Examination of Witnesses (Questions 20-39)
SIR MICHAEL
LYONS, MR
MARK THOMPSON
AND MS
ZARIN PATEL
8 JULY 2008
Q20 Helen Southworth: Is this a check
that you will actually do?
Mr Thompson: Yes we will go back
and look at the data. I have seen some data in the past. It is
a level of granularity below what we report in the Annual Report
but we will go back and if we find anything useful, I am very
happy to send that information on to you.
Q21 Rosemary McKenna: Just one quick
question on a concern that has been expressed by a lot of people.
I agree that you do produce family viewing and that is very good
for families to be able to sit and watch and enjoy the programmes
together, but there is concern about the story lines particularly
in Eastenders. I certainly have some concerns and you had
a lot of complaints about the burial alive scene and that story
line is going on and on. What is your view on that?
Mr Thompson: I think that you
will understand that for a programme like Eastenders to
capture the public's imagination and to hold their attention,
and particularly given that Eastenders has always had an
interest in exploring tough and difficult social issues and family
conflict, it has always been rather serious-minded about that
and often with various kinds of outreach and phone lines and so
forth associated with that, that quite often the makers of Eastenders
will be coming up with story lines and treatments which are pretty
close to the line. I certainly think that the story line involving
the burial alive was close to the line, but I watched that quite
closely myself around the transmission and I believe that in the
context of that story line, of how it has unfolded, that it was
in the end justified and acceptable, but I think that what I would
say is that keeping a constant vigilance on quite traditional
things such as the use of language before the watershed, the levels
of violence or implied violence in very popular programmes like
Eastenders, we should be very careful about that, and I
think that the path we try and tread is quite a tricky one. We
want these programmes to feel dramatic, relevant—
Q22 Rosemary McKenna: Do there have
to be quite so many disturbed people in one programme?
Mr Thompson: There seem to be
a lot of people in Albert Square with big difficulties, that is
certainly true. It is a bit like Inspector Morse and the
appalling murder rate in Oxford and so on. I accept that an awful
lot of human woe is concentrated in a small place. For what it
is worth, I think the controls we have got in place, the way in
which our editorial policy team are involved, and involved early
on in conversations about story lines like that, we do try and
keep an eye on it. We also try and gauge from complaints, particularly
when there are a lot of complaints, about whether looking into
the future we need to be more careful but actually, as it happens,
although I thought it was pretty strong stuff I thought that that
story line was justified.
Q23 Mr Evans: Mark, the iPlayer seems
to have taken off dramatically—42 million programmes your
Report tells us were accessed over a three-month period.
Mr Thompson: It is over 100 million
now.
Q24 Mr Evans: If you could arrange
for the public service broadcast of the circus dwarf, the Hoover
and the pot of Superglue to be put on the iPlayer, I should imagine
you will do that in one day. You are clearly ambitious for the
iPlayer. Do you want to say something about your future proposals
for it?
Mr Thompson: It is a curious thing
because what the iPlayer enables people to do is to do something
they could have done 25 years ago with a VHS machine at one level
or an audio tape, in other words to have made a note in the Radio
Times and carefully recorded the programme and go back to
watch it, but the ease of use, the fact that (without getting
too techy about it) the Adobe player plays inside the browser
so you do not have to download a client or register, you can just
click and you are watching or listening to a programme is obviously
why people are finding it convenient to use. The underlying idea
of the iPlayer has been simply to make it more convenient for
people to access BBC programming for which they have already paid.
They pay the licence fee; we make the programmes. Historically,
broadcasting has not been a very efficient way of getting the
right programmes in front of the right people because most of
us either forget a particular programmes is on or never knew it
was on or we are out doing something else and we never quite get
round, even if we record it on our PVR or SkyPlus, to actually
watching it. I believe firstly that the iPlayer will make it much
easier for people to catch up with recent programming and if they
would find it interesting and enjoyable to watch and to enjoy
it. We are looking at our archive. We have got the biggest archive
of television and radio in the world. There are amazing treasures
in the archive. We have got to be quite careful, it will mean
careful consideration by the Trust because again there are market
impact concerns about suddenly releasing this tidal wave of programming
to the outside world. We are looking at the archive. We are looking
at whether or not there are ways in which we could play a part—only
a part and with partners—in making it easier for people
to get services like the iPlayer on their main television set.
