Select Committee on Culture, Media and Sport Written Evidence

Memorandum submitted by ITN


ITN News

  ITN's news operations provide news programming for ITV1, London Tonight, Channel 4, More4 and over 260 commercial radio stations in the UK, and its combined news broadcasts reach over two-thirds of the UK population. ITN International also produces a weekly programme, World Focus, which summarises the week's international events. The company has a strong reputation for the creative and innovative use of technology, winning the Royal Television Society's 2004 Innovation Award.

ITN Multimedia

  ITN is driving expansion in the fast-growing new business area of ITN Multimedia, where the company is established as the UK's leading supplier of news and other video entertainment content to 3G mobile phones and established broadband operators. Key partners to ITN Multimedia are mobile operators such as Vodafone, O2 and 3, as well as broadband operators BT Yahoo! and MSN, search engines such as Google Video and Blinkx TV and enterprising new companies such as

ITN Archive

  ITN Archive is an international company and one of the largest commercial archives in the world, with nearly 700,000 hours of moving imagery. With footage from 1896 to the present day, ITN Archive represents exclusively the collections of ITN, Reuters, British Pathe, Granada, Channel 4, Film Four, Fox News and Fox Movietone. The enormous range of the collections provides imagery from celebrity and entertainment to politics and current affairs; from wildlife to history to fashion.

ITN programme production

  ITN Factual is ITN's award winning documentary-making unit which leverages the archive collections as well as relationships with existing broadcast clients. Visual Voodoo is a division of ITN specialising in factual entertainment; since its creation in 2000 it has established a reputation for popular, controversial, cutting edge programming across a wide range of UK channels.

What is the impact of recent and future developments in digital convergence and media technology?

  ITN's businesses create, aggregate and distribute content to a diverse range of customers. From its news operations creating bespoke news programming, to producing and packaging content specifically for the mobile and broadband platforms, to providing its business partners and consumers with a range of iconic moving imagery, to its production of factual and entertainment documentaries, ITN's content is tailored to its customers' needs.

  The success of these businesses has been underpinned by harnessing state-of-the-art technology to develop and innovate. The use of advanced technology has enabled ITN to pioneer product development as it has identified and built on new and creative methods to generate and distribute its content.

  ITN is a world leader in digital newsroom technology and on-screen graphics. All ITN services now use an integrated digital picture management system that is cost-efficient for its news customers and a benchmark of excellence for television stations across the world. ITN has built a consultancy business (ITN Consulting) exporting its technical expertise to clients in India, the Middle East, Eastern Europe and the UK.

  ITN is building on its strong reputation for creativity and innovation by expanding into the fast-growing new business areas. The company has made an early and significant investment in ITN Archive, which manages one of the world's biggest collections of moving imagery. Through digitising this collection, ITN Archive will be able to organise its footage for rapid access and retrieval, providing customers with greater accessibility that will increase speed-to-market and drive archive sales in new markets. For example, there will be a greater potential use of archive footage by new media companies seeking to send their products via broadband and wireless technology, and the general public who want to be able to view archive material using these technologies. Digitisation will also help to protect and preserve visual heritage from physical decay.

  ITN Multimedia is also a growth business and ITN is now the UK's leading supplier of news, entertainment and other video content to 3G mobile phones and broadband. Making content accessible in numerous ways and on a variety of platforms is vital to extend its appeal across different generations and to different audiences. ITN's multimedia products are pitched to a broad demographic range and, via mobile, are reaching young audiences who want news delivered in ways other than the traditional appointment-to-view, linear model of consuming content.


  Another growth market for ITN that harnesses new technology is educational content delivered via broadband to schools. ITN has a stake in a company called "Espresso", which is the UK's leading educational broadband content company. It is a comprehensive, easy-to-use and constantly growing digital library of high quality, innovative, video-rich, cross-curricular resources, all tailored to the National Curriculum and cross-referenced to QCA Schemes of Work.

  ITN has built a successful business in providing video content to the company. Thus, ITN has been following the development and launch of the BBC Digital Curriculum service—now called BBC Jam—with great interest.

  ITN understands that Tessa Jowell approved BBC Jam in January 2003 but with a large number of conditions imposed by DCMS. Condition 4 states: "The service must innovate continually and exploit the extensive archives of the BBC and its media rich resources, and promote technological and pedagogical experimentation. The service, taken as a whole, should be distinctive from and complementary to services provided by the commercial sector." ITN believes that if approval for BBC Jam was given with conditions imposed, then the BBC should comply with those conditions.

