RTS North East Lecture
The Future of Communications: From Global to Local
by Patricia Hodgson
7th November 2001
Many people, since 11th September, feel they are living through a turning point - both
in their own lives as they face a more dangerous world, and certainly in world affairs.
Communications have a key role to play in determining our future, for obvious
reasons
-
because new technology like the Internet is being used to co-ordinate
international terror,
-
and because the propaganda war will now be conducted via global satellite
links; (as the Gulf War ‘made’ CNN, so we see Al-Jazeera, the Qatar-based
Channel uplinked from Paris, at the eye of global megaphone diplomacy)
But there are other more deep-seated reasons; TV and Radio are at the forefront of
national debate about who we are and how we respond to physical and cultural
tensions, around the world. Recent events have demonstrated the role of television and
radio as the main arena for national debate, not only about terrorism and international
affairs but also cultural differences tested by the current conflict. Aside from rolling
news, television has given us the considered analysis of programmes like Channel 4’s
The Day That Changed the World, as well as thought-provoking debate like the
excellent Dimbleby Special on Understanding Islam. Programmes made before 11th
September, like the BBC’s Islam series, have taken on a new resonance. At the regional
level, Tyne Tees covered a joint service from the Newcastle Mosque, and the weekly
news magazine North East Tonight paid close attention to the plight of Yvonne
1
Ridley, the journalist from Co Durham, while also focusing on more indirect issues
like the impact on tourism.
And, of course, there are underlying economic issues; our whole communications
infrastructure is so important to the functioning of our economy and to our ability to
cope with the downturn that was already apparent but made worse by the economic
aftershocks of 11th September.
Within this vast but uncertain communications world, there can be no doubt that
broadcasting is a British success story. For two reasons:
- we’ve got the structures and funding right, and
- we’ve remembered the key; it’s the programmes, stupid!
 Broadcasting is the UK’s biggest investor in drama, performance and the arts.
 BBC TV and Channels 3, 4 and 5 spend over £3bn on programme making in the UK;
all other channels spend around £800m
 Over 1000 independent companies produce programmes for the networks.
 13% of exported TV programmes shown anywhere in the world in peak time come
from the UK.
 Broadcast news in the UK is impartial and trusted (a MORI poll this year showed
that 61% of the public regarded broadcast news as their most trusted source of
accurate and impartial information, against 15% for newspapers and 1% for the
Internet)
So how does British broadcasting manage to punch so far above its weight? With a
ground-breaking mix of public and private investment – up to £5bn of commercial
spend via advertising and subscription, rooted in a foundation of public investment via
2
the BBC and the public/private “deal” which gives Channels 3, 4 and 5, spectrum
privileges in return for public service obligations.
As a result, Britain spends more per head on television than equivalent economies, so
it’s not surprising we support one of the most flourishing production industries in the
world. Success in broadcasting is demonstrated by high quality programmes across a
range of genres, from EastEnders to News at Ten; from Big Brother to David
Starkey’s Elizabeth.
Diversity is one of the keys to this success. Programming and production from the
nations and regions is an important feature of the television landscape, and the
regional character of ITV is a critical distinguishing feature of the channel. Each ITV
licensee must provide high quality regional news and current affairs, and a diverse
range of other programmes designed to reflect life within the nations and regions. In
2000, this accounted in total for nearly 12,000 hours of programming, and an
investment of around £170 million. (The BBC’s output for the regions in comparison
was over 5,000 hours at a cost of £137 million last year.)
In the North East, Tyne Tees' regional output has been the company's enduring
strength, mirroring the rich culture of this region. Serving nearly 3 million viewers
from the Scottish border to Selby in North Yorkshire, Tyne Tees provides over 13
hours of regional and sub-regional news, current affairs and other programmes each
week. North East Tonight achieves a 30 per cent audience share, and other non-news
regional programmes – When We Were Kids (history) or Grundy’s Wonders
(architecture), for example - regularly perform ahead of the network average in their
peaktime slots.
