Examination of Witnesses (Questions 360
- 379)
TUESDAY 7 SEPTEMBER 2004
BECTU, EQUITY AND
NUJ
Q360 Michael Fabricant: I have to
confess, listening to what I heard just now, you seem to be more
concerned with the welfare of your members, which I suppose you
are paid for, rather than the welfare of the licence payer who
actually watches and views radio and television. I wonder if I
may just concentrate on the NUJ, and if anybody else wants to
come in then please do so. I am asking you these questions on
the basis that I very much support the BBC and want to see it
continue and go from strength to strength. Yet the NUJ seem to
be arguing against any change at all. One of the areas that came
up in the Communications Act, when it was a bill going through
Parliament, was the question of how much time should be made available
to independent producers. I argued on the bill, for example, that
radio producers should be guaranteed a particular percentage;
yet the NUJ are saying there should not be any independent production
at all. Why?
Mr Dear: Looking at the submission
it says "independents should continue to provide programming".
We do not think independents should not provide programming either
for television or radio, but certainly we think the value of the
BBC's in-house production and the economies of scale it can bring
and the immense wealth of experience and expertise that it has
is a tremendous benefit to the country and to the broadcasting
ecology as a whole. That is why we support the BBC maintaining
that. I am not rigid on 25%, 26% or 24%, whatever it might be,
in terms of production. I do think that the BBC has to have its
own strong in-house production base in order to allow it to make
the kind of programmes we think are necessary to deliver on public
service broadcasting.
Q361 Michael Fabricant: The NUJ also
argue that the commercial activities of the BBC should not be
sold off. Although there is a large turnover, with the sale of
BBC programmes overseas and various other commercial ventures
they get into, the actual net profit and contribution towards
programming is actually very small and leads the BBC into whole
areas of controversy about whether it is competing fairly or not
with commercial companies who are not funded by the licence fee.
Why do you oppose any change to that at all?
Mr Dear: I support what the BBC
have done in terms of talking about a public value test about
any of its activities, whether they are public service ones or
whether they are commercial activities. The commercial activity
is around £160 million which is additional to the licence
fee money, a very small amount. I think 95% comes directly from
the licence fee; something like 3% from the subsidy to the over
75s; and the rest from its commercial activity. So a small amount,
but important money that can be reinvested in public service broadcasting
in the industry and in programming. I would hate to see that that
would be thrown out on a point of principle, without applying
this public value test to any of its commercial activities, or
indeed any of its other activities at all.
Q362 Michael Fabricant: Finally,
the BBC, as you know, are toying with the idea of providing ultra
local news programming, community news programming, in up to 60
different cities. While I can see that might well lead to more
employment of journalists it reminds me rather of the early days
of BBC local radio with which I was involved, which started off
as BBC Radio Brighton but no longer exists any more because it
became BBC Radio Sussex, and that became South Coast Radio based
in Guildford, which is nowhere near Brighton. The BBC has moved
away from that and now they seem to be moving back again. I would
like your comments on that and how that would relate to independent
community broadcasters, who are trying to do much the same thing.
Will that not take resources away from national news and international
news coverage, for which the BBC is so recognised as being a first-rate
performer?
Mr Dear: We certainly hope that
it will not take resources away from national and international
news. That, of course, depends on the level of resources the BBC
is given as to whether or not they are able to carry out properly
resourced the 60, or however many, ultra local news services.
We are certainly very supportive of the idea, but I do think they
have to be properly resourced, and they have to maintain the standards
for which the BBC is known. It should not just be one person with
a microphone. They have to be proper news services if they are
going to be done. That, of course, is a question of resources;
and that would depend on whatever the final settlement is in terms
of BBC funding for the future. In principle highly supportive
of them, especially at a time when the ITV network is busy pulling
out with a 12% reduction in regional output in 2002-03. I think
it is very important there is good quality local news for people
to make informed decisions about what is happening in their local
area.
Q363 Mr Hawkins: I have one general
question and then one specific one about one of the submissions
BECTU have made to us. The general question: there has, I think,
been a fairly widely held perception that the BBC has made a number
of very expensive mistakes in relation to its digital services.
While recognising you all have responsibilities towards your members,
would you accept there is a public perception that some of the
financial decision-making in relation to digital services, on-line
services, has been pretty disastrous in the BBC's recent history?