We have already got the iPlayer in Virgin homes and in cable homes
in the UK you can now get the iPlayer and use it directly. Our
ideal would be to offer people the iPlayer functionality in every
home in the country if we could do that, so we are looking at
ways of doing that. We are also looking at whether for people
on the move, whether they want to download in an iPod-like way
content or whether they want to receive content on the move so
they can get our content on the move. The iPlayer is part of a
bigger story which has two or three basic themes one of which
is BBC content you have paid for but getting it when and where
you want it, with a slightly more personalised shape of services
presented to you, and the fact that broadcasting was once largely
transitory becoming permanent, so once something is made people
can go back and watch it again and so on. It is part of a revolution
really in what broadcasting means but at each stage of this and
the reason the Trust is looking so closely and looking to stage
it is because it obviously has impacts beyond the BBC.
Sir Michael Lyons: That is the
issue of balance which I think we come back to time and time again.
There is a limited fund from which to draw. The debates that took
place last October and which will continue as we move across the
six-year period the Trust will constantly keep under review, the
balance between these different services and the values that they
are generating and particularly that balance between investment
in platform and production of distinctive contents.
Q25 Mr Evans: You have got a problem,
have you not, with the iPlayer because it is programming that
you say people have paid for which they can access on their computer?
In the old days, even if you did not have a TV, if you had a VCR,
you needed a licence fee. If you have got a lap-top or a computer
you do not need a licence fee. If you access BBC programming via
an iPlayer you do not need a licence fee. Where I think Anthony
Jay was coming from is that we have moved on. We are now using
this new technology and if you do not need a licence fee to pay
for it then how much longer is the licence fee going to exist?
Is it not a fact that the licence fee is now being put on Death
Row? It is pointless. We might as well just pull the lever and
scrap the licence fee.
Mr Thompson: I think my headline
would be "Steady on". Look at the sale of television
sets at the moment in this country, in particular high definition
television sets. The British public are buying television sets
in great numbers because the television experience is growing.
You will appreciate that for decades now the licence fee, which
is being collected on the basis of having a television receiver,
has paid for BBC radio content and the reason it has been able
to do that is because pretty much every household has a television
set and it seemed futile to have a separate radio licence. Why
not use the television as the MacGuffin or the justification for
making the charge? I believe the overwhelming majority of British
households will have television sets well into the next decade.
They may well be using their computers and radios and other devices
to access our content as well, but they will be using television
sets and watching some live content. For the final of Wimbledon
on Sunday there was an enormous audience and with the Euro 2008
final there was an enormous audience. If you watch live television
with a mains powered device you will have to pay a licence fee.
If you are watching live content through a PC you will have to
pay a licence fee. That will continue for many years to come in
my view. If you say at some point in the future as broadcasting
evolves the British public want to go on paying for a BBC and
pooling investment to pay for high quality content you may have
to adjust the terms on which the licence fee is defined by making
a technical fiscal adjustment. I do not believe we will even get
to that point for many years. If we did get to that point, even
then I believe the adjustment could easily be made. The point
about the future of the BBC and about public service broadcasting
is around the willingness of the public to pool investment to
pay for the content. It is not really about the technicalities,
which I believe could be addressed, if they needed to be, as we
go forward. I think Death Row is going it a bit!
Q26 Mr Evans: If you are looking
at the exponential growth and the way that people are accessing
it and also the philosophical argument that comes from people
like Jeff Randall and Anthony Jay --- You have just smiled there.
