Examination of Witnesses (Questions 320-339)
24 APRIL 2007
MR MARK
THOMPSON AND
MS CAROLINE
THOMSON
Q320 Chairman: Can I ask a general
question. We have moved to a situation where I think it is 70%
of the population now have access to multi-channel television
and we are shortly going to switchover which will result in 100%,
so there has been a huge increase in the choice available and
in the variety of programming which the market is providing. Is
there any area which as a result of that the BBC has decided it
no longer needs to provide a service because the market is now
doing so?
Mr Thompson: You can see in successive
annual reports that the amount of money and proportion of money
the BBC devotes, for example, to acquired programmes and to feature
films has been steadily falling. I will not say the BBC will not
ever decide, we do sometimes decide either because licence fee
payers expect a big feature film on Christmas Day or because we
think a particular piece will work well in the schedule and we
will continue to buy some programmes as well as originating. As
recently as a decade ago acquired programmes played a central
role in BBC schedules and people who grew up in the 1960s and
1970s will remember that most days of the week a big American
piece was in the middle of the BBC schedule. That has changed
and it has mainly changed because you do not need the BBC generally
to show you American programming, there are lots and lots of other
ways of seeing it. What we have tried to do is progressively reduce
the amount of money and amount of airtime we devote to acquired
programmes. That will be an example of the BBC trying to exit.
There are other examples. There is less entertainment as such
on the BBC than there once was and fewer quiz shows than there
once was. The BBC has consciously decided to take a much smaller
position in reality formats than other broadcasters, and so on,
again because there is lots of choice out there.
Q321 Chairman: Less reality formats
is not something that I recognise as being a feature of the BBC
particularly, there seem to be reality formats every day.
Mr Thompson: Let me slightly amend
that. What I was trying to say about reality was that whereas
many other broadcasters have gone very, very extensively into
reality television, the BBC has not gone into reality television
to anything like the same degree as our commercial rivals.
Q322 Chairman: You would hope that
we will no longer have the absurdity of the BBC competing with
ITV and the commercial channels for American films and series
which merely benefits the producers in the United States?
Mr Thompson: Although I cannot
rule out individual examples, it is already true of the market
after the LA screenings and the market for feature film packages
that the BBC is less often involved in the bidding and it is much
rarer for us to be involved in aggressive bidding, as it were.
I cannot rule out that there will not be a particular piece which,
for whatever reason, we believe is important. There was a watershed
moment when the BBC decided not to pursue the bidding for the
renewal of The Simpsons which ultimately was sold to Channel
4. What we now try and do in our investment committees, but also
with our channel controllers involved as well, is try and look
quite closely always at what we are spending on acquired programming
and in particular what it might cost to make a programme. By and
large where the BBC can originate a new British programme instead
of buying one, we think it is better to spend the money on origination.
Q323 Mr Evans: Do you watch a lot
of television yourself, Mark?
Mr Thompson: I am afraid that
a professor talking about children would be rather worried about
my consumption which is rather more than the advice is for three-year-olds.
I do not watch as much as I should, but I try and watch as much
as I can.
Q324 Mr Evans: Is that a lot or not?
Mr Thompson: I suppose I am probably
watching 20 hours a week.
Q325 Mr Evans: For how much of that
do you watch the other side, ITV, FIVE, Channel 4?
Mr Thompson: I would watch probably
significantly more BBC than the other channels, but probably I
am watching five or six hours at least a week of Channel 4, FIVE,
ITV, Sky and so forth.
Q326 Mr Evans: As far as the public
service content that the other channels are now providing is concerned,
have you got any favourites amongst those where you think, "Gosh,
why hasn't the BBC done that?"?
Mr Thompson: I think that in news
terms, if you are talking about the other public service channels,
news on ITV, Channel 4 and Five, so talking about network news,
it continues to be, and is, in different ways a very strong offering.
I think ITN does a very good job, I think Channel 4 News
is an outstanding news and current affairs programme, but when
I catch ITV News, I am also impressed, and I catch the
news on Five less frequently.
