that, what would be the implications of a collapse of ITV 2
on the distribution of your programmes?
(Mr Dyke) A collapse of ITV Digital would not immediately
affect us. We have looked into that. There would still be a signal
and those that could receive, could receive. I think it would
put an even bigger emphasis on trying to promote the free-to-air
box and of course, if it did happen, there is a lot of extra spectrum
that becomes available that could be used for free-to-air that
is currently used for pay. Again, it is a difficult decision.
It is not the BBC's job to try to keep alive a commercial entity
but we are working very closely with ITV Digital in trying to
develop a free-to-air box. In the box is potential for an upgrade.
Therefore, although it is a free-to-air box, it gives them the
opportunity to market to the people who have got the free-to-air
box the possibility of going over to pay, so it offers a real
hope for ITV Digital because there would be a lot more people
out there who could receive, if they chose to, the pay services.
The really interesting change of course is appearing on so many
different platforms. Obviously we took the decision several years
ago that we should be on all platforms, because everybody pays,
therefore everybody should be able to receive. The real difficulty
for us is that the cost therefore of broadcasting the signal has
gone up massively compared to, say, 10 years ago. Basically, broadcasting
an analogue signal was comparatively cheap compared to broadcasting
an analogue signal, a digital terrestrial signal, a Cable signal
and a digital satellite signal. Once the switch off, those costs
come down, because you would not have the costs of the analogue
signal. Should we be in any way financing the platform? I think,
if we did start financing the platform, we would have the same
problems about State aid and all sorts of things. I do not think
Sky need our help; I think they have done it pretty successfully
themselves—in fact, I think they would probably be horrified
if we walked through the door and said we would like to help.
Sky is a very effective marketing organisation, it seems to me.
They have done extremely well. We will also—because we again
are obliged not just to choose one platform above another—try
to develop with manufacturers a free-to-air satellite box for
those who want to receive our signal.
49. But it will not be subsidised.
(Mr Dyke) But it will not be subsidised by us. In
our discussions with the retailers—and we have talked to
all the big retailers—they have basically said, "Look,
at £99 we think there is a market." Our research says
people want to have them. In our discussions with the manufacturers,
we shared with them our research. We said, "Look, our research
says if you try to sell this at £150 the market is considerably
smaller than if you sell it at £99." PACE coming into
the market with the first box at £99 basically have set what
the price is. Competition will, I suspect, bring that price down
over time, as the manufacturing process gets easier.
50. On the cooperation of approach to the proposed
legislation, it seems to me that your strategy is to present a
situation where the new legislation is going to have a serious
impact on the BBC, and you use the expressions—we have heard
them today and in your briefing paper—that you will operate
within the marketplace, that you want to see a level playing field,
these sort of questions. I must be honest I had not quite interpreted
the White Paper as including the BBC, certainly in Tier 3, but
that seems to be your interpretation. On the other hand you make
a strong argument for retaining the BBC's special position with
the Secretary of State making key decisions. That seems a little
bit anachronistic, particularly at the pace of change that we
are seeing in broadcasting and communications generally. I think
there is a strong argument being presented by many commentators
in this area that we should have some basic principles which apply
across the board so that we do have a genuinely level playing
field. How do you deal with that paradox?
(Mr Davies) I hope that you will not be able to characterise
in the future (if, indeed, you ever have in the past or one has
in the past) the BBC as kind of swaggering around in an independent
and uncontrolled manner. That is not our intention. Our intention
is to fit in with the OFCOM framework in a sensible way for the
BBC and for the rest of the broadcasting marketplace. To clarify
again, on Tiers 1 and 2 and on economic regulation, we are essentially
going to be treated the same as any other broadcaster. On Tier
3—and this is where I think there has been some misunderstanding—the
White Paper intends to shift everybody mainly to self-regulation,
and in the BBC's case the Governors would presumably continue
to apply the self-regulation. But there is one difference, which
is the backstop powers that would be applied above that level
of self-regulation. For ITV they would be applied by OFCOM and
for the BBC they would be applied by the Secretary of State. Our
feeling is that it is appropriate for a public corporation like
the BBC (which operates hopefully in the public interest, does
not have private shareholders) to have the final backstop power
lying with the Secretary of State and I think that will improve
and continue accountability of the BBC to Parliament, hopefully
via this Committee, in a very direct way. I am not convinced myself
that OFCOM would do that job better. I think OFCOM has so many
other things to do that taking those backstop powers on the BBC
away from the Secretary of State does not seem to me less straightforward.
51. In your paper you make the comment that
the BBC will continue to be subject to all aspects of competition.
I found it very difficult to believe that if the Secretary of
State approved, for example, the new channel, which was in direct
competition with something which was being provided by one of
the commercial channels, that the competition authorities would
not intervene in that situation. That is the sort of anachronism
that I think has some of us worried.
(Mr Davies) In the same way that we as a nation decided
that it is in the public interest for BBC1 and BBC2 to be provided
free-to-air, even though that may be inconvenient for ITV or Sky,
it seems to me that we as a nation could decide if it is in the
public interest to provide News 24 or the BBC children's channels.
Those are essentially public interest questions which I think
it is very hard to take out of the political process. Finally,
the people taking those decisions, I think, are best placed inside
the political process.
Ms Shipley
52. First of all, let me agree with my colleague
about the Rolf Harris programme, because I was seriously impressed.
It took really quite serious and complicated things and made them
accessible and engaging. So good on it, well done, and all of
that sort of stuff. What I want to investigate is the distinctiveness.
