Memorandum submitted by ITN
SUMMARY OF
THE MAIN
POINTS
In summary we would like the Select Committee
to consider the following:
— We believe there is a threat to the
provision of plural sources of news from digital switchover.
— We have strong relationships with
both our major PSB customers (ITV and Channel 4) and they are
committed to the importance of broadcast news in their schedules.
They fund excellent news services, but we recognise that both
have outlined threats to their own funding and these could jeopardise
their ability to fund high-quality news.
— In addition, we agree with Ofcom
that there's a threat to regional news, which meets important
local information needs and also provides material to ITV's National
News and Channel 4 News. We think regional news retains a significant
role in the ecology of UK broadcast news because of its continued
large audiences. They are universal and inclusive services that
might not be possible to replicate in an on demand digital environment.
They should certainly be considered as candidate for PSP funding.
— We believe that high quality, impartial
news is important in broadcast news and equally important in new
media news. The expansion of BBC News online, and the resources
required to invest in these areas, will make it difficult for
ITV News and Channel 4 News to develop their online propositions
to compete as successfully as they do on television.
— While there is a growing market for
news from new media—broadband and mobile—and from
the diversification of newspaper groups, it is not yet clear that
revenues could make up all or any funding gap for PSB news caused
by a decline in TV advertising.
— Regulators should therefore monitor
BBC's new media activities. In particular, we are concerned at
Mark Thompson's suggestion that the BBC might give video and audio
news "free" to newspaper websites.
A BRIEF INTRODUCTION
TO ITN
ITN is one of the world's leading news and multimedia
content companies creating, aggregating, packaging and distributing
news and other multi-platform content to a wide range of customers
around the globe.
In the UK ITN produces news programmes for ITV1,
ITV London, Channel 4 and More 4 as well as supplying news to
300 commercial radio stations (IRN). ITN's multimedia division
ITN On has led the way in producing news and entertainment content
for mobile and broadband platforms. Clients include Vodafone Live!,
3, MSN and BT Movio.
ITN Source is the world's leading aggregator
of professional video content, representing the largest collection
of moving image libraries in the world, selling video clips from
over 700,000 hours of footage captured over three centuries. As
well as ITN's own news material, ITN Source represents the British
Pathé, Reuters, Channel 4 (including E4, More 4 and Film
4), Granada, FOX News and FOX Movietone content libraries.
In our submission we have sought to address
the issues raised—issues that clearly could impact our business
and ability to provide the UK with a pluralistic, impartial news
service and our ability to provide our multi-platform content
services.
RECOMMENDATIONS WE
WOULD LIKE
THE CMS SELECT
COMMITTEE TO
CONSIDER
In our submission, ITN has sought to explain
that high quality, impartial broadcast news is a valuable PSB
operation. Whilst there is a plethora of news providers in the
commercial marketplace, there are no guarantees that PSB values
in news will survive the changing regulatory and market conditions
of digital switchover.
ITN has also explained how closely connected
broadcast and new media news is in ITN's multi-media business,
and how we successfully carry PSB news values into the new media
environment. However, the survival and expansion of these business
areas is entirely reliant on continuing levels of adequate investment
in our PSB broadcast news operations, and switchover raises questions
about this, particularly as we and our customers are competing
against a BBC operation which benefits from large budgets from
licence fee funding.
Ofcom has made the case that PSB content is
under threat and that a Public Service Publisher (PSP) might fill
the funding gap. ITN certainly feels this needs to be explored
and that if funding is available some should be set aside for
the continuing survival of PSB quality news.
In view of the issues raised by Ofcom, ITN suggests
that the Select Committee should consider the case for an early
and holistic review of the commercial marketplace, including the
threat that any potential future funding deficit in the commercial
sector could pose to high quality, impartial news. We do not consider
this should wait till switchover, as the Government proposed during
the BBC Charter review, but should be started now.
INTRODUCTION: THE
IMPORTANCE OF
PLURALISM OF
HIGH QUALITY,
IMPARTIAL NEWS
ITN welcomes the opportunity to give written
evidence to the Select Committee on Culture, Media and Sport regarding
its inquiry into public service media content.
