Examination of Witnesses (Questions 260
- 274)
TUESDAY 13 JUNE 2006
MR ANDREW
YEATES, MS
ANGELA MILLS
WADE, MS
SANTHA RASAIAH
AND MS
CATHERINE COURTNEY
Q260 Mr Evans: On that note!
Mr Yeates: It is a bigger place.
Q261 Mr Evans: I thought they would
be ahead of the game and perhaps doing things with DRM that we
were not.
Ms Mills Wade: I do not know.
It would be interesting to know.
Q262 Alan Keen: I want to talk about
the effect of labelling and that sort of thing but before I do
that I was a bit astonished at the Newspaper Society's defence
against the BBC going to ultra local radio and television. I have
seen local newspapers. They do not train people, they just pay
them low wages and tell them to get on with the job, which is
a bit unfair to the readers, whereas the BBC has virtually trained
the whole of the TV and radio industry. There seemed to be quite
a bit of desperation, do you not agree, from the local papers.
They are losing revenue and trying to act often like tabloids
in order to attract sales and even extending inexperienced people
into editors and sub-editors. Is it not an industry that is really
coming to the end of its life like the coalmines? I worked in
the private sector for all of my life. There should not be feather-bedding
of the private sector. If the technology is coming to the end
of its life, why not let it go?
Ms Rasaiah: If you look at the
circulation figures for the local and regional weekly newspaper
industry, until recently they have been rising and bucking the
general trend. Advertising revenue has been rising over the past
13 years or so, until recently. The regional and local newspaper
industry is still the major trainer of journalists, not only those
within the local and regional newspaper industry but also those
who may go on later to the national newspapers, and of course
with the new technology it is also working on the training of
its journalists in respect of online/audio-visual media. They
employ journalists already in that area. Far from `coming to an
end', everybody is realising that life is local and you have the
large internet and other media companies wanting to come in to
engage with the local communities at the local level. That is
where the strength of the local and regional newspaper industry
lies. You can see research on the Newspaper Society's web site,
in terms of advertising, for example, that shows that, contrary
to other media sectors, the local newspaper advertising is `wanted
advertising' in that respect. People buy a local newspaper because
they want to see the advertisements and they act on the advertisements.
Local and regional editorial coverage, as I have already said,
is second to none. About a third of its workforce is involved
in journalism in editorial areas and, no, newspapers are not going
tabloid, there is still a real depth of journalism there. Coverage
of local issues at the most local level and regional level is
not provided by anybody else. If you look not only at the campaigns
but the stories that newspapers have covered, some of which might
have been taken up at a national level- The day-to-day work that
they are doing which involves issues that affect their community,
whether it is health or education or policing or human interest
stories, what schools are doing, what hospitals are doing, where
there are problems in their communities, but also where there
is good work,- And regional and local newspapers are still covering
it all and they are covering it in a depth and investing in that
coverage. What they are doing is innovating in the way that they
bring that information, whether it is editorial or whether it
is advertising, to their communities. And everybody else is actually
realising that that is where the desired connection is and trying
to find a way into there. Far from the picture that you paint
I think that it is a lively industry.
Q263 Alan Keen: You seem to be excessively
defensive then if it is a flourishing industry and advertising
revenues are growing and there is no problem. Why are you being
so defensive about new media coming into it?
Ms Rasaiah: Not about new media.
It is in respect of the BBC where it is doing that free from the
commercial constraints of other competitors. The BBC will be doing
that with licence fee-funded money. The BBC proposals are part
of its licence fee activities and therefore it has public funding
to do that. It is not bound by the same constraints as regional
and local newspaper companies or any of other companies that are
involved in new media. As I said before, there is not a problem
about fair competition between commercial competitors. The issue
with the BBC is that it is licence-fee funded and there is this
issue as to audience fragmentation with everybody wanting to get
into the local market. Local and regional newspapers are working
on their strengths and competing and successfully developing the
new media area, but you do not want the BBC to be able to come
in in a way that has an adverse impact upon that market. It is
a question of whether the BBC has an adverse impact on the market,
including local and regional newspapers, and whether the BBC should
be allowed to do that. There may be some areas where there will
not be a problem for the BBC doing that. But what we want is a
framework to make sure that there is a distinction made.