Q327 Mr Evans: As far as Sky is concerned,
have you noticed that the number of viewers now for BBC News 24
has gone up dramatically since Sky News has gone to subscription
or since it is going to subscription?
Ms Thomson: Yes, I think Sky News
has not yet gone to subscription on Freeview, but we would obviously
expect it to mean that News 24 audiences would rise. News 24 audiences
are now generally exceeding Sky News' anyway across all platforms.
Mr Thompson: Even before this
change, News 24's reach has continued to grow and the cost per
viewer hour, the actual cost per person reach on News 24 has continued
to fall.
Ms Thomson: I think the general
answer to your question is that we would prefer Sky News to be
freely available because actually competition is very good for
our news services and obviously particularly subscription restricts
that competition, although in general Sky's move to launch a subscription
service on Freeview, I think, is quite an interesting one for
the future of Freeview platforms and particularly because they
are going to use this new compression technology, MPEG4, which
is quite an interesting development in the market and may help
the market for other things like high definition television, so
as a whole their move is, I think, just an interesting one from
our point of view, but obviously, although it will benefit our
news audiences, competition is better for us.
Mr Thompson: So we would prefer
News 24 to be available freely, but I would be the first person
to say that you cannot look to Sky News to be available to everyone,
but I would also be the first to say that you cannot compel them,
I simply do not see how you can compel Sky to make it available
to everyone. I certainly think, as to those people who believe
that Sky News is a natural answer to the issue of plurality of
news, that this step of editing Freeview suggests that you cannot
rely on that.
Q328 Mr Evans: Do you think though,
because of the pressure on the independent sector, particularly
public sector television costing so much money and advertising
revenues going down, that the belief is that maybe there are going
to be fewer public service broadcasts now on the independent sector
and do you see the BBC taking up any of that slack?
Mr Thompson: I think in areas
like news, people who look at the wider ecology, if you want to
call it that, of public service broadcasting worry most about
the plurality and whether there will be voices other than the
BBC's, and that is not something that we can fully address. We
try to encourage a fair amount of plurality within the BBC, but,
if your concern is that there should be other voices and other
perspectives available for network and regional news, that is
not something we can readily address by increasing the amount
of our news. In fact the amount of news and current affairs on
BBC television is growing somewhat, but it is not something where
I think we cannot address the plurality issues and I am certainly
someone who believes that, although I am sure there will be fully
commercially available news in Britain, and Sky News is a good
example of that, I am one of those who believe that it is strongly
still desirable on television that there should be a plurality
of public service news provision.
Q329 Paul Farrelly: If ITV decided
to move Trevor McDonald back to News at Ten, would you
be doing a public service in broadcasting by moving your news
to another slot so that viewers would have a choice of times to
watch the news?
Mr Thompson: No. I think that
the experience of the last few years is that moving the news all
over the place is not a great public service to the public. We
moved our news once from nine o'clock to 10 o'clock at a time
when the ITV News was on a sort of open-ended journey around the
schedule and the public have got used to the 10 o'clock news,
it is a convenient time for watching, and I think that we have
used the airtime at nine o'clock in a way which has been very
useful actually. If you look at the programming we have put into
the schedule at nine o'clock in particular, the current generation
of BBC dramas, Spooks, Life on Mars, Hustle,
The Street and so on, we have come up with some stronger
peak-time and, actually in a way, more distinctive peak-time drama
than we have had before, and I think that the current BBC One
schedule is very strong. I believe that it is a matter for ITV
what it does with its news. I think the idea that ITV should have
a fixed and recognisable time for its news though is probably
not good for the public and it is probably not a good idea for
them in terms of running a schedule.
Ms Thomson: Also, it is just important
to say that patterns of news consumption are changing probably
quicker than patterns of any other consumption and with continuous
news available online and on-demand and so on, the importance
of the big, scheduled bulletins, you still get big audiences,
but it is diminishing over time.
Q330 Mr Hall: The BBC so far has
not submitted any written evidence to this inquiry, yet you have
had an awful lot to say so far about it. Why is that?