There is an online petition, which Jeff talks about, which says
that "the world has moved on since the days when the BBC
was central to British life. Any modern government that fails
to acknowledge this fact quite simply is defying the will of the
people." Anthony Jay talks about the BBC and says that in
its sprawling bureaucracy its reliance on funding through a compulsory,
ruthlessly enforced levy in the form of a licence fee, in its
determination to dominate every field of broadcasting, in its
adherence to fashionable, liberal orthodoxies, even when those
views are at odds with most of their audience, the BBC is acting
like the monopoly provider it was in the mid-Fifties. What do
you have to say about that?
Sir Michael Lyons: The BBC has
a long history of facing up to challenges from those who would
like to see it narrow down what it does for different reasons.
There is the danger in doing that that it would end up not meeting
this requirement to deliver something to everybody who contributes
to its cost, as Helen Southworth underlined. The challenge here
for the BBC is not to take those things, important though they
are, that you might find on BBC One and Radio 4 and say, "This
is all excellent material. Let us concentrate on doing more of
this." Both of those have apportioned audiences but not the
entire range of audiences that the BBC serves. I think we come
back to a different challenge. The last Charter set down some
very challenging public purposes for the BBC and recognises that
in the making of programmes it contributes to the very nature
and quality of the life that we live in this country. I think
those public purposes themselves very clearly underpin the fact
that the BBC remains at the heart of many of the big debates about
the development of a democratic discourse in this country, about
the development of skills and creativities. There is no backing
off from that big agenda, but there does have to be a recognition—and
you see that graphically underlined in our PSB response document—by
the BBC that there is more to be done in the future in working
in an even more co-operative vein with others. I do not think
this is the time for the BBC to back off in terms of its commitment
to those public purposes, but it is the time to recognise that
others can contribute too.
Mr Thompson: We have talked already
this morning about reach and it is 95% of UK households and growing.
It is hard to see how you can argue that as a broadcaster meeting
95% of all households—there is virtually no other public
service in the UK with that kind of penetration and it is currently
growing—the BBC is not central to our national lives. You
might argue you do not want it to be central.
Q27 Mr Evans: You are in a unique
position, Mark, with a Poll Tax on everybody's television sets.
Mr Thompson: What both Anthony
Jay and Jeff Randall are suggesting is that this position is changing
and there is always new media which means that this centrality
is less true than it was in the past. Projects like the iPlayer
suggest a BBC which is rather effectively migrating into this
new digital space and is maintaining the loyalty of audiences
because it is changing with the times.
Sir Michael Lyons: Can I just
make an anorak point and it comes back to the issue of the use
of the iPlayer? Somewhat to our surprise, most of the use is as
a result of people streaming rather than downloading programmes.
Our very clear understanding is that you need a television licence
to be able to do that.
Q28 Mr Evans: To stream but not to
download?
Sir Michael Lyons: If you are
watching it as it is broadcast you need a licence.
Mr Thompson: There has been a
presumption almost since the moment that television was created
in the 1930s that you would see substitution, that radio would
give way to television, that the movies would give way to television
and actually what we have seen is these things co-exist, that
BBC radio is very hale and hearty despite the fact we launched
our first television service in 1936. I would expect a future
media environment where you continue to see radio being very strong,
you continue to see a lot of broadcast television, particularly
of live events in people's lives, but all of these other media
devices and methods are going to co-exist. What is happening is
the world of media is getting a lot more rich and complicated.
Q29 Alan Keen: Somebody might look
at Jay's argument and find it seductive. It would get rid of all
this bureaucracy and all these people earning lots of money. Could
you help me paint a picture of what people would have to watch
and listen to from 1 January next year if the BBC had only one
channel? What would the broadcasting industry exist on? What would
we have to listen to?
Mr Thompson: At the end of next
week we are going to start The Proms. It is the biggest and greatest
music festival in the world. It is broadcast extensively on Radio
3, on BBC Four and BBC Two. The Proms would not exist and all
of that classical music investment would not exist. You would
not get anything like the amount of history, science, natural
history, music and arts and religious affairs on television. Popular
music in this country would be a shadow of itself. I was talking
to a very senior leader of an American global record label last
week and he said that one of the reasons that British rock and
pop is so strong is because you have got—and you do not
have this in America and most other countries—a big broadcaster
prepared to put unsigned new artists on the air and to build them.