Q264 Alan Keen: Angela said in answer
to one of the questions that the BBC is competing with delivery
into mobiles. We have been to South Korea and they have got live
television on mobiles. You are not suggesting, Angela, that I
should be stopped from receiving the BBC on my mobile because
they are public broadcasters? What did you mean by that statement?
Ms Mills Wade: There is mobile
delivery which to us is one particular area in the commercial
sector. Is that going to be subject to a separate public value
test, market impact test or is it just going to be approved blanketly
through the one service licence? That is one point. The other
point is on the licence fee itself. They have asked for an extraordinarily
high licence fee increase. If the licence fee was at a lower level
in the final agreement, would they choose to go, for example,
into the local TV area? Where would they spend their money? If
their money is restricted would they stick to the core public
service broadcasting and beyond or would they do a little bit
in all the different areas?
Q265 Alan Keen: I understand. I did
not really intend to get into this, I was just astonished by some
of the answers you gave. I really want to ask how will the search
engines business model affect both newspapers and the Internet
providers?
Ms Mills Wade: Search engines
do a fantastic job in routing traffic to everybody's sites and
a lot of publishers spend a lot of money in making sure that their
sites are given great prominence through the search engines. The
other thing the search engines do is build their own services
beyond the pure search to, as they say, add value to their users.
For example, Google News does more than just provide automated
search links. They are building their own portal of news by helping
themselves to everybody's content and redisplaying it. It is arguable
whether that is straightforward copyright theft or whether this
should be brought within a framework of licensing. That is something
we want to discuss with the search engines.
Q266 Alan Keen: You are talking more
about national newspapers but they are also local. I have been
in west London for 40 years but my football team is in the north
east and I read about it both on the Northern Echo web
site in the mornings and the Evening Gazette in the afternoons.
There is nothing to stop the Echo and Evening Gazette
charging for access to it and I would probably pay. Why do newspapers
not just do that rather than just complaining about the system?
Ms Mills Wade: I do not think
we are complaining. Most of those services are funded through
advertising. There are added services which can be on a subscription
basis and one of them is mobile delivery of sports results, for
example. That is a very vibrant area. We look to find our revenues
where we can.
Q267 Alan Keen: I sometimes read
the national newspapers on the Internet. Why do they not charge?
Is there some reason why they do not charge for access?
Ms Mills Wade: I think some of
them are starting to think about which bits they can monetise
as parts of their archive but for straightforward news delivery
on the day is very difficult to change what has now become accepted
practice. Suddenly to say to consumers, "I am sorry, you
can't have your news headlines in the morning. We are going to
have to start charging you for it," would be very difficult.
Q268 Alan Keen: Presumably it is
the same for free newspapers. When I am reading about my football
team, I look at the advertisements down the side. Is that the
principle?
Ms Mills Wade: Yes.
Mr Yeates: Yes, absolutely and
there is an increased amount of advertising online which is benefiting
members. There is one area of the search engines on which there
is concern amongst industry bodies and that relates to the review
of the E-Commerce Directive and whether the copyright rules should
somehow be made more flexible as far as the search engine operators
are concerned. I think there is real disquiet as to why should
those people have preferential status as far as copyright clearance
is concerned. We do not think the E-Commerce Directive should
be used to extend copyright exceptions to these sorts of traders
and that the copyright law is the right place to look at copyright
exceptions and limitations and we hope the Gowers Review will
definitely take that point on board.
Q269 Alan Keen: You also mentioned
that the search engines when looking and searching miss out the
home page where the main advertisements appear and therefore the
people reading it do not see the adverts. Is it not technically
possible to stop that happening?
Ms Mills Wade: I do not think
that is always the case. Are you talking about hyperlinking?
Q270 Alan Keen: Yes.
