17
Examination of witnesses
David Abraham, Jane Tranter and Nigel Warner.
Q22 The Chair: I would like to welcome our second panel of witnesses. In this part of the session, we are interested in exploring some issues raised by the BBC charter Green Paper from the perspective of independent production companies. Could you please start by introducing yourselves and telling us a little about the organisations you represent?
Nigel Warner: Good afternoon, Chair. Thank you very much for inviting me to speak this afternoon. I am the chief executive of Pact, the Producers Alliance for Cinema and Television. We represent the independent production community all around the UK. I have been in the post for two months and am very pleased to be here.
Jane Tranter: I am the CEO and co-founder of an independent production company called Bad Wolf. Bad Wolf is notable for two things, not including its name; you can tell me later if you recognise where the name comes from. The first is that we are one of the UK’s leading independent drama producers and the second is that we are based in Wales. Bad Wolf has been in existence for nearly 11 years and our presence in the nation and regions—specifically Wales’s impact on Bad Wolf—is significant.
David Abraham: Good afternoon. I am the founder of a company called Wonderhood Studios. We operate in London, have about 100 employees and work at the intersection of the creation of premium content for channels, streamers and the advertising industry.
Q23 The Chair: How would you describe the health of the UK independent production sector currently and what are the main pressures facing producers?
Nigel Warner: In my first couple of months, I have been travelling all around the country, meeting Pact members and independent producers based in the nations and regions of the UK. It is fairly safe to say that most are experiencing significant financial pressures at the moment. It is a tough time in the marketplace. There are some reasons for that. One is that there is a significant amount of uncertainty at senior levels in most of our main public service organisations at the moment and obviously over the longer-term future of the BBC.
The public service broadcasting world—ITV, Channel 4, Channel 5 and the BBC—accounts for about 80% of all the money that is spent on independent production and original content in the UK. It is a very important part of the market for my members, and all those organisations are in a state of flux at the moment for one reason or another. That creates quite a lot of uncertainty but there are also the longer-term trends of the decline in advertising revenues for the main PSBs and that the BBC is about £1 billion worse off today than it was a decade ago.
The financial pressures are cascading down the marketplace and affecting commissions for all our members, which is raising significant challenges for them. They are a highly resourceful bunch and are looking at ways to address those pressures—innovating, raising finance and all the rest of it. But it is fair to say it is a tough climate out there at the moment.
Jane Tranter: It is an interesting one. If you were to ask what the health of the UK’s production economy is, you would say it is actually quite buoyant, but I agree with Nigel that the health of the UK’s independent production sector is suffering some significant challenges. According to some recent BFI statistics, there is increased investment year-on-year in high-end television—where I specialise in production in the UK—coming from big American shows that come over here to film. Money should be spent by genuinely UK-based independent producers who are making stories in the UK for every part of the UK, and they are very cash-strapped.
Remember that I am really looking at this through the lens of a drama producer. There are crises in three areas: funding, sustainability and creativity. The crisis in funding comes from the fact that the budgets for high-end television have more than doubled over the past few years and yet the public service broadcaster’s licence fees have roughly held the same. What this means for an independent production company is that, when you get a commission for a drama from, for example, the BBC, one thing you know right from the start is that the licence fee will not cover the entirety of your making of the show. You then have to go out and raise money elsewhere in order to put that together with the BBC’s licence fee, throw in the UK tax credit, and hope somehow that you will get to the figure that works.
Recently the opportunities for funding outside the UK have really narrowed—for two reasons. First, normally the greatest part of that money comes from America. Partly with the increasing merger and homogeneity of some companies, those opportunities for individual pieces of co-production funding have lessened. Secondly, those American companies that would and are still able to invest and partner with the BBC are not interested in UK content in the same way that they were. We are finding that America is beginning to look into itself culturally; it is more interested in Americana than it is in our UK stories.
There are good news examples—one being “The Other Bennet Sister”—where you find a way of fighting your way through. It really is a battleground and means that every time you go to the BBC for funding, you know perfectly well that the BBC will green-light it and that that is the beginning, not the end of its journey. That is what we are paid to do; that is our task, but it is harder than it ever was and means that there are fewer opportunities for British indies to be able to find that funding.