The Select Committee's inquiry runs in parallel
with Ofcom's ongoing review of the future of public service broadcasting
(PSB) post digital switchover. Ofcom's view, supported by public
opinion research, is that it is a key priority after switchover
to ensure that PSB content, which includes high quality broadcast
news, is still delivered by competing providers, and via new media,
as well as traditional broadcast means. ITN believes Ofcom is
right to highlight the importance of news as the first and foremost
of PSB values.
High quality, independent news from different
sources for different audiences is essential to an informed democracy
and is the stimulus for political and cultural debate. While there
is a proliferation of news on different platforms, mainstream
broadcast news in the UK is, unlike news in the print media, subject
to standards of independence and impartiality. It is transparent
and accountable. In addition, terrestrial broadcasters are subject
to licence requirements to schedule news at periods throughout
the day as well as in peak. In addition, ITV is required to ensure
its news programmes are adequately funded.
People expect to be able to access news in different
ways, including on mobile devices. So Ofcom is right to propose
that PSB content should be delivered via new media, and not just
via TV.
There is already a proliferation of new media
news content, but not all of it is in compliance with the PSB
values of independence and impartiality that form the basis of
ITN's output. The existing multitude of channels and web outlets
that carry news are overwhelmingly text based and have not, to
date, led to either greater pluralism in broadcast news or greater
provision of high quality news.
Ofcom argues there can be no guarantees of public
service provision on commercial television in the UK after digital
switchover. It has questioned whether impartial, high quality
news can continue to be delivered in a free, competitive marketplace,
when PSBs will find their advantages and audiences in decline,
and advertising revenues come under more pressure. From ITN's
perspective, this scenario would threaten the health and viability
of its broadcast news and it might make it difficult for ITN to
extend further into new media (Channel Four News has already extended
its new franchise into new media, drawing on its brand heritage,
journalistic expertise, presenters and infrastructure) as the
fortunes of the two are interlinked, and the latter cannot survive
without the former.
If Ofcom (and more importantly the public) want
pluralism of high quality, impartial news to be available after
switchover, new measures may be needed to replace the protections
afforded to news by the current broadcasting ecology. Also, if
plurality of high quality, impartial news is important in broadcast
news so it should be equally important in new media news.
ITN'S ROLE
IN DELIVERING
PLURALISM
ITN today has grown from being solely ITV's
news provider over 50 years ago, to a successful and innovative
multi-media business. It is well positioned to play a key role
in delivering high quality, impartial news content to the British
public via any means.
ITN is one of the world's leading news and multimedia
content companies creating, aggregating, packaging and distributing
news and other multi-platform content to a wide range of customers
around the globe. In the UK, ITN produces news programmes for
ITV1, ITV London, Channel 4 and More 4 as well as supplying news
to 300 commercial radio stations (IRN). It does not supply regional
news for ITV (except in London—London Tonight), but its
close relationship with the ITV regions enables ITV's national
news operation to draw on regional stories, and vice versa.
ITN also has a substantial archive business,
ITN Source. ITN Source is the world's leading provider of professional
video content, representing the largest collection of moving image
libraries in the world, selling video clips from over 700,000
hours of footage covering 110 years. As well as ITN's own news
material, ITN Source represents the content libraries of British
Pathé, Reuters, Channel 4 (including E4, More 4 and Film
4), Granada, FOX News and FOX Movietone. ITN Source has won praise
from Getty, the world's largest image business, and is moving
to establish itself as a world leader by expanding into the US
and other markets.
The competition in news that ITN has provided
to the BBC for the last 50 years has helped create high quality
standards in news broadcasting, which have also been maintained
by newer market entrants such as BSkyB. This setting of high standards
of quality, independence, impartiality and accountability has
been to the benefit of the British public. Pluralism of news services
and providers also delivers consumer choice. PSB-based news services
on ITV reach millions of people daily, and have helped make news
the hallmark of Channel 4.
The challenge for news providers today is to
reach different parts of a culturally and ethnically diverse population
in a relevant and accessible way. The shape and availability of
news is rapidly changing (for example, on demand, local news,
consumer journalism, blogging). ITN has diversified and adapted
its news services to embrace these developments.
For example, ITN's Channel 4 News operation
comprises not only daily news programmes on Channel 4 and More
4, but also video/SMS news to mobile, a daily email news bulletin
by Jon Snow called "Snowmail", and an expanding Channel
4 News website with a news blog, as well as a Fact check website.
In contrast to the big ISPs which provide commoditised news feeds,
Channel 4's PSB news values are reflected throughout its services.
