Examination of Witnesses (Questions 500
- 519)
TUESDAY 19 OCTOBER 2004
BBC
Q500 Rosemary McKenna: Yes they do.
Mr Thompson: That will help them
pass their exams we hope. Radio 1 might well be a radio station
they listen to. A surprising number of them—they may deny
this- would find themselves watching some of our mainstream drama
on BBC1.
Q501 Rosemary McKenna: They all watch
Eastenders.
Mr Thompson: Yes. When we say
nothing, what we mean is not that they are not using BBC services
but there is not enough that they feel is particularly targeted
to them, their world or their concerns. I think it is a gap we
should look at. This is an area which I think the BBC could do
more in. I think the success of our younger children's channels—these
people do not think of themselves as children and rightly so—the
two children's channels which are very quickly gaining acceptance,
with both children and parents, shows that we can work in this
area. It is a tough audience, 11-18 year olds are probably the
toughest, most discriminating audience that are out there. I think
we can do more.
Mr Highfield: The mid-teen audience
does consume quite a lot of our services, like Radio 1, and GCSE
Bitesize, as with those services are not terribly heavily branded
BBC and quite intentionally sometimes. For example, online that
core audience is using the internet all the time. We syndicate
a lot of our news and information to places where they are, like
AOL. We have very close relationships with them. When we dig deep
we do find they are using our services, but sometimes they do
not recognise or associate us with it.
Q502 Rosemary McKenna: One of the
areas that I wondered was worth exploring and they mentioned it
themselves, BBC Three does not start until 7 o'clock. You have
that time before that you could use, is that something you would
consider?
Mr Thompson: There is an issue
on digital/terrestrial television about our children's channels
which use the same band width. I think the idea, again if it can
be afforded, of producing a block of programming which we can
offer on all digital platforms and which perhaps is a multi-media
offering, so we are offering something which has got a linear
television expression on an existing digital channel and it is
also available on broadband and it has got extensions onto the
internet, I think it is a very interesting idea. I have talked
about not wanting to launch any more television channels, I think
it is not a fresh service but whether there is a block we can
find on an existing service. As you can see, there are debates
for both sides. Professor Barwise's view of BBC Three is it should
be more mainstream, more broad spectrum and less targeted. One
of the interesting debates of the BBC going forward is to what
extent do you want a collection of, as it were, targeted services
and to what extent is the BBC's duty to be more mainstream and
we have to work those debates through.
Q503 Rosemary McKenna: I should pass
on a message which I had said previously and I thought I was just
an old fogey, but they did not like the Eastenders storylines
over the last year.
Mr Thompson: Thank you for that.
Q504 Rosemary McKenna: Can I move
on to another issue which you brought up, the BBC children's programming
and take us on to your regionalisation, your moving out. There
are two issues there: moving staff out of central London, out
of the M25 corridor, what are your plans there? For example, it
has been suggested that BBC children's programmes should move
to Scotland? Staffing is one aspect. The other aspect is regional
broadcasting and you said yourself there was a clear shift in
how the independent television producers were delivering regional
news and programmes, do you think both of those are something
you would do in the future?
Mr Grade: The Governors are awaiting
the result of the Director General's deliberations on practical
moves out of London. We are united, both boards the Executive
Board and the Board of Governors—as we expressed in the
Building Public Value document that for the BBC to be quite
such a heavily London central organisation is not a long-term
future for the BBC. There are independent producers, producers,
writers and performers, there is a job to do outside London, that
is absolutely clearly visible now and that is a public service,
public value territory that the BBC must populate. The provision
of news on an international, national and regional and local basis
is an absolute cornerstone of public service broadcasting for
the BBC and we have to meet that and we have to put resources
behind that. What is different this time, and Mark's plan when
he eventually comes forward to the governors I hope will be driven
by this, is that previous BBC tokens about moving out of London
have meant moving Janet Street-Porter and a religious programme
to Manchester, so they all got on the train at Euston on Friday
and went up to Manchester, did the programme and all came back
to London and the whole thing cost 30% to 40% more than it needed
to, but it meant the BBC could say, "Yes, we are moving out
of London". The only way effectively to build roots, real
roots and foundations outside of London is to move resources and
airtime. Those are the only two currencies that mean anything
inside the BBC. Money and airtime has to move out of London. How
it moves and what the cost of it is, that is all being worked
on by the executive and the governors. That commitment is an absolute
cornerstone—I cannot stress this enough. We do see that
one of the justifications for the existence of the BBC going forward
is to fill that vacuum which is so clearly evident today.