The sustainability point is around rights. Increasingly for independent production companies, the old-fashioned way of doing things, if you like—where you would get a UK licence fee and hold on to and use those rights to go and raise the money around the rest of the world—does not happen anymore in the streaming economy. I am sure you will have questions about that so I will not go into too much detail. Suffice to say, it means that the Labour Party’s 2003 terms of trade, which the whole of the UK independent production sector was built from, is being eroded because independents no longer hold on to the rights in the same way. That means it is not sustainable as a business because you are not having any growth put into your business.
Inevitably the third outcome from those first two things is creativity because, when you are looking to develop a project and to tell stories about the way we live now, you have to look to develop them with an eye to how we are going to get this funded. That means that some stories that are really important to us to share as a nation are no longer getting told, either because producers feel, “Well, I’m never going to get it off the ground”, and a form of self-censorship happens or they simply cannot get it off the ground because there is no longer the market available that there once was.
Q24 The Chair: I was going to ask a question about how global streamers have changed the economies of independent production, but I will come to David first. You can start us off on that or answer the subsequent question.
David Abraham: Just building on what Jane and Nigel have said, in answering the health question there are three layers. The really vibrant, healthy part of the creative economy in video production—let us not talk about TV as a traditional subset but video—is the creator economy. The creator economy employs and generates wealth for far more people in this country today than the traditional TV industry, which is a good thing. It has been created by the availability of YouTube and social media platforms that have revolutionised the way that creative people reach an audience.
In our industry—I suppose the more conventional, linear part of the industry—we are looking to that community to contribute to the world we are in. One of the biggest cinema launches of the last few days is a movie that comes from a 19 year-old who was a star on YouTube. We are living in a very buoyant, interesting, creative era in terms of the creative economy. Clearly, the premium end of television production remains very buoyant because the tariffs are very high. If you are fortunate to be in a position to get those commissions—hard though they are to win—then there is revenue to be generated.
The collapse has been in the middle area of the industry where people could set up a business at relatively low barriers to entry, produce some maybe inexpensive programming in daytime or teatime, and then over the years build credibility and start doing bigger shows. That conveyor belt of creativity has been broken and has forced a lot of people out of the industry. The freelance community that relied on those types of programmes is now almost giving up and permanently out of work. There is a big structural change. The question for us all is perhaps not to look back but to build on the strengths of what we have, both as a country and in particular the strengths of the BBC and other public service broadcasters.
The Chair: Jane and Nigel, do you want to add anything on that second point I raised about how the rise of global streamers has changed the economics of independent production?
Nigel Warner: I understand David’s point but there is the reality that the industry that I represent and the companies that are involved in that industry constitute something like around £3.5 billion a year. It is still a big industry and a very important part of the television and audiovisual industry. Many of those people are exploring all sorts of opportunities on new platforms, YouTube and other places, but most people are finding that the revenue opportunities there are quite limited at the moment, as your witnesses demonstrated to you in the previous session.
Jane made the point that the streamers are an important part of the inward investment that has come into the UK. Successive Governments have done significant things to attract investment from international players and that has become a very important part of the mix. As I said at the beginning, we must not get away from the fact that 80% of the money that is going into commissions in the UK for television and television content comes from the public service broadcasters. We cannot just abandon all that as if it is some part of the past and move into something that we think is the future because actually it is still and will continue to be very important. I hope one outcome of this charter review process is to give the BBC the strength to continue to be a very important part of that story.
Q25 Lord Knight of Weymouth: Jane, you talked about the difficulty with funding. Probably the most critically acclaimed recent British independent production was “Adolescence”, which was made on a streamer by Jack Thorne, a collaborator of yours on “His Dark Materials”. Is that an example of British talent having to go to the streamers because they just have more funding?
Jane Tranter: I would say that is an example of how good the streamers can be. I agree with the last point that Nigel made: just because the streamers are growing and having a great deal of success—both creatively and economically—does not mean that we are all going in that direction. It simply means that public service broadcasting, in particular the BBC, needs to be protected. The world is changing and therefore the BBC needs to have change accompany it.
We are very fortunate in the UK because we have very strong UK commissioners in Netflix and Apple. While in the UK you have access to everything that, for example, Netflix and Apple have to offer, they have very strong teams. A lot of our best dramas—for example, “Slow Horses”, “Adolescence” and “Baby Reindeer”—have come from those places and are quintessential British pieces of drama. They are the minority and may have a public service value to them, but they are not made from that point and purpose of the public service; they are made for very different reasons.
David Abraham: Interestingly, they have employed writers, actors, producers and directors, all of whom—
Jane Tranter: They have grown through the BBC.