Thus Channel 4 is one example where a media provider is already
providing commercially-funded media content in competition with
the BBC's multimedia news service.
In addition, while ITN does not have a separate
online and video-on-demand service, its multimedia division, ITN
On, has led the way in producing news and entertainment content
made for mobile and broadband platforms. Clients include Vodafone
Live!, 3, Orange, MSN and BT Movio.
Therefore though it is entrepreneurial and innovative
in these areas, ITN has to operate in a challenging market, head
to head with the publicly-funded BBC and providing pluralism,
but at a fraction of the budget. The continuation of such services
is heavily dependent on ITN's PSB customers wanting to invest
in these areas to ensure PSB news reaches new platforms. That
is different from our multimedia news operations, where it is
entirely up to ITN to find new business, in a commercial marketplace,
from mobile and broadband customers. Whilst there is some overlap,
the latter do not expect to pay the costs of expensive PSB news.
THE PROSPECTS
FOR MAINTAINING
PSB PLURALITY IN
THE DIGITAL
AGE
The future of key areas of public service media
content such as news provision
On a fraction of the BBC's budget, ITN has re-positioned
its business at the forefront of new technological developments,
and uses its experience and expertise in news gathering and production
to remain relevant to people's lives and to deliver a diversity
of news to people in the UK in different ways.
However, ITN's successful business model only
works because it uses economies of scale from its existing PSB
broadcast news businesses, in terms of shared newsgathering and
production infrastructure, to drive expansion into new media.
PSB broadcast news is not a hugely profitable business either
for ITN or for its customers. It is unlikely ITN could continue
doing what it does at present if its PSB customers were, in the
future, to reduce their funding below a critical level. Thus any
changes to the broadcasting ecology, as a result of switchover,
could make ITN's business model vulnerable, and jeopardise its
ability to continue providing high quality news in both broadcast
and new media.
News has shown itself to be remarkably resilient
as a programme genre on UK television. But unlike the much larger
US market, where TV news is broadcast by a variety of providers
in a fully competitive commercial environment, the pluralistic
and vibrant state of TV news in the UK has been helped in part
by the existence of regulatory requirements for quality broadcast
news.
ITN is confident that high quality impartial
broadcast news is not yet under threat, and that it remains a
"must have" in the schedules of broadcasters with big
brands.
However, in the longer-term, if and when the
current PSB ecology has broken down, the situation is less clear.
It is expensive to produce impartial, independent TV news that
competes head to head with the licence fee-funded BBC for quality
and the commercial returns from advertising revenue are low.
To retain its technological edge, ITN needs
sufficient resource and commercial clout to compete with other
major players, including the BBC and BSkyB. Yet unlike them, ITN's
whole multi-media business depends on renewal of its contracts
with its core customers. Channel 4 has recently renewed until
the end of 2010, and ITV's current five year contract, currently
in negotiation, ends in 2008. This system undoubtedly delivers
to our customers very high quality news at value-for-money prices.
But it does create an element of risk to ITN's business model
that could be exacerbated by the changes digital switchover will
make to the broadcasting market.
THE PRACTICALITY
OF CONTINUING
TO IMPOSE
PSB OBLIGATIONS
The viability of existing funding models for ITV,
C4 and FIVE
Ofcom says though news is much valued by viewers,
there are important questions about its future on UK television—though
there is more news than ever, provision is uneven, there are concerns
over regional and national news, and the implications of digital
switchover.
As stated above, not all news is the same—there
is a difference between PSB news and what the market is providing.
For this reason, ITN believes there is still huge value in heritage
brands—the established television channels and their audiences.
Channel 4 is a strong contender to deliver pluralism with the
BBC after switchover, but on its own, this is not enough. ITV
News reaches around 10 million people every day. Size and universality
matters, as does reaching all audiences. If that is lost, there
is a risk that audiences will ebb away and will not be recaptured
by new media or local TV alternatives.
In an on demand world, where users "bookmark"
or put their favourite services in a "play list", big
brands become more, not less important.
