Select Committee on Communications Minutes of Evidence


Examination of Witnesses (Questions 2500 - 2519)

WEDNESDAY 23 APRIL 2008

Mr Paul Myners

  Q2500  Lord Hastings of Scarisbrook: How significant is the BBC.com's advertising as a deterrent to your own advertising?

  Mr Myners: The BBC is a very, very powerful competitor, particularly in the area of radio. It is a distinguishing feature of the UK market compared with others that we have such a large publicly funded broadcaster with such a dominant share of the market. That is the reality. The BBC provides high quality product and does not have to rely upon advertising. We seek to provide equally high quality product but do not have the benefit of the licence fee; QED.

  Q2501  Lord Hastings of Scarisbrook: You go on to make the point, probably quite wisely, that the BBC is partnering with private equity groups and, therefore, drawing in revenue from lots of commercial streams, and you make the point in your remedies that the BBC Trust should be much more diligent in restricting its activities. So, for you, is this competition just in the UK or competition internationally?

  Mr Myners: It is primarily in the UK but it is also internationally. I talked about The Guardian being the most visited national newspaper British website in America. Of course, the most visited UK media website in America is the BBC. So the BBC is competing for attention with other media and, as I have said, it is very powerful. I would hope the BBC Trust, which is a relatively recently established entity, will develop an independence of mind and will appropriately challenge what should fall within the remit of public broadcasting and what would fall outside that and that we are all mindful of the need to ensure that the BBC's activities do not frustrate the development of other sources of information and service.

  Q2502  Lord Hastings of Scarisbrook: The Guardian has always been seen as a BBC fan by some, but do you think that the nature of the concerns that you have here—I am not suggesting that the editorial position of The Guardian might change, but does the Scott Trust view the BBC as a threat to your online advertising growth in the US?

  Mr Myners: I am not sure the Scott Trust has ever discussed it. Certainly at the Guardian Media Group level, we would recognise that if the BBC was to carry a lot more advertising that would be advertising for which it would be competing with us and we would have to then challenge very vigorously, from a commercial perspective, not from an editorial perspective, why the BBC was allowed to do this whilst continuing to benefit from the licence fee without having to share any of the benefit of the licence fee with other providers of public services.

  Q2503  Lord Hastings of Scarisbrook: One last point, if I may. Given what you have said about the growth of your newspapers, particularly your national newspapers, as online papers, could you just project out ten years or so? Do you see the printed newspaper for you ever disappearing, that you just become an online brand?

  Mr Myners: I think it is extraordinarily difficult to really be confident about anything as far ahead as ten years, but what I would say is that clearly at one stage online was a derivative of the newspaper. As our very first step, all we did was put newspaper on the web. It has now moved to a situation where it walks shoulder to shoulder with the newspaper and it is, therefore, quite conceivable that, if the readers prefer this from of delivery, in due course the newspaper becomes a derivative of online. For instance, we are one of the newspaper groups, probably the first of the British newspaper groups, to put many of our stories online before they are printed. The protocol originally was always you print it first and then after that you put it online. Now we put it online first and not only that but we have mechanisms that draw your attention to the fact that a story in an area of interest to you has been placed online. So this is a very significant change in priorities. Would I see a point when we no longer printed a national newspaper? I find that very difficult to envisage, but I think the balance of focus will continue to move towards digital delivery.

  Lord Maxton: This international audience which has, quite rightly, developed, how do they find you? Is it through the news applicators in the first instance?

  Q2504  Chairman: We will come on to that. Going back to the BBC a moment, do you not define a problem for the BBC which you get an either way? First of all, they are being told they have got too much of the licence fee so we should actually top-slice it, and then they say, "Okay, we will maximise our income", and then you say, "You cannot do that either." It is quite difficult. The BBC are caught between a rock and a hard place, are they not?

  Mr Myners: They are.

