Examination of Witnesses (Questions 1000
- 1019)
WEDNESDAY 28 NOVEMBER 2007
Mr Michael Grade CBE, Mr John Cresswell and Mr Michael
Jermey
Q1000 Chairman:
You do not feel that it reduces choice in any way, the fact that
some of the public, having missed the 10 o'clock news, can actually
check into the 10.30?
Mr Grade: There is no shortage of news supply
today, with News 24 and Sky News. If people feel they have missed
the news at 10 and it gets to 10.30 and they have missed ITV's
news and the BBC's news, they can go to News 24. We have 80% of
the country now with digital multi-channel homes. They can access
the excellent Sky News and BBC News 24. There is also the wireless,
Chairman, and the Web.
Q1001 Chairman:
You said a very interesting thing about News at Ten. You said
that it made commercial sense.
Mr Grade: Yes.
Q1002 Chairman:
We were in the United States and we were told basically that the
news programmes were not as popular as they once were, and the
idea of actually putting the news programmes into the really peak
time viewing was regarded as completely unacceptable by any of
the channels. You say in the United Kingdom that is different?
Mr Grade: It is different. The market is very
different in the UK. To start with, there are four networks in
America, all commercial, all capable of being of equal size, and
it is a much, much more competitive situation. We are head to
head with the BBC but not for revenue, and I think UK audiences
have a different view of news and feel very loyal to and engaged
with the major news bulletins in ways that they do not in America.
Q1003 Chairman:
Did you talk about the change with advertisers?
Mr Grade: No.
Q1004 Chairman:
You just made the decision?
Mr Grade: Yes. Obviously, the move of the news
is part. You do not just move one block of the schedule. This
is part of an overhaul of the whole of the ITV1 schedule for 2008
which we have not yet revealed for commercially competitive reasons
but when people see the schedule, they will see how it fits into
a much more streamlined and more competitive schedule. The fact
is that some genius with a PowerPoint presentation convinced everybody
in ITV some years ago that they could make more money moving the
news out of peak time, and the question nobody asked was "What
are we going to put in its place?" When you start moving
the news, it is five nights a week, 50 weeks a year—excluding
Christmas and New Year—so you have to find 250 pieces of
television for prime time to replace it. I think they had two
pieces at the time they did it that would get them from the watershed
at 9 o'clock to 10.30. That left 248 a year to find. It was an
absolutely crass piece of commercial thinking but some genius
with a PowerPoint presentation convinced the powers that be and
nobody asked the obvious question. What we are able to do commercially
now by moving the news back to 10 o'clock is offer our viewers
much greater relevance on the channel, providing them with a brilliant
new service from ITN at 10 o'clock, which is when they want to
watch the news. It enables us to free up resources to invest in
British production, British drama, at 9 o'clock midweek, which
we have not been able to do. It makes a lot of commercial sense.
Q1005 Lord Maxton:
I remember having these discussions with the "idiots",
as you call them, who took this decision in the past ...
Mr Grade: I would not want to cast any aspersions
on any individuals but I have yet to meet the person who did the
PowerPoint presentation.
Q1006 Lord Maxton:
... when I was on the Select Committee in the other place, and
the argument always was that your drama so often before you moved
it started at 9 o'clock, went till 10 o'clock, and then had to
re-start at 10.30. That was the argument that was put to us.
Mr Grade: I think it was movies, Lord Maxton.
Q1007 Lord Maxton:
Yes, but you now do some drama that runs from 9—not a lot
but some.
Mr Grade: Very, very few in the year. They are
very successful when they go but there are very few of them. It
was the movie argument. You are starting a James Bond film at
9 o'clock, stopping at 10 o'clock to go to the news and coming
back with our hero dangling.
Q1008 Lord Maxton:
Do you now dismiss that argument? That is really the point.
Mr Grade: We do not run any movies in prime
time—very rarely. The whole audience taste has changed.
They can get a plentiful supply of movies on the digital channels.
They want original, high production, high-value, UK content at
9 o'clock, which is not the movies.
Q1009 Baroness Bonham-Carter of Yarnbury:
I was actually going to ask exactly what the Lord Chairman asked
you, having also been in America. I was interested in your answer.
You said that in America they were all commercial channels.
Mr Grade: Four of them of equal size.
Q1010 Baroness Bonham-Carter of Yarnbury:
Are you saying that, without the BBC, there would not be the same
pressure on you to have news in prime time and that you, like
the American channels, would be affected by scheduling?