Mr Thompson: Well, two things.
Firstly, we have over the last couple of years in the Charter
renewal process destroyed many trees in providing from Building
Public Value onwards with hundreds of pages of closely argued
and brilliantly expressed language about the BBC, its public objectives
and its view about the emerging media market, and we rather thought
that on this topic, the future of public service broadcasting,
the Committee might feel they have heard quite a lot from us in
the last couple of years. However, what I would absolutely say
is that, if there is any area of this topic where you feel or
any of the Committee feels that they have not, as it were, over
this last very intense period of public debate, heard enough from
the BBC or would like any more facts or figures or other evidence
from us, we would be only too happy to put on our lumberjack shirts
and go out and chop down a few more trees.
Q331 Mr Hall: Well, you could do
it by email and save all of that of course. There is a worry that
with digital switchover and analogue switch off some of the commercial
broadcaster are now actually going to find it really difficult
in the new environment, and the Government has indicated quite
clearly that it would look at extending the use of the licence
fee for non-BBC purposes. What is your view on that?
Mr Thompson: I think what I want
to say is this: firstly, you have just heard me say that I believe
that plurality of public service news provision is important and
I think it would be good for the British public and for the national
debate if there was a range of different public service providers—
Q332 Mr Hall: I do not think there
is any threat to the way that news is going to be broadcast. I
do not think that is under threat through digital switchover,
in fact I think that is probably going to be enhanced.
Mr Thompson: More broadly, I think
the idea that there should be a strong public service ecology,
certainly in television, is something I would, and I think the
BBC would, support. It is a bit of a jump to say that the only
way of providing that is by splitting up the licence fee, and
the danger of that argument, I think, is two-fold: one, that you
end up with something which is rather rare in the public services
which is a lot of clarity in the minds of the public about what
they pay and what they pay it for, so a licence fee which you
can relate directly to the quality, good or bad, of the services
you get from the BBC, and that clarity potentially, if you split
up the licence fee, you lose; and, secondly and manifestly, there
is a danger that you start weakening the one bit of the system
which still looks relatively strong. Therefore, I think there
are quite powerful arguments against it and that is why I think
it is quite important that you do two things: firstly, that you
become very clear about precisely what is the extent of the public
service plurality you want to secure, what are the programme types,
what are the areas that you want to ensure you have secured; and,
secondly, that you get to exactly the bottom of what are the alternative
ways of paying for that and ensuring it happens. I would say that
I do not think you can rule out, and the Government clearly has
not ruled out, the possibility of using the licence fee, I think
there are some quite significant advantages to doing that, and
I do not think we have yet got to the point of being absolutely
clear about what precisely the problem is that we are trying to
solve.
Q333 Mr Hall: I think the general
public's view is that they have to pay a licence fee because they
have got a television in the house and just the fact that the
money goes exclusively to the BBC is quite an irritation to quite
a lot of them. If I give you one specific example, if Channel
4 is in real difficulty because of digital switchover, is there
a case for the Government saying to the BBC, "You've got
to help out Channel 4 with specific amounts of money to meet their
switchover costs"?
Ms Thomson: First of all, to take
you up on your licence fee-payer point, it is certainly not the
experience of the BBC, and the BBC Trust could answer this better
than me because they are there to represent the licence fee-payers,
that there is massive resentment about paying the licence fee,
and indeed the work we did as part of the licence fee bid showed
that 80% of the population is prepared to pay the existing level
of the licence fee or more for the BBC—
Q334 Mr Hall: I read that.
Ms Thomson: The association with
the BBC is, I think, quite strong, in our experience—
Q335 Mr Hall: Well, that was not
really the question which was asked.
Mr Thompson: You will notice that
when the DCMS did its research it came up with the same answer.
Ms Thomson: It was a very similar
answer.
Q336 Mr Hall: They asked the same
question.