David Abraham: They have grown through the system—exactly. If you are thinking about the ecosystem of creativity that the country is nurturing 10 or 20 years in the future, I suspect it will come far more from the world of YouTube than the world of traditional television.
Lord McNally: John McVay must be a hard act to follow.
Nigel Warner: I have been told that many times.
Jane Tranter: But you are still here after two months so you are doing well.
Nigel Warner: Exactly!
Q26 Lord McNally: I am not trying to undermine that. I have said this before so there will probably be groans from the rest of the committee. I was on the Puttnam committee that looked at the 1983 Act and one of the most successful pieces of lobbying then was to extend the market for the independent producers, which Pact became very successful in representing. The only drawback is that although John’s strongest message to legislators was that he was working for people working in garrets in Glasgow and other places to produce this good work, the creatives were very quickly gobbled up by international companies and even the independent sector was very difficult to see as promoting British values.
At the moment, I am interested in the way the BBC is promoting itself, particularly with its drama productions, for example “Blue Lights” in Northern Ireland and the other regional-based drama productions, which are still part of the great strength of BBC drama. It is very difficult to see how it is able to sustain that, as you say, with it having to look for funding from a wide variety of sources, most of which will—one suspects—demand a watering-down of the distinctive regional contribution to the blander sell-it-in-any-market contribution.
How do you think the BBC is sustaining the UK’s independent production sector. Is it too big a burden for the BBC? Are there reasonably sensible changes in legislation that would help that independent sector as they did with the 1983 Act?
Nigel Warner: One thing I can reassure you on—having gone around the country and been at lots of members’ meetings—is that there are lots of substantial companies that have grown out of the very fertile environment that was created around independent production and that is the envy of the world, quite frankly. But there are also still plenty of very small businesses: more than 80% of independent producers in the UK are SMEs where turnover is lower than £25 million a year. There are very small companies growing all the time. It is still a very mixed sector with some very big players but a very long tail. My job is to represent all those interests.
The role of the BBC in relation to the nations and regions’ production is particularly critical. More than a third of all the commissioning revenues outside London among independent producers comes from the BBC, so it is a very big player in that marketplace. The relationship between the BBC and the independent producers is very important. A message that I have had from members over these last couple of months is that they want to see that relationship improved. They would like—the BBC is minded or thinking in this direction—to see more power, authority and finance devolved down to local commissioning centres, which already exist in Northern Ireland, Wales, Scotland and elsewhere, to people on the ground who have close relationships with independent producers to be able to streamline the commissioning processes.
As Jane mentioned, one of the most difficult things for our members at the moment is partly a financing issue but also just the length of time that commissioning decisions are taking because the BBC’s processes are complex. That just causes huge cash flow issues for our companies. While they are going around raising money from whatever sources they can find to do so, they are having to pay their staff, run their offices and develop ideas, all of which cost money. The more streamlined we can make those processes, the better.
The other thing I would say is that it is not just the BBC; there are other players in the marketplace that are helping and supporting independent production. The screen agencies Creative Wales, Northern Ireland Screen and Screen Scotland are all putting money into helping to support local businesses, develop ideas and develop their local creative industries, particularly their screen sectors. They all see the opportunities that their local screen sectors provide in terms of jobs for local people, but it has to be on a sustainable basis. You need a good long-term relationship with the commissioning organisations and that is really the role that the BBC can crucially and increasingly play, in my view.
Q27 Lord McNally: What about intellectual property? One of you—I cannot remember who—mentioned that in raising money for a project, the intellectual property has to be signed away if not given away by the original initiators to be able to raise—
Jane Tranter: It does not have to be with the BBC. With streamers, the rights situation is different. That is one way that the BBC has worked hard to support independent production companies: it has recognised that you need to hold on to the rights in order to be able to raise the rest of the money for you to make your show.
The Chair: Is that the difference in how it works? With the BBC you retain your rights; with the streamers you do not.
Jane Tranter: Yes.
David Abraham: With Channel 4 as well.
Jane Tranter: And ITV. Can I just return to your point about nations and regions? I have a slightly different view about the BBC and its relationship with the nations and regions. I am obviously not Welsh, but I have a very long association with Wales that started in 2003 when I was controller of drama commissioning at the BBC and I made the decision to make “Doctor Who” from Cardiff.
What I discovered then was the importance of doing one thing of great strength. For example, rather than try to grow lots of small flowers and hope you are going to have a big impact, you actually keep those flowers growing but do not put too much pressure on them and allow something bigger to blossom there. During the period of time that I was at the BBC, drama in Wales grew and grew. One of the last things I did as controller of drama commissioning was to move “Casualty” from Bristol to Cardiff in order to ensure that that cluster in Cardiff was going to survive.