Border Television is unique as a regional ITV company because it embraces three
separate and distinct cultures - English, Scottish and Manx. Border’s regional output
appeals to all age groups and there is a balanced geographical coverage of each region
epitomised in Lookaround, which commands the highest ratings of any regional news
magazine, including the BBC, on mainland Britain.
3
Of course, the public service broadcasters also commission a significant amount of
network production outside the London ‘factory’. Taking local and network output
together, around half of ITV’s programme investment is spent in the Nations and
Regions; a third of the BBC’s; around a quarter of Channel 4’s, and the new kid on the
block, Channel 5, is well on the way to achieving 10% of outside London spend. This
is good for local communities, and means more generally that UK networks reflect the
range and diversity, the warp and the weft, of UK society back to the nation as a
whole. And it’s not just Coronation Street and Brookside but Heartbeat, Peak Practice,
Tonight With Trevor McDonald and many others.
I began with the role of TV and Radio in our consideration of who we are; in the
nation talking to itself. The ITC conducts regular research into audience priorities. A
questionnaire placed on the BARB panel over 4 weeks earlier this year, revealed that,
of 3,500 viewers:
- only one in ten said they were not interested in regional programming;
- 77% said it is important that BBC1 and ITV programmes reflect the regional
diversity of the country; and
- 89% think ITV should have to provide regional programming.
Similarly, in this year’s report on Public Service Broadcasting: What Viewers Want,
audiences from different ends of the country showed strong support for programmes
made in, and about, their area, and felt it important that television used local talent and
fed the local economy.
We are now conducting a new round of citizens’ juries, taking 2 or 3 days with
representative groups around the country, to tease out what they want from television
both as citizens and consumers. The distinction is important. Over the years, those
surveyed regularly stress the need for diversity and for a wide range of regional
programmes, even if they don’t themselves choose very often to watch them. And
there’s the rub.
4
In September we held a citizens’ jury in Leeds. The output was interesting. Nearly all
the group, over 90%, watched regional news. The next highest score, in terms of
interest, was factual programmes, watched by half the panel. Other genres had
relatively low scores.
The group concluded that:
- regional output was important for regional identity, even if they didn’t always
watch it themselves.
- they criticised stereotyped regional output – poverty in Leeds, walking in
Cumbria, and so on
- they would like, in an ideal world, quantity to be sustained but, looking at the
pressures, said quality was more important than hours.
This chimed with work Robin Foster has done for the ITC, published in ‘Culture and
Communications’ in September. He asked David Graham & Associates to plot
production across the UK and identified, not surprisingly, the importance of critical
mass; where the BBC and ITV have centres and clusters of Indies grow up round
them. The question is, how many of these centres can the UK sustain? And will they
move in response to changing markets?
The BBC’s investment in a new broadcasting operation in Hull shows how new hubs
can emerge. Aside from creating a base for the regional TV service and BBC Radio
Humberside, money is being invested in BBC Hull Interactive, offering television on
demand plus broadband in partnership with Kingston Communications, the local
telecoms operator.
Kingston’s 10,000 ADSL customers will be offered all the
networks, video-on-demand, local features and an interactive local news service from
a dedicated team.
5
These developments must be seen within the wider question about the health of the
sector. I’d like to take some time to talk about that and come back to the idea of a
new settlement for public service, including a Charter for the Nations and Regions.
I’ve said that broadcasting in the UK has been, and still is, a success story due to past
policy choices and a funding structure which has created a balanced ecology. But we
are witnessing a new chapter in that evolution, with fresh challenges from
convergence and the as-yet-unanswered questions about a new Communications Bill.
The UK is switching to digital faster than any other nation, with over 30% of homes
now taking digital television services, and almost two thirds of those exploring the
access they offer to interactive or online services delivered through the TV.
With the Lords in discussion about a Paving Bill to set up a kind of pre-OFCOM to
prepare for change and merge the existing regulators - we need to be clear about some
important questions:
-
How do we maximise UK success in global communications?
-
What do customers at home want and need from services delivered by
new technology?