Ms Thomson: The business of supporting
Channel 4, I think, is a very interesting one. We have already
agreed, as part of the Charter, that, if the Government deems
it necessary that Channel 4 has help with its switchover costs,
they will paid for from the licence fee, and I think Tessa Jowell,
the Secretary of State, is going to make an announcement about
that in the summer, depending a bit on a study of further work
that Ofcom's advisers have done. What I think is the interesting
question about how you support plurality of public service broadcasting
is that there are a number of levers still at the Government's
and Ofcom's disposal, I think, to help support public service
broadcasting. For example, the argument always used to be with
digital switchover that spectrum scarcity was dead and there was
masses of spectrum and everyone could broadcast. Actually, we
are switching over the country onto DTT, on to terrestrial spectrum,
which is very scarce and it is an enormously valuable asset. Now,
one of the levers, which is absolutely at the regulator's disposal,
is to offer someone like Channel 4 free or subsidised spectrum
not just for their core public service, but so that they could
have enough to broadcast their other services which could make
a profit to help support them, and that would be a significant
benefit to Channel 4. I notice that ITV are beginning to come
round to this view as well, that actually in return for free spectrum,
ITV would be prepared to accept some continuing public service
obligations, so I think that, whilst the challenges are undoubtedly
great and we may run into serious problems with the financial
viability of Channel 4, there are other things you can do in terms
of regulation in order to help them and in order to create a viable
alternative.
Q337 Mr Hall: Normally that would
rule out of course the direct transfer of some of the licence
fee to Channel 4, but that is another lever that could be looked
at.
Mr Thompson: It is clearly another
possibility.
Ms Thomson: It is clearly another
possibility. As Mark said, no one in their right mind would completely
rule out the licence fee going to support either Channel 4 or
other forms of broadcasting, whether it is children's or news
services or whatever it is that everyone thinks is going to be
endangered, but there are significant disadvantages to top-slicing
the licence fee in that way and there are other levers at their
disposal which could be used before you had to do that. It should
be said just on the spectrum point that of course at the moment
the current proposal is not just not to give free spectrum, it
is actually to charge public service broadcasters for their use
of spectrum, so actually to increase the financial pressures on
public service broadcasters, like Channel 4, rather than to decrease
them and help them.
Mr Thompson: In my experience,
many of the people who are in favour, or who say they are in favour,
of top-slicing the licence fee are also people who do not believe
that the licence fee should exist or will exist, so I do not see
how they can see it as a long-term solution given that they do
not actually believe it should exist.
Q338 Chairman: Can you just tell
us your attitude towards another of the options which has been
floated on the table, the one which Ofcom appears to be particularly
keen on which is the establishment of the public service publisher?
Ms Thomson: I think it is an innovative
and bold idea, the public service publisher. It may be a very
good one, but it is a bit difficult from our perspective at the
moment to see quite what the problem is designed to solve, if
I can put it that way. As we have been saying, we believe enthusiastically
and energetically in the plurality of public service broadcasting
and we want to see Channel 4, in particular, carry on. It is bad
for the BBC to have no competition, we would be better with it
and it is better for the public to have pluralism. Whether the
public service publisher is the right way to solve that problem,
personally I think the jury is out on that. I am not saying it
is the wrong way, but it is difficult to see, if that is the main
problem, quite how it solves it. We would hope, before any moves
were made to launch such a thing, that the sort of public value
test principles, which we are using in relation to our public
services, were used in relation to it as well.
Q339 Chairman: The public service
publisher appears to be evolving into primarily a new media activity
now, providing online contact. You, I think, have pointed out
that there are very low barriers to entry and low cost of content
production and that has meant that valuable content can already
be found from many thousands, if not millions, of sources. If
that is the case, why is the BBC having to spend so much time
on the online content?
Mr Thompson: I think you have
to go down to, as it were, one greater layer of complexity there.
There are not many sources, there are quite a few and many which
come from newspapers, but there are not, in my view, so many sources
of, for example, very thoroughly resourced journalism about international
events from a British perspective. They exist, but there are not
so many that it does not make sense for the BBC to get its journalists
to provide, as it were, news content about the world on the web
as well as through the World Service and indeed through our UK
radio and television.
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