Select Committee on Communications Minutes of Evidence

Examination of Witnesses (Questions 2280 - 2290)


Mr Luke Johnson and Mr Andy Duncan

  Q2280  Baroness Bonham-Carter of Yarnbury: You mentioned the way in which ITV coverage of regional news through ITN gives you access to a regional infrastructure. What you skirted around is the fact that ITV have been saying very publicly that they want to get rid of this obligation. What is the knock-on effect likely to be on Channel 4 News? Is that not a real cause for concern?

  Mr Duncan: It is a cause for concern but I think there is some way to go in the debate about what actually happens to ITV, whether they have to get regulatory permission to substantially reduce what they are doing. I think their early evening bulletin, for example, does quite well for them commercially, so whether in fact they need to reduce by as much as they are currently planning to or whether in fact there are some levers that Ofcom and others can still hold them to, that remains to be seen. It is true to say that if there were a substantial reduction in their regional news coverage that would, at some level, have a knock-on effect in terms of our ability to tap into that infrastructure.

  Q2281  Baroness Bonham-Carter of Yarnbury: Ofcom appear to accept that economic circumstances make it "much less likely that commercial broadcasters would choose to carry news for the UK nations and regions" at anything like its current level. That is presumably something you are going to need to address.

  Mr Duncan: For us it would be in the next contract that we do. In 2010 it would be a real issue as to whether there would be more cost that we would have to put in. At the moment we have a shared infrastructure so the question would be whether we had to put more money in to actually make sure that for our national news coverage we have the appropriate richness and texture around regional issues that are going on in the UK.

  Q2282  Baroness Bonham-Carter of Yarnbury: I know you are about to launch 4 Radio; does that have a regional infrastructure to it?

  Mr Duncan: To be clear, both on television and on radio, we would have fully UK-wide services. We have never had a regional news service and do not plan to offer one, but obviously the point is when you are doing national news you want to be able to cover things that are happening on a regional basis as appropriate.

  Mr Johnson: We piggy back on the 80% of the overall turnover of ITN that is essentially provided through ITV.

  Q2283  Baroness Bonham-Carter of Yarnbury: What would happen if you lose the thing you are piggy backing.

  Mr Johnson: ITN makes the point that the terms of the contract they are able to offer us are based on economies of scale that the contract with ITV gives them. If that diminishes sharply that would inevitably have a cost impact for ITN and they are a for-profit business that cannot, I would imagine, trade at a loss.

  Q2284  Baroness Bonham-Carter of Yarnbury: I am just wondering what solution you would envisage if, as is quite likely, ITV does cut back.

  Mr Duncan: You would either have to accept that we lose regional texture and richness in our programming or we would have to spend more money to pay for that entirely by ourselves.

  Q2285  Chairman: ITN provides you with news and obviously provides the News at Ten with news. Do they use the same correspondents?

  Mr Johnson: No, not generally.

  Q2286  Chairman: If you are in a foreign position would there not be some benefit there?

  Mr Duncan: Typically in terms of correspondents and reporters and so on we have a separate news provision. That is the whole point, that you share back office costs, you share infrastructure costs and to some extent you tap into the regional network, but the Channel 4 News is a very, very different programme editorially to either of the ITV major bulletins and I think that is very important. I think it would be a false economy to say, "Let's have the same war zone reporter reporting for both news bulletins". The whole point is that you have a very different news provision; it is a different editorial spec, different perspectives, very often going into issues in more detail or whatever it might be.

  Q2287  Chairman: Sometimes you could get more foreign news. Covering foreign news is getting more and more expensive.

  Mr Duncan: Yes, but again there are shared infrastructures so if you have a big China bureau then sharing some infrastructure costs makes sense, but I think it is important that the plurality of the actual editorial reporting is different.

  Q2288  Baroness Howe of Idlicote: I am very interested in what you are going to be doing in the digital side with the younger generation. There is a new £50 million fund being set up of which you committed £20 million. How can you afford this at this stage with all the different issues we have been talking about?