We live in a news environment where people expect to get news
24/7 on whatever device they are close to, with the website and
so forth. You would go back to a handful of television and radio
news bulletins but the reach of broadcast news would shrink. BBC
Parliament would be taken off the air. There would be no live
television coverage of Parliament. It is a splendid headline in
The Sun, but is that really what the British public are
saying they want to happen? When Ofcom asks the public about public
service broadcasting there is a lot of support. You may be able
to argue some philosophical argument about how that at some point
in the future it may not be required because of changes in technology.
If you ask the public about public service broadcasting, there
is colossal support for it because of some of the things I have
talked about, because of the sheer range and diversity of choice
it offers people.
Sir Michael Lyons: It would be
rather strange if the debate about what the public want in return
for their licence fee was driven by the objective of reducing
or abolishing the number of folks that actually manage it. The
debate ought to start with what the BBC is for. What are its public
purposes? Are they still appropriate? Does it serve those public
purposes? Are the British people still willing to pay a dedicated
sum, whether it is the licence fee today or some other arrangement
in the future, for that bundle of activities that they get? That
ought to be the debate. Let me offer you one particular proposition
on this. One of the things the Trust is interested in is the wider
economic impact of the BBC, recognising that sometimes that will
be very positive, as indeed we see illustrated in the BBC's commitment
and impact on training across communications and broadcasting
industries, but at other times it might have a different impact
if it impacted on competition in the market. With that in mind
we have now commissioned a major piece of work, which will be
made public before the end of this year, into the economic impact
of the BBC which will give us more evidence to conduct this debate
about what would be lost and possibly what might be gained if
the BBC were smaller in size. The Trust's commitment is taking
an evidence-based approach to this and putting that evidence into
the public debate so you can have informed debates rather than
hastily put together articles prepared for newspapers which are
not always revealing the real interests of those commentators
responsible for them.
Q30 Helen Southworth: Could I put
in a small request regarding the phenomenally successful iPlayer
and the obvious specialism and expertise and knowledge that the
BBC has got within it to be able to think these things up and
make them work? In terms of digital switchover, are you going
to be able to make sure that older people, particularly frail
older people for whom television and radio is the amazing link
to the world, get the benefit from future technologies, not just
a digibox which means they have to watch stuff when it is on and
cannot access other services?
Sir Michael Lyons: Let me just
start with the headlines on the digital switchover. I think Mark
will have some interesting comments to share with you about the
BBC's willingness to look constantly into the future and bring
forward developments which have exactly the impact that you are
looking for. The iPlayer itself has already been revised in its
very short life to make it friendlier and easier to use. We have
now had the first experience of switchover from Cumbria. It went
very smoothly. There was a particular focus on the frail, elderly
and those who might have had economic difficulties in being prepared
for the switchover. The lesson that comes back from that is that
most of the population anticipated the change and made their own
preparations. We have not only looked at the figures but we have
also gone back and done some survey work through Digital UK about
how people felt about the way they had been handled in that process
and it is remarkably positive. That is just the first step. You
are right to focus this debate on the scale of the change that
is still to be implemented, but I think it is worth underlining
that most people have already made their preparations for this
and that makes it easier for us to focus on those who are needy.
Mr Thompson: Whenever we come
up with a service like iPlayer we build accessibility in from
day one. We will see different versions of the iPlayer. There
is going to be an iPlayer interface for children, for example,
and again with accessibility so children with disabilities can
use it. On accessibility for older people, we have gone to 100%
subtitling now on our television services. We are working hard
to broaden and strengthen audio description and so forth. In our
targeted help scheme the partner we chose was partly because of
their experience with the Warm Front scheme and their proven ability
to understand and be trusted by older and vulnerable people with
new technology and new technical issues. We absolutely recognise
we have a special responsibility both to encourage older, more
disadvantaged groups to consider digital technology but also to
help them make the transition as well.