I then went to work in the US from 2009 to 2015. I worked a lot in New York, where I began to meet a lot of the crews and teamsters who are based there. I discovered that their jobs—those local crew jobs—were generational jobs. They were passed down, normally from father to son; I would like to see mother to daughter. That really struck a chord with me. One of my grandfathers was a coal miner and the other was a mill worker. Both those jobs have been in their families for generations; it came to my parents’ generation and they were gone.
I began to look at New York and think, "Well, if you can do that in New York, why can’t you do that in Cardiff? If you come with a position of strength, why can you not grow a creative cluster just as an independent production company?” I started Bad Wolf in complete association with Creative Wales; you are right about how important those screen agencies are. We started strategic partnerships with people in the local community. With schools, we built a studio and we have a classroom in the studio. With universities, suppliers and all sorts of satellite businesses around our business, the production started. Over the past 10 years, we have put hundreds of millions of pounds and the equivalent of 11,000 full-time employees into the Welsh economy. In so doing, it has just created a whole new way of doing things.
We all pretend we can, but we cannot get away from the fact that London is where the theatres are, therefore the actors are, therefore the agents are, and many—not all—writers are. It should not matter anymore where someone is placed. What matters is how much care and attention you are giving to the people, the creative industry and the stories that they are telling in that nation and region. I feel that it is not necessarily about devolving power to a Welsh-based commissioner but forming strategic partnerships with the independent production companies that are there, both the big ones such as Bad Wolf and the smaller ones, to work together with the universities, as your previous witnesses were talking about. It is about working together to strengthen on the ground, not from a grander, “Let me give you this money”, but actually from the practitioners from the grass roots up.
In fairness to the BBC, I have always had to get co-production money but have made “His Dark Materials” with the BBC and HBO, “Industry” with the BBC and HBO, “Dope Girls” with the BBC and Hulu, and recently “The Other Bennet Sister” with the BBC and BritBox. It has really supported us in that area along with Creative Wales and, in so doing, has enabled us to help grow that area. There is no one-size-fits-all answer of, “We’ll build a new block in Salford and everyone will come”; they will come only if you have the right people there.
Lord McNally: Do you think the BBC gets enough credit for that?
The Chair: Tom, we need to move on. We have three more questions. Could I come to you, Baroness Caine?
Q28 Baroness Caine of Kentish Town: Yes, and it is linked actually; you have already started to talk about issues that my question relates to. Basically we are just talking now about whether the BBC should have a new public purpose to support growth and the broader creative economy. Within that, what should it actually encourage? It is interesting that you were just talking about the drama situation and linking it to the questions earlier, which you were here for. I am also interested in some narrower genres that we were talking about: the diversity of genre and smaller companies that are producing around things such as arts, daytime et cetera. David, could you perhaps start on that? Jane has already given a fantastic illustration of Wales. Then, Nigel, could you finish up?
David Abraham: I will be brief in my answer because I know that there are a couple of other points to cover. I am a little sceptical about broad-brush ambitions around growth, because it is such a large and amorphous concept. What Jane has shared is very impactful and I reflect on the contrast between that and the interventions of putting offices and buildings of broadcasters around the country, particularly more recently at Channel 4. It is not that many good things have not come from that, because they have, but is perhaps about the sustainability of the ecosystem, where you have clustered all those trades, crafts and specialisms. This is much more how the American model works.
We need to recognise the position of London in the global industry. We are now in a global industry, supplying content to global players that exist on a scale that has never occurred before and we therefore have to ask ourselves how many of those clusters we can actually create as a country.
Nigel Warner: I guess where it works best is where there is good collaboration between the different partners, whether they are commercial, public sector or public authorities. Often it relies heavily on strong local leadership, good local leaders and the relationships with those people. The message that I have taken from the last few weeks of travelling is that, without collaboration between the different players, we will not be able to sustain the level of production investment that this country has seen over the last couple of decades.
Last year, the independent production community contributed more than £650 million into the overall costs of PSB production. Our members are big players in that mix now. If you put together the commercial contribution from those, the screen agencies and the support that they provide, and public service broadcasters and the critical role that anchor tenants such as the BBC can play in certain places—particularly the West Midlands and the north-east—you will have something that works together. You can bring other partners into that as well.
