Q6

Peter Grant: Good morning. Within the past day or two, Radio Scotland has announced the axing of three very highly regarded music programmes, “Classics Unwrapped”, “Jazz Nights” and “Pipeline”. Do you understand the anger that is causing, not only among regular listeners, but current musicians who got their big chance on those programmes?

Tim Davie: I have had some feedback. I am not close to it, but it has just been coming up in some of the feedback, so I am getting some of that. The BBC were going to come to this—the BBC is making tough choices. We cannot have everything. We have been cut by 30% in real terms in the past 10 years—30%. We have, by and large, delivered our numbers of nearly 90% of the population coming to us every week, but we have to make some hard choices.

No one feels more strongly than I do about specialist music. For piping music, the BBC is in some ways critical to airing and developing that music. In some situations, however, that does not necessarily—although it is very difficult—require a special programme; it can be put in the output. The feedback is being heard, and I will continue to have that conversation with the director of Scotland on how we make sure that provision is continued if the programmes go.

Q7

Peter Grant: Thank you. How damaging would it be to the development of culture across the UK if the cuts that BBC Radio Scotland are making were replicated throughout the BBC’s family of stations?

Q8

Sir Geoffrey Clifton-Brown: I think you have been notified of the specialist issue of “The Breakfast Show” on Radio Foyle. This was raised by our colleagues, Gregory Campbell, the Member for East Londonderry, and Colum Eastwood, the Member for Foyle. It has been the subject of a public meeting with Sandra Duffy, the Mayor of Derry City. It is an issue that is felt very strongly locally. It is a long way from Belfast, and it is a very separate community out there. This concerns the issue of “The Breakfast Show”, which in December you announced that you were going to end. I gather it was all to do with redundancies, and that you have 650 staff in Belfast, whereas you only have 20 in Derry, so it seems a little disproportionate to cut off “The Breakfast Show”, which a lot of local people rely on. There is also a complaint that you have not actually written to or engaged properly with the Mayor and the NUJ. I wonder whether that decision can be revisited.

Tim Davie: By the way, these are not side issues; they are my job.

Sir Geoffrey Clifton-Brown: In terms of your organisation.

Tim Davie: I understand that, but they are really important, and we take it very seriously.

Sir Geoffrey Clifton-Brown: Absolutely—they are.

Tim Davie: Firstly, we have only just received some of those letters. People who know me know that responding and engagement is a critical factor for the BBC. We need to listen, and we are there to serve. I am going to sound a bit like a broken record, but we have to make choices in terms of where the audience impact is versus where our money is and where the future is going.

With regard to Foyle, this is a painful saving, but we believe we should be investing more in digital and doing more across the whole of Northern Ireland in terms of developing the production sector and other things. We think there are better ways of using the money. The Foyle is an opt-out from Radio Ulster. I totally take your point that there are differences in the community there, and they need to be served. What we are protecting— there will be debate about whether this is enough, and clearly many feel it is not—is three hours of opt during the weekday, including a full half-anhour news programme for that area, which is 137,000 people. We are continuing that. We are consulting with our staff to May. I note your comments and thank you for raising them.

Q9

Sir Geoffrey Clifton-Brown: Is there a savings target for the whole of BBC Northern Ireland? I know from Radio Gloucestershire that you can run a programme at breakfast time for relatively few people. I am just wondering whether this was a proportionate move compared with what is spent. 

Q10

Chair: You mentioned the specific Foyle lunchtime programme. Are you committed to maintaining that?

Tim Davie: We are committed—I am trying to get this right, and we can confirm it, but we are committed to keeping the three hours of programming, which is the half-an-hour news programme and, I think, two other programmes. “The Mark Patterson Show” and the Sean Coyle show will both be kept.

Q11

Chair: And that is a long-term commitment.

Tim Davie: That is a commitment until we have to keep reviewing things. That is a commitment for the next period. We have no plans to go beyond that—absolutely not.

Chair: Thank you very much for that. I am now going to bring in Jonathan Djanogly, on our tour of the United Kingdom.

Q12

Mr Djanogly: Going back to local provision, as a Cambridgeshire Member of Parliament, I was concerned, along with many other MPs, residents and journalists, at the recent closure of Cambridgeshire “Look East” news. The general feeling is that the resulting provision can only be worse for local people. The closure happened a few weeks ago. Will you be monitoring that, to see whether the provision is negatively affected as a result?

Tim Davie: Yes, we will be monitoring it.

Q13

Mr Djanogly: And if the result was negative, would you look to change it back?

Q14

Mr Djanogly: What does that mean?

Tim Davie: If you take our investment in England—regions and local investment—it is broadly flat. We are going to come to all the other areas of pain that we have to take to cope with the 30% real-terms cut, but it is broadly flat. So why are we causing ourselves this trouble? The answer is: because of the numbers. You support the licence fee based on usage. 

The 6.30 news is critical, by the way. It is the biggest show in the UK on many days, but the average age of linear television viewers is very, very high. I am not youth obsessed, but when I see data that shows most people get their provision from online, you have to be in the position—I have seen this around the world where public service broadcasters get trapped in traditional broadcast delivery. The issue is that some of those things that we care about—local democracy, those debates, those stories—get lost. So what have we done? We have increased the investigative journalists capability in our plan. We have ensured we keep every local radio station. We are really going to ensure that our online offer is competitive. That is what we are doing. 

Q15

Mr Djanogly: I am not talking about digitalisation of the service so much as a lack of local journalists in situ to do the job.

