25
Examination of witnesses
Martin Baker, Magnus Brooke, Stephen Lotinga and Mitchell Simmons.
Q50 The Chair: Good afternoon. I am pleased to welcome you all to this meeting of the Communications and Digital Committee. In this session, we will be continuing our work on the BBC charter review. The BBC is just one of the UK’s public service broadcasters alongside ITV, Channel 4 and Channel 5. We are looking forward to hearing from each of those broadcasters today as well as from Sky.
It is worth my mentioning that the Culture, Media and Sport Committee in the Commons also has an inquiry into the BBC charter review. I imagine that some of you, if not all of you, will be speaking to them as well. It is worth pointing out that we are choosing to look at different aspects of the charter