Q31 Chairman: Let us move on to acquired
programming. You told this Committee about a year ago that it
was your intention to reduce the amount of money that the BBC
spent on acquisitions from overseas. Can you tell us, in terms
of the amount that you spend and in terms of air time, how much
you have reduced acquisitions by?
Ms Patel: We spend broadly £70
million a year on acquisitions. It depends on what we buy and
what we show. In hours terms it is about 5,600 hours, which has
been broadly constant over the last couple of years. The big shift
came in 2005. If you look at peak hours, we show about 486 hours
in peak time and on BBC One in peak time we only show 28 hours
of acquisitions from outside the UK.
Q32 Chairman: Are you saying that
in the past year you have not reduced the amount you spend on
acquisitions?
Ms Patel: The reduction came in
the last few years. In the last year it has held steady.
Q33 Chairman: It was last year you
told us you were going to reduce it.
Ms Patel: I think by then we had
already reduced it. It is because we buy non-UK acquisitions a
long time ahead of the time we show them on screen. The reduction
will have come much earlier.
Mr Thompson: It is 28 hours in
peak per year. That is less than half an hour per week on BBC
One. The biggest single transaction in acquisitions over this
past year has been the loss of Neighbours. Neighbours,
as you will recall, was an Australian soap opera running five
times a week in two slots on BBC One, one after the One O'Clock
News and again at half-past five in the afternoon and it was
actually much loved by the audience of BBC One. There was an auction
for it and eventually Neighbours was bought by Channel
5, another free-to-air channel and available for the public to
see on Channel 5. It would have cost the BBC a great deal of money
to retain Neighbours. We took the decision, as we did with
The Simpsons and the X-Files, that the licence fee
was better used making original British content. Although you
will still sometimes see us buying pieces, we are trying to focus
more on pieces—I think the series Madmen for BBC
Four would be an example—where there is very limited or
no other terrestrial interest in the piece, so this is not a piece
which would be easily seen elsewhere and where we think the quality
and the particularity of the piece means that in the context of
the rest of BBC Four it will be something that people really enjoy.
The point is that the bar that a piece has got to pass to be bought
by the BBC is much higher than it has been in the past and will
grow higher. Certainly in the core parts of the schedule I expect
the reliance on acquisitions to be far less than it used to be.
People forget that BBC One was once dominated by acquisitions,
the Kojaks and a man called Ironside, The Virginians,
Dallas and Dynasty, it was the core of the BBC One
schedule most evenings of the week and we are now down to half
an hour at a peak time per week. I suspect that the reliance of
the BBC on acquisitions in peak times will reduce further.
Q34 Chairman: Are you suggesting
that if there is a strong bid for an overseas programme from a
commercial channel the BBC will not bid against that?
Mr Thompson: I think there have
got to be very powerful reasons in that context why we would.
We talked a year ago about Heroes. With Heroes there
was no interest from a UK terrestrial for series one. We bought
series one. When it became a hit in the United States we decided
it was an important piece that we wanted and we did compete to
retain Heroes. I think the test now of whether the BBC
should compete, especially when the alternative is another free-to-air
broadcaster, is higher. We have had a parallel example recently.
We decided not to bid, despite extensive press speculation that
we would, for the rights to show the Champions League, the rights
currently enjoyed, at least partly, by ITV. The reason we decided
not to bid was not because they are not attractive rights, they
are very attractive rights, but because we could not see that
the extra advantage the licence payer would get—no advertisements,
our presenters, our analysis—outweighed the very considerable
cost when you are talking about competing with another public
service broadcaster.
Q35 Chairman: If it did not apply
to the Champions League why did it apply for Formula One?
Mr Thompson: As you will recall
if you read the papers at the time, although it is not for me
to get into the whys and wherefores of the relationships between
the rights holder and ITV, ITV made it very clear that it was
very happy to have seen the Formula One rights transferred to
the BBC. It wished to concentrate its fire power on its football
rights. I spoke to Michael Grade afterwards. There was no sense
of the BBC "taking" these rights from ITV. It was an
arrangement which seemed to suit all the parties. There is an
interesting difference between Formula One and football, which
is that for the fans of Formula One the ability to show Formula
One races without advertising breaks is a very considerable benefit.
