Select Committee on Culture, Media and Sport Minutes of Evidence


Examination of Witnesses (Questions 320 - 334)

TUESDAY 6 JULY 2004

VIRGIN RADIO, GRAMPIAN TV, SMG

  Q320  Rosemary McKenna: You cannot possibly compare the programmes that BBC Radios 1 and 2 produce with the kind of pop programmes that the average commercial radio station produces.

  Mr Pearson: Yes, I would. If you look at the audiences that they are chasing and the amount of volume to music that they play, yes, I think we can.

  Q321  Rosemary McKenna: You are suggesting that BBC Radios 1 and 2 are simply chasing audiences, not producing quality programmes that people want to listen to?

  Mr Pearson: We need to go one step back. We were talking about public service and I am not sure again where the public service lies in competing, whether it is television or radio, for the same audiences with the same product.

  Q322  Rosemary McKenna: Let us talk about Scotland and the west of Scotland in particular. There is not a commercial radio station that produces anything like the work that BBC Radio Scotland produces.

  Mr Pearson: Probably it is a question for my radio colleagues coming on later, especially the Scottish radio colleagues.

  Q323  Chairman: Is there not an argument for saying, as Max Hastings has said, that the BBC does not need to do everything? Just because it is there it does not need to do everything. In the case of Radio 1 and Radio 2 that Rosemary McKenna has been talking about, they were there first. It is one thing to say that the BBC should not add to services that it does not already provide and that the commercial sector is already providing them and providing them well. In that sense it might argue that it is gratuitous for the BBC to produce a BBC 3 digital channel. On the other hand, when they were there first is it not a bit much to ask them to close down services that they have been producing for audiences—and I do not listen to Radio 1 but Radio 2 is something that arouses great affection in audiences—just because other radio stations provide some form of counterpart?

  Mr Pearson: We are not asking to close them down. What we are trying to do is contain the activities that are competitive with the free market forces that the rest of us are in. I will give you an example of Radio 2. There was a leaked document from Radio 2 some four or five years ago which said that Radio 2's intention was to reposition itself to a younger audience and get rid of all the old people listening. It has done so very successfully over the last four or five years by pricing out talent, by changing its music policy, by getting lots of younger DJs in. That is not serving a public service remit. That is just competing with services that are there. If Radio 1 decides it is going to move its market position tomorrow it can do so because it is unregulated, whereas the rest of us cannot do that. By doing that it is chasing commercial audiences. The fact that it was there first might be one issue. When it has the freedom to go and reposition itself I think that is not quite fair; it is not quite the same thing. Also, it is not just the freedom to act; it is the commercial activities as well. If you talk about Radio 2 and Radio 1, where we have things like sponsorship—the Barclays Premier League Football, the Renault Proms in the Park, the RBS Six Nations Championship—those are the commercial activities and the promotion they enjoy, whereas on current Ofcom rules the rest of us with ownership rules cannot get to that size to enjoy that sort of performance.

  Q324  Rosemary McKenna: During the discussions on the Communications Act, when Ofcom was set up, as a member of the All Party Music Group we campaigned quite heavily to have a requirement for everyone to provide local music, not just local news, which was on the Bill, but there was a reluctance on the part of the commercial companies to do that. Can you explain why because there does not seem to be a will to encourage young local bands, whether it be folk, pop or whatever type of music they play?

  Mr Pearson: As a national radio contractor I am not party to that argument.

  Mr Thomson: If you want an answer from television rights, in Gaelic it has always been our policy to encourage young talent coming through, whatever musical background they come from. Certainly Nochd Gun Chadeal, which is in our Gaelic-commissioned programmes, has done extremely well, producing several new bands who are now doing extremely well not just at home but abroad as well. In terms of contemporary Scottish music we tried a programme two years ago which we put on at peak and it quite clearly failed in ratings terms compared to more factual documentary type of material which the public currently seem to have an appetite for, and that is regional factual documentary material. There are issues with the audience but certainly if it is Scottish or Grampian we try our best to involve those groups where possible.

  Rosemary McKenna: I think you have just illustrated exactly what is the difference between the demands on commercial and the demands on BBC, in that they do not have to worry about audience share. They have the pleasure of being able to produce good quality programmes and you are market driven. I agree with Alan that that balance is right and should be maintained.

  Q325  Chris Bryant: Can I go back to the Radio 1/Radio 2 argument briefly because it seems to me that the BBC is sometimes in something of a double bind. If Chris Moyles on the breakfast show on Radio 1 loses half a million listeners every newspaper in the country screams that BBC is not serving its young audience properly. If he puts on audience you lot all scream that it is shocking because the BBC is competing where it should not compete. How can the BBC win in this argument?

  Mr Pearson: The way it is set up it cannot. I think you are quite right to point that out. What we need to do is find what is in the public's interest in Radio 1 and Radio 2. If you are going to judge it by ratings, which is exactly what the public are doing, if the BBC itself in its own statement starts off talking about audience share and ratings, then they will be judged that way. We need to go back and see what it is that the considerable sums of money going to these two networks are trying to achieve with the public's money, especially when you look at the dominance. Radio 1 is a good example where, if you look at the dominance of commercial radio for 15-34s, it merits a 65% regional reach. I can verify those figures later.