-
What are our social, political and cultural expectations of the
Information Society?
The White Paper was a good start. But pre-election aspirations must now become
hard policy in a very different economic climate.
I’d like to suggest three priorities for regulation in this sector. They should always be
priorities. But given the business cycle and the economic aftershocks of the recent
atrocities, they are vital. One, as I’ve suggested, is a new settlement for public service
broadcasting and a new solution to ensure regional output is central to it.
6
But before I come on to that I’d like to apply some context and look at, first,
investment friendly policies and, second, competition.
First Britain must set the standard for investment friendly regulation.
Broadcasting does well. Regulation based on competition for audiences, not revenues,
grew ad-based services to complement the publicly funded BBC and, more recently, a
dynamic subscription sector. Of course advertising is cyclical, like the economy.
There will be further pressure from recent events and I don’t underestimate the
downturn. But UK television has several sources of revenue and will come through.
That doesn’t mean it isn’t burdened with the costs of the switch to digital. There is a
debt problem for individual firms and we may see some consolidation. But the switch
is now largely made - for the broadcasters, if not all viewers - and digital TV is a
success.
The internet has taken off. But broadband faces a bigger challenge. Businesses will
pay for speed and more capacity. But, so far, we’ve seen no killer ‘ap’ to drive
consumer take-up.
What to do? First of all, be realistic about the market. Broaden our definition of
broadband and focus on the supply side. DSL may be a slow starter in the consumer
market. But cable passes half of all homes and combines broadband capacity with a
key driver in that market – entertainment. DTT can combine broadcast TV with full
internet access. DSat mimics broadband with hundreds of broadcast streams, a smart
set-top box, now with memory, and a return path.
It will be content and services that grow broadband and, in the consumer market, these
are likely to attach themselves first to digital TV, where there’s clear demand for a
service which will soon reach 50% take-up.
Broadcasters are now versioning
interactive services for the different capabilities of different platforms. Anyone who
7
wants to see the Information Society take shape early in Britain should look at how
Government, education and public services can do the same.
Combine access to digital TV with the numbers of broadband pc connections and you
see a “quotes” broadband roll-out able to reach most people within 5-7 years. It could
take 20 years to make true broadband universally available, reaching the information
poor. Proxy broadband can do it in 5; a patchwork quilt of services, with cable and
DSL offering full functionality, but satellite TV and DTT, - combined with smart settop boxes and a return path – offering services hard to distinguish from the real thing;
creating a truly national market for information services, a genuinely inclusive
information society and a growing demand that will eventually benefit all operators.
So, we should be focusing on investment in content, and not just infrastructure.
-
encouraging the free flow of capital, with simpler ownership rules and
regulation only where necessary;
-
protecting intellectual property rights, particularly for Independents, and
-
ensuring the most protected broadcasters, the BBC & Ch 4, focus their
spend on real quality and innovation.
Second, competition.
The aim, of course, is to use competition rather than regulation to deliver what
customers want. Regulatory structures should never impose unnecessary burdens.
We have an opportunity to review current practice.
communications should be lean and mean.
Any new framework for
Lean, because we need to roll back
regulation and mean, because – when regulation is necessary – it must be tough.
Competition doesn’t just happen.
8
Communications has its natural monopolies and the cost of broadband and digital may
mean consolidation and a few dominant networks. We must be realistic. Recognise
where investment duplicated is investment wasted. Don’t fear the global players. We
need inward investment. But keep the networks open:
-
we’ve long required common carriage on natural monopolies
-
fair, reasonable and non-discriminatory access to systems with
significant market power is established in EU Directives and
-
we should encourage non-exclusivity on other key systems, to extend
the range of services available to customers and grow the market.
Third, this will only deliver what we want if there’s a new settlement for public
service broadcasting, to underpin investment in content and drive demand.
Broadcasting is pretty good in this country, but it’s under strain. Many believe – with
a sense of inevitability – that competition will destroy the range and creativity our
generation enjoyed. It will create commodity television; popular, good of its kind, but
failing to offer real mental nourishment.