If you look at what is happening in the West Midlands at the moment, you can see the growth potential there. Part of that is to do with independent production, part is to do with the BBC, and part is to do with strong local leadership there and the resources that people are prepared to dedicate to it. It really needs people to come together with resources who are prepared to work together on a long-term, sustainable basis. I go back to my point that, unless the BBC is given some longer-term certainty and sustainability—particularly over its future funding—it will be really difficult to sustain that.
Q29 Baroness Caine of Kentish Town: I would just like to press you on one more issue that Jane alluded to, which is that talent is the lifeblood of all these industries and the development of that talent is really important. The whole skills-training area was identified by both the Green Paper and the BBC as being a key contribution to growth. Do you have views on what the role should be and how it should sit alongside current arrangements within the industry?
Nigel Warner: It works in a number of different ways. The BBC is a very important player when it comes to bringing new, young talent into the marketplace. BBC apprenticeships and all the training programmes that the BBC has in place are very important to that. Something that we have seen in the sector in recent years has been the loss of people in the middle tier of the industry and the BBC has an important role to play there. Part of that is actually through its commissioning structures, because those are people who will work if there is work to do; they learn as they are working and will improve their skills during the course of that. That may well be something that we need to look at focusing on more as an industry. ScreenSkills is doing it and Pact as an organisation is doing it to help our members learn new skills—how to reach out into some new platforms and how to take advantage of the opportunities that exist out there. That is something that the BBC can also continue to play an important role in.
Jane Tranter: Anecdotally, our industry is quite a mobile industry, so it normally tends to be that you follow where your production needs to be filmed. In moving to Wales, I made a commitment that we would immobilise ourselves and try to look for employment for people 52 weeks a year. In so doing, I also had to accept the quid pro quo, which is that I might not have all the people I need 52 weeks of the year. I had two things to look at; one was that the cost of my productions is going to be slightly higher sometimes because I might have to bring people outside Wales into Wales.
While I was doing that, I did the second thing, which was to start a training programme at Bad Wolf with Creative Wales and Screen Alliance Wales. We have people in our classroom from age eight onwards, but one of the last people we trained who went on to take a job with us was in their 60s, so it is a range across the piece. It has meant that I am able to target where we have a shortage—for example grips or editors—so you can really begin to focus. The focus normally tends to be on writers or actors, but it is actually everything so you can target it.
I am going to keep going back to the same thing about having these clusters of people. We are in a world where there are some players who want to sit there and do it all on their own. Maybe they have the ability to do that; maybe that is just the way they are driven. But the rest of us have to share, which is not a bad thing. It is not a bad thing for an independent production company to take its responsibility of training, but the BBC needs to take its responsibility too.
Over the years, it always has. I did my training at the BBC; most of the big drama players across the piece started at the BBC, in one way or another. Long may that continue because, if it does not, David is right: they will come from other places as well. They should not be mutually exclusive; there should be room for us all if we arrange ourselves properly to include everyone.
The Chair: The next question takes us back to something we started with Jane on regions.
Q30 Baroness Elliott of Whitburn Bay: You have answered part of the question I want to ask, but I want to turn on its head what you were talking about—the support for nations and regions from the BBC. You can tell from my accent that I am very much from the regions. The Government have said that they will explore a “range of interventions” that could help the BBC better support the production sector in the nations and regions in the next charter period. I am very interested to know what interventions you think the Government should prioritise to actually do that. What would work?
Jane Tranter: I will just say very quickly what worked for Bad Wolf. When I started, instead of taking start-up money from a broadcaster, studio or distributor, I wanted to be truly independent and make my productions in Wales. I knew perfectly well that, if I took money from elsewhere, they would say, “Well, come and work in our studio that we own rather than be in Wales” or “It will be cheaper if you move this particular production to X part of England or somewhere else or go to Europe to film it”. Stubbornly, I did not want to do that; it was non-negotiable that I wanted filming to be in our studio in Wales so I could grow this community.
So we entered a public-private partnership with the Welsh Government and I took a commercial loan, which was repayable and has been repaid, so I could start. It was offset against the slate of programming that I had so that when I said, “Okay, we are now going to make ‘His Dark Materials’”, no one could say, “Could you please go to our studio in Leavesden?” It had to be in Wales. I am not saying that Bad Wolf is one-size-fits-all but public/private partnerships are really important. Incentivising people to go and set their productions up and form these kinds of clusters that Bad Wolf has managed to form around itself is one way that I strongly urge the Government to look at.
