Examination of Witnesses (Questions 920-933)|
THURSDAY 4 JULY
Lord Pilkington of Oxenford
920. All we have to do is change our citizenship,
and then we can buy in.
(Ms Clark) It might be worth adding that if the fear
is foreign content there are rules in place at a European level
to protect European consumers from a perceived threat of too much
foreign contact. There are also licence requirements in place
on ITV and Channel 5 and Channel 4 which also can be used.
Nick Harvey: So we can all watch cheap British
programmes at 4 o'clock in the morning.
921. Of course you are right but I think the
real issue is whether the existing content regulatory framework
is robust enough to deal with a completely new ownership structure.
That is a genuine question and one which is worth looking at,
and I think it would be absurd not to relook at all those issues.
It is ridiculous to create an obstacle to investment, but not
to do it at the same time is inviting tears before bedtime.
(Mr Hinton) But I also think, to address the issue
of pre dawn and British programming, any international company
operating in foreign markets knows that the only way you can attract
audience in a market is by providing for that local market. If
the London Times filled itself with columns from the New York
Post, then you can be sure that its circulation would plunge quickly.
You have to accommodate and connect with your local audience,
and I do not think any sensible foreign investor would try to
dump, let alone have the ability to prevent it, a cheap American
programme because it would not work.
Lord Pilkington of Oxenford
922. I accept the point you make about newspapersfor
the whole of the last century the foreign investment in newspapers
from Beaverbrook onwards was enormous and without it it is very
doubtful that the English newspapers would be as active and prosperous
as they are nowbut there is a distinction with television,
particularly with somebody like Time Warner or Disney who have
a full production process and on the evidence being presented,
even though they might produce programmes acceptable to the British
audience, could drive out many independent producers. That is
where reciprocity comes in and, as I said earlier, the chances
of getting reciprocity with the US are very remote. Do you see
a worry in that case? I take your point about newspapers but there
is a difference.
(Mr Hinton) I have lived in America and I have been
subjected to the fodder of prime time network television, and
if a British audience were subjected to it they would turn off
in their millions, and I am sure Lord Puttnam with his experience
would agree. I do not think it is an issue.
Lord Hussey of North Bradley
923. News International state "It is consumer
demand that drives content, not ownership". I am bound to
say in the circumstances I find this a slightly surprising comment
but we will pass lightly over that. Shall we put it in a different
way: Is that statement not much more true of newspapers than television,
since in the case of television foreign-originated content has
a clear market value?
(Mr Hinton) As a premise of your question, are you
challenging our position that consumer demand is primarily what
924. I am slightly surprised that it is consumer
demand not ownership, but I pass over that.
(Mr Hinton) But I think it is an important point since
you seem to challenge it.
925. I do not challenge that bit.
(Mr Hinton) Media companies that are successful do
nothing except understand the taste and interests of the audiences
they want to reachthat is what they do. So the skill of
a media company in perceiving what audiences want is what drives
it. I think content is absolutely the king in all of this.
926. I do not dispute thatyou are misunderstanding
me. The point is that television has much more foreign-originating
content and that has a clear market value. Is that not worth something?
(Ms Clark) We completely agree; it does. There is
some great American programming and some bad, and at the moment
the TV companies including the BBC produce and provide foreign-originated
programming because the consumer wants it, so I do not see what
difference there will be when the ownership changes.
927. I do not think it affects ownership; it
is a question of what drives the content.
(Ms Clark) The viewer.
Lord Hussey of North Bradley: Good. Let us leave
it at that.
928. I think possibly what Lord Hussey was saying
is that it is a chicken and egg situation, particularly when it
comes to the world of the media. The media to an extent senses
where there may be demand, creates the demand, stimulates it and
creates an audience. There is a chicken and egg component which
is not true of most widget production.
(Mr Hinton) Right, but I think certainly our experience
with Star TV in Asia is that we only succeed if we produce local
programming that appeals to local tastes, and while it is, I am
sure, possible to broadcast certain Hollywood blockbusters that
have appeal there, by and large you have to accommodate local
tastes and any company entering this market will not thrive unless
it develops local production.