Mr Thompson: Specifically, in
network production we talk in Building Public Value about
our vision of a major new network production centre in Manchester,
but it is worth emphasising that when we talk about network production
outside London, I think that has also got to mean new opportunities
for network production in Scotland, Wales, Northern Ireland and
also other parts of England as well, notably our centres in Birmingham
and Bristol. This is not about, as it were, Manchester gaining
at the expense of other parts of the UK other than London, it
is about Manchester as a big part of the vision but actually looking
at what we can do in terms of network production in Scotland and
other parts of the UK as well.
Q505 Rosemary McKenna: I think it
is also important to say that with the investment in the infrastructure,
certainly in Glasgow, it has involved a real regeneration of an
area so there are other spin-offs that are just as important as
actually doing the broadcasting.
Mr Grade: I think it is unacceptable
in this day and age for talented people in the nations and regions
to have to come to London to work, it is nonsense. It flies in
the face of the whole experience of ITV where there were centres
of excellence with Granada in its heyday of production in Manchester,
Yorkshire Television in Leeds, Scottish Television and so on and
so on. They built up fantastic centres of excellence and they
were magnets for local talent, new talent. A lot of it eventually
came to London. The late Jack Rosenthal was a local lad up in
the North-West who got a job writing on Coronation Street
and became one of our finest television dramatists. Where are
those opportunities today? It is the BBC that must create those
opportunities because they do not exist anywhere else.
Mr Thompson: If I can just add
one last thing. I think whereas in the past people have seen this
as an imperial gesture, in Glasgow and Pacific Quay, in our new
centre in Manchester, in the Mailbox we have just opened in Birmingham
and elsewhere in the UK, we are very keen to do this in collaboration
with other broadcasters and other partners. It is partly about
where STV is going to be and Channel 4 in Glasgow. It is about
can the BBC and Channel 4 together help build an independent sector
in Scotland with medium sized and large players as well as small
independents. We see ourselves as more of a catalyst working with
others to create sustainable creative industries in these other
parts of the UK rather than, as it were, the BBC doing it all
on its own.
Q506 Mr Hawkins: Good morning. I
want to say first of all that I have been somewhat reassured on
some of the points I was going to raise by what Mr Thompson has
said to us this morning. There are a couple of things I will come
back to briefly. My first point is really to ask you all, given
that the Public Accounts Committee is often referred to as one
of the most important, if not the most important, committees of
the House, how worried were you by what certainly appeared to
be some pretty savage criticism recently, about a month or so
ago, by the Public Accounts Committee? In particular, a very senior
Member of this House, not normally somebody who says extreme things,
a former Minister, he will be Father of the House after the next
election, was describing the BBC as "arrogant" and "self-satisfied".
Do you find that of concern?