Because there is one area of broadcasting which I seem to know
a lot more about than I ever thought I would, children's broadcasting,
I would like you to focus on your claim to be distinctive within
that particular area of broadcasting. The reason I say that is
obviously because I do not think you are, or nowhere near as much
as you could be. I personally am 100 per cent against advertising
interspersed with children's programmes. I would like to see the
advertising forced out of children's programmes. I may well take
that further over the next year or two. But that would leave a
huge gap. At the moment you have to ask yourselves why parents
still tune into Channel 5 and any of the other programmes when
they are interspersed with these appalling, inappropriate advertising
slots. Why are they not turning onto the BBC? Sometimes there
is an option, sometimes there is not. What is the distinctive
quality that is lacking in the BBC's output here?
(Mr Dyke) First of all, we are just about to launch
in the next month two new digital children's channels. What has
really changed in the marketplace in recent years has been the
advent of children's channels: Nickelodeon, Fox, Disney, etc.
We, in our proposals, went to the Secretary of State and said
we wished to do non-advertiser funded, predominantly British,
two new channels, one of which was for the younger children and
one of which was for children up to 14 and that we are just about
to do. Which means we have put a considerable amount of extra
money as a result into children's television.
53. But not into your BBC1, BBC2, but into some
other digital channel.
(Mr Dyke) No, if you look at BBC1's children's programmes—
54. I do!
(Mr Dyke) Luckily I have just got through it—you
will find that we have overwhelmingly the most popular programmes
on television, with the exception of the Saturday morning where
ITV do spectacularly well. But during the week we have by far
the highest rated programming. Interestingly during that period
of children's programming on BBC1 during the week, actually we
get higher ratings than even satellite homes or multi-set homes.
55. But there is a great chance when you are
not head to head with anything, so you are not comparing it with
anything.
(Mr Dyke) Sure.
56. This morning, as I am flicking through and
I am getting news, news, news—great—Channel 5 children's
programme/advertising, and it is quite a long time before the
stories come on. You are not actually head to head with competition.
(Mr Dyke) There is an argument which is that at times
people switch the other way. There is clearly a children's audience,
which is the children and people like you with younger children.
The rest of the population does not watch children's programmes,
they turn away, so you are playing both. We are increasing our
children's programmes quite significantly this year. A lot of
the programming we are making for the digital channels will also
go on to the terrestrial channels. We have new head of Children's
who has now been with us 18 months. I think in children's programming
we are going through a renaissance in some ways. It is going to
be a very exciting time over the next 18 months to two years.
And of course in radio, Jenny wants to talk about children and
radio.
(Ms Abramsky) Yes. We are going to be creating a new
children's radio department, the first one we have had for many
years, really establishing speech children's radio, which I think
is an extremely important initiative. It will be a critical part
of the new network we are going to launch in the late summer.
57. On the public service content of children's
programming, can I move to serious topics that are aimed for children,
things like child abuse. I know it goes into soaps and everything,
but I do not mean in soaps. Your public service content for children
of those serious order subjects, how are you handling that?
(Mr Dyke) Obviously we do Newsround which will
be both on BBC1 but will be a rolling service on our new channel,
a new service for children. I am beginning to get out of my area
of expertise. We can very happily, if those of the Committee who
are interested would like me to, talk to Nigel Pickard and some
of our children's people who spend their life thinking of nothing
else.
58. Send me a written response.
(Mr Dyke) We will send you a written response.
Alan Keen
59. You were being pressed earlier by one or
two of my colleagues who were insinuating that you were shifting
the more highbrow, specialist stuff away from BBC1 in order to
get the ratings. Can we look a little further ahead into the future.
We have obviously moved pretty fast in the last few years into
specialist channels. How would you see the situation developing
over the next two or three or five years? Do you still think that
BBC1 will be a channel with all sorts of stuff on it or will that
gradually filter to the specialist channels?
(Mr Dyke) What is interesting about the last year
is in the numbers watching, if you just take digital homes—forget
about traditional, five-channel analogue homes—the share
for BBC1 and BBC2 have both gone up, which suggests that what
happens is people go digital, get this enormous breadth of programming,
start watching it, and then come back. Although they do not come
back in as many numbers, I still believe BBC1, ITV, BBC2, Channel
4 and Channel 5 will be the dominant channels in this country
for many years to come. As a publicly-funded public service broadcaster
we do not see any change in that mix over time. We think that
BBC1 and BBC2 between them will still be supplying the historic
mix of genres. When you get to switch-off—and you only get
to switch-off by everybody having a digital set—all our
services will then be available to all homes and then there is
a different discussion, I think, and then it will be which way
we should go or which way we should not, but certainly in the
next five or six years this will not change.
(Mr Davies) I believe BBC1 will persist and BBC2 will
persist as mixed channels for a very long time. I tend to think
of it almost as a front page of a newspaper. I think of BBC1 as
the front page of an enormous newspaper of programmes containing
huge richness behind that front page but only the very best gets
onto the front page, and I think there will be a role for that
even when we are all digital and we can access all the channels,
but we will have to see how our licence feepayers' tastes and
needs develop. I do not think we can promise that BBC1 will always
stay the same but I think there will be a role for it for a very
long time.
(Mr Dyke) Because there are enough digital homes you
can know the sort of share the BBC will get, roughly, in a world
where everybody has got digital. That is good and I suspect we
will be around a 30 per cent share. What is happening in digital
homes is that the original channels that came with multi-channel
television are themselves being fragmented, so a 30 per cent share
will still be a very significant proportion of viewing when other
channels are surviving on a one or two per cent share.
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