Joint Committee on The Draft Communications Bill Minutes of Evidence

Examination of Witnesses (Questions 920-933)



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 newspapers—for 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 now—but 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 drives content?

  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 reach—that 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 that—you 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 it—you 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.

Lord McNally

  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 commented—that 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 reborne—we 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.

Lord Crickhowell

  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[3]. 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.

Lord McNally

  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

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