Mr Grade: If the BBC were a competitor for revenue,
advertising revenue, of a similar size to ITV, that would change
the commercial landscape quite dramatically and we would begin
to be much closer to the American model. That would put undue
pressure on us and then we would have to start looking at how
much we spent on news, where it went, all those questions would
be an issue but, fortunately, we are in the happy position, from
the consumer's point of view, that that is not the case.
Q1011 Baroness McIntosh of Hudnall:
Mr Grade, I take your point about the way that you want to reorganise
the schedules being an important factor in determining your decision
to go back to 10 o'clock but I was quite intrigued by what you
said earlier, when you said—and I think I quote reasonably
accurately—"Who wants to watch the 10 o'clock news
on BBC and then watch it again at 1030 on ITV?" What that
made me wonder was who you think the audience for your news programmes
is. One might infer from what you said that there is a group of
people who watch the news, and they are just a group of people
who watch the news, whereas conventionally, I suppose, we have
been led to believe that the news programme is watched by people
who migrate from whatever happened before it and therefore there
would not be that kind of overlap. What did you mean by that observation?
Mr Grade: The audience for the news is everybody
who is available to view, who is interested, who is awake and
anxious to know what is going on in the world, in the UK, et
cetera. We regard the audience for the news as everybody who
is available to view at that time. On a big news night people
will gravitate to the first available big news that is on their
set on one of the big channels at the earliest opportunity on
a story that is unfolding, which happens more and more often these
days. They will go to BBC1 at 10 o'clock. They are unlikely, because
of their hunger for information about the story that is unfolding,
to come to us at 10.30 to see the same story all over again. So
it is much better to come back to 10 o'clock.
Q1012 Baroness Eccles of Moulton:
This is really the same question from a slightly different angle.
If you are going to switch on at 10 o'clock because you want to
watch the news, why would you want to choose a news programme
that was interrupted by commercials rather than a news programme
that was going to run straight through if you thought that the
quality of the two programmes was about the same?
Mr Grade: The answer to that is we will find
out. I think news is slightly different to sporting events, when
we are head to head with the BBC on major sporting events like
the World Cup final or the rarer and rarer occasions today. Undoubtedly,
the BBC has the advantage because their coverage is uninterrupted
by commercials but, if our news product is good enough and compelling
enough and authoritative enough, I think viewers, consumers, are
very sophisticated. They understand and sometimes welcome that
chance to sit back for a minute and relax and watch the commercials.
I do not think it is a problem. It should not be a problem.
Q1013 Chairman:
How many viewers do you think you lost by moving from 10 o'clock
to 10.30?
Mr Grade: It is impossible to say, Chairman.
Undoubtedly, whatever the case was for moving from 10 o'clock
to 10.30, it did not stack up. If we had had the programmes to
fill in behind, maybe it would have worked but we did not, and
we have struggled at 10 o'clock ever since it was done. It has
cost us money and it has cost us ratings. Whether it is possible
to quantify it or not I do not know because at the time the move
was made BBC News was at 9 o'clock and it was not until ITV switched
that the BBC moved theirs to 10 o'clock so it is hard to pull
any data together, but the commercial judgement is that undoubtedly
it was an expensive failure for ITV.
Q1014 Chairman:
Mr Cresswell, do you have any views on that?
Mr Cresswell: I think one of the issues that
we have found is on probably Mondays, Wednesdays and Thursdays
we have been running 90-minute dramas and we are probably the
only mature broadcaster in the world that funds drama at 90 minutes.
Everyone else runs at an hour. It is an unnatural length for viewers.
It is an unnatural length actually to be able to sell those programmes
to other broadcasters. As Michael said, in terms of changing our
schedule for next year, returning more to one-hour drama series
means there are more natural junctions at 10 o'clock and therefore
you are inviting the viewer to make more of a schedule choice
at 10 o'clock, therefore moving our news to give them that schedule
choice at 10 o'clock we think is beneficial. In the general context—because
you obviously have been talking to networks in the States—news
on its own does not pay for itself but, as Michael said, the relevance
and what we call the "halo effect" it brings to the
channel about being a serious, mainstream provider of entertainment,
current affairs and relevant news is very important to us and
news on ITV1 tends to provide a very ABC1 audience for us as well,
viewers who are increasingly harder to attract, with more demands
upon their time. As Michael said, we do believe that the changes
we are making are commercially beneficial to ITV given that we
are in a very different and competitive world now.
Q1015 Chairman:
It is a very odd way of using "commercially beneficial"
if you are actually making a loss on it.
