Examination of Witnesses (Questions 660-676)|
MONDAY 24 JUNE 2002
660. In your evidence to us you did not express
any view about the Bill's provisions in relation to nominated
news providers, nor the policy narrative suggestion that if Channel
5 were to secure a substantial free-to-air market share that similar
provisions of nominated use providers would also apply to Channel
5. Does that, therefore, mean that in so far as you have looked
at them, you are content with them, and does it also therefore
mean that by implication the absence of media ownership controls
in other areas is sufficient to offer plurality, but that you
recognise the case for special rules relating to news provision?
(Ms Cassells) I think our view is that nominated news
provisions are now rather anachronistic. We do not see why a broadcaster
should not wish to produce a high-quality impartial news service
in competition with the BBC and in competition with the press.
661. You would wish there to be no special rules
relating to news provision.
(Ms Cassells) There are special rules relating to
news provision in terms of the licence conditions which require
people to produce high-quality news.
662. In relation to ownership of news providers?
(Ms Cassells) We do not think there is any reason
663. Nor numbers of owners of media news provision
in the system; so at the moment we have effectively across the
television scene three news providers. You are not looking for
there to be a kind of rule of three continued in the future; and
if there were to be two providers, that would be perfectly sufficient
in your view, would it?
(Ms Cassells) Providing the viewers are able to receive
news from a variety of different sources. We have to bear in mind
that we are talking about a multi-channel environment where on
the digital satellite platform, for example, you have something
like six dedicated news services, so there is plenty of choice.
People can also receive news from the Internet and from newspapers.
The issue may go to whether there should be media ownership rules
in relation to cross-media owners. Again, we believe that competition
law can deal with that. It was interesting to hear Derek Morris
from the Competition Commission talking about how they look at
plurality, and how they believe they have sufficient powers.
664. You have been quite clear that you just
want more cross-media ownership restrictions swept away. You think
the market is mature enough and you would prefer to rely on competition.
Under your current ownership do you believe there is any justification
at all for you hypothetically being able to buy Channel 5 but
not an ITV licence?
(Mr Ball) Yes, it is an oddity. I would think that
if we were buying Channel 3 on competition grounds we would not
be able to do that anyway, so you do not need that rule. It is
curious that it is there.
665. Do you think the Government should be consistent;
that it is "make your mind up" time; that it is all
(Mr Ball) Yes. I do not think we would be allowed
to. If the rule was not there, we would have difficulty anyway.
666. It should be consistent.
(Mr Ball) Exactly.
667. Presumably, if you were to own it, I presume
you would try to grow audience to market share to try and match
ITV and BBC. You would not be content with second or third fiddle.
(Mr Ball) I honestly have not given it that much thought.
We are not trying to buy Channel 5.
668. But you would not be prepared, as a
(Mr Ball) It would be a pretty big hill to climb to
grow it to that kind of market share. The BBC is spending, the
last time I looked, about £1 billion on BBC1 programmes,
and ITV about 800 million, and Channel 5 are spending 120 million
or so, or perhaps more than that. Share points and programming
budget is not an exact ratio, but nonetheless there is a connection.
So the kind of investment we have to make to take on a channel
that is hugely dominant in the commercial market, like ITV, is
669. It is not impossible, given your success
in satellite broadcasting.
(Mr Ball) Not impossible.
670. If it is not impossible, do you not think
that is another
(Mr Ball) As I understand it, if someone, whether
it is us or somebody else, did come in and grow Channel 5 to a
huge position in the market, I am sure the rules could be looked
at again as to what you can do with it.
671. The possibility exists.
(Mr Ball) Yes.
672. That, in itself, would be another reason
for the Secretary of State's argument, for example, allowing a
different thing for Channel 5; but because it is smaller now does
not smack of being terribly consistent
(Mr Ball) I agree.
673. We could not rule out Sky owning an ITV
licence. It would take a change to your ownership structure.
(Mr Ball) Correct.
674. For contingency planning, have you or the
board ever considered what changes to your ownership structure
might be necessary to allow you to buy an ITV licence?
(Mr Ball) No.
675. As you know, the British film industry
is reeling from the tax changes in the budget, but also independent
television production companies took a knock in the budget as
well. I am sure that Sky puts a value on independent production,
but what can you do to help independent television producers and
also the British film industry; and why did you close Sky Pictures?
(Mr Ball) On independent production, we spend about
half the budget of Sky One going to independent producers, and
on the sports side we spend a fair bit on independent producers.
Sky Pictures still exists. We just changed the way we go about
it. Originally, we planned to make up to eight films a year. I
think we now are making eleven. We do not have any distribution
muscle here, or anywhere, in terms of theatrical release, which
meant that we never really got to see the best projects. We were
not getting bangs for our bucks, so we decided to do a deal with
Pathe, where we finance up to four films with Pathe each year.
We have the option of four and we did three this year. The one
we passed on was a biog of Hitler. We put in about half a million
or so, but Pathe make far bigger budget movies than we would have
made through Sky Pictures, plus they have distribution, which
means that they get the better scripts and are probably one of
the first the independents would come to. That is a more efficient
way for us to support the film industry. Going forward, would
we have a stab at expanding Sky Pictures, or looking at the Pathe
deal somewhat more? Yes, I would. Clearly, if you have content
that people value, it is worth doing that. With Sky Pictures,
we tried to do too much, too early, and it was really distribution
that made us make the decision to drop it.
676. You mentioned sport three or four times,
where you have an enviable reputation. The listed events are enshrined
in legislation. Do you now support that concept, that there are
some events, for example the football World Cup, that should be
available live, free-to-air to the whole population?
(Mr Ball) I do not think we have ever bid for anything
that has more recently become an "A" listed event. I
have no real problem with anti-syphoning rules. The biggest problem
is some of the federations, which clearly do not want to be included
in the list because financially it can be disastrous.