  Mr Johnson: I think it is really a question of how can we afford not to do it in the sense that as attention amongst young people increasingly shifts away from traditional television towards digital media, particularly the internet and mobile devices et cetera, if we are to remain relevant with that group of viewers then we have to work through the sorts of media that they access. We will for certain become a declining organisation with, as Andy said, a declining impact unless we spread across the media. If we are to remain relevant we cannot afford to rely exclusively on the traditional Channel 4 channel. That is why we have launched new channels like More4 and E4 and so forth and we have to beef up our online presence by various means. This is a mechanism, if you like, to explore what is the best way of reaching those people with a variety of contents, some of it more commercial but certainly some of it public service.

  Q2289  Baroness Howe of Idlicote: You say you are cutting back on certain things but equally you were saying in the presentation that you are wanting to cut back on some of the more obvious American gap fillers. Perhaps you could more fully explain that at the same time as telling me a bit more about what you are proposing as far as the news is concerned for the 16 to 24 year olds in this collaboration with Bebo and how much they are going to contribute to that. Could I also ask why not the younger generation because there, we already know, particularly in America, they are communicating one another their own form of news and really not taking much notice any more of any form of news, even the Channel 4 and ITN news?

  Mr Duncan: To take your funding point first, we have tried to re-prioritise quite rigorously as much as possible. That is in the plan we published last week and we have mentioned that position. We are taking £35 million out over the next few years from our American acquisition spend which frees up money to put into British content. There are two areas in particular that we are piloting in addition to the £100 million gap that we think will be there, both of which are exactly what you are talking about. We are piloting a children's fund for ten to 15 year olds and we are piloting this digital media fund where we put £20 million in. We have also raised over £20 million from other organisations—regional development agencies and so on—and as Luke says we cannot afford not to do it. The affordability of both those things beyond the pilot is linked to the wider Channel 4 issue. We have been very transparent in saying that we are funding the pilots out of reserves but actually to sustain the on-going funding of older children's television and the digital media fund is dependent on a wider Channel 4 settlement. Within the digital media funds specifically the idea is to pilot an experiment with public purpose projects online. There might be commercial models behind them but they are ultimately there as a public purpose objective. There are a number of projects we want to look at across a range of areas for education and so on and news will be one of them. To your Bebo point that is just one project we want to experiment with; it is not just about 16 to 24 year olds, some of the Bebo users are very young; it is actually about how much time that generation is now spending online on these social interaction sites in particular, is there a way in which you can, in an imaginative, interesting creative way, use that to put out news and information. It is rather like John Craven's Newsround which was a rather good children's news programme—and still is maybe—over previous decades; it is almost an equivalent of that which works in tandem with the way that age group are now interacting with social network sites. We are hoping, across the pilot as a whole, to prove the hypothesis that in fact some of our public purpose can indeed be delivered through new platforms. The key point is that we are trying to do it with the minimum money we can for now and get as much money from elsewhere to fund it and support it.

  Baroness Howe of Idlicote: I personally hope you succeed with this and not least because it might stimulate the BBC to do rather more instead of cutting back on what they have done, thereby fulfilling your major objective to be good competition for BBC.

  Q2290  Lord Maxton: The best way to get yourselves on the internet is to expand the number of households actually on broadband and high bandwidth broadband at that. You really cannot watch Channel 4 if you do not have broadband at all or if the broadband you have is a slow, jerky sort of television.

  Mr Johnson: Our view is that broadband take up will happen on its own. The competition in that space is considerable and I think there is a good choice of suppliers. There is a digital divide out there but steadily, it seems to me, the take up of broadband is increasing and I think it is growing on its own. The fact is that I think we do a pretty good job for the balance of the households through traditional analogue television or possibly digital, so we will reach them one way or another. We do not have to reach them through broadband means, we can reach them through traditional broadcast television.

  Chairman: We have gone over time; I apologise for that. Thank you very, very much for coming. We are very grateful. As I say again, coming at short notice is particularly good of you. We very much enjoyed your evidence. Thank you.

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