Memorandum submitted by ITN
INTRODUCTION
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 Greengrass.tv.
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.
BBC DIGITAL CURRICULUM
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.
CONCLUSION
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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