Tim Davie: I am very interested in monitoring the level of coverage and what stories we are telling. There are two big things: that coverage and then how many people in Cambridgeshire and your constituency are using our local services. Currently, that might be one in five at best, in terms of the local element, and one in two when it comes to the regional. We need to protect those numbers. That is all I am interested in. But the answer to your question is yes, we will assess it. We are not stuck here just doing the same thing for ever. We adjust as we go. 

Chair: We hear the point about local journalism, which brings me to Olivia Blake MP, who will quickly round off our tour of the United Kingdom.

Q16

Olivia Blake: Yes, with Sheffield. I have three quick questions. Recently I met some people from Sheffield. They were very clear that the radio stations there reach demographics that the rest of the BBC could only dream of reaching. 

Tim Davie: Indeed.

Q17

Olivia Blake: Do you have any reflections on that, and are you planning on producing any equality impact assessments on changes to local radio?

Q23

Mr Djanogly: To set the scene, if I may, I am looking at the NAO Report—the summary, paragraph 3—and it notes: “The BBC sees its digital services as essential to its long-term future.” It gives a list of recent speeches and publications: the 2020 “value for all” strategy, the October 2020 strategic technology review, and then in May 2022, there was taking a new digital-first approach. In December of last year you, Mr Davie, followed up by setting out your plans “to move to an internet future with greater urgency.” Before discussing the BBC specifically, could you please describe the market need for this urgency? What, in your view, is happening in the market on digitalisation and what is the timescale of change?

Tim Davie: I think the need for urgency is—what my speech was around is very simple. If you look at any forecast of the future—we can talk about a broadcast backbone or whatever—the vast majority of media consumption will be via the internet, whether it is on this device, a phone, or whether it is on your screen through Netflix or through Disney+. My speech said, very simply, that there are some major choices for the UK in terms of what our position in that global game is. Who is in control of those services? What is the creative industries’ strength for the UK within that game? And, critically, what access do people have to those services?

Coverage and affordability—that is the point I was making.

Q24

Mr Djanogly: On that last point, about access, I have seen independent research that shows that, in 2034, 46% of broadcast TV use will still come from DTT homes—that’s terrestrial. Actually, that is very slightly more than we have now and is because of the ageing population, so can you see why I am questioning your strategic approach?

Q25

Mr Djanogly: That is an important clarification that you have made to start with, but I have to say that the appearance of the policy statements and the speech that you gave—from my reading of them—is that they are long on strategy and vision and rather shorter on delivery methods. If we accept the strategy for the moment, how realistic is your new aim of going fully digital by the early 2030s and what will be your overarching approach to going fully digital?

Tim Davie: To be clear, I didn’t say we are going fully digital by the 2030s, but I did say we wanted to get—

Mr Djanogly: You did say—

Tim Davie: No, this is really important. I understand your interpretation—

Chair: You need to be really clear about this.

Mr Djanogly: It is important.

Tim Davie: And I want to be clear. I was definitely being provocative in the speech, but what I think is clear is that you need to set a course. There is no public service broadcaster in the world that isn’t now being left under significant pressure. We are in a wonderful position; we are going to talk about the problems we have and the very, very significant budgetary challenges that this brings. But if you just ringfence us to public service broadcasting, to a type of media, to DTT, rather than pushing it into online, you will find yourself in a very small place in terms of UK IP and the creative industries. That is what concerns me.

Q26

Mr Djanogly: Is the impact of that that you are basically saying, “Well, we see where things are going fully digital. We’re not sure exactly when it’s going to happen. We appreciate that it’s not going to be everyone. But it’s up to you, Government, to make sure everyone is digital”?

Q27

Mr Djanogly: Okay. I note, looking at the Government’s position—the latest I could find was from August 2021, which said that the view of the DCMS was that currently the most appropriate method of meeting the objective of delivering universal free-to-air access to PSB channels is via DTT terrestrial spectrum and that “there is unlikely to be a credible alternative to the DTT platform which would reach full migration and consumer adoption before 2034.” What discussions have you had with Government on internet-only broadcasting and are they supportive, and are they still—

Tim Davie: We are just beginning those discussions. There are a number of phases in my mind, but I will be quick. One is, “How do we get match fit in this current construct?”, which we are going to talk about in terms of all the changes we are making to ensure our digital services are fit in the current construct, and I am sure Storm and Leigh will talk about that. 

When you look to any kind of transition, where you are pushing more and more people into digital, that is a conversation that I think in some ways is just starting. In that, as I say, the BBC’s role, in my view, is to ensure that we editorially, as an organisation, and in terms of our products are absolutely match fit for a digital age. To be clear: it is coming. It is coming. If you look at the behaviour of—

Q28

Mr Djanogly: I could agree with you, Mr Davie, but just to say, “It’s coming” is, as far as this Committee is concerned, not adequate. We need to know, in terms of planning and preparing the population—

Tim Davie: Where I bristled slightly was the BBC’s lack of, you know— “It’s great strategy, Mr Davie, but what about the meat?” We can talk in detail in a minute about our next three years and what we want to do in terms of our digital plans—in detail; rigorous detail. 

Beyond that period, by the way, we have a view that we want a BBC service that has got the right level of IP and that has the right level of investment to be in that game. Our role—this Committee has a broader set of questions, I am sure, beyond the BBC—is to provide outstanding content and services that are unmissable and advantaged in the digital age. One of the things that is really interesting when we are looking at local news is that if we could serve that up—if we knew where you live, as such—we could serve up information that is much more relevant. 

One of the frustrations of the system is that it is reductive. So, if I talk to a team in the BBC in Lagos or in Sheffield, they will say, “Why can’t we get on the 6 and the 10?” If you’ve got an interest, the digital environment could get you much more of our work surfaced, if we got it working right. That is what we need to move to. 

Mr Djanogly: Thank you. 

