Select Committee on Communications Minutes of Evidence

Examination of Witnesses (Questions 120 - 139)


Mr Chris Shaw and Ms Sue Robertson

  Q120  Chairman: Just to go back to the question you heard me ask Channel 4, this £10 million a year that you spend on news, which is not an insubstantial amount,—

  Ms Robertson: In terms of our overall programme budget, which is around £200 million, you are looking at around 5% of the overall programme budget, which is roughly what you heard from Channel 4 in terms of what they spend on their news, but I think their overall programme budget is over £400 million.

  Q121  Chairman: Did you agree with what Channel 4 was saying, that if you ran this as, if you like, your own outfit you would not be able to make it profitable? How do you view news?

  Mr Shaw: I did not like what Dorothy said about, "I am proud to lose £10 million", as a sort of badge of public service honour. I would like news to make money but it is true it is very difficult to make news make money.

  Q122  Chairman: But you do not make a virtue of it?

  Mr Shaw: No. I do not see any reason for it to be virtuous not to make money. Anyway, that is a personal opinion. I do not think we do make money out of our news. It is very complicated. I do not find doing the kind of cost value analysis of any programme worthwhile because advertising gets shifted around the schedule, depending on where most viewers are and how the regulation divides it up across the day, but we do have adverts in the middle of our news programmes and if we were allowed to sponsor them I am not saying we could make a lot of money but I think we could get close to breaking even.

  Q123  Chairman: If the news was sponsored by ... ?

  Mr Shaw: If we had an American system where we were allowed sponsorship of the news.

  Ms Robertson: But we are not saying that is what we want.

  Mr Shaw: No. I am just saying that it is possible to make money out of news but not under current regulation.

  Q124  Chairman: So you are not saying that is what you want but that is how you could do it. Why do you not want to? What is the difficulty?

  Ms Robertson: There is a whole other debate about another company sponsoring your news programme, and whether or not there is an editorial link between a sponsor and a news programme. We have not even had that debate; so it is not something we are looking to do.

  Q125  Chairman: Unless you do go down that road, which you appear reluctant to go down, news is an unprofitable business as far as five is concerned, just as much as it is for Channel 4.

  Ms Robertson: It is not the most profitable part of our programming, but you have to look at the programming as a whole. Going back to your last questions to Channel 4—about "Would you still be doing news in 2013 after digital switchover?"—I would say as the director of Channel 4 that, as a multi-genre channel, we would absolutely be doing news. It is part of the personality and—I hate to use the word because it is very marketing-oriented—the brand of your whole channel. Who your newsreaders are, the face of your news, the type of news you do, says a lot about you as a channel; so I think it would be really unlikely that we would stop doing it I cannot talk for our shareholders in five or six years' time, but it is a very important part of our personality as a channel. We will continue to do news. It is not just how much money it happens to make in terms of the outbreak in the middle of the news; that is not the only way you cost or value your news service.

  Q126  Chairman: Do you get the impression that that view of yours is shared by Bertelsmann?

  Ms Robertson: We have never had this discussion with Bertelsmann, so I cannot say; but RTL and Bertelsmann are very happy for us to—

  Mr Shaw: The investment in news has actually grown over the ten years that I have been involved with it. There has never been downward pressure on the money we spend on news. Unlike Channel 4, we are a private profit-making company. You can therefore draw your own conclusions from that. I would like more viewers and I would like it to make more money for the company, but I realise that a lot of the benefits are not cash-based. As Sue said, they are to do with the image of a channel.

  Q127  Chairman: You have a system of cross-subsidy, basically?

  Mr Shaw: There are parts of the schedule that do not make money and there are other parts that do.

  Ms Robertson: You could talk about our children's programmes or our arts programmes in just the same way as we are talking about news, but all of these things together—with our American-purchased programmes, our documentaries, features—all go to make an overall channel. We decide where we are going to put the advertising—more or less.

  Q128  Lord King of Bridgwater: I am not quite clear what you actually have to do with news. You have contracted Sky to provide your news. What input does anybody in five actually have to any news programme?

  Mr Shaw: I am the Controller of News at Channel 5 and I have exactly the same relationship to the editor of five News as Dorothy has with Jim, who is a Sky employee in the same way as Jim is an ITN employee.

  Q129  Lord King of Bridgwater: Do you talk on a daily basis to Sky about what priority, what order of programming, what you are going to attach importance to? Sky say, "Look, we've got this menu today. We've got these various stories around". Do you get involved in deciding?

  Mr Shaw: No. Like Dorothy, I set strategy. I tend to discuss programmes after they have been transmitted rather than before. We discuss campaigns, areas that we might want to focus on in the future weeks or months; but, in terms of day-to-day decision-making, that is best left to the editor who controls the programmes.

  Q130  Lord King of Bridgwater: The Sky editor?

  Mr Shaw: The Sky News. The editor who works for Sky is a Sky employee, in the same way that Jim is an ITN employee.

  Q131  Lord King of Bridgwater: So why should I watch five News rather than just watch Sky?

  Mr Shaw: Sky is a 24-hour rolling news service; Channel 5 News, if you have watched it, you will know is very different from Sky. It has a very different proposition. It is a linear programme of set points during the day. It has a particular take. It has won awards for its distinctiveness. It is on at different times of the day that may or may not suit you, but 5.30 suits quite a lot of people.

  Q132  Lord King of Bridgwater: Could you describe the different take?

  Mr Shaw: Yes. I think it is fresher, clearer and more straightforward than other news programmes.

  Q133  Lord King of Bridgwater: Than Sky?

  Mr Shaw: Than Sky and than any other news programme, actually. I think that it is clearer than others. We also are the only channel that runs what I would call these little, bite-sized updates, which are in prime time, on the hour—one minute, one and a half minutes' long. They are extremely popular; they are watched by up to three million people a night. Often, if you ask people about what is news on five, they will refer to those updates rather than our main programmes.

  Q134  Chairman: It is because you are waiting for the next programme, is it not?

  Mr Shaw: Yes, but they are still being watched and they are still useful, in the same way that Radio 1 news programmes are useful. They are there as a service and, when we researched them, they are much appreciated. However, if you are talking about the essence of five News, it is to do with its clarity, accessibility and straightforwardness.

  Q135  Lord King of Bridgwater: Have you ever had any representations made by your owners about the stance you have given to any particular news items?

  Ms Robertson: No.

  Mr Shaw: I have not.

  Q136  Lord King of Bridgwater: You are corporate affairs, are you not?

  Mr Shaw: I also have not had any conversations with Gerhard or any other shareholder about the content of the news.

  Q137  Lord King of Bridgwater: Who negotiated the contract with Sky?

  Mr Shaw: I did.

  Q138  Lord King of Bridgwater: Was it ratified by RTL?

  Mr Shaw: I think that any major contract is under the supervision of our shareholders, yes. It is something that is worth £10 million pounds a year. They would certainly have known about it. I think that they are very happy about—

  Q139  Lord King of Bridgwater: More than that: did they actually get involved in the negotiations?

  Mr Shaw: No.

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