  However, in its report to Ruth Kelly in December, the official monitoring body for the service, the Content Advisory Board (CAB), highlighted significant concerns that BBC Jam was not meeting the required conditions—particularly Condition 4—nor did CAB have assurances that it would be able to do so. CAB recommends an early review by DCMS, to be completed by September 2006, with the terms of reference allowing for a fundamental review, including the possibility of significant changes to the scope, coverage and timing of the service.

  ITN is concerned that the BBC is operating this service without complying with the agreed conditions, which were in place to prevent a free service from crushing the commercial market and stifling innovation.

  ITN believes that an early review is vital if the commercial sector suppliers of educational content are not to be severely damaged by the operations of BBC Jam.

To what extent should regulation be applied to creative content accessed using non-traditional media platforms?

  ITN is very concerned by the proposal to extend European regulation to new audiovisual media through the revision of the Television without Frontiers Directive.

  ITN's news business operates in a regulated environment for broadcast content. It must ensure that its news programmes for licensed services such as ITV, Channel 4 and commercial radio stations, comply with the law, as well as with the specific requirements for balance and impartiality in news programmes in the 2003 Communications Act.

  However, when providing news and entertainment content to new media platforms, including 3G mobile, ITN operates outside the broadcast regulatory framework, because the content rules in the Communications Act do not apply to content streamed to mobile or broadband platforms. ITN's news content for mobiles is subject to the same rigorous compliance testing as its television broadcasts, with the producers having full access to ITN's compliance officer and legal support team. ITN's news content for mobile phones is therefore compliant with broadcast content regulation. However, other video content that ITN produces for new media platforms—be it entertainment, weather information or archive clips—is only required to comply with UK law and is not licensed and regulated as broadcast content.

  ITN therefore finds it unacceptable that the new "Audiovisual Services Directive" will now extend the broadcast regulatory framework to new media platforms containing moving pictures, including online services, streamed content to mobile and on-demand services. This market is very competitive and evolving extremely quickly so it is not clear what effect the Directive may have on future developments in this area. The concern is that additional regulation could have a stifling effect on innovation.

  In addition, ITN does not see the justification for spending additional resource on legal advice to comply all ITN's new media content, including on-demand entertainment clips. This would result in unnecessary cost for its growth businesses which must operate leanly, competitively and commercially in order to survive and grow. ITN's significant investment in the development of its growth businesses means that it is helping to create new consumer demand for such services. This extension of consumer choice requires long-term and high-risk investment, which should not be fettered by unnecessary extensions of European legislation, carried out on theoretical, but not practical, grounds.

  The compromise proposal for an "Audiovisual Services Directive", published on 13 December 2005, which extends a "basic tier" of the Directive's rules to new media—except those originated electronically by the print media—will create potential distortions of competition and an uneven playing field between print-originated and broadcast-originated electronic content via new media platforms. Though the draft Directive seeks to differentiate between the two by excluding from its scope services where the audiovisual content is merely incidental to the service and not its principal purpose, ITN is doubtful that, in the future, such clear-cut lines can be established. We believe this unhappy compromise will provide no obvious consumer benefit.

  Although recital 12 of the Directive's Preamble suggests that no new licensing requirements will arise, ITN believes that the extension of European rules to new media would have to be implemented in the UK and probably in other Member States, through a licensing regime. It is unrealistic and impractical to expect Ofcom to license new media originating from the UK. It would be difficult for Ofcom to enforce rules about EU programme quotas, advertising and sponsorship, and right of reply on new media operators who do not necessarily have editorial control over the content receivable on their platform. In addition, the benefits offered by the Directive to new media—in other words, free circulation of their services throughout the EU—have little relevance or incentive to those service providers who do not currently face obstacles to free circulation.

Where should the balance lie between the rights of creators and the expectations of consumers in the context of the BBC's Creative Archive and other developments?

  The BBC's new Creative Archive has developed with the sound and admirable objective of ensuring the public has access to as wide a range of content as possible, whether moving imagery or stills, free of charge.

  At the same time, it is crucial to ensure that the BBC pays due regard to the rights of creators and also the market impact on competitors. It is vital to competition and commercial innovation to balance the availability to the consumer of free, publicly funded content with the ability of business operators to provide content on a commercial basis.

  In theory, the Creative Archive, which is currently running on a limited trial basis, should not be in direct competition with ITN's archive business as the public would access low-resolution clips of licence fee-funded BBC content on a non-commercial basis.