Q29

Sarah Olney: I want to ask quickly about the roll-out of broadband,

Q30

Sarah Olney: When you say “affordability”, you mean individual households purchasing broadband contracts. 

Tim Davie: Yes. As I understand it, with the numbers I was shown, we have only got 80,000 households that cannot get at least 10 meg. Whether they want 1 gigabyte is another issue, but I am talking about the minimum provision. You are going to get to some level of coverage. That question has to be addressed, and I am sure it is a bigger one than the BBC—much bigger. 

Chair: We are challenging the Department on this again on the 23rd of this month. 

Tim Davie: That is a discussion in which we are one member of the party, as it were. Our role, to be clear, is not to build out or any of that. I am very strong on that, actually: I think we should not be doing that. 

Chair: We are clear that that is for the Department.  

Tim Davie: The BBC should not be doing that. 

Chair: We know that. 

Tim Davie: What we should be doing is creating incredible demand and saying, “Look, it’s amazing; “Have you seen what they’ve got on the iPlayer?”; “If you watch that, you get more information”; and “Your news bulletin can do this.” That is what our role is—simple. 

Q31

Sarah Olney: But the other side of affordability is perhaps in the broadband contract. It is also about having the equipment in the home to receive digital, and there will be a lot of households, even in areas with good broadband coverage, that still have an old television that is not capable of accessing digital and do not plan to change that. Do you see that as a barrier to achieving greater digital coverage?

Q32

Chair: You say it is going to happen, but we still have 88% of people getting access to the BBC via traditional media—radio and terrestrial television—although the NAO highlights that, for the younger generation, a higher percentage access things online. But there is a very big drag there—a big change that needs to take place.

Perhaps I will turn to Ms Fagan here. The products that the BBC can produce could well be outstripped by other providers, because your £50 million is trounced by over £1 billion from Netflix, for example. Ms Fagan, you are new to the BBC—a new role. You have come from an interesting background—not from broadcasting. How can you convince people that the BBC products will be able to back up this digital plan?

Storm Fagan: Perhaps I can start with your point around the 80%. That is true at the moment, but what we are seeing is a trend, year on year, of people moving to digital. You are right to say that it is affecting younger people in a larger proportion, but, actually, we are seeing this across all demographics in the population. For 42% of people over the age of 65, their primary way of accessing television is now through streaming. For over-75s, one in three—

Q33

Chair: Is that watching BBC television through streaming?

Storm Fagan: No, just streaming generally. For over-75s, one in three of them now—

Q34

Chair: I want to ask about the BBC particularly. Certain providers—I mentioned Netflix—are only streaming services, so if you want to watch something on there, you can only see it through streaming. With the BBC, you have a choice of listening on radio, watching terrestrial TV or, potentially, streaming. Do you know what percentage of people are watching the BBC through streaming and watching it through the traditional channels?  

Storm Fagan: Yes, absolutely. The reason I started there, though, is because it is part of that broader change. Because there are such good providers, we are seeing this trend year on year, and we are seeing it at the BBC as well. On your question around whether we can compete with them, we have to compete with them, because that is where our audiences are going, and the NAO Report talks about how well we are performing, despite the budget differences that we have with competitors. In terms of market share, we are second for video on demand versus Netflix. We are vying for second place in audio; Spotify is No. 1. For news and sport, we lead the market. So despite the difference in budgets, we are still able to perform really effectively. 

Q35

Chair: What new products are you cooking up that people can look forward to? This is a moment to advertise what might be coming that will entice people down this digital channel. 

Q36

Chair: Mr Davie, you came from the commercial side of the BBC. One of your broadcast colleagues did say they thought you were the directorgeneral for the moment—maybe I will tell you privately who they are afterwards. That means you have that commercial side but you have to play this huge role doing all the universal service stuff. You talked about the jubilee, the late Queen’s funeral, the coronation, Eurovision and all the live football. That is creating great content, but it uses a lot of journalistic resources. In our earlier conversation, you were talking about the need to save money. How are you going to mesh that universal service obligation, and the expense of doing all that live news and broadcasting, with delivering a digital programme that competes against companies that have deeper pockets and are not dragged back, if you like, by having to provide that day-to-day highly intensive journalistic information? 

Tim Davie: Exactly; well put. What I mean by that is, that is exactly the trick we have to pull off in terms of the balance we have to make. To be clear, our vision for the BBC is universality. We believe in universality—

Chair: Well, it is in your charter—

Tim Davie: But that is misrepresented sometimes. I understand the Committee’s concern and your questioning around, “Well, don’t you understand how many people are using DTT?” Of course, we do. We are not going to do anything. It would be an act of self-harm to cut people off for the BBC. 

Chair: We have gone through that already. You have all this work you are doing—

Tim Davie: Now we come to the—

Q37

Chair: —with intense outside broadcast, people, all the technical stuff. These are things you do not have if you are producing a film for a streamer. You have to pay for that once and then you have the product. You are having to do these big live broadcasts and these intensely expensive operations all the time, and this last year has shown how you do that and how expensive that is. 

Q39

Chair: So that will be subscription services. 

Tim Davie: Well, international commercial business. How does that help our tech aims? We have talked about developing business—

Q40

Chair: Will there be more paid-for subscription services for some of the products Ms Fagan is developing? 

Tim Davie: Are you talking about internationally? 

Q41

Chair: In the UK. 

Tim Davie: Not in the UK. There is no plan in the UK to add subscription services. You have paid. It is £159.

Q42

Chair: That is what I am saying: the licence fee pays. But for the addons? 

Tim Davie: We have got commercial business in the UK on advertising, but there is no plan at all for the BBC to go to subscription. 

Q43

Chair: Okay. That is very clear. 