David Abraham: Physical production around the world is about to go through the biggest revolution it has ever experienced with AI. It is now possible to shoot a movie in a box with actors and then add all the sets and external experiences that the viewer normally would only—up until now—see through physical filming. If we had a strategic focus through the BBC and into the industry over the next decade, it would be to make sure that the next generation of talent coming through understands how to use those tools really effectively to continue the brilliant storytelling that we will always have as a country.
We are currently at the very start of this. I am in the middle of a production for the BBC at the moment, where we are taking some scenes that would normally be done as a documentary and which are going to be dramatised. We have gone out to different groups, individuals and companies to see what is now possible in the world of elevating what a documentary can be through AI. I can tell you that what is happening in that space almost on a weekly basis is utterly extraordinary. It is going to be possible to do things in hours on a computer that up until now were only possible with hundreds of people and millions of pounds.
Jane Tranter: I quite like the employment of hundreds of people though.
David Abraham: I do not defend this other than to say that we also cannot be Luddites; it is coming. It is also going to create a lot of career opportunities for the next generation of young people who are currently in their bedrooms creating this content, which is already achieving a level of visual finish that is indiscernible from something that is shot using physical production. We need a national plan for this, and it goes back to something that was said earlier around where the horsepower for all this AI is really based. Do we have a sovereign strategy with regard to that component of it? A subsequent question is around the distribution of the content and the extent to which we can have a strategy to control that better than we are at the moment.
Nigel Warner: I agree with the point that Jane made about public/private partnerships. Something that was interesting talking to the various screen agencies in different parts of the UK is that there is an increasing focus on linking the resources that they make available. Some give grants and some give recoupable loans to companies to help them support production. There is an increasing focus there on growing local companies as part of the requirements around that money.
That will potentially have an impact because, if you are having to put together a mix of funding, for example to commission at the BBC, and can only get 50% of the way and need 50% of the money to come from the producer, the relationship that they have with those local agencies is going to become important. That may well direct resources towards specific areas where those agencies are providing funds that are linked to local companies in that way. That could be a significant way to help to develop local sustainable businesses. We see that happening now.
Q31 Baroness Elliott of Whitburn Bay: What can the Government do to help the BBC?
Nigel Warner: The BBC is the only public service broadcaster that has obligations to make content in the nations—Scotland, Wales and Northern Ireland. Maintaining those kinds of quotas and obligations is an important part of these charter discussions and we should not let that go.
Q32 Baroness Elliott of Whitburn Bay: Should they be increased?
Nigel Warner: They are a floor, not a ceiling; the BBC can spend more if it wants to. It comes to the point of how the local economy and the organisations there work, and the BBC’s ability to work with those organisations to develop the best ideas. What we are looking at here is creating these clusters or local economies where different players are all involved in making all this happen. The truth is that the BBC cannot do it all on its own.
Jane Tranter: Nor should it be expected to.
Nigel Warner: Exactly. We want a plural environment and commissioning. We want Channel 4 to be in a stronger place than it is today, because Channel 4 was originally designed to support the independent production sector. This is more of an operational thing to be honest, but we want to encourage the BBC to be more streamlined and efficient, and to reduce the levels of bureaucracy and the pressures that it puts on producers in terms of having cash flow over long periods of time while decisions are being made. Some of that stuff sounds quite dull and like business affairs, but it could actually make a significant difference to quite a lot of companies in terms of their sustainability locally.
Q33 Baroness Owen of Alderley Edge: To what extent do you agree that there is an “urgent need” for strategic partnerships between public service broadcasters to enable them to compete with the big technology companies? Could you discuss the opportunities and risks that this would present? After hearing about Jane’s work in Wales, I am particularly interested in how we ensure that these partnerships do not inadvertently squeeze out smaller producers.
Jane Tranter: David is probably going to have a much better answer about the strategic partnership in terms of the bigger picture across the broadcasters. My interpretation, in a smaller way, goes back to the thing I was saying that, actually, strength will come through partnerships. I have always taken this analogy with Bad Wolf: you know that thing on the aeroplane where you do not put an oxygen mask on anyone else’s face until you have put it on your own, and it seems like a terrible thing to do with your kids but, “All right, I am breathing. You breathe too”? Bad Wolf is a successful company, but it has taken us 10 years for me to think, “All right, I can now look around”. As Nigel talks about, we have weathered the enormous cash flow gaps that you get sometimes.