Mr Cresswell: I would say we are probably making
more of a loss at 10.30 than we would be 10 o'clock.
Q1016 Chairman:
No-one has any idea what the audience figures were before and
what the audience figures are afterwards?
Mr Grade: Chairman, if I may say, I am sure
we could pull the numbers together for you and provide them for
the Committee but they are rather meaningless because of the impact
of digital multi-channels; the take-up of digital multi-channel
homes has accelerated to such an extent that, whatever the numbers
were frozen in time at that moment are irrelevant because the
whole landscape of how people consume television and from what
source, digital or analogue, has changed.
Chairman: Can we go on to regional news.
Q1017 Bishop of Manchester:
Let us explore your proposed reduction in 2009 of ITV regional
news services from 17 to nine. To put alongside that, if I may
quote from your speech at the Guardian Media Summit, you said
"I am committed to regional news remaining at the heart of
ITV1's schedule. It is part of what distinguishes ITV, and it
is valued by our audiences." Am I right in thinking that
regional news provision is one of the public service requirements
that you have to fulfil in return for access to the spectrum?
Do you agree that the reduction of ITV news services from 17 to
nine to save money is not actually quite consonant with your claims,
not least in that speech, that ITV's regional news coverage is
a kind of jewel in the crown?
Mr Grade: I have to reconcile a number of competing
dynamics here: the interests of my shareholders, the interests
of the audience and the sense of what traditionally ITV has meant
to its audiences. ITV was started with a brilliant piece of public
policy-making as a federal, regional system of 16 companies in
those days, designed to complement ... They were given a monopoly
of a very scarce resource, spectrum, in return for taking on all
kinds of loss-leading, public service obligations but the regional
thing was designed to compete with the BBC, which was a national
broadcaster; pretty well everything came from London in 1955:
"Alexander Palace", as I remember the announcers used
to say. That has changed. That spectrum is no longer a scarce
resource. The digital revolution means that spectrum is virtually
worthless. Competition has expanded. ITV lost its monopoly in
the beginning of the Nineties when Channel 4 was required to sell
its own airtime. We are in a fiercely competitive environment.
We are losing audience share because of the fragmentation and
that old settlement is no longer economically viable. That said,
I have been working with my colleagues here to come up with a
plan, because we do believe that there is value for ITV audiences
in the provision of regional news. There is an important democratic
duty on us, I think, to provide a regional news alternative to
the BBC and not to leave the BBC with a monopoly of regional news
supply but we have to do it in a way that we can justify to our
shareholders. The old map, which is an analogue map based on the
original ITV transmitter configuration, is just not viable. What
I wanted to do was to come up with a model, embracing technology,
which is about portability of newsgathering now, which has changed
out of all recognition. We have come up with a model that will
save us £35 to £40 million a year, will mean we are
still investing £65 million a year in regional news at a
time when our revenues are threatened, our share of audiences
falling, but we have come up with a model that we think will make
the best use of what resources we are able to put in. I do not
think the viewers will notice much, if any, difference because
the newsgathering on the ground is what counts. The fact that
we do not have a building in this town or that town is neither
here nor there.
Q1018 Bishop of Manchester:
Can I just take you up on that very point? I am a regional bishop
and we go further north than Manchester. ITV Border is one of
the highest-rated regional news programmes and, as you know, covering
Cumbria, south-west Scotland, Scottish borders and the Isle of
Man. My understanding is that you plan to shut down Border and
amalgamate it with Tyne Tees.
Mr Grade: Correct.
Q1019 Bishop of Manchester:
And that local news coverage will be reduced from 30 minutes to
a 10-minute slot over the whole region. You may want to come back
and correct me on that if I have got that wrong but, in general
terms, this kind of policy will surely have an impact on local
newsrooms and their ability to quickly and accurately cover stories
of national importance that take place in areas where ITV will
no longer have journalists, particularly journalists who are rooted
in the local area and have that local cultural understanding.
Mr Grade: Factually, you are correct. Where
I part company with your analysis is that what the viewers will
see is a regional news programme. It may well be coming from the
Tyne Tees area but the fact that we have plentiful journalistic
resources on the ground throughout the region will mean that the
news programme that they see, with that dedicated 10-minute odd,
but the whole bulletin will not ignore the border region. It will
be done on news values on the night. The programme will be created
based on news value. So you are not going from 30 minutes to 10
minutes; you are guaranteed absolutely 10 minutes covering your
border region but the rest of the programme is not going to exclude
border, depending on news values.
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