That’s why the ITC’s agenda for this Autumn has been largely focused on issues of
content - putting the programmes and services back centre stage. The sector needs
content for growth, and audiences want quality. This was a central theme of “Culture
and Communications”, a volume I commend to you.
Our authors were pretty clear about investment friendly policies and competition.
They also stressed what we called “Cultural Citizenship”.
9
We want to make new networks and services available to all. Why? Well, economic
growth of course, but what else? What should they offer? More than commodity
content is the answer.
Most of our authors urge us to have ambition for what
broadcasting and new media can contribute. ‘It should be the arena’ says the Chief
Rabbi’ of our shared public conversation on who we are and what kind of world we
want to hand on to future generations...(on this) much depends, not least the future of
Britain as a free and gracious society”. His thoughts have fresh resonance in the light
of the terrible recent events.
Tim Gardam thinks these issues ‘go to the heart of the challenge to modern
Government: can a modern democracy in a global market economy’, he asks ‘retain
the necessary cohesion still to work as a civil society’?
That’s a pretty stark question and most of our writers believe part of the answer lies in
the electronic media.
So there’s a public interest in what it purveys.
Sabrina
Guinness writes of her work with young people. The impact of new services and the
growth of the sector, she says, make it the biggest single influence on many
youngsters – certainly bigger than schooling. Wilf Stevenson, Samir Shah and Keith
Khan worry about a failure to serve properly some of the very diverse communities in
our society. Without a meaningful shared experience, can that society work?
Their conclusion is not to give up, but to focus on the public interest as well as the
market. We mustn’t sleepwalk into the kind of crisis of quality that challenges some
other public services and divides the nation into haves and have-nots. We can and
must make the most of a broadcasting market that’s flourishing and of public service
within it, guaranteeing a certain range and quality available to all. We can combine
demanding remits for the lead players, with fresh offerings from new ones. Our
authors are feeling towards a new settlement for public service within a growing
commercial sector.
10
 My own view is that we can combine realistically demanding remits for public
service broadcasters, with fresh offerings from new players in new ‘public spaces’
made possible by technology. Britain’s creative industries, not to mention
audiences, depend on the programme and related investment of the four main
players. We want them to continue.
 The BBC and Ch 4 are the most privileged providers and the best protected against
market pressures. They need the strongest remits.
 ITV and Ch 5, the commercial psbs, can give us investment commitments in return
for the privileges that make them viable. And here I return to the issue of
regionalism, because these commitments should of course include original
production and output from and in the Nations and Regions.
But the deal must be realistic. In the book, Robin Foster argues the case for the
importance of regional production - to viewers, to regional economies, and for its
wider social value – but he shows the significant costs involved. And we know that
current structures and activities may be at risk as competition in the television market
increases.
The status quo is not an option – the current obligations on ITV remain too detailed
and focus too heavily on quantity of regional output rather than quality, investment
and prominence in the schedule. So we need a debate about hours, investment targets
and the accessibility of the regional schedule, together with a sensible flexibility of
resources in response to technological and market change. It doesn’t make sense to
spend money on bricks and mortar when it should be focused on programmes.
Acknowledging this challenge, the ITC is in discussion with ITV about a Charter for
the Nations and Regions, which will aim to simplify current regulations whilst
buttressing the underlying investment commitment.
11
We believe ITV can commit to public targets for investment outside London, whether
in programmes made for the network or for specific nations and regions. A new
settlement can be reached to deliver real benefits for the future if, in exchange for
stretching targets, there is more flexibility to manage that commitment within a robust
framework of accountability.
Underpinning this is a real need to encourage investment in content – because, in our
converging world, it will be this that drives new networks and systems. So we must
ensue that broadcasters focus their spend on real quality and innovation. This in turn
will have lessons for the wider sector.
Many in the nation, industry and government want content put back centre stage as the
parliamentary draftsmen polish the Communications Bill. Economic success, not to
mention a decent society for our children, depends upon it.
12