Select Committee on Culture, Media and Sport Minutes of Evidence

Examination of Witnesses (Questions 40-59)



  40. I just say that because you seem to be averse to give us your view on switch off.
  (Mr Dyke) Switch off is, in the end, a government policy and a government responsibility. The last Government and the current Government both took a decision that they wished to move to a situation of at some stage switching off the analogue signal and everybody going to digital and then being able to gain the financial benefits from what is left of the analogue signal. No-one is quite sure what those financial benefits are. They could range between £2 billion and £15 billion, depending on whether you were valuing them just after the 3G licences were sold or now. There is clearly a value to that and therefore there is a value to the society generally in having switch off. All we are saying is that the free-to-air box moves you further towards that because for the people who do not want pay or cannot afford pay it gives them the opportunity to go digital and get all our services and other free services that are available.

  41. Can I ask Mr Davies whether he still stands by his recommendation in his report to have the BBC subject to the inquiry.
  (Mr Davies) That is not for us to decide, Miss Kirkbride. I think there are pros and cons in that debate. My panel by a majority vote decided to make that recommendation.

  42. Did you support it?
  (Mr Davies) I was not the greatest enthusiast at the time

  43. You are less so now, surprisingly.
  (Mr Davies) I am probably less so now.

  44. Again on finance transparency, could you clarify the position with regard to services supplied to British Airways and whether or not they are purely commercial and paid for by British Airways?
  (Mr Davies) Yes, they are purely commercial and paid for totally by British Airways.

  45. My final point, News at Ten. Are you happy with News at Ten news at 10?
  (Mr Dyke) Let us take the figures before the new BARB panel—because the measurement system changed three weeks ago and is at the moment all over the place and no-one has any confidence, I think, in any sorts of figures. If you take the figures from last year, actually the movement of the Nine O'Clock News to 10 o'clock in the first year saw a small increase in the viewing for us and the second year another small increase. That was in the period up until Christmas. In the second year, remember, we had been through September 11, and that increased news viewing generally. Are we happy with it? Yes, I think we are. What is interesting about the figures is if you look at nights when we are head to head with ITV at 10 o'clock, which, of course, as you know is not every night of the week and we are never even sure which night it is—but that is their problem, not ours—there is actually, from the audience that we inherit and they inherit, roughly a million people switch over to watch the BBC news—which was not always the case with the BBC news. So we are happy we took the decision. We always strive to improve the position. In areas it needed to improve. One area, for instance, in business reporting, Geoff Randall has made a big impact. But by and large, yes, we are happy with the move. We think it was the right move.

  46. You would dispute the claim that you have gone down by 200,000 from 5.2 million to 5 million.
  (Mr Dyke) I can provide you with all the figures if you like. We have not gone down.

  47. You would dispute those figures.
  (Mr Dyke) Yes, they are not right. There had been a decline every year in news viewing for the last five years. Last year it stopped and there was a very small increase—and when I say the year, I mean the year from when we moved, October to October. In the period after October there was another slight increase. The figures which we have not seen in detail, the figures since January 1, are all over the place. If you ask Channel 4, they have the same problems. None of us understand what is happened to the rating figures. What is quite clear is that the present BARB panel is not working effectively—or it is. But, I mean, weird things happen. The range from one week to another is so big it is not right.

Mr Doran

  48. Can I add my congratulations to the BBC for their services, particularly for BBC Scotland and Radio Scotland which provide an excellent service—particularly for those who do not have Scottish 6, and I have never been a supporter. Can I also make a little plug for Rolf Harris. There were a few sniggers around the room when his name was mentioned earlier and they have come again. I have always seen it as the BBC's responsibility to provide the high arts but also to make art successful and I think he did a tremendous job in the programmes that you produced. I do not think we should ignore that. I want to ask some questions about your approach to the proposed legislation but I have just one question on digital. It does seem to me that the BBC is able to spend a lot of its money on producing new programmes, developing small channels, but very little on the platform. I would like to hear what you are doing in terms of the platform, but, prior to that, what would be the implications of a collapse of ITV 2 on the distribution of your programmes?
  (Mr Dyke) A collapse of ITV Digital would not immediately affect us. We have looked into that. There would still be a signal and those that could receive, could receive. I think it would put an even bigger emphasis on trying to promote the free-to-air box and of course, if it did happen, there is a lot of extra spectrum that becomes available that could be used for free-to-air that is currently used for pay. Again, it is a difficult decision. It is not the BBC's job to try to keep alive a commercial entity but we are working very closely with ITV Digital in trying to develop a free-to-air box. In the box is potential for an upgrade. Therefore, although it is a free-to-air box, it gives them the opportunity to market to the people who have got the free-to-air box the possibility of going over to pay, so it offers a real hope for ITV Digital because there would be a lot more people out there who could receive, if they chose to, the pay services. The really interesting change of course is appearing on so many different platforms. Obviously we took the decision several years ago that we should be on all platforms, because everybody pays, therefore everybody should be able to receive. The real difficulty for us is that the cost therefore of broadcasting the signal has gone up massively compared to, say, 10 years ago. Basically, broadcasting an analogue signal was comparatively cheap compared to broadcasting an analogue signal, a digital terrestrial signal, a Cable signal and a digital satellite signal. Once the switch off, those costs come down, because you would not have the costs of the analogue signal. Should we be in any way financing the platform? I think, if we did start financing the platform, we would have the same problems about State aid and all sorts of things. I do not think Sky need our help; I think they have done it pretty successfully themselves—in fact, I think they would probably be horrified if we walked through the door and said we would like to help. Sky is a very effective marketing organisation, it seems to me. They have done extremely well. We will also—because we again are obliged not just to choose one platform above another—try to develop with manufacturers a free-to-air satellite box for those who want to receive our signal.