Mr McGarry: They have done a bit
better than ITV, as a starting point.
Q364 Mr Hawkins: Our inquiry is into
the BBC, because we are talking about licence fee payers' money.
Suggesting that somebody else has done worse is not a defence
of the BBC?
Mr McGarry: No, and I am sure
you will be putting these questions to the BBC directly. We would
not be in a position to defend every decision they have made.
I think many of the decisions they have made have been under pressure
from government and what they perceive the government's ambitions
to be in this area and have sometimes been over-influenced by
that and invested slightly mistakenly in some of those areas.
Q365 Mr Hawkins: You do not think
there was perhaps a danger, rather than being subject to government
influence, that it was a desire to wish to be up with the latest
technology, to be perceived to be the leaders, which caused people
to plunge so disastrously an awful lot of licence fee payers'
money?
Mr McGarry: I would not accept
your description of it, but I think there is an element of that.
Yes, I think the BBC has wanted to be at the forefront of those
developments, because I think it sees that as being compatible
to its other main function of providing the main terrestrial network
channels. I think it is probably right to be there. As for individual
decisions, I could not argue about those. I think it is a very
difficult area in which to make judgments—not knowing how
people are going to want to adapt their watching and viewing and
having to experiment to a degree. I think it is very difficult
to predict how audiences will respond to different levels of services.
Therefore investment is a bit risky but at least the BBC has been
in a position to invest and has in fact taken on a leadership
position in most of those new technological developments.
Mr Dear: I think it has also had
tremendous successes. BBC News On-Line is the recognised
world leader as an on-line news service. We are always more than
happy to admit that the BBC makes mistakes in deciding to fund
some things over others; and we will frequently have arguments
to say, "More resources should be put in here and less in
there". There will be mistakes but, on the whole, it has
been a valuable addition to its public service broadcasting role
especially in terms of promoting things like media literacy, on-line
learning, language learning and all those kinds of things. BBC
News On-Line has been one of the real success stories of
the last 10 years of the Charter for the BBC.
Q366 Mr Hawkins: Can I turn now to
my specific question on BECTU. If we have interpreted correctly
your submission to us on this, as part of the opposition to any
idea that the BBC could be funded from advertising, you are saying,
"Nor, incidentally, does advertising ever provide free television
to viewers, since the cost of TV commercials adds an estimated
11% to 13% [you say] to average household bills". I was fascinated
to find out a little more about how you come to that conclusion.
Mr Bolton: By using the tools
available to everybody: looking at companies' expenditure on advertising;
how much of that is on television advertising and what percentage
of a product price that makes up. You get to a figure by doing
that. I do not think there is huge disagreement about the figure
we have used. I think the people involved in research would tend
to agree with that kind of figure. In the more general sense,
in terms of the BBC gaining funding from advertising, not only
would that have an adverse effect on the BBC but it would probably
have a disastrous effect on the rest of the broadcasting economy
which is in some degree of trouble in this country already.
Q367 Mr Hawkins: Is not the contrary
argument to your interpretation of fees to say that companies
are going to advertise anyway, and they will use whatever media
are available to advertise. If you suddenly did not have any television
advertising at all, companies would still want to advertise. Because
companies are going to advertise anyway, I do not think most members
of the public would think, "I am paying 11-13% more on my
household bills because companies want to advertise on television".
It may be an argument you feel helps your cause against advertising,
but I do not think it is one which would really be accepted by
the general public?
Mr Bolton: Let me put it in a
slightly different way and that is: it is clear from our submission
we support the BBC as being the cornerstone of public service
broadcasting. If there has been a debate about what public service
broadcasting is, if that has been a pan-European debate, one of
the areas with the greatest question mark over it is the status
of those broadcasters in Europe that had mix funding, some from
licence fees and some from advertising. That is where the competition
becomes really difficult. Are they competing fairly with the rest
of the market? Generally speaking the answer to that has been,
"No". I think the BBC, taking advertising, would place
the BBC in a position of very great danger.
Q368 Mr Hawkins: One final, very
short question. One point which is often made to me by constituents
is that effectively the BBC is now the same as every other broadcaster
because there are advertising breaks, it is just their advertising
breaks are advertising their own programmes. What do you say to
that?