Mr Grade: Of course. We must be
concerned. I think that is part of what we are trying to address
with the reforms that we are putting in place. Historically, arrogance
is the word that the critics of the BBC would reach for first
in an appraisal of the BBC's performance. Having worked inside
the BBC previously it did not feel as if we were being arrogant
but now, coming back, I can see how the lack of transparency,
the lack of objectivity and judgment making by the governors,
easily could be described as arrogance and as a former competitor
of the BBC either at Channel 4 or in ITV, at London Weekend, which
is another example of a disaster when it started, another one
to add to Grade's laws' list—it had recovered by the time
I got there—the fact is that from the outside the BBC has
looked arrogant. It is not arrogant, it takes it accountability
responsibilities very seriously. The problem is that the decisions
that it has made have been behind closed doors, a cosy discussion
between the two boards, the executive board and the board of governors,
no transparency, no objectivity, no independent thought, until
after the decision had been made and, of course, that must seem
arrogant but we are addressing that. Decisions will not be made
to do anything, adjust anything, change anything, launch anything,
until we have been through that process of objectiveness so that
we can tell the world how we reached the decision we reached and
what evidence we took in order to form that judgment. That is
a radical departure and I hope that will address the PAC's very
robustly expressed concerns.
Q507 Mr Hawkins: Obviously the PAC
were looking at some things that some of my colleagues have already
touched on in relation to the digital services particularly. I
said earlier on that I was somewhat reassured by what Mr Thompson
had said because I was a bit worried in preparing for this session
seeing that Mr Highfield was described as somebody who was looking
forward to a 100% digital Britain. Like my colleague, Frank, certainly
I do not regard myself as a Luddite, I am quite keen on information
technology, but I do have a lot of concerns expressed to me by
constituents who say that there is far too much concentration
in almost every BBC programme on both television and radio promoting
things to look on the internet, to look at BBC websites and, particularly
having come recently from being a sports spokesman for my party,
sports fans saying "It is all very well Radio Five Live constantly
talking about you can get these extra services on digital radio"
but we know how low the number of digital radio sets there are,
very, very low take-up. In a world where still an awful lot, particularly
of the older generation, not only are not on the internet but
have no intention of going on the internet, do you accept that
there can be some criticism that the BBC has become too obsessed
by that?
Mr Thompson: Perhaps if I can
begin. We have a difficult and ever changing balance to strike.
More than half of all households have now got digital television
and more than half of all households have now got web access.
We are particularly interested in how we can potentially encourage
and attract older audiences to think about digital technology,
both the digital buses we have and projects like People's War,
which is an attempt to find subject matter which is particularly
likely to attract older audiences and to engage them with digital.
We talk about our efforts to broaden the digital offering to all
audiences, that is part of what we are trying to do. I absolutely
recognise that for quite a few years to come we will have people
who are still in analogue television households and for a generation
we will probably have a minority of audiences who are really living
in other than television in an analogue world. We can mitigate
this problem, to some extent, by trying to take the best of our
digital programmes, for example on BBC 3 and BBC 4, and showing
them as well on BBC 1 and BBC 2, so analogue households can see
them as well. I absolutely agree that we have to be very careful
that we do not end up where you do not feel you are getting, as
it were, a proper service on analogue because you are constantly
being pointed for the full information to digital platforms. However,
all I would say is, taking all those things on board, nonetheless,
I think our role and our success so far in accepting, if you like,
the innovation that Mr Wyatt talked about and of taking the advantage
to strengthen and broaden our services and, also, to encourage
Britain to adopt digital technology early—we have now got
the deepest penetration of digital television anywhere in the
world—is basically a success story, and although we have
to keep that balance in mind I do not think you can deduce from
what has happened so far that we have got the balance way out
of kilter; I think we are broadly finding solutions to that balance,
though I accept that individuals will still get frustrated when
they hear about services they cannot receive.
Q508 Mr Hawkins: You clearly, from
the answers you have given, take the view that it is part of the
BBC's mission to say to everybody, "You have got to go digital."
That is something that you have sort of adopted in your minds,
even though I was putting to you analogue switch-off is clearly
not going to happen in 2012, it is going to be a lot later than
that.
Mr Thompson: Can I say I would
not put it quite the way you put it? I think it is probably part
of our mission to say "Here are the advantages of digital"—whether
it is GCSE bite-size for your exams or whether it is People's
War and remembering your and our collective history—but
I would never say to an analogue licence payer, "It's your
fault" or "You're old-fashioned". I think we need
to offer a full service to them as well. As far as digital switchover
goes, it is interesting to reflect on the fact that not only are
more than 200,000 Freeview digital adaptors being sold every month
now (200,000 households every month, so a million in five months)
but I believe there is now a Freeview box on sale at £25.