Q44

Sir Geoffrey Clifton-Brown: In many ways, we the consumer have the best choice we have ever had, and the best quality. Look at DAB, look at HD. I watch my television in absolute amazement at the quality. We have talked about the digital switch-off, which I am very interested in because I have a very high cohort of over-65s and over 85-year-olds. With the best will in the world, we can make all of this available—all the broadband available and all these devices available—but at the end of the day, it is about education for those people who are not yet into that world. What can we do about that? 

Leigh Tavaziva: Specifically, we have talked already about the future plans and what that means, and about the BBC’s role in protecting our broadcast audience, but also understanding that much of our audience is moving on to digital platforms. We have an obligation in that universality to ensure that we are making content that is accessible and that all those audiences reach. I think in the future plans around what needs to happen—we have been discussing the BBC’s role in education—the BBC is one part of that future story, which I think is a UK obligation for a digital Britain in the future. When that happens, we have had that conversation.

In the next few years, it is absolutely critical, particularly, as Tim has articulated, as we are challenged in terms of resources at the BBC and we certainly do not have the deep pockets that we have talked about that other tech providers have, that there is the focus and prioritisation of our resources to ensure that we continue to serve all our audiences—young and older audiences, audiences that see portrayal and that the BBC represents them. That is absolutely critical. 

We have a very clear set of metrics—they are talked about in the NAO Report—about how we measure the reach of our services to all our audiences, but also the daily habits. You talked about your daily habit. Those measures are essential. The conversations that we have with all our teams, whether with a local radio station or our network stations, are about, “How are you delivering that value for audiences?” Return on investment, and the prioritisation of choices that we make about our overall capital based on that return, is something we have developed very strongly in the organisation over the past few years. I think that is critical to ensuring we can continue to deliver.

Q45

Sir Geoffrey Clifton-Brown: May I follow that up? That is a great answer. Young people get that education at school and middle-aged people get it through their workplace—most people now have to engage in the digital age in their workplace—but how are you going to start to educate my older cohort? I have constituents who have old televisions and no smartphone, and they don’t even want a computer. How are you going to educate them that this great new world is out there, and they should participate in it?

Q46

Peter Grant: Mr Davie, in an earlier answer, you mentioned the effectiveness of the BBC. Can you briefly describe what you mean by effectiveness and how you measure it? If you were ITV, it would be dead easy—it would be how much advertising you sell.

Tim Davie: Welcome to the joys of public broadcasting. There are two major metrics in the UK. One is engagement with the BBC, so how much time people spend with it. The BBC is not an organisation that can be justified, in the way we fund it, just by being a good thing for society—it has to be used. You can see some of the metrics in the NAO Report, such as the 5/5/2—excuse the jargon; five days a week—which we measure religiously. It is very data led. 

The second element is whether we are delivering on our purposes, which means trust and fair and balanced coverage. We have a set of metrics. The tension in the online world, by the way, is that if I just wanted to drive usage, there may be ways in which clickbait and other things could drive more usage and reach. The critical thing in running the BBC, which is a joy, is to balance the ability to drive reach—currently we are pulling that off at 88% a week, and pretty much everyone in a month—with quality and distinctiveness. That is what we are trying to pull off. We have a set of metrics and clear KPIs at the board. The board hold me to account on that. It is a very rigorous process.

Q47

Mr Djanogly: Mr Davie, can I take you back to your speech on 7 December? You said: “Digital offers a huge opportunity to unlock more audience value but it requires big organisational change: a radical overhaul of how we use data, a heavyweight world-class tech team, new operating models, new creative solutions and ideas.”

Why, having implemented a strategic technological review in 2021, did you say in your recent speech that you need new operating models?

Tim Davie: Because it will keep evolving. I do not think that what is in my head is that the strategic technology review will be rewound. It may be worth Storm talking a little bit about how we operate, but getting ourselves organised with product, tech and distribution was the right thing to do—full stop. What I mean by operating model is that, currently, if you run television or content—this will be interesting—you have to create new operating models where, editorially, you are making sure that you are doing the right thing for the iPlayer as well as all the technical things. By the way, that cuts across traditional silos.

Q48

Mr Djanogly: So the 2021 model is defunct?

Q49

Mr Djanogly: Is there a point at which the general public will get news of your new model?

Leigh Tavaziva: I will talk a little bit more about the strategic technology review. Storm is right: it is about setting ourselves up for the future. In particular, it delivered on a number of areas: it split not only what we used to call the design and engineering function into product areas but, specifically, teams specifically designed to deliver our digital products and services into technology teams that look after our broadcast and our underlying enterprise infrastructure; so, the running and delivery of that underlying technology—cyber-security and those more traditional areas. Then there is the distribution—how the content we make reaches our audiences. That enabled us to develop the leadership, to build the capability, which Tim was talking about in his speech, and to really focus on not general technology capability, but real focused technology. That is the way that product teams work, which is very much in an agile way—lots of test and learn, development, and quick movement activity for digital services. That was entirely essential for us to compete against the product delivery that comes from a Netflix or a Spotify and those other competitors, compared with the larger, more capital-intense, bigger enterprise-type investments and the delivery of our broadcast. STR was all about setting ourselves up for the future. We have just completed that. We have just delivered the teams building that capability. It is all about that future delivery. It is certainly not something that we are now changing to. The future operating model work, which Tim then references also in his speech, is about how the organisation as a whole works. It is one thing to get our tech teams and the capability right, and another for all the content creators to start to understand the changing audience habits and to think about how the audience receives the BBC, not just through broadcast, but also through digital. We have to optimise the capabilities and resources of our teams—

Q50

Chair: The multi-channel stuff, and reporters also doing vlogs and blogs—

Leigh Tavaziva: And you would see that at the heart of our local strategy announcements—the changes that we are making. We continue to maintain the same level of investment in local—Tim talked about that. That is really important. That is part of our prioritisation and our focus, but we are moving some money out of the broadcast in that investment to enable more multi-media teams and our ability to have a stronger digital offer at the same time. 