Ms Mills Wade: The hyperlink will
take you to the part of the newspaper site that the link is joined
to, so it may not be the home page but that may be to do with
the search criteria. If you have searched for your football results,
you would get straight to that part of the newspaper but that
part of the newspaper would still be taking advertising so you
would still have the advertising.
Ms Rasaiah: I think there are
also issues about search engine caching and about content organisation
so you do not necessarily see the newspaper home page or go to
the newspaper site for the pages on an article appears. At an
international level through the World Association of Newspapers
there are projects looking at that and they say they want to see
whether there can be a symbiotic rather than a parasitic relationship
search engines etc and the publisher, because it is questionable
whether content aggregators are simply getting the benefit of
the publishers' material often without the publishers knowing
it, to the publishers' detriment. I suppose there could be inadvertent
indirect effects, because these things are developing. For example,
bypass of the revenue that can be raised by digital press cuttings
and so on, which is already a substantial form of revenue- But
publishers are trying to see whether there are technological ways
of control and then entering into symbiotic relationships with
the search engine/content aggregator companies. I think that it
is very important the copyright provisions and the copyright framework
remain as they are and that exceptions are not made for these
companies which are really working on the back of the newspapers'
and other content providers' content that they have generated.
Alan Keen: It is very complicated. I
hope our inquiry helps you to get the message across to people.
Thank you very much.
Q271 Mr Evans: I was in Japan just
over a week ago and there they have got a system that you can
use your mobile phone to scan something akin to a bar code which
will then give you more information, so if you are reading a paper,
then it will take you to more information about what is going
on. Is that something that the newspaper industry is looking at
doing here?
Ms Rasaiah: I do not know has
to be my own personal answer. I can look into it.
Ms Mills Wade: The mobile phones
are the next generation in Japan so I would guess that all those
sorts of things are in development now. We are one stage behind
them. The things they are doing on the mobile phone are amazing.
I have seen them on public transport basically watching television.
Q272 Mr Evans: I was thinking this
could possibly be a lifeline to newspapers which are stale when
you buy them but you can get up-to-date news and get the newspaper
by using the new technology.
Ms Mills Wade: Certainly newspapers
are investing in making sure that the news is up-to-date all the
time on the web site. That is the first stage. You have probably
read that The Guardian and The Times are
breaking news on the web sites first.
Q273 Chairman: One last area, we
have heard from a number of our previous witnesses about the concerns
right across the industry about the Television Without Frontiers
Directive. I do not want you to repeat what we have heard from
everybody else because there does appear to be general unanimity
in this country about the damage that will do, but if you have
any specific observations which you would like to make about TV
Without Frontiers, perhaps you could.
Ms Mills Wade: I think our Government
is doing a grand job in fighting the fight at Council of Ministers
level to try and extend understanding of the impact on the private
sector of what the proposals might do. I think it is quite interesting
to see that gradually there are more and more countries at government
level, as opposed to parliamentary level in the European Parliament,
who are starting to question the validity of what the Commission
is doing because of course they have had to look at it from the
practical point of view of enforcement so they are in a way one
step ahead of the parliamentarians who are looking at it perhaps
from a wishful thinking point of view.
Q274 Chairman: This is a more optimistic
reading than I have heard from others, that you think other governments
are starting to question it.
Ms Mills Wade: There are now apparently
several who have said, "Is this the way to do it? We already
have the e-Commerce Directive, we have the Unfair Commercial Practices
Directive, and we have the general law. There is not enough focus
on self-regulation and maybe there is a better way to do it."
They are also now querying what on earth the definitions mean,
what is "linear" and "nonlinear" and if we
cannot tell today we certainly will not be able to tell in five
years' time when the legislation comes forward. From our own personal
press point of view, the European Commission has properly said
that the press online should not be covered by what are in effect
prior controls over the editorial content. We are very grateful
that they have recognised this. However they are giving us an
exemption from part of the Directive with which we fundamentally
disagree.
Ms Rasaiah: That is the view of
newspaper publishers across Europe; that is not simply a UK reaction.
Mr Yeates: And that is our view
on that as well.
Chairman: In which case, thank you very
much indeed.
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