  49. But it will not be subsidised.
  (Mr Dyke) But it will not be subsidised by us. In our discussions with the retailers—and we have talked to all the big retailers—they have basically said, "Look, at £99 we think there is a market." Our research says people want to have them. In our discussions with the manufacturers, we shared with them our research. We said, "Look, our research says if you try to sell this at £150 the market is considerably smaller than if you sell it at £99." PACE coming into the market with the first box at £99 basically have set what the price is. Competition will, I suspect, bring that price down over time, as the manufacturing process gets easier.

  50. On the cooperation of approach to the proposed legislation, it seems to me that your strategy is to present a situation where the new legislation is going to have a serious impact on the BBC, and you use the expressions—we have heard them today and in your briefing paper—that you will operate within the marketplace, that you want to see a level playing field, these sort of questions. I must be honest I had not quite interpreted the White Paper as including the BBC, certainly in Tier 3, but that seems to be your interpretation. On the other hand you make a strong argument for retaining the BBC's special position with the Secretary of State making key decisions. That seems a little bit anachronistic, particularly at the pace of change that we are seeing in broadcasting and communications generally. I think there is a strong argument being presented by many commentators in this area that we should have some basic principles which apply across the board so that we do have a genuinely level playing field. How do you deal with that paradox?
  (Mr Davies) I hope that you will not be able to characterise in the future (if, indeed, you ever have in the past or one has in the past) the BBC as kind of swaggering around in an independent and uncontrolled manner. That is not our intention. Our intention is to fit in with the OFCOM framework in a sensible way for the BBC and for the rest of the broadcasting marketplace. To clarify again, on Tiers 1 and 2 and on economic regulation, we are essentially going to be treated the same as any other broadcaster. On Tier 3—and this is where I think there has been some misunderstanding—the White Paper intends to shift everybody mainly to self-regulation, and in the BBC's case the Governors would presumably continue to apply the self-regulation. But there is one difference, which is the backstop powers that would be applied above that level of self-regulation. For ITV they would be applied by OFCOM and for the BBC they would be applied by the Secretary of State. Our feeling is that it is appropriate for a public corporation like the BBC (which operates hopefully in the public interest, does not have private shareholders) to have the final backstop power lying with the Secretary of State and I think that will improve and continue accountability of the BBC to Parliament, hopefully via this Committee, in a very direct way. I am not convinced myself that OFCOM would do that job better. I think OFCOM has so many other things to do that taking those backstop powers on the BBC away from the Secretary of State does not seem to me less straightforward.

  51. In your paper you make the comment that the BBC will continue to be subject to all aspects of competition. I found it very difficult to believe that if the Secretary of State approved, for example, the new channel, which was in direct competition with something which was being provided by one of the commercial channels, that the competition authorities would not intervene in that situation. That is the sort of anachronism that I think has some of us worried.
  (Mr Davies) In the same way that we as a nation decided that it is in the public interest for BBC1 and BBC2 to be provided free-to-air, even though that may be inconvenient for ITV or Sky, it seems to me that we as a nation could decide if it is in the public interest to provide News 24 or the BBC children's channels. Those are essentially public interest questions which I think it is very hard to take out of the political process. Finally, the people taking those decisions, I think, are best placed inside the political process.

Ms Shipley

  52. First of all, let me agree with my colleague about the Rolf Harris programme, because I was seriously impressed. It took really quite serious and complicated things and made them accessible and engaging. So good on it, well done, and all of that sort of stuff. What I want to investigate is the distinctiveness. Because there is one area of broadcasting which I seem to know a lot more about than I ever thought I would, children's broadcasting, I would like you to focus on your claim to be distinctive within that particular area of broadcasting. The reason I say that is obviously because I do not think you are, or nowhere near as much as you could be. I personally am 100 per cent against advertising interspersed with children's programmes. I would like to see the advertising forced out of children's programmes. I may well take that further over the next year or two. But that would leave a huge gap. At the moment you have to ask yourselves why parents still tune into Channel 5 and any of the other programmes when they are interspersed with these appalling, inappropriate advertising slots. Why are they not turning onto the BBC? Sometimes there is an option, sometimes there is not. What is the distinctive quality that is lacking in the BBC's output here?
  (Mr Dyke) First of all, we are just about to launch in the next month two new digital children's channels. What has really changed in the marketplace in recent years has been the advent of children's channels: Nickelodeon, Fox, Disney, etc. We, in our proposals, went to the Secretary of State and said we wished to do non-advertiser funded, predominantly British, two new channels, one of which was for the younger children and one of which was for children up to 14 and that we are just about to do. Which means we have put a considerable amount of extra money as a result into children's television.