Therefore, whilst new platforms and services
should be encouraged to develop, in order to deliver diversity
and choice to consumers, traditional broadcasters for whom ITN
is providing a multimedia news offering still have an important
role to play. Ignoring that role, and side-lining them in public
policy terms, would have ramifications for the quality and impartiality
of news as a PSB standard.
Even if national news services remain (and the
signs are that the commercial PSBs are very committed to these),
Ofcom has signalled that regional news may not be commercially
viable for ITV post switchover. Ofcom has argued that the ITV
regions are too large to be meaningful to local communities, and
that local news services can now address local issues more appropriately.
However, ITN believes there is a danger that
if Ofcom has "written off" regional news too precipitately
whilst not recognising that the mass, size, and infrastructure
of ITV's regional news services remain important not only to regional
and local news, but also in delivering quality journalism for
national news stories, both on ITV and Channel 4.
Local news and on demand services are all important
parts of the pluralistic mix, but not a complete substitute for
universal coverage which is the hallmark of PSB.
THE CASE
FOR PUBLIC
FUNDING OF
BROADCASTERS IN
ADDITION TO
THE BBC
Pluralism in quality, impartial news services
has flourished in the UK in part because of the broadcasting ecology
created to promote competition between the BBC and the commercial
sector.
Though the commercial free to air TV sector
is funded by advertising, it has also been indirectly subsidised
by the use of free analogue spectrum capacity. In return for the
use of this limited spectrum capacity, broadcasters have accepted
PSB obligations.
If those advantages and obligations, granted
through the licence, disappear and broadcasters have to start
paying for spectrum on the same basis as other users (as discussed
in Ofcom's July "Issues Paper"), then Ofcom will have
little regulatory hold on broadcasters which are incentivised
only by market conditions.
As stated above, broadcast news has stood apart
from print journalism in part because of the existing PSB system
that guarantees impartiality, independence, quality and accountability.
There is no guarantee this level of quality
will be delivered entirely by market forces. If it is worth preserving,
alternative models to adjust market conditions, including via
public funding, should be considered.
Delivery of news to new media should not be
publicly funded unless there is a quid pro quo with the transfer
of broadcast standards of quality, independence and impartiality.
Thus one can envisage a free market (as exists
in printed media), where news reporting can be biased and opinionated,
alongside a "protected PSB market"" for impartial,
high quality, independent news.
THE VALUE
OF THE
PSP CONCEPT
If one accepts, as ITN does, Ofcom's case that
pluralism with the BBC is important (particularly in news) and
must be preserved, then the Public Service Publisher (PSP) concept
proposed by Ofcom is one model worth exploring as a means to inject
new thinking into PSB content in the new media digital age.
Ofcom appears to envisage that the PSP would
be an institution with a core PSB purpose rooted in new media,
as opposed to traditional broadcasting media. It would not be
a traditional, linear broadcaster, but use all communications
platforms to achieve further reach and impact. It would be awarded
by competitive tender; it would have £300 million a year
at its disposal to commission public service content, but no guaranteed
means of distribution.
In addition to content for new media services,
we believe Ofcom has looked into other areas where the PSP might
stimulate public service content, including digital local TV services,
and voluntary activity (eg the Media Trust).
ITN agrees that there is a demand from the public
for local news, telling people what is happening in the area in
which they live. Local news services should be encouraged (and
ITN would pitch in any tender process).
However, we are not persuaded of the need for
significant PSP funding for local TV for several reasons; because
it cannot deliver PSB values of universality, because local TV
only works successfully in larger cities; competition and plurality
already appears to be emerging in this sector, with local news
and TV services being offered by the BBC and ITV, as well as by
regional newspaper companies.
ITN believes that Ofcom should not focus on
projects such as local TV at the expense of what already exists
(ie ITV's regional TV network), because there is much value in
existing brands, established infrastructure and distribution,
and the loyalty of their audiences.
Instead, PSP funding could be targeted at the
production of PSB content that can be delivered almost universally,
and with wide reach. It should be channelled towards mainstream
PSB content that is expensive to produce (and this includes impartial
news reporting to quality broadcast standards), and where any
cost-cutting might endanger quality of output, and therefore viable
competition and pluralism with the BBC. It is worth considering,
for example, whether it would be justifiable to fund a 24-hour
multi-platform multi-media news service, a 24-hour channel which
is also delivered to broadband and mobile. ITN could produce such
a service at low costs, given obvious synergies, and potentially
in partnership with a major broadcaster such as ITV or Channel
4.