Q51

Mr Djanogly: Just being a bit more specific, will the £500 million investment plan, which predates your speech, be enough under the new model?

Q52

Chair: So not salami-slice cuts. 

Tim Davie: No salami slicing. Take 1,000 hours of content out—we have done that. We have made some tough decisions that were sometimes very unpopular. We have worked our way through that and tried to be sensible. The answer to your question is: we do not know if it is enough. My sense with the £50 million plan that we are going to invest in product—I think Storm should talk about her assessment of the competitiveness of that—is that overall we are going to have to find ways of attracting more capital in from the commercial arm. We will look at other solutions to ensure our tech budgets. The Chair’s point is spot on; you do not want to do that at the expense of closing lots of radio stations or doing things that would be acts of idiocy or self-harm. So we are going to have to spin both plates, but it is incredibly difficult. I think there are chances that we have missed to invest in the BBC—I am going to be blunt—in terms of licence fee settlement and funding of the World Service. We have a choice to make about whether we are going to be effective digitally. That was the challenge I made in the speech. 

Q53

Mr Djanogly: Right. I will address my next question to Ms Fagan. Paragraph 2.3 of the NAO Report says: “The BBC’s spending on its technology, products and distribution covering broadcast and digital has been steadily declining, falling from £638 million in 2018-19 to £524 million in 2021-22, an 8% decrease”. The basic question is, how will the BBC have enough money to carry out this digital strategy? 

Q54

Chair: Because you have mentioned that again, while we all know what 5/5/2 means, could you lay it out simply for anyone who is watching?

Storm Fagan: It is five hours, across five days a week, across two of our products. What that shows is high engagement in the BBC. Online, we look at that in terms of our signed-in users and how frequently they are coming back. We can see that the result of the strategic technology review and the changes that we have made are now starting to come through in those sign-in rates. That is a really positive indication of progress, which was called out in the NAO Report.

To answer your question about whether that is appropriate for the future, you have to take a step back at that point and look at the market. We operate in a number of markets. Some of the markets are incredibly competitive. With the video on demand and the video streaming market, for example, there are new market entrants all the time and a huge amount of investment going in. It is really difficult to compete in that market effectively without big budgets. However, we are No. 2 in the UK in market share, so in the work that we are doing we are providing really good value. But that jeopardy and risk exist as we look to the future. As Tim said, that is a really active conversation. 

Tim Davie: The answer to the Chair’s question is that we have just enough to be in the game at this point. I’ll be honest: we will have to monitor the KPIs. This is a very difficult conversation, without getting into the real detail of how what is the acceptability of Netflix service—it is not just Netflix—and how people rate it. All I would say is that we have a level of a team here that is world class in deploying 1,000 tech people against 4,000 or whatever it is in Spotify. We are in the game, but we need to invest while keeping our editorial strength. Those are the facts. 

Chair: As I said at the beginning, a minnow in a world with very big fish. Perhaps a bit bigger than a minnow

Tim Davie: Perhaps a bit bigger. I won’t play fish guessing games. 

Chair: I think I may be straying into territory where I am not the most expert. I would need to bring in Sir Geoffrey. 

Q55

Mr Djanogly: My next question is for Ms Tavaziva. I am looking at paragraph 2.7 of the NAO Report. This Committee recommended in 2021 that the BBC should “produce a long-term financial plan setting out how it would fund its new strategic priorities. The BBC has subsequently

Q57

Mr Djanogly: I raised that because the implication from Ms Tavaziva was that you cannot raise money from the market. But you are saying that you can. 

Tim Davie: No, the point being made is, within the public—you set a different set of thresholds when you go to the commercial world. Obviously, we have public money, and we are very privileged to have a licence fee and certainty of income. By the way, that is a significant—

Chair: As Ms Tavaziva has laid out.

Tim Davie: Yes. That is a significant thing in the balances of how we can get success in this, faced up against these huge— Chair: Yes, you have certainty of funding on that one.

Tim Davie: So, that is important, but the point on the public—we have low public service debt facility. The commercial debt is most welcome, and extremely helpful, and allows you to do partnership, but whatever partnership you do, it has to make a commercial return. We have a target EBITDA margin at Ofcom, so it is not like—you can’t just—it is a different set of thresholds. Can that be useful to supporting the aims we have discussed in this sitting? Of course it can. But even with the borrowing that we have, which is most welcome, we are under pretty tight constraints. 

The other thing is that if we go with partnership, the question is about what the partner gets and what you are ceding, as the UK, if you go into an international partnership, so there is no free lunch. If we do a deal with Disney, which we are really excited by, they will have international rights with Doctor Who—we keep IP—so you are trading that. But there are opportunities there. 

Mr Djanogly: Good. Thank you. 

Q58

Sarah Olney: Ms Fagan, can we talk a bit about how the digital products kind of present themselves to the viewers? We have touched on this a little bit, but in your world of creating and developing the digital products, what do you think the BBC’s competitive advantages are, compared to Netflix, Amazon or any of the others? 

Q59

Sarah Olney: Can you tell me a bit more about the challenges and what you are doing in digital product development to overcome those? 

Storm Fagan: One of the big challenges is data, in that there is a big shift globally in the ability to access data and use it. You can see that in the NAO Report, where it talks about the three key challenges that we have around search, recommendations and metadata. Those were all actually data-led.

Chair: This is in paragraph 3.8, for anyone who is following. 