Moreover, the commitment by the BBC both to show the races prominently
wherever they occur, because of the time zones, they occur around
the clock, and to develop across our web and across other media,
including the iPlayer, lots of ways for the fans of motor racing
to follow Formula One, meant the creative opportunity for Formula
One was so good and is one of the reasons the rights holder chose
to go with us. There was no sense from ITV that this was the BBC
coming in and "taking" their rights.
Q36 Chairman: They did win a Bafta
for their coverage of Formula One so they were not exactly doing
a bad job.
Mr Thompson: I believe that ITV
has done a very good job with Formula One. I hope we can build
on their success and do it even better.
Q37 Chairman: Apparently you have
bought the format rights to the Japanese programme "human
Tetris" which is described as "celebrity contestants
clad in shiny leotards try to force themselves through various
holes in a giant moving wall or end up head first in a swimming
pool." Is this another one where you felt this was such an
important acquisition from overseas it merited licence fee payers'
money to be spent?
Mr Thompson: Some years ago we
bought the format to the programme The Apprentice. Had
you looked at the original version of The Apprentice in
the United States I think the Committee might have raised an eyebrow
about whether this could be made into a programme which would,
as it were, express the BBC's values and be appropriate on a BBC
channel. Over the past few years I think we have done a good job
both with our own formats, formats like Strictly Come Dancing,
and also with some formats which we bought but then changed substantially,
eg The Apprentice and Dragons' Den, to make something
which creates wholesome, enjoyable, high quality entertainment
for licence payers to get through the BBC. I have not seen the
programme. If there is a celebrity version of the programme you
will be the first on our list to join it as a contestant! The
business of making popular entertainment in my experience can
be a little bit hit and miss. Not every single programme we have
high hopes for turns into a great hit. Our entertainment commissioners
are looking far and wide for interesting formats. Japanese game
shows, which has been covered very extensively in the Western
media, is an intriguing, bizarre and strange world. Do not discount
the fact that something interesting and enjoyable may come out
of it. It is a bit too early for you and I to judge how that will
come out. The idea we are looking for unusual and interesting
new ideas does not shock me too much.
Chairman: We may revisit this next year.
Q38 Paul Farrelly: Sir Michael, I
would like to ask a question about the table on page 69 of Part
Two of the report regarding independent production quotas. I see
from that that the BBC has exceeded more than in the past its
quotas of 25%. I make the point every year, Sir Michael, about
how this does not tell me very much about how the BBC has achieved
those targets. For instance, it does not tell me how original
and creative the programmes have been or whether they are settled
BBC formats, such as Question Time, that are farmed out
to independent staging companies, it does not tell me which of
those programmes have been produced by producers in which the
BBC has got a stake or which are connected to BBC employees current
or former, nor does it tell me the genre or strands that are involved,
nor, if you go down to the levels of original production, across
which parts of the BBC they are being transmitted. Is that information
that you request and receive as part of your monitoring of how
the BBC fulfils those quotas?
Sir Michael Lyons: I think the
important thing to say is that we are drawing to a close a piece
of work to look at the operation of the WOCC.[2]
That will have delved much more deeply into this and it has sought
to explore some of the issues which I think are implicit in your
question about the way that the world of supply is changing and
the extent to which the BBC starts with a programme that it seeks
to commission or responds to ideas that emerge from the independent
sector. What these figures clearly show in headline terms is the
earlier anxiety that the BBC did not fully recognise the skills
available outside of its doors certainly no longer prevails, if
it ever did. Here is very firm evidence of the BBC looking for
value, being willing to work with independents and independents
doing very well, on the face of it, out of the WOCC. The very
reason for reviewing that is really around this issue, amongst
others, of sustainability.
Q39 Paul Farrelly: Is this the PriceWaterhouse
review?
Sir Michael Lyons: It is, commissioned
by the Trust.
2 Window of Creative Competition Back
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