Mr Bolton: It is reinforcing a
brand which all of the broadcasters do. I do not think there is
anything wrong with that. There is a very strong brand in terms
of what it does. People recognise it is promoting its own programmes.
I see nothing wrong with that.
Mr McGarry: The specific point
that BECTU made about advertising—it does not seem to appear
in our other submissions—we are all one in relation to the
general view of not thinking it would be possible for the BBC
to be in whole or part funded by advertising. There seems to be
a general consensus that that is the situation. What we do have
in this country is a very successful mixed economy of broadcasting.
We have a private sector, commercially funded sector and we have
a publicly funded sector. It is rather strange that almost uniquely
that public funded sector is in fact being criticised because
it is successful. From our point of view, we ought to be congratulating,
welcoming and celebrating the fact that the public funded sector
of the broadcasting industry in this country is, in fact, as successful
as it has been.
Q369 Chairman: Without taking any
sides on that, I repeat that Channel 4 is a public sector publicly
owned television organisation which is funded by advertising.
Mr McGarry: And would suffer dramatically
if the BBC were to compete for its advertising revenue.
Chairman: So that is self-interest and
nothing to do with principle.
Q370 Rosemary McKenna: During our
inquiry we looked at how television, not will be delivered in
the future, will be received in the future. One of the things
which is very clear is that there will be much more recording
of programmes by various mechanisms modern technology allows people
to have—TiVo and various different ways they can record,
select and decide how they are going to view. It has been suggested
to us that advertising will be of much less significance in the
future because people will be able to cut out the adverts from
the programmes they record. They will want to watch a film all
the way through, will not want to watch the adverts and will be
able to do that. They will be able to record concerts from commercial
radio and all sorts of things without the advertising. Advertising
will have to be delivered in a different way which means, I suppose,
in one way the BBC are ahead of the game because they do not have
that problem. Taking on board this is going to be happening over
the next ten years, and there is no doubt about that because people
will be viewing television in a different way, what would your
view be on that basis for continuation of the Charter and the
licence over five, 10 years or whatever? It is a different angle
from the questions you have been asked before.
Mr McGarry: It may well be there
will be a decline in the traditional source of television advertising
as we have known it over the last few decades. We should not be
presented as being against advertising on television. That is
not a position of principle or anything else that we take. A lot
of our members work in the creation of television commercials
and, therefore, they have an interest in that. There may be a
decline in that form of advertising and, consequently, the source
of income that comes from it. As I said earlier on, it seems to
me that in all these changes it is all the more important that
the BBC should be there firmly funded by the licence fee so that
it is in a position to provide the ranges and qualities of programmes
others could aspire to. It puts an even greater pressure on a
secure future for the BBC.
Mr Bolton: If we have a concern
it is not just about the BBC within that context. If you look
at the date when they have analogue switch-off and the whole thing
is delivered in a digital manner, there is a really serious concern
that the business model which underpins ITV at that moment in
time collapses. I do not know—and I do not know if anybody
in ITV knows—what the answer to that is yet, and that places
a great number of our members who work for those companies and
their employment in great peril. I think that matter has been
given urgent thought and urgent consideration. It would be facetious
of me to say we have an answer to that particular problem at this
moment in time.
Mr Dear: If the BBC were to have
advertising it would change its mix of programming very definitely—would
have to. If advertising across the board were to decline and you
had to look at another source of funding, the only other potential
is something like subscription or pay TV, which of course then
takes out the universality and accessibility for all people to
be able to access those services. It could mean the commercial
sector could lose 35% of its advertising revenue, and that would
be a 35% loss to programme-making and content, so I do not see
either advertising or subscription as attractive alternatives
to the licence fee.
Q371 Rosemary McKenna: Given that
scenario where people will watch in different ways and it will
be much more difficult to measure, do you believe that the audience
share should be significant in the future? I believe that the
BBC should be funded to produce programmes that are a benchmark
for broadcasting throughout the world. Do you agree that basing
it all on audience share is false premise, because it will be
difficult in the future to measure audience share? Is that the
most important thing the BBC's future should be based on?