Storm Fagan: Correct, thanks. Those are all stemming from how much data is changing. It is about how we use our data in our products and how we use the data to make the experience simpler. What I mean by that is that, when you move from broadcast to digital, one of the great things, as Tim said, is that you have so much more choice in content. However, as a user, when you go to that product, it can feel overwhelming, and often if we have not quite got that experience right, you cannot find what you are looking for. That can be quite a frustrating experience, so we use data to be able to match our users who are coming in to the content and try to provide that best kind of shortcut connection. 

Q60

Sarah Olney: What is your expectation when a viewer is coming to iPlayer, for example? Is it that they know what it is that they want to watch and they just need to be able to find it, or is it that you want to provide a menu of stuff that they might be interested in, because they do not know what it is they want to watch, or is it a mixture of both? 

Storm Fagan: It is both. We have all been there on a Friday night— sometimes we know exactly what we want to watch, and at other times we are scrolling around and cannot decide. We need to cater for both of those. The search function, where you type in the search box, is for when you know exactly what you are looking for, and you need to get a result back that is accurate really fast.

Q61

Sarah Olney: And you think that that is one of the things you need to be developing.

Q62

Sarah Olney: In terms of people knowing that they want to watch something, how are you promoting your content? You mentioned “Happy Valley”, for example, which is a big new drama series starting this month. How do people know they want to watch that and then come to iPlayer to find it?

Tim Davie: We have two ways of doing that. We are getting 88% of people, including 70% of 16-to-34s, weekly, so we have opportunities within our midst to cross-promote. Having said that, it gets a bit more difficult in a modern environment. It has always been sensitive—I will be blunt—about whether the BBC should do above-the-line marketing. My personal view is that some selective work where it is needed, particularly in the digital space, is something we need, but it should be limited, because I want to spend money on making sure we get the best return on investment in terms of our public service mission.

I just want to say one other thing on what you were talking about. Storm put it perfectly: the BBC needs to build something that is different from a commercial algorithm. When you go to the news, I do not just want to surface the stories that you are most likely to click on. There is something important for our national shared story—and the BBC is in the midst of this—in what the BBC sees as the main stories. Editorially, we are trusted to lead; I do not want this to be read as arrogance, but that is our understanding from a service point of view.

Also, we want to educate and entertain in a way that is Reithian. There are many commercial models that lead you editorially to where you do not want to be. We are going to have to get a very careful balance, and this is a very interesting challenge. It is different. That is going to be a real balance for us—and no one in the world has done it, by the way; it is completely fresh. That is why Storm and the team are going to have to create something that has never been created before. It is quite exciting.

Chair: It makes us nervous on this Committee.

Tim Davie: We like that.

Q63

Sarah Olney: That is really interesting. It is a balance between an algorithm that will just churn out more of the same stuff you have seen before versus something you are not interested in—gardening, for example. I do not want necessarily to see everything you have.

Q64

Sarah Olney: We are going to talk a bit more about personalisation in a minute, but for people who are unpersonalised when entering iPlayer, how would you manage the curating or the algorithms? Is it more of a challenge?

Storm Fagan: It is a challenge, but it is something that every product faces, and the key is to provide a mix of things that are really popular. There may be some assumptions you can make about that person—do you understand where they have come from, for example, and does that give you some indications about what they might like? Have they come from social, for example, if they were on the web? You provide the best that you can if they are new to that product. We keep testing that. We can keep trying things out to see whether or not we have a better mix of content or a better mix of features that we can show people.

Q65

Chair: How do you measure that?

Storm Fagan: We measure it in terms of click-through rate: for people coming in, how many of them click through to a piece of content. If no one is clicking through to something, it is sort of taking up real estate. But we have a number of rails on iPlayer particularly, and we can swap content in and out; we can swap the topics and themes of those rails. We can test that all the time. 

Q66

Sir Geoffrey Clifton-Brown: May I just follow this theme back to my original question about the “Today” programme and BBC Radio 4, which I listen to on Sounds? On Sounds, you have the ability to switch from one channel to another. What I would really like is a fairly precise menu on all of those different radio channels, so that I can say, “Right, I will listen to Radio 4 from 8 to 8.10 on that item, but I want to go to Radio Glos from 8.10 to 8.20 on that item.” Is that a digital world we can get to?

Storm Fagan: That is something that we hear in user research a lot, so it is great that you have brought it up. It is something we are actively looking at. 

Q67

Sir Geoffrey Clifton-Brown: How far off is that sort of vision?

Storm Fagan: I am a little nervous about giving timeframes, but we have prototypes and demos that we are looking at, at the moment. 

Chair: We all look forward to that. I think you are wise not to give timeframes in this Committee, as we will hold you to them, so you have learnt that lesson. 

Q68

Sarah Olney: I want to quickly ask about BBC Three, which moved online and is now back again. What was the learning on that? What was the original reason for the move and then—

Q69

Sarah Olney: Very quickly, on personalisation and users, one of my frustrations relates to where a household shares a channel. My children do not tend to watch the same things as I do. My personalisations and some of my different things look slightly odd, and they are not really in line with my preferences. Is it something you are developing where we can have this not down to household level but down to the individual user? 

Storm Fagan: Yes, absolutely. On iPlayer, you can have different profiles. You can have one app that you are using but then you can have your children set up with a different profile, so that that does not necessarily pull through in the evenings to you when you are watching TV. 

Sarah Olney: Excellent. That is very helpful. 