Lord Pilkington of Oxenford
929. I am sorry to stress this but I think you
are being a bit optimistic. You are forgetting the fundamental
fact that the Americans speak the same language. In the course
of my lifetime there have been many and large amounts of amazingly
successful American programmes on English television. This idea
that rubbish would flow out from America, there would be a strong
American input, lots of people would look at ityou really
are sure that our independent producers will not be threatened
in any way if Time Warner took over?
(Ms Clark) You have to give some credit to the British
consumer. People out there are not stupid; they choose what they
want to watch. They will watch good quality programming because
they enjoy it. I watch a lot of great American television programming
but, if they put on bad programming, I will turn off.
930. But the point I am making is there are
good American programmes, they have a bigger production background,
they are a bigger country, they speak our language, and yet you
say there would be no threat.
(Mr Hinton) But I think local television production
is of enormous quality. The output of both independent and BBC
television is of enormous quality. I think if there were an American
company here it would make the local producers more competitive
and I think the programming would get even better. I do not think
it is an overriding issue.
931. Can I just go back to ownership and content
in newspapers? Our evidence earlier from the Daily Mail was that
the newspaper market was shrinking and that this had been a kind
of twenty year period. Mr Murdoch once speculated that we may
one day face a newspaper market that consisted of The Sun,
The Mail and The Times. Do you see that newspaper
market causing mergers or disappearance of major newspaper titles,
and do you think that the competition rules can govern that kind
of contraction and still guarantee the kind of plurality that
you said was one of the triumphs of our market?
(Mr Hinton) First of all, it is one of the age old
myths that Mr Murdoch said what you attribute to him. I am not
aware that he ever said it but, putting that aside, it is true
what the DMGT people before us commentedthat newspapers
in this country have contracted in circulation over the past few
years as other forms of media have advanced which is a big issue
for newspapers companies' competitiveness, but it still is far
and away the most flourishing newspaper industry in the English
speaking world. You walk into a local newsagent anywhere near
here and you can choose from nine daily newspapers, and it is
the same on Sunday plus your local newspaper. So it is flourishing.
Within it, as was always going to be the case and was the case
thirty years ago when I was first involved in Fleet Street, there
were papers that were non competitive and papers that were rebornewe
are expecting a new national newspaper on Sunday to be launched
in the next few weeks, so it is still a thriving industry. The
extent to which it might consolidate is hard to predict but again,
if it does shrink in a way that titles are threatened, it would
be as a consequence of the advance of other forms of media gaining
the share of people's attention and therefore the climate will
be very much altered, so I guess there may be a case for consolidation
in the future although I cannot predict it.
932. I have been listening with the greatest
respect to your views about newspapers but I am wondering why
I should take particular notice of your very clearly strongly
held views about American television and so on against the powerful
views put to us by many deeply involved in the television industry
itself. I suspect I should listen to them on that issue perhaps
with rather more attention than I should listen to you, but that
is merely a reaction.
(Mr Hinton) I was just answering the questions I was
asked. My job is publishing newspapers.
I work for a multi-media company; I very politely hope I have
answered your questions.
(Mr Graf) Adding to the question of newspapers
and competitiveness, Les has spoken very persuasively and I agree
with what he said about national newspapers but I think with local
and regional newspapers there is a slightly different issue here.
I feel very strongly that if you want to maintain the plurality
of local newspapers and the diversity of opinion in local newspapers,
and want to maintain good quality local media in this country,
given the nature of the change in mediacy you need to have a strong
competition regime, and the newspapers mergers regime recognises
the threats to those newspapers which come not only from other
news organisations in competition but from organisations and other
advertising media, because the local press is dependent to 70
plus per cent on advertising revenue, and recognising that advertising
market and that threat and understanding how that advertising
market works is going to be very important to maintain the health
and diversity of local newspapers in this country as we go forward.
It is important that the regulatory environment as a whole understands
that and is forward-looking and not backward-looking in its views.
933. Does that not make even more extraordinary
your views that OFCOM should not keep newspapers within its general
view and oversight?
(Mr Graf) No. OFCOM in my view have no ability to
understand or comment on how local newspaper markets work. I really
do not believe so.
Chairman: Thank you very much indeed.
3 Note by witness; I am a director of BSkyB,
a member of the News Corporation executive management committee,
and a former chairman of the Fox TV Station Group. Back