  ITN has built a strong growth business in providing global business and consumer markets with content from its vast collections of archive video and film footage. It has done so by meeting the requirements of its customers on a viable, profitable basis. This is a fast-expanding area and ITN Archive is using its creative expertise to productise its content to make it relevant to new opportunities opening up in different markets. Therefore, if the balance is not right, and commercial operations are jeopardised, so too would be pluralism, innovation and competition.

  ITN has been engaged with the BBC Creative Archive trials and is in discussion about participation as a partner in the project. The conditions for this support would be:

    —  That the project develops in a way that recognises and facilitates the potential for additional commercial use of the clips.

    —  Any digitisation, promotion or commercial exploitation of BBC content for the Creative Archive should not become a subsidy or cross-promotion which delivers commercial advantage to BBC Motion Gallery.

  The BBC's Motion Gallery business, which operates commercially as part of BBC Worldwide, is a direct competitor to ITN's archive business which provides a wide variety of video content on a commercial basis to a global market.

  ITN is paying the full cost of digitising its own archive and would not expect Motion Gallery to have the benefit of a licence-fee funded project. Motion Gallery is free to join the Creative Archive but ITN believes that this should be on an arm's-length basis and that Creative Archive should remain a separate project.

  ITN anticipates that the Creative Archive has the potential to deliver commercial returns to partners and there is anecdotal evidence for this from similar projects in the US, such as Internet Archives. For example, one of the pilots has been a Radio 1 project called Super Star DJ where people can download some clips from the internet, mix them and then upload them for judging. If the result of this was that a music broadcast station wished to use the winning mix, ITN would like to see a mechanism in place for appropriate rights clearance to copyright owners who were willing to permit such use.

  However, in the case of BBC content made available under the Creative Archive project it would not be appropriate for this clearance to fall automatically to BBC Motion Gallery. Only if Motion Gallery had itself made the content available should it be entitled to a clearance fee.

  Any management of commercial rights and licensing around BBC Creative Archive content should be open to a fair, transparent commercial tender process.

  Conversely, should the BBC Creative Archive or other partners not wish to benefit from commercial exploitation, ITN would argue strongly against the content being available to be used in a commercial context free of charge. This would seriously undermine the large number of companies, including ITN, engaged in commercial licensing of footage. In this case, the usage should be non-commercial and personal, rather than free of charge for any usage.

  The BBC has said that at the end of the Creative Archive trial, the service will not become permanent unless it is subject to the full Public Value Test. While this is welcome, ITN believes it should have to have a full Service Licence, with a measurable remit against which the Creative Archive's performance can be regularly assessed.

  ITN is very concerned that neither the Government nor the BBC can give reassurances on this point. Indeed, the BBC has stated categorically in its recent consultation on Service Licences and the Public Value Test that it proposes only a single Service Licence for BBC Online to include all the activities falling with the scope of this service, including the Creative Archive, IMP Player and the provision of content on mobile.

  This is not acceptable to ITN as each of these services is clearly differentiated in terms of its use by consumers and has a different and unique market impact. There is no reason why each should not have a Service Licence of its own.


  Today's lightning advances in technology mean that the media market is fragmenting, providing more opportunity and choice than ever before. In this fast-evolving environment, it is vital to ensure that fair competition and plurality of news provision is maintained, especially when many of the emerging new media markets are fragile and their future paths still far from clear. In this arena, the issue of balancing the public interest with healthy competition and an innovative, creative economy is critical.

  These considerations have shaped ITN's positioning as regards the BBC. ITN believes the BBC must deliver value to the licence payer by making its content as widely available as possible, but it needs to be clearly and transparently regulated so that it cannot stifle competition, and therefore pluralism, in new markets. Service Licences are an essential part of these reforms because they require the BBC to operate, as the commercial sector already does, against a clearly defined and measurable remit. We hope the forthcoming White Paper will reverse the BBC's current stated intention of applying one Service Licence to the whole of BBC Online, including the Creative Archive and other online BBC services. If it remains that merely one Service Licence is required, the new levels of transparency for which the Government has called will be obfuscated from the start.

  ITN's success in harnessing the latest digital technology has put the company in the vanguard of driving the creation of new services, such as video content to mobile phones where it is, at present, a step ahead of the BBC. It would be regrettable and damaging if new regulatory measures—whether at EU level in the context of the Television Without Frontiers Directive, or at UK level in the context the next BBC Charter period—were to smother enterprise and market innovation driven by commercial British companies like ITN.

28 February 2006

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