Q70

Peter Grant: Ms Fagan, you mentioned that you are competing in several different markets with a different set of competitors for each one. Clearly, your competitors for drama are not the same as your competitors for live sport or news. In the longer term, is it always going to be sustainable to

Q72

Peter Grant: One of the big differences in doing things digitally is that the provider gets to know an awful lot more about you than they did before. Previously, the BBC knew through TV licensing that I had a licence, and that is all they knew. They would pretend they knew if I was watching TV and they would pretend they knew whether I had a TV, even when I did not. A lot of your competitors will get financial value out of that information by sharing it with others—legally, clearly, through data protection legislation. Are there any plans for the BBC to commercialise the data you hold on viewers?

Storm Fagan: No, there are no plans. We collect the least amount of personal data that we can when you sign up, then we do collect data at an aggregated level and on an anonymised basis as people use the product so that we can tell how many people are coming, what they are clicking on and everything, but we do not share that data and we do not sell that data on, and we have no plans to.

Q73

Peter Grant: Does that also mean that if you have programmes produced by someone else, you do not share with them data about who is watching it, other than on an aggregated basis?

Storm Fagan: Yes.

Tim Davie: Just to say, that is spot-on for public service broadcasting in the UK. When we are running a commercial business in the US around the BBC with a partner, whether subscription or BritBox—under any scenario, the BBC is at the top end of ethical data usage and making sure that we are transparent.

Chair: It is good to have that on record.

Q74

Peter Grant: Just to be clear, the way that you operate in the US, and I suppose how you treat your US subscribers, is something for the US Senate to question you about. Are you giving a categorical assurance that the information you hold about subscribers will not be used or sold out of the United Kingdom or to anyone else for commercial purposes?

Tim Davie: I can categorically say that we have no plans to do that. You know I am “never say never”, but we have no plans to do that. That is not what we want to do. To some of the earlier questioning, one of the advantages we have is trust. I think it will become more of a societal issue, where data is going, who is using it and what their ethics are. It is a competitive advantage for the BBC, not a restriction.

Q75

Peter Grant: Thank you. When someone is logging into any website, they are always told “We use cookies” and some of the cookies have to be used. How easy do you make it, and how easy do you intend to make it, for subscribers to opt out of non-essential cookies? There are some

Q76

Chair: Just a quick question from me about the competition that online news has with other outlets. The BBC funds these digital democracy reporters for local newspapers. We know that local newspapers are struggling or indeed disappearing in some areas, yet they are a very good resource to feed news into local BBC outlets. How are you navigating that in the new digital world? There is a lot of online news, but the BBC has a pretty good brand and pretty good dominance on all the search engines.

Tim Davie: I would say there are two things. We are talking very much to other providers about our role. With the local democracy reporters, we are totally committed and are keeping that budget in there, just for what it is worth.

Chair: That is useful.

Tim Davie: We see it as working, and it has been a success. It has gone beyond my personal expectations. I wondered whether we would really get the pull, but we are getting the pull and people are using the articles. There is also a question of how we ensure we are linking through to other providers, how that works and how we can ensure we are testing things in that area where we are supporting each other. Often we have this conversation as if it is a zero-sum game. The truth is that if we look at the performance of the local press in America—I am not talking about the state-wide New York Times level—this is a structural issue based on where advertising money is moving to digital. If you are interested in news in Bradford, it may be that you go for a couple of providers. Are there ways in which we can help each other and support each other, rather than purely viewing it as a zero-sum game? That is an interesting question. 

Q77

Chair: So there is not a plan by BBC Online to take out local news media.

Tim Davie: That would be an unacceptable situation for the UK and our democratic process, but what I would say is that you cannot change some of the macroeconomics that sit around some of these markets. That is very difficult.

Q78

Chair: We are not going to get into the whole future of local newspapers— much as I would love to, as a former local newspaper reporter, but not in today’s session. Ms Fagan, you talked about your products and how, compared with different competitors, you are competing second and third.

Q79

Chair: One of the challenges is that Ofcom regulates you and, with your back catalogue, there have been some delays in it agreeing future release, more information. So, the speed of decisions is an issue there. Will you comment on that, but are there other issues where Ofcom may or may not be moving at the right pace to help you deliver your plans? Ms Tavaziva, do you want to come in, or Mr Davie?

Leigh Tavaziva: We continue to work incredibly closely with Ofcom. We have seen that speed of regulation and decision making improving all the time.

Chair: Eighteen months was a long time to let you put some more content up.

Leigh Tavaziva: Certainly if you look at the start of iPlayer in 2007 and some of the time it has taken to get some of those changes—moving iPlayer from being a catch-up service to being able to put more content on it—that did take longer than I am sure we would all have liked. It is incredibly important that that relationship continues to be thoughtful and that we work very closely with our regulator. Of course, we have obligations and accountability to them, and I think that all regulators in any industry are having to adapt to the changing digital environment and are having to make sure that regulation comes through more quickly in reaction to some of the big trends.

Q80

Chair: Obviously, you will not say anything too negative about Ofcom in a public session, but what areas do you think that it could improve in both to maintain your competitiveness in a digital market and, generally, to make sure that the digital market is being dealt with in the right way, so that decisions at the pace at which they are being made can be made and delivered?

Q81

Chair: When you say “we”, do you mean the UK, the BBC or—

Tim Davie: Let us just say the UK in the round, and the regulators particularly. Looking at markets too narrowly, saying, “There’s the UK”—I won’t mention it, because that wouldn’t be sensitive—and one of our media markets, news or audio, then suddenly the market is completely reshaped by international providers. The simple truth is that we have seen an increase in the speed of turning things around. With Ofcom, we are discussing how we look at service licence reform, to ensure that we have the flexibility to respond to the market. It is work in progress. It is constructive, but the proof is in the pudding, in terms of us actually getting that done.