Mr Dear: I do not believe it was
set up on the basis that it had to have a certain level of audience
share. It was set up to educate, entertain and inform and it still
needs to do those things. The rest of the media are very critical
of it. If it produces a programme that is brilliant but nobody
watches we slam it. If it produces a programme people think has
been dumbed down but millions of people watch it then we slam
it for dumbing down. It has to be able to mix those two things
to be able to cater right across the board. I do not think that
audience share, therefore, can be the only factor you look at.
It has to sometimes be taken into account. If nobody is watching
a programme there could be no point in making it. I think reach
and accessibility are much more important than audience share
for the BBC if it is to truly stick to its public service values.
Q372 Mr Doran: Looking at your evidence
collectively, if your views were accepted there would not be any
great change in the structures of the BBC, just a little tinkering
here and a little bit there. I am interested in particular because
I think you are the experts in this and the people in broadcasting.
One of the things we are seeing, and my colleagues have mentioned
this in their questioning, are very substantial changes in the
landscape of broadcasting, certainly since the last Charter review,
and extremely substantial changes in the technology. We have been
looking at the technology, and one of the things which appears
to be coming clear to me is that things are going to change very
substantially over the next few years, certainly within the life
of this particular review. I wonder whether the status quo
really is an option?
Mr Bolton: I am slightly uncomfortable
being portrayed as being in a position where the three unions
sitting at this table here are defending the status quo.
I have been dealing with the BBC one way or another for the best
part of 30 years—20 of them as a trade union official and
ten as an employee—and it has been my experience that unless
you are willing to accept that the BBC is at the cutting edge
of technological change, and unless that is accommodated and negotiated
through, the BBC will fade away and die. It is part of what we
do. It is part of what we are. In trying to help the BBC negotiate
through the staffing difficulties that arise from the technological
change, when I first had anything to do with the BBC 20 or 30
years ago 95% of its staff were permanently employed, and today
approximately 50% are. The BBC was the first Broadcaster in Europe
to actually negotiate and have electronic news gathering, we are
not Luddite in our approach to the BBC, but I see the Charter
as being a facility to allow the BBC to change to actually deal
with the technological change that is coming along.
Mr Dear: And should be driving
it. Driving the digital take-up is something the BBC can do. One
statistic: the majority of training in technological change and
adapting to technological change is carried out by the BBC. 38,000
training days a year are given over by the BBC, more than the
whole of the rest of the industry put together, and that is people
taking up, understanding and learning the new technologies they
are going to have to work on. It has a good record in that—something
we pushed it very hard to do, and we are pleased that it does.
We wished the others would do more to keep up with it, to be honest.
Q373 Mr Doran: Let me take it forward
a little. Some of the evidence we are hearing is pointing in the
direction of quite substantial changes, for example, in the way
in which consumers want to control the product they receive. We
know about TiVo and various other technological developments.
One recent fact-finding was that we were presented with a scenario
by one very influential individual who suggested that what we
may be seeing is a slow deterioration and decline in normal terrestrial
broadcasting, to the point where terrestrial broadcasting—digital
or analogue- could become a fairly low end niche market, where
advertising would not provide the income it does at the moment,
for example, for commercial broadcasters. In a scenario like that
it was speculated that the people who would win were the content
producers—which puts the BBC in a very strong position—as
compared with, for example, my local television company which
produces a very small amount of its own broadcast. That must mean
substantial changes for the staff. I think most of them would
be positive, but I am interested to hear how you are preparing
for that if you accept that sort of scenario, and what it will
mean for the people inside broadcasting?
Mr McGarry: I am not sure we would
accept that scenario or the timescale in which it has been advanced,
but it is a question which needs to be addressed. I do believe
all three of us sitting here can say very honestly and genuinely
that we have led the people we represent in a process of reform
and change and the acceptance of change. If you just think, for
example, in relation to the rights which actors and others in
Equity enjoy in the programme material, we have adapted and extended
those to cover all the new areas and the new technologies. I think
essentially the point you are making is the best argument I have
yet heard, with respect, for the future continuation of the BBC
funded as it is. It is the only guaranteed way of securing the
production base; which I think is absolutely essential, not only
from the point of view of training but, indeed, having all of
the abilities to make programmes over a whole range and quality
one wants to expect in an otherwise uncertain area of commercial
activity and investment in television production. We do need that
investment from the licence fee into the production base because
otherwise it will disappear.
