Select Committee on Culture, Media and Sport Minutes of Evidence

Examination of Witnesses (Questions 470 - 479)



  Chairman: Sir Michael, I would like to welcome you two here today. Sir Robin Biggam has explained to us why he cannot be here. Ms Hodgson, I welcome you for the first time in your new capacity. You are an old hand in a new glove. It is very nice to see you.

Mr Fearn

  470. Good morning. You are conducting a survey of "what consumers expect from public service broadcasting". To what extent is it realistic for regulation and funding of public service broadcasting to be based on such expectations?

  (Ms Hodgson) We conducted about the most exhaustive survey that has ever been conducted—both in terms of citizens' juries, public meetings and interviews with opinion-formers, who of course would address particularly the question that you have asked, and a quantitative survey—and we found that the public was very realistic in answer to your question. Their views of what they want had changed over time. They recognised that the market was supplying a very great deal of choice. That it was unrealistic to expect public service broadcasters to stand still in such an environment. They did say very clearly, and there was agreement across all the different types of survey that we did, that there were still some things they felt that the market alone was not at present delivering as they would wish. They particularly emphasised the need for competition between the publicly funded and the commercial public service broadcasters—a competition that tended to set quality and improve quality. I was impressed by the realism, and I think the underlying reason is the economics of television at the moment: which is that landmark-type programmes—the Survival series, Simon Schama's History of Britain, the big dramas—cost anything from half a million to a million pounds an hour to make. With the economics of the market as such, that at present cross the newcomer channels, there is no way of recovering that sort of investment, and you need the large established networks with their established brands (the privileges of reaching a universal audience; of being well promoted on programme guides, whether they are in print or electronic) to generate the audience interest that justifies that kind of investment. While that is the case, there is some value in it, I think.

  471. Did you say half a million to a million pounds per hour?
  (Ms Hodgson) Yes. The average that niche channels at present can afford is very small. The BBC/ITV will spend, on average, £120,000-£130,000 an hour on programming, and that is not the landmark stuff. The niche channels will be single figure thousands. That is the difference in the current state of the market.

  472. What do you mean by a "quantitative survey"?
  (Ms Hodgson) We asked the Audience Research Panel, that is 6,000 people; and you test, by that sort of quantitative survey, what you get from citizens' juries where you talk to people over a day or two days and allow them to debate and develop their understanding. What was interesting was we were getting the same kind of responses from both types of survey.

  473. Are there any particular changes you wish to see in Channel 4's remit?
  (Ms Hodgson) I am sympathetic to Channel 4's approach to the challenge of continuing to be a major player in an exponentially expanding market, and their idea of operating a fully commercial service alongside their public service Channel 4. If they are going to do that, I think audiences and the public would want a number of safeguards. That their remit is strengthened a little; that they commit to maintaining (and one hopes increasing) the investment that goes into Channel 4 because that, after all, is the purpose of trying to run a successful commercial operation. When you do not have shareholders, you are not a profit-making organisation and the dividends go back into programming on the public service channels for the viewers. I think if that is clear, and there are separate accounts so that you are clearly not cross-subsidising the other way from the public service to the commercial, it ought to be a beneficial development for Channel 4.

  474. Are there any balance figures that we see? Is there a balance sheet produced that we actually see? You talk about how much goes in.
  (Ms Hodgson) Channel 4's current annual accounts conflate their businesses. We have been talking to them about that; and they will move this year to start to separate them; and by next year they are committed to having separate accounts.

Derek Wyatt

  475. When the BBC was set up in the Home Office in the mid Twenties part of its job was to set up the infrastructure for radio and television. Given that that is now done, what is the role of public service television if it does not own any infrastructure any more and has sold it off?
  (Ms Hodgson) I think a really critical mass of investment in standard-setting programmes, making sure that those are available to everybody in the nation. I suppose "programmes" ought to be defined very widely in the current environment (because we are not in the heritage industry; we are in one of the most dynamic developing industries) to include new media. The BBC has been very successful online, and I think one of its roles going forward should be to address the problem of the information-rich and the information-poor; and indeed to drive new services and make sure we do not have that kind of divide in the nation.

  476. That sounds like a lot of platitudes to me. The BBC has refused to have an education channel on digital. It says its third arm of broadcasting is the Net; but the Net is not broadcasting, but it has used that to camouflage investment on the Internet larger than any other commercial organisation in the world.
  (Ms Hodgson) Is this a question that ought to be addressed to the BBC?
  (Sir Michael Checkland) I am not sure that is an ITC question.

  477. In the OFCOM regulation, which we will come to, you have run an investigation into what "public service" means and what it is. What does it say about the Net?
  (Ms Hodgson) A good deal of support for the services that were on the Net and, as I have said, a very strong view from the public that the free-to-air broadcasters in all their manifestations, including interactivity and new media, provided a very important service in ensuring that everybody in the nation had access to a basic quality and range of information.

  478. Do you feel in the White Paper that basically we have put the BBC in aspic within it, and we have not really given a level playing field for the rest of the broadcasters, Internet service providers and content providers in the country?
  (Sir Michael Checkland) Not in aspic, I do not think; but certainly the time to review properly the role of the BBC will be more in the Charter rather than now, which means from 2004. At the moment we are heading towards a parliamentary bill and the setting up of OFCOM. OFCOM will take some time to establish itself; and I think review of the role of the BBC is going to be more appropriate in looking at the Charter than it is at this particular moment in the history of broadcasting.

  479. Do you think it is a fudge that the regulator will not have a remit over the BBC?
  (Sir Michael Checkland) I think in some senses it does have a remit. The first tier of public service broadcasting does include the BBC for the first time—an overall code of community standards, or however you like to describe it—that will be new. The BBC will be answerable to that and complaints will be dealt with through there as well. The BBC will be answerable for the first time to a body about its investment in regional production, for example; that has never been the case before. There are other areas where, when OFCOM is asked to look at new services, the BBC will certainly be within the remit of OFCOM in advising the Secretary of State.

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