Q82

Chair: Ms Fagan, you have come from a very dynamic tech world which moves very fast, and is often unregulated at the beginning, when products have first been developed. Has it been a culture shock coming to a regulated organisation like the BBC, and having to deal with the pace of change?

Storm Fagan: It is a different environment, yes.

Chair: That is very politely put, sat next to your boss.

Tim Davie: Go for it, Storm.

Chair: We love candour in this Committee.

Storm Fagan: The BBC moves incredibly fast—it does. We respond to change very quickly. The teams internally move very fast. It is not that different, actually, coming from a commercial business. As Leigh said, the relationship with Ofcom is really positive.

Q83

Chair: You are an example of the staff skills—Ms Tavaziva as well, in some respects—that the BBC needs to recruit. You are both recruited from outside in. Previously it was people coming up through the BBC. In fact, Mr Davie, you probably have among the least traditional routes of a director-general, if I am right in thinking through my last few directorsgeneral. So, we are seeing a change at the top. Ms Fagan, you have been there since 2021. I am sure there are people trying to poach you, because of your niche skills. Are you going to stay?

Q84

Chair: So you are here for a while? 

Storm Fagan: Yes. In terms of attracting talent, last year was really difficult. That was because we were coming off the back of covid, and we saw a real shift in the technology market in terms of the type of contracts that were offered. Suddenly international organisations were offering remote contracts, and therefore when we were in Salford and were competing previously against the local technology market, suddenly we were on the international stage. 

Last year was difficult. That meant that salaries moved faster and recruitment was happening at a faster pace. We did a lot of work last year—maybe Leigh can talk about that more—around our salaries and the changes we put in place around the employee value proposition. We are in a much more positive position now. I would add, before I hand over to Leigh, that I think the BBC offers something really unique in terms of what you can do in your career. You are working on, as Tim said, something that does not exist anywhere else. 

Q85

Chair: As in the range? 

Storm Fagan: Exactly, and with that public service mission and purpose.

For the right type of person, this is the perfect job really. 

Q86

Chair: How much have you had to ramp up pay, Ms Tavaziva?

Leigh Tavaziva: It is a great point. We work with Willis Towers Watson to advise us on multiple industries and job family ranges, and every industry saw the competition for digital and technology. 

Q87

Chair: How much have you have to ramp up pay? 

Leigh Tavaziva: We have increased the job pay ranges in some of our digital job families more than the 4% base pay rise that we agreed for the majority of employees at the BBC last year.

Q88

Chair: And what percentage of your pay bill is going on people in Ms Fagan’s area of work?

Leigh Tavaziva: I would need to come back to you on that. 

Q89

Chair: Could you come back to us on that? We have obviously highlighted the issue about actual journalists in studios in different parts of the country being a critical part of the content. It is not in direct equivalence, but it would be interesting to know the amount. 

Leigh Tavaziva: We spend £160 million on the product team in total. What I cannot give you is the exact amount. It is the majority of the people team, but there are some elements that will not be people-related.

Q90

Sarah Olney: Mr Davie, we have talked a lot about your competitors, including Netflix and so on, but one of the things that is striking about Netflix—I think I am right in saying this—is that it is yet to turn a profit. It is spending a lot of money but not generating the income that might be expected. In that context, what do you think about the future of the digital

Q92

Peter Grant: It was really the questions that have been raised by the NAO about the data protection arrangements in the BBC. We have had an answer about what has been done so far, but will there be a need for further improvements to that regime as you collect more and more information about more and more people?

Storm Fagan: Leigh covered it really well. We have put those changes in place. Inevitably every business, over time, will be collecting more data, but the framework that we have in place means that we are in a good position to mitigate any risk.

Q93

Peter Grant: There is another issue with data. Clearly, you collect it for a reason. You need to protect yourself against the way data is being lost or corrupted in some way. Given that you are putting a lot of emphasis on the improvements in user experience that come from personalisation and so on, do you have robust contingency plans to maintain the service if there is an unintentional loss or corruption of data, and how do you test those plans to make sure they are going to work?

Q94

Chair: When you say you have not had to report to the ICO, that sometimes can mean just that people are not ‘fessing up that there has been a problem, so are you sure that it is because you are not having data breaches?

Leigh Tavaziva: I would be very, very concerned if there were data incidents that were required to be reported to the ICO and we were not doing that. That would not be acceptable for the BBC.

Q95

Chair: When we looked at Government Departments across Whitehall, with the ones that actually said that they had had data breaches—that was understandable; in big organisations, that can happen—we were far more confident in their returns than in the Departments that said they were perfect and never had a data breach. So, you have a good mechanism for making sure that there is a proper, positive reporting line-up.

Leigh Tavaziva: It is useful to hear that. I am confident that we manage and monitor our data incidents, and we are raising them when we need to. But I take that feedback and it is important, of course, that we—certainly the executive team—are continuing to make sure that that is not happening. 

Q96

Chair: As Mr Davie says, trust is an important part of—

Tim Davie: To be clear, we are tracking the data incidents. And it is not zero. Sometimes emails, you know, in the life of a unit, so it is not as if—

Q97

Chair: They are just not at a level enough that needs to be—

Tim Davie: And my guidance is really clear, as this team know—if it hits the threshold, we absolutely declare it. 

Q98

Sir Geoffrey Clifton-Brown: Mr Davie, you may choose to pass this question to one of your excellent team either side of you. I am taking you to paragraph 13 and building on Ms Olney’s questions. Almost every organisation that comes before us has a shortage of IT and digital skills. That paragraph shows that you have had a 23% turnover in your product development team last year. I am wondering whether that explains the reluctance of Ms Fagan to give me an answer about when we will get to this brave new world of a pop-up menu and when there will be a search function so that I can watch different programmes throughout the morning.