This is ceasing to be an expensive or, in any sense, heroic piece
of technology; it is a routine thing.
Mr Highfield: I think we probably
have reached the tipping point on the net in Britain anyway, with
55% of homes having the Internet. In fact, the fastest growing
are the over-55s, through things like genealogy, which the BBC
can promote an interest in. It kind of goes with my job title
that I have a technical brief. It has to be borne in mind that
I am responsible for only 3% of the licence fee, but I think that
is still £100 million that we spend on the net and on interactive
TV, and we have a responsibility to make people aware of those
services—often far too deep and analytical news, for instance,
that we can possibly broadcast from our linear schedules, but
you are actually tackling the balance right.
Q509 Mr Hawkins: It has been suggested
to us, as a Committee, not only by other witnesses but in recent
reports we have had from academics, that there is a real issue
about the BBC unfairly using its position, as it were, to cross-subsidise
and compete with channels in fields like Arts World and History
Channel, and that kind of thing. You are all aware that that is
an issue. At the same time, I suspect that to an awful lot of
the British public your suggestion in your recent document that
you are eliminating derivative programmes and ideas from the schedules
would simply cause hollow laughter. How do you respond to that,
because certainly from my own experience as a regular viewer and
a great supporter of what the BBC has done both in history and
the arts I would have to say that some of the things you have
done with your recent channels are clearly an attempt to muscle
in on successful markets which have been created by the History
Channel or Arts World. I think there is a real issue here that
you have to look at. I see the commercials, as it were, you are
doing for your own products, and a lot of constituents say to
me "In the old days we liked the BBC because there weren't
commercials on it; now there are commercials on the BBC, but it
is just the BBC promoting their own stuff all the time."
Mr Grade: On the interaction with
the private sector, I think that we are currently undergoing a
review of all our commercial activities. The first thing to say
is that the BBC embarks on commercial activities—what it
amounts to is—exploiting beyond broadcast the intellectual
property that the BBC has created and in which the licence-fee-payers
have invested. We embark on commercial activities for two reasons:
first of all, Parliament requires what is colloquially known as
self-help—that we maximise our commercial advantages. Secondly,
we owe it to the licence-fee-payers to give them a return on the
IP that they have invested in and created. So there are two good
reasons for doing it. You then have to say, "Are we doing
it fairly? Are we doing it in a way that is fair to the private
sector?" All the evidence that I have seen so far suggests
that the controls and mechanisms and the procedures and guidelines
that exist within the BBC, which have been independently audited,
at least once—Caroline can, perhaps, tell us how many times
we have had outside people come in and look at our procedures—have
not been found to be wanting in any way, shape or form. There
is a fair trading committee of the Governors, which entertains
complaints after the fact, and there are complaints. What I would
say is that in future the way we intend to run it is that in launching
any new commercial activity or any activity which is likely to
have any impact on the private sector we will examine that not
on the evidence of what management tells us but we will go to
the governance unit of the BBC and we will call on outside experts,
we will get the information and we will get the views of the private
sector before we move. Therefore, let us say, we launch some new
commercial activity; of course we must not abuse our privileged
position with the distribution that we presently enjoy to promote
commercial activities with an amount of air time that is not available
to our competitors. It has to be a level playing field, and that
is policed and there are very serious strictures. It may not seem
like that to our commercial competitors who would love to win
politically, sometimes, what they cannot commercially. It happens,
in some cases, that their complaints are founded, but not in every
case.
Q510 Ms Shipley: I am not sure it
has to be a fair playing field, actually. I do not see why the
BBC cannot have its own unique area that it leads, and if it tramples
on a few commercial stations so be it, if it is in unique areas.