  Q2505  Lord Maxton: And long may they stay there! You have expressed concern about media merger and regulation. One of your concerns is that this regulation we have in this country about media mergers does not cover the new medias; in particular, the Googles and Yahoos—and of course Yahoo, in particular, is at the present time under a possible merger with Microsoft. Is there any way that could be done?

  Mr Myners: I would like to see equivalence of regulation across all forms of competing media. I find it difficult to think that the right position for us to be in is that in which one part of media is subject to quite significant regulation and another part, the emergence of which may not have been contemplated by legislators on the scale that currently prevails, is free of regulation. To some extent, I could live with either the lightening up of regulation on those parts which are heavily regulated or the introduction of regulation in those areas which are not regulated. I find it far harder to convince myself that the current situation is one that a rational and reasonable person would conclude was right.

  Q2506  Lord Maxton: Arguably, lightening up the present regulation is perfectly feasible within the national context. Regulating international bodies is much more difficult. Therefore, I think you are saying that you would prefer the first rather than the second.

  Mr Myners: I think that is a fair summary.

  Chairman: We are getting a lot of agreement here.

  Q2507  Baroness Eccles of Moulton: Now we are on to aggregators. We have gained two rather different impressions from talking to Google and from talking to the newspaper industry. You tell us—and this is certainly not the first time that we have been told this—that the news aggregators scrape your content and set it to their own audience. Google argue that they supply you with a lot of custom and, therefore, advertising, because all they are doing on their news pages is providing a link to the main news story. Their position is that they are almost providing you with a service and not really making serious inroads into your potential advertising revenue. The newspaper industry's view of this is rather different. Can you see any solutions to this dilemma?

  Mr Myners: I think it is worth recognising that Google has created, in the end, a monopoly position. But, as Lord Maxton has advised us, that is an international issue rather than limited to the UK. We feel that the current situation does not fairly represent the value the content providers bring to the search engines and the aggregators. We would like to see Google, Yahoo, Microsoft and others sign up to the ACAP initiative, the Automated Content Access Protocol that allows publishers more control over how search engines and aggregators access their content. Second, we think the UK Intellectual Property Office should take a look at both the copyright and competition issues that are evolving as a result of the growth of search and aggregation.

  Q2508  Baroness Bonham-Carter of Yarnbury: How has the Guardian built up this large international readership of which you are, quite rightly, so proud? Is that not through aggregators?

  Mr Myners: Aggregators have certainly played a role. Research tells us that when people find us they put us on their favourites' list because they say, "This is rather good. I might have gone there to find an article about this, but it has taken me to the site and I've found it very interesting." The audience of America that has found its way to us has, to some extent, found its way to us because of the shortcomings of the American media when it came to coverage of the situation in Iraq: people who were trying to see the Iraq situation from different perspectives were taken by aggregators and others to the Guardian and to The Independent.

  Q2509 Baroness Bonham-Carter of Yarnbury: That does suggest that they have supplied a very valuable service.

  Mr Myners: Yes. We have a symbiotic relationship: they need us; we need them. But at times it feels that the balance of need is not one which is equitably rewarded.

  Q2510  Lord Maxton: Do you provide links to your other organisations through your Guardian website? In other words, if I want to listen to Real Radio or something, I can do it by going through the Guardian?

  Mr Myners: I do not think we do.

  Q2511  Chairman: Google argue, do they not, that they do not put advertising on Google news itself and that is some defence. Is that a defence? Is that a total defence, or is it just that they want the loyalty to the total Google brand?

  Mr Myners: Yes, I think it is part of their brand offering. I think it is their corporate process.

  Q2512  Lord Maxton: You do not pay them to get high standing on their site?

  Mr Myners: We do not pay them to do that. We, clearly, as with all other people who have to work with aggregators, seek to understand their algorithms so that our stories are correctly positioned high on the list. I do not always personally go to the first few that they offer me when I go to a search engine.

