Select Committee on Culture, Media and Sport Minutes of Evidence

Examination of Witnesses (Questions 200 - 207)



Mr Keen

  200. It was interesting, a few minutes ago, when Mr Wyatt was asking questions, that there were two opposite definitions of public service broadcasting, and Derek was still seeming to say that it was a Government announcement, whereas Mr Withey, I think, much more accurately, was saying it was just free-to-air broadcasting, just funding an organisation in a different way. Do you all agree that that really is the definition of public service broadcasting, the BBC should not be restricted to Government announcements, and it never has been restricted to that, that really Mr Withey's definition is the true one, is it not?
  (Mr Brown) As a broadcaster, what we would say is that broadcasters tend to broadcast in the public interest, and this is an issue of funding, and always has been, and it is not a matter of what is in the public interest, as such. Clearly, somebody who is funded publicly has a duty to provide things which the commercial sector may not provide, simply because you would not be able to sell advertising on the back of it, or you may not be able to do it by subscription, but that is a different matter. On the broadcasting side, certainly on the commercial side, I think we tend to think that the whole public service side of things is overemphasised and tends to take the argument away from the important things, which, as far as the BBC is concerned, is its size and its funding.

  201. The regulator could ensure that the public interest was served by making sure that the commercial broadcasters, as well as the BBC, put out what was in the public interest, and not just put the duty on the BBC. Could we not just let the BBC compete with the commercial sector as just a different sort of company? As you say, if you listened to this Committee often, you would think I was pro-BBC and anti-commercial, sometimes, but I have worked in the private sector the whole of my working life until I came here, in 1992, but I defend the BBC for two reasons. One, which is very important, is because of the two people on my left, I think it is important to have some sort of balance. I want there to be competition on the Internet with the BBC; I do not want the BBC to dominate it, but it is a massive question. And I do not want to restrict the BBC, for one reason, I am part of it, I pay my fee every year, as you all do, so we want it to flourish. It is getting that balance right. You come here representing the commercial sector, obviously; if you could take your commercial hat off, does the BBC really restrict people coming into the market? Obviously it must do, by the fact that it produces its own web site, but if you could set that aside slightly and take your commercial hat off, does it really restrict? The commercial sector has never been slow in coming forward with innovative ideas, where there is a chance of making money. Should not the real division be that the BBC should not be allowed to advertise, and then it would be competing with you in exactly the same way as it competes with Independent Television on TV broadcasting?
  (Mr Hersov) It is a number of issues. The first, of course, is the funding, is this the correct use of funding, and there is not a single service that the BBC has offered on the Internet that has not been offered before, by pioneers like The Telegraph, or by entrepreneurs, and there certainly is not a service that the BBC has launched on the Internet that has not been done by someone else, or could not be done by someone else. So that is a start. The second, clearly, is the use of funding, which Paul, I think, was very clear about, is this an effective use of funding and had they done it efficiently; well I think there is a big question-mark about that, and we would like to see some transparency on the budget and a lot of scrutiny over where they have spent the money and why. There is another issue, as well, and it is not just draining traffic away from commercial enterprises like ours, but it is also drawing talent away from entrepreneurial entities, and as well as head-hunting from our own organisations, at potentially higher salaries than we can afford to pay.
  (Mr Drayton) I am not sure that the average consumer in the UK would be particularly pleased to know that one of the ways that their licence fee is being used at the moment is to lure talent away from entrepreneurial, commercial companies to pay them significantly higher salaries. The Telegraph, in its pioneering, online days, became known as the university of the Internet, along with a few other providers, like The Guardian and The Times newspapers, where sub-editors from our stables, had been trained by us, were learning with us, taken away to the BBC, and especially in 1996, 1997, 1998, at salaries 30 per cent, 40 per cent above what they were earning, to do the same job; that distorts the market. I do not think it adds anything particularly to the consumer. I am not sure that is the right use of public money.

  202. I have to say, has not the BBC been the main trainers and givers of experience to television producers, directors, over all the years, and they have been stolen for high salaries by the independent sector?
  (Mr Drayton) But is not that the right way round?

  203. It is just part of industry and commerce, is it not, really? I know it is the other way round on the Internet, but as it has happened the other way round all of the time, you are just after stopping competition?
  (Mr Withey) With respect, I think your premise is somewhat flawed, because you are suggesting, I think, if I interpret you correctly, let us set aside the BBC's ambitions to make money out of this, and they are there, they are in the market, they should be allowed to play in it; yes, to an extent, but you cannot set aside their scale and their reach. None of us can reach ten million people, or more, on a nightly basis, top-and-tailing every programme with pushers for our Internet services, none of us can do that. One could argue that, if the BBC had got its act together and introduced, before Dixons managed to get Freeserve out, Dixons would not have bothered. Now that would have stifled a huge amount of competition in the market.

Derek Wyatt

  204. They did try, actually. John Birt could not get any followers inside the BBC.
  (Mr Withey) I can imagine they did. But that is a very good example, I think, of the BBC failing to deliver something, but, in doing so, accidentally helping the market.

Mr Keen

  205. What you are really saying then is that, instead of viewers and listeners being able to get more information through the Net, after they have listened to a programme, the BBC should not be able to tell them? You are fighting against what is reality, that is what I feel. I am sympathetic with you, I want your companies to do really, really well and see we have proper competition, but I am just searching, I am not antagonistic to you, I am just searching for the way we can do it. I am just saying, should we not just say to the BBC, "You must not advertise, but otherwise you can do what you like"?
  (Mr Withey) It is a bit more than that. We are not saying they should not be in the market, but they should play to the same rules, and particularly in the funding of content, and other matters where considerable expense is involved in getting Internet services out, they should play to the same rules. And we think only a properly regulated service can ensure that process.
  (Mr Drayton) There is a difference, as well, between a programme which spawns, as you say, extra information, which is absolutely valid, and the types of activity we have seen recently, where, for example, BBC Worldwide has introduced magazines, which have nothing to do with programme content that they have created as a broadcaster, and that have everything to do with exploiting entrepreneurially a market niche, with Eve and Star recently. And, obviously, the Government has taken a dim view of that, or at least the Governors have been goaded into action to stop some of that cross-promotion.

  206. It seems to me really as if you are saying that, just because a public company, if you like, is using initiative and enterprise, and all sorts, that we should stop it; the criticism of public bodies in the past has been just the opposite, that they do not use enterprise and drive. And we have got one here, now, that is doing it, and you are saying, "We must not let them compete with us, poor commercial companies;" you have always thrived on this, I think?
  (Mr Brown) I think all we are saying is, it is very difficult to talk about the BBC without being accused of being a whinger; we are not whingeing about the BBC, we are merely saying it is an elephant in the market-place, it is the only cross-media elephant we have in the UK, it requires some form of restraint.


  207. One could say they use initiative and enterprise; another way of putting it is that they have the power to squander vast sums of money that they do nothing to earn, on projects which do not find audiences.
  (Mr Hersov) Absolutely right.

  Chairman: And with that impartial statement I will draw this session to an end. Thank you very much indeed, gentlemen.

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