  Q326  Chairman: There is no doubt in my mind that what you are saying took place under Greg Dyke, but Mr Grade says he is going to change all of that and that chasing ratings is not going to be the BBC that he is going to be Chairman of. If that were to turn out to be so, and I think all of us hope it will, then a bit of the rug will have been pulled out from the argument that you were putting to Chris Bryant.

  Mr Pearson: I would very much welcome that and we did welcome the introduction of service licences that they were talking about in Michael's speech last week. What we would call for within the service licence, apart from the things that are going into it, is some form of very specific format control so that we know what they are trying to achieve with the money.

  Q327  Chris Bryant: I am still perplexed about this because of course the BBC should not be chasing ratings; that should not be its primary aim in life, but it also should not be so careless about whether anybody is bothering to listen to or watch it that it ends up not producing anything that anybody wants, and that seems to me the complex double-bind they are in. On Radio 2 it is probably not in their interest to have so much talk in the Jeremy Vine Show if they really want to go as commercial as they can; it is probably not in their interest to have DJs who choose their own music rather than go to play lists.

  Ms Arnot: Ofcom introduced the definition of "public service broadcasting", or it was the Communications Act which introduced it, but Ofcom has developed a "high-fallutin" definition of what is to be public service broadcasting, be it on radio or television. It is to be innovative, it is to have great reach, it is to capture all these diverse audiences and so it is the BBC which is to be charged to still capture those audiences with a type of programming which serves their public.

  Q328  Chris Bryant: I just have this picture of the government saying that the BBC must have format control pressed upon it and I cannot see that that is going to be an open government process. Let me just go on to one of your other proposals which is about subscription. You say that a future BBC model might be partly licence fee and partly subscription. How do you see that working? Do you mean that some channels would be sold off or would become subscription channels?

  Mr Thomson: Yes, is the answer to that.

  Q329  Chris Bryant: Which ones?

  Mr Thomson: The lesser viewed ones.

  Q330  Chris Bryant: Which ones?

  Mr Thomson: Three, four.

  Q331  Chris Bryant: Nowhere else?

  Mr Thomson: In terms of the BBC?

  Q332  Chris Bryant: Yes, I understand, but why those? What is your rationale for those? Because nobody is watching them they should become subscription?

  Ms Arnot: The rationale would be for the next tenure. We are not advocating subscription now. We are advocating that that should be a potential form of funding in the future.

  Q333  Chris Bryant: So at the moment you think that the funding of the BBC should be the licence fee, end of story?

  Mr Thomson: Absolutely.

  Chris Bryant: All the broadcasters have said that so far. Thanks.

  Chairman: When it comes to the question of the BBC's digital services and what they are providing, it is clear—and you are experts in radio—that the big breakthrough on digital radio has not happened, has it? We are now seeing advertisements in the press for digital radio sets which are really quite inexpensive and yet people are not taking that up. You cannot get them in cars. I bought a new car and wanted a digital radio in the car and I could not get one. It was a very expensive car.

  Chris Bryant: It would have been even more expensive with a digital radio!

  Q334  Chairman: A marginal addition, Chris! The first digital radio I heard was when I went to an experiment in a commercial station. Is this not where a public sector organisation and the commercial stations can supplement each other very usefully, assuming that people actually want digital radio? They are going to have to have digital television because at some time there will be an analogue switch-off.

  Mr Pearson: I think the public will want digital radio if digital radio gives them more choice and more diversity of output. The one thing that digital radio has brought is the unlocking of new spectrum and new services. For any new technology to survive it needs a clear consumer benefit. There is a clear consumer benefit in these services. The trouble is that digital radio amplifies the resources gap we have seen over the last few years, where the BBC have had a secure inflation-busting income and the commercial sector, both television and particularly radio, have suffered one of the worst downturns that we have seen in 25-30 years. We have been piling money into digital radio now for the last six years. My station, Virgin Radio, was one of the first to broadcast on the digital one multiplex and we own two other stations in London. The commercial radio sector has now put nearly £40 million into DAB. When we talk to the City we still cannot give them a business plan that makes any viable sense for our shareholders, so this is becoming a very expensive thing. There are about half a million sets around. We do welcome the BBC's promotion of digital radio. It has gone some way to kick-starting the medium but I think it needs to go further. What we have got now again is this resources gap where Radio 6, I gather, has six million pounds going into it every year and that is £12 per radio, not even per household. In the digital world the radio stations have some format control, so we are very happy with that, as I suppose you know. Digital radio is still very worrying because of the commercial sector's inability to fund it and, of course, to keep piling money into resources for us in the commercial sector in current circumstances is very difficult.

  Chairman: Thank you very much indeed. It has been extremely helpful. Your perspectives have been very valuable to us.





 
previous page contents next page

House of Commons home page Parliament home page House of Lords home page search page enquiries index

© Parliamentary copyright 2004
Prepared 16 December 2004