Mr Bolton: It is probably no accident
that the National Training Organisation, the Sector Skills Council
for the audiovisual industry, where the BBC has a huge influence,
is seen as a trailblazer in terms of training in this country
and is leading the way in trying to define the needs of the employees
over the next five to ten years.
Q374 Mr Doran: If the scenario I
present is accurate or even close to accurate, what you could
see is a very distorted market where you have a preserved megalithic
BBC and a very much fractured market everywhere else, surrounded
by very, very small companies.
Mr McGarry: The answer to that
scenario does not seem to me to in any way damage the BBC.
Q375 Mr Doran: Except it is a very
distorted market.
Mr McGarry: Rather that than no
production base at all, surely? Who else is going to make programmes?
Most of the new channels exploiting the technologies, as far as
my members are concerned, are not really investing much in programming
production at all. Largely the BBC, to a lesser extent ITV, and
to an even lesser extent Channel 4 are investing in that programme
production. The BBC is absolutely key to it. Whereas if you look
at what Sky is producing in terms of originated drama that would
be challenging to audiences in this country, you would have to
look long and hard to find any.
Q376 Alan Keen: I am not discounting
what you are going to tell us, if anything, but we are going to
interview and talk to young people, because when we are talking
to you and most of the people we have as witnesses here it is
the people who have been brought up on the BBC over the years
and are used to being presented with a schedule. When we went
to the States we were told by two people, and one particular person
was not putting an argument but was he was absolutely dogmatic
that people will not be presented with schedules of programmes,
or if they are they will not take any notice of them. We have
already seen a decline in individual channels viewing numbers,
obviously because there is more choice. If this comes along, where
the future viewers and listeners have no interest in being presented
with a schedule of programmes—and this is one of the strengths
of the BBC, and I am a strong supporter, and it has been mentioned
a number of times by your panel this morning—presenting
a whole variety, some of which would be definitely defined as
public broadcasting and others as wonderful entertainment and
mixed up with education, if in fact all the public want to do
is draw down from whatever programme they want to watch, what
future is there for the BBC if nobody wants to be presented with
a schedule? It is not easy for you to respond to but it is something
we have to face.
Mr Dear: I think that is a tremendously
exciting future for the BBC, rather than a negative one. If you
take the Olympics, even with digital TV you press the red button
and you can decide not to watch the 4 x 100 metres but you can
watch the world record attempt at pole vault or the long jump.
The ability for people to demand what it is they want to see and
when they want to see it of course is going to increase through
technology, but think of the tremendous archive that the BBC has
in terms of people being able to demand that kind of stuff. There
also has to be a certain point where you have watched everything
there is to watch or you want to watch and people have to make
new and original programmes and original content, and that is
where the BBC really comes into it strength. Pay TV only reinvests
3% into original production; the BBC reinvests the vast majority
back into its own production and into other productions. I see
it as an exciting future for the BBC where it has to compete
on the basis of the best content. From all our points of view
that is what we want—strong content that people want to
watch. When they watch it and how they watch it will be up to
them, but you still have to have the content that people want
to be able to watch.
Q377 Ms Shipley: Part of the BBC's
unique selling point is listening to discussions through public
service broadcasting and it comes back to that time and time again.
I think it would be very helpful to have on record what each of
you defines as "public service broadcasting" because
it does seem to be something of a moveable feast from time to
time.
Mr McGarry: The easiest answer
is to say that you know it when you see it.
Q378 Ms Shipley: That is not a definition.
Mr McGarry: I know. I think it
is a system of broadcasting which provides for the totality of
the available audience a range and series of programmes of quality
which do fulfil what Jeremy was quoting earlier, to educate, inform
and entertain. I do not think you can say there is any one programme—and
I was asked last time I came to your committee, "Did any
particular programme qualify as public service broadcasting?"—I
think you have to look at the service as a whole and see the balance
of it and the range of choice of programmes that are delivered
because there is an audience for them, and not necessarily driven
by the size of audience. I think the broadcaster, to qualify as
a public service broadcaster, must fulfil that remit.
Q379 Ms Shipley: How is it a public
service to entertain?
Mr McGarry: I believe it is. If
you asked anybody—
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