I do not really think it ought to be on the grounds of the non-unique
areas. When I start thinking about "I want to believe in
the BBC", what worries me is the areas where it is not unique.
So I starting looking at where is it unique, and I think the news
reputation is very, very strong and the children's television
is very, very strong, but in terms of its unique selling points
there are a lot of dodgy areas which, hopefully, you are addressing
through your Building Public Value. I would like to ask
you, Mr Grade, what is the difference between public service and
public value?
Mr Grade: Public value is the
result of the public service, we hope, and we are striving always,
in whatever we do, to be able in some way to measure the effectiveness
of what we do. Public service broadcasting, in the end, is the
result of the unique, securely and adequately non-competitive
funding of the BBC. That creates the climate in which public service
broadcasting can thrive. It is interesting to note that ITV had
a monopoly of revenue, up to the point when Channel 4's arrangements
were changed—if you remember, ITV sold Channel 4's airtime
up until 1980-something—but once Channel 4 and ITV were
in competition for revenue it affected the nature of the service,
undoubtedly. So the conditions for public service have to be created
by the unique, secure and adequate funding mechanism.
Q511 Ms Shipley: Do you agree, then,
that there is a whole area that is not unique about the BBC at
the moment; that really it has moved itself into competitive areas
where, actually, it should not be competing and that it really,
really should be focusing on its seriously unique possibilities?
Mr Grade: We should be striving
at all times to be the benchmark of quality, innovation and the
highest rate of delivery of those qualities. The more you strive
you are going to have failures. You are going to make decisions
about programmes which seemed like a good idea at the time—
Q512 Ms Shipley: For the life of
me I cannot understand why the BBC has to do game shows, for example.
Okay, it comes under entertainment, but I cannot understand why
it has to do game shows.
Mr Grade: It is dangerous straying
over this line here, but there is a BBC quiz show and there is
an ITV game show.
Q513 Ms Shipley: Is that not a little
pedantic?
Mr Grade: No, no. Who Wants
To Be A Millionaire is an ITV show, in my view.
Mr Thompson: If you think of Have
I got news for you? or The News Quiz on Radio 4, I
think it depends on the game show. I think there are game shows
which the BBC should not do. Comedy is quite an interesting area
because people say, perhaps, "That is not unique, it sounds
very commercial, it is about entertainment." Actually, the
BBC has got 60 years of heritage in comedy and, probably, as a
matter of fact, is investing more in comedy than the whole of
the rest of—
Q514 Ms Shipley: I was not talking
about comedy.
Mr Thompson: In other words, the
idea that some parts of entertainment could be distinct and the
BBC could be making a unique contribution can be just as true
as in news or in children's programmes.
Q515 Ms Shipley: Mr Highfield, you
said in answer to my colleague's question that you do not brand
all your services and that you do that on purpose. So why do you
not brand all your services? I cannot understand that—the
proud brand of the BBC. Why do you choose not to brand them?
Mr Highfield: We do brand all
our services.
Q516 Ms Shipley: It is on record
earlier on in these proceedings.
Mr Highfield: We syndicate into
others, we keep branding quite light for that particular audience.
Q517 Ms Shipley: Why? I do not understand.
Mr Highfield: Because with some
of the new services that we may put into AOL, the branding at
that particular age for some audiences may just not appeal and
yet we still think there is public value built by providing news
or educational services, you just need a more subtle approach
sometimes to it rather than slapping in big, bold letters "This
is good for you" all over it.
Q518 Ms Shipley: Is that what the
BBC is? Good for you? No, come on. There must be a way of branding.
Mr Thompson: Just to explain,
I think what that means is if you imagine a young subscriber going
on to their AOL homepage you would see "BBC News" embedded
on the homepage. It is still branded BBC but it is in that AOL
environment, as an example.
Q519 Ms Shipley: There is room for
manoeuvre here, I think.
Ms Thomson: I think it is about
increasing reach as a news service, which you yourself just said
is an important part to do, to new, young audiences which we are
trying to get to. That is the point of it.
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