To be honest, the BBC is probably the least bad offender of all that. Sometimes you need cash flow to such an extent that any other company would be put out of business. We have finally got ourselves to a solid enough place to be able to look around and think, “All right, it’s not just about training crew or heads of departments and getting people’s careers up. It is not just about training school kids and giving college students their first jobs. It is not just about the writers or the directors. It is actually about other independent producers”.
That is a very good example of how the BBC could work with Bad Wolf to say, “All right, what can we all do together? Can you help with independent producers who are just starting out?” You can get knocked over very easily and times are such that we are not always very good at sharing or asking for help—I am terrible, let us be clear—or asking for partnerships. Everything will be better if we start doing that, not just in this industry but everywhere. A good place for the BBC to start is in the nations and regions; go for the more solid people and ask them to help together.
Q34 Baroness Owen of Alderley Edge: Do you think there are risks involved as well?
Jane Tranter: There are huge risks involved in starting out as an independent production company in the year 2026. I am not saying that there was no risk in 2015; there was massive personal risk. The risk is strong and it is now very easy, if you start off small, to get hoovered up by someone bigger. That bit cannot be a hoovering up; it has to be a partnership.
David Abraham: We are all reliant upon a healthy ecosystem, both nationally and globally. There is no doubt that the global is winning out over the national, both in the UK and around the world. We have a decision to make as a country about whether we want to reset the level of collaboration that occurred in previous eras.
If you think back to the origination of the BBC as a radio technology and how it was an industry body that got together with the Government and licenced users, and then how television as a medium has evolved in subsequent developments, these were national strategic priorities and then systems and ecosystems were built to deliver on them. Everyone in the creative industries contributed to and benefited from those ecosystems.
As a country, we do not have a sufficient vision today as to what the future ecosystem of these media looks like. We are fooling ourselves to believe that the current line-up of technologies globally—let alone nationally—is the end state that our children and grandchildren will be consuming. I actually think that we have gone way backwards in terms of the consumer experience and the clarity and simplicity of how we find our media compared to where we were 15, 20 years ago. Just buy a new TV set, try to plug it in and work out what the hell you are meant to do in terms of the borders between free, pay and streaming; it is profoundly confusing. There is a huge amount of friction and then you layer AI on top of that.
We need a national strategy for our distribution that will then breathe new life into the ecosystem for the creative industries. Without that, I fear that there will be a small number of very significant winners because the excellent and best of the industry today will continue to get great commissions from these huge global companies. I fear for where the next generation will come from, albeit that the organic chaos of YouTube is going to generate a wave of creative voices that have yet to find their outlet in traditional media, but it is coming.
Q35 Baroness Owen of Alderley Edge: Do you believe that these partnerships will be enough to take on the global technology companies?
David Abraham: This country cannot take on a global media company that is in 200 countries, but it can set the parameters with Government for how we wish to operate as a country. We can remind ourselves that there are now bad actors everywhere in the online world that are trying to do the opposite of what public service broadcasting is there to do: they want to disinform, divide and disrupt among our young people and within our communities. This is a fight that has to be addressed slightly less politely than it is being at the moment. We have to deploy some of our best tech minds in the interest of defending the boundaries of our culture and media in a way that has hugely more force, resource and ambition than we currently have.
Nigel Warner: From the point of view of the independent production sector at least, it is important to maintain the plurality of different opportunities to go to in that environment. Some are growing organically. If we were having this conversation 10 years ago, we would not have been talking about UK commissions from international streaming companies, because it was just not happening. We would not be talking about opportunities to grow and monetise your IP on YouTube, because it just did not exist in the same way. There are new opportunities growing organically.
It is also important that we ensure that the diverse opportunities that exist at the moment for producers to bid for commissions for content continue to exist in this new world, because it is still a very important part of our broadcasting, content and IP creation. It is a world-class industry. If you talk to people in other European countries about this, they still look at the UK and what we have succeeded in doing here in the last 20 years with a degree of envy. We need to ensure that we preserve, maintain and build on that, at the same time as exploring all these new opportunities that are coming up.
Jane Tranter: A lot of the reason that people outside the UK look at us, admire what we do and follow their admiration is these huge productions that helicopter in because it is cheaper to film here, but they love our UK talent, both in front of and behind the camera. The irony is that the majority of the people they are helicoptering in to work will have started in the BBC, in some form or another.
