Examination of Witnesses (Questions 2280
- 2290)
WEDNESDAY 19 MARCH 2008
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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