THE CASE
FOR PROVISION
OF PUBLIC
SERVICE MATERIAL
ON NEW
MEDIA
Ofcom's case for provision of public service
content on new media to provide pluralism with the BBC is compelling.
People, especially young people, increasingly expect to access
news on demand, in ways convenient to them, in addition to or
instead of traditional media.
But there are important reasons why Ofcom should
also nurture the traditional broadcasting brands which continue
to deliver public service content to millions of people every
day, and which (at ITN) serve as the basis for generating new
media news content.
Broadcast standards of reporting and production
are applied at ITN to news content via new media. This means that
ITN is able to provide high quality, impartial national and international
news across all of its services, even though this is expensive
to produce, because of the manpower needed for research, coverage,
production and compliance.
Although news is a genre that is currently thriving
on a competitive basis in new, start-up markets like 3G mobile,
there is a danger that:
— the BBC will enter these new markets
with "free" content, stifling competition (the BBC Online
Service Licence will continue to include BBC services on 3G mobile
in terms of remit and budget, with a resulting loss of transparency),
and
— in the competitive, unregulated broadcasting
environment after switchover, commercial broadcasters may find
it increasingly difficult to commit the scale of funding needed
to resource quality independent news reporting, with knock-on
consequences for new media news content at ITN.
ITN believes Ofcom should review the challenges
to ITN and to broadcast news provision set out in this paper,
and consider the case for public funding for news material in
new and in broadcast media, should the new (post switchover) market
threaten the viability of news production.
CONCLUSIONS
— We believe there is a threat to the
provision of plural sources of news from digital switchover.
— We have strong relationships with
both our major PSB customers (ITV and Channel 4) and they are
committed to the importance of broadcast news in their schedules.
They fund excellent news services, but we recognise that both
have outlined threats to their own funding and these could jeopardise
their ability to fund high-quality news.
— In addition, we agree with Ofcom
that there's a threat to regional news, which meets important
local information needs and also provides material to ITV's National
News and Channel 4 News. We think regional news retains a significant
role in the ecology of UK broadcast news because of its continued
large audiences. They are universal and inclusive services that
might not be possible to replicate in an on demand digital environment.
They should certainly be considered as candidate for PSP funding.
— We believe that high quality, impartial
news is important in broadcast news and equally important in new
media news. The expansion of BBC News online, and the resources
required to invest in these areas, will make it difficult for
ITV News and Channel 4 News to develop their online propositions
to compete as successfully as they do on television.
— While there is a growing market for
news from new media—broadband and mobile—and from
the diversification of newspaper groups, it is not yet clear that
revenues could make up all or any funding gap for PSB news caused
by a decline in TV advertising.
— Regulators should therefore monitor
BBC's new media activities. In particular, we are concerned at
Mark Thompson's suggestion that the BBC might give video and audio
news "free" to newspaper websites.
RECOMMENDATION
In this submission, ITN has sought to explain
that high quality, impartial broadcast news is a valuable PSB
operation. Whilst there is a plethora of news providers in the
commercial marketplace, there are no guarantees that PSB values
in news will survive the changing regulatory and market conditions
of digital switchover.
ITN has also explained how closely connected
broadcast and new media news is in ITN's multi-media business,
and how we successfully carry PSB news values into the new media
environment. However, the survival and expansion of these business
areas is entirely reliant on continuing levels of adequate investment
in our PSB broadcast news operations, and switchover raises questions
about this, particularly as we and our customers are competing
against a BBC operation which benefits from large budgets from
licence fee funding.
Ofcom has made the case that PSB content is
under threat and that a Public Service Publisher (PSP) might fill
the funding gap. ITN certainly feels this needs to be explored
and that if funding is available some should be set aside for
the continuing survival of PSB quality news.
In view of the issues raised by Ofcom, ITN suggests
that the Select Committee should consider the case for an early
and holistic review of the commercial marketplace, including the
threat that any potential future funding deficit in the commercial
sector could pose to high quality, impartial news. We do not consider
this should wait till switchover, as the Government proposed during
the BBC Charter review, but should be started now.
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