  Q2513  Baroness Eccles of Moulton: You told us a few solutions to what you see as an imbalance between the advantages of the news websites. Are they practical and feasible? It would appear that the Internet is an area which is very, very hard to control and grasp. As you were reading them out to us, I immediately thought that Google, being very clever, would probably find ways around it almost immediately.

  Mr Myners: Yes. I think the sort of agreement that we seek through ACAP is one which will only work if all parties to the agreement recognise that it is in their interests for it to work. I do not think it is one on which legislation imposes a rock solid obligation; rather it seeks to recognise, as I have said, that there is a symbiotic relationship which it is in both parties' interests to sustain and neither party's interest to abuse at the unreasonable expense of the other.

  Q2514  Baroness Eccles of Moulton: You think there is potential reasonableness on both sides to be able to reach this symbiotic relationship.

  Mr Myners: The Guardian always approaches issues with that core assumption.

  Q2515  Baroness McIntosh of Hudnall: Before we get on to the next issue, I would like to stay with the global thing for a moment. Google have put it to us—taking up your "Do no evil" point—that really they are completely neutral as far as the content of the news site is concerned; that they just put up there what other people have designated as being newsworthy, that they determine the order in which their site presents that news purely algorithmically, that there is no editorial intervention of any kind. Do you buy that?

  Mr Myners: I have never had reason to question it.

  Q2516  Baroness McIntosh of Hudnall: I suppose my question really is: Do you think that aggregated sites, where there is ostensibly no editorial control, genuinely are neutral in terms of editorial content? This is right outwith the questions that we were going to ask you, but I am interested to know whether you see sites like Google as having any direct influence on opinion by virtue oaf the way in which they present and organise the news.

  Mr Myners: I am not aware of that being a feature of the Google approach. I have never felt that when I go to a Google news site I am being taken to stories which have editorial bias, on a consistent basis, to a certain philosophy. It is conceivable that a business could be developed. If you look at some of the blogs, if you look at Guido Fawkes, or Iain Dale, or bloggers4labour, you are taken to stories which have an editorial bias, but the aggregators and search engines do not do that. It is quite possible, however, that somebody could say, "I'm going to create a vehicle which will pander to your prejudices by only drawing content to your attention which is broadly sympathetic with this particular set of values."

  Q2517  Baroness McIntosh of Hudnall: You espy no corporate position in what they do?

  Mr Myners: I detect nothing of that sort.

  Q2518  Baroness McIntosh of Hudnall: I would like to move on to the question of regulation in relation to mergers and acquisitions. You say in your written evidence that you believe Ofcom's role in this is helpful because of their market knowledge; the ability to apply quite sophisticated judgment in this area. Other people take a very different view. Trinity Mirror, who we were going to see today, take a different view of that and think they do not have any expertise. Do you have confidence in Ofcom as a regulator in terms of not just its processes but its ability to advise and steer the way in which a secretary of state might take decisions in this area?

  Mr Myners: I think the level of competency in Ofcom is high. I think they need to continue to broaden their awareness of new medium—and they are no doubt doing that. I do have a high degree of confidence in the senior people at Ofcom and the leadership of that organisation. It strikes me as being probably a little over-resourced, but that is another issue. I recognise the views expressed by Trinity Mirror. I am sorry Ms Bailey is not well, so I cannot hear her articulate those views, and I wish her a swift recovery.

  Q2519  Baroness McIntosh of Hudnall: Broadening the issue slightly to the general question of public interest in matters of media ownership and mergers: do you feel that the way in which the public interest has to be applied is robust within the regulatory regime? Do you think people, including you, understand it; that it is sufficiently broad-ranging; that the notion of plurality of interest, plurality of view, is clear enough and one which is readily enough applied in a consistent way?

  Mr Myners: I would regard it as an area that Mr Ed Richards was much more competent to reply on than me. I think anything which encourages plurality must be encouraged and must be to benefit. I have nothing further to add to that.


 
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