  53. But not into your BBC1, BBC2, but into some other digital channel.
  (Mr Dyke) No, if you look at BBC1's children's programmes—

  54. I do!
  (Mr Dyke) Luckily I have just got through it—you will find that we have overwhelmingly the most popular programmes on television, with the exception of the Saturday morning where ITV do spectacularly well. But during the week we have by far the highest rated programming. Interestingly during that period of children's programming on BBC1 during the week, actually we get higher ratings than even satellite homes or multi-set homes.

  55. But there is a great chance when you are not head to head with anything, so you are not comparing it with anything.
  (Mr Dyke) Sure.

  56. This morning, as I am flicking through and I am getting news, news, news—great—Channel 5 children's programme/advertising, and it is quite a long time before the stories come on. You are not actually head to head with competition.
  (Mr Dyke) There is an argument which is that at times people switch the other way. There is clearly a children's audience, which is the children and people like you with younger children. The rest of the population does not watch children's programmes, they turn away, so you are playing both. We are increasing our children's programmes quite significantly this year. A lot of the programming we are making for the digital channels will also go on to the terrestrial channels. We have new head of Children's who has now been with us 18 months. I think in children's programming we are going through a renaissance in some ways. It is going to be a very exciting time over the next 18 months to two years. And of course in radio, Jenny wants to talk about children and radio.
  (Ms Abramsky) Yes. We are going to be creating a new children's radio department, the first one we have had for many years, really establishing speech children's radio, which I think is an extremely important initiative. It will be a critical part of the new network we are going to launch in the late summer.

  57. On the public service content of children's programming, can I move to serious topics that are aimed for children, things like child abuse. I know it goes into soaps and everything, but I do not mean in soaps. Your public service content for children of those serious order subjects, how are you handling that?
  (Mr Dyke) Obviously we do Newsround which will be both on BBC1 but will be a rolling service on our new channel, a new service for children. I am beginning to get out of my area of expertise. We can very happily, if those of the Committee who are interested would like me to, talk to Nigel Pickard and some of our children's people who spend their life thinking of nothing else.

  58. Send me a written response.
  (Mr Dyke) We will send you a written response.

Alan Keen

  59. You were being pressed earlier by one or two of my colleagues who were insinuating that you were shifting the more highbrow, specialist stuff away from BBC1 in order to get the ratings. Can we look a little further ahead into the future. We have obviously moved pretty fast in the last few years into specialist channels. How would you see the situation developing over the next two or three or five years? Do you still think that BBC1 will be a channel with all sorts of stuff on it or will that gradually filter to the specialist channels?
  (Mr Dyke) What is interesting about the last year is in the numbers watching, if you just take digital homes—forget about traditional, five-channel analogue homes—the share for BBC1 and BBC2 have both gone up, which suggests that what happens is people go digital, get this enormous breadth of programming, start watching it, and then come back. Although they do not come back in as many numbers, I still believe BBC1, ITV, BBC2, Channel 4 and Channel 5 will be the dominant channels in this country for many years to come. As a publicly-funded public service broadcaster we do not see any change in that mix over time. We think that BBC1 and BBC2 between them will still be supplying the historic mix of genres. When you get to switch-off—and you only get to switch-off by everybody having a digital set—all our services will then be available to all homes and then there is a different discussion, I think, and then it will be which way we should go or which way we should not, but certainly in the next five or six years this will not change.
  (Mr Davies) I believe BBC1 will persist and BBC2 will persist as mixed channels for a very long time. I tend to think of it almost as a front page of a newspaper. I think of BBC1 as the front page of an enormous newspaper of programmes containing huge richness behind that front page but only the very best gets onto the front page, and I think there will be a role for that even when we are all digital and we can access all the channels, but we will have to see how our licence feepayers' tastes and needs develop. I do not think we can promise that BBC1 will always stay the same but I think there will be a role for it for a very long time.
  (Mr Dyke) Because there are enough digital homes you can know the sort of share the BBC will get, roughly, in a world where everybody has got digital. That is good and I suspect we will be around a 30 per cent share. What is happening in digital homes is that the original channels that came with multi-channel television are themselves being fragmented, so a 30 per cent share will still be a very significant proportion of viewing when other channels are surviving on a one or two per cent share.

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