While we exist in this system, we have to look to protect the BBC, because one thing that the BBC does best is to give people a first: a first job, a first taste, their first steps in whatever it might be. If we are looking at, “All right, let’s really drill down into what the point of the BBC is and what its public purpose should be”, one of those is to ensure that a healthy, creative economy is first off kick-started by the BBC. We should not forget that.
Nigel Warner: I know this is not necessarily the subject of your inquiry, but we need to be braver about the conversation we are having about the future funding of the BBC. Everybody accepts that the licence fee model is extremely challenged and that we need to have a public conversation about how it is actually going to be funded for the future.
Jane Tranter: To the question about whether we need a new public purpose, it is also brave to have those conversations about what the public purpose of the BBC is. It will be defined as much by what it does not do as by what it does. At some point, do we really throw some doors and windows open and say, “Okay, this is what you should be doing”, and close some others in order to ensure that? To be clear, I believe it tackles its public purpose really well, but it needs to future-proof itself.
Q36 The Chair: We have just a couple of final questions on the BBC’s public purpose. David answered whether he thought the public purpose should be on growth and I think he said no. Do you believe that the public purpose should be stated in terms of driving growth?
Jane Tranter: I do not think it is about driving growth. I understand that I am a drama producer and that I am very touchy-feely, but, as David is talking about, in a world of confused truth, facts and alternate facts, storytelling has never been important. Storytelling is the way that we will communicate about our very humanity to each other, and you cannot argue with the truth of a writer’s story. The BBC tells stories as well as anybody in the entire world. Our cultural life should not be a luxury; it should be a necessity.
Again, the BBC broadcasting as it is—into living rooms, not in places that you have to pay hundreds and hundreds of pounds to get into—has never been more important. Really focusing down, I do not think that the BBC has to be any bigger; it has to be fit for purpose. The battleground is to find out what that size looks like and therefore what its purpose looks like.
David Abraham: It may not be able to do it on its own given the scale of this, so the national plan is really important.
Jane Tranter: I agree; it does not have to do it on its own.
David Abraham: If there were alignment on the right issues among all the broadcasters—including those US-owned PSB owners, because there is a lot for them to gain from being in the tent, as well—that level of national co-ordination would have a chance. We need to rediscover our creativity and technological prowess at this moment, because we live in a world where we are being told that the resources of Silicon Valley and the scale of its investments in AI mean that we are basically not going to be invited to the party.
I challenge that because I see, for example, the impact of DeepMind on Google being very profound. What did the founders of DeepMind do in their childhood? They watched the BBC, they went to school, they benefited from the National Health Service and they have just made an extremely significant contribution to the future of Google, albeit they had to sell their company to make that happen. Nevertheless, what was the source code of that brilliance? It came from the UK. We should not allow ourselves to be told that global distribution platforms are the end state forevermore to get our stories to our own audiences. That simply makes no sense, and it feels almost cultural suicide to accept that as an end state.
Q37 The Chair: The final question—we put this to the first panel, when I think you were all here—is whether there is a case for restoring technology, R&D and innovation as a core part of the BBC’s remit.
David Abraham: Yes. Look at what the BBC R&D department is doing currently; it is doing very good work. For example, it often looks at how workflows and distribution technology are changing, but mostly using systems that are proprietary. Ultimately the source code comes from Silicon Valley and a lot of the storage is subject to kill switches that Silicon Valley will ultimately control at a sovereign level. Therefore, again, if we think about this far more—as we are beginning to do—around the defence of the country, we will go out there and build our own systems ourselves. We will be told by the Americans that we are idiots and that we should not be doing that, but we have to make a decision such that we can at least embark upon that as a national goal. Everything else we have been talking about this afternoon is down stream of that issue.
Nigel Warner: Growth should be part of the BBC’s charter mission; it always has been. My old boss, Tessa Jowell, called it the seed corn for the creative industries.
Jane Tranter: It is venture capital.
Nigel Warner: Indeed—and we should recognise the whole value of the BBC. Of course it is a very important media institution, but it is also a £3.8 billion public investment in our creative economy. We need to make sure that we make the most of that without expecting the BBC to do absolutely everything, because clearly it cannot.
Jane Tranter: I agree with what everyone has said, really. We cannot say that the BBC should be a place of firsts if we are not asking it to make this a core tenet, because it is just going to get left behind.
The Chair: The idea of sovereign developments will be music to Lord Tarassenko’s ears because that is his big thing. Thank you very much indeed. We have covered a huge range of ground and I am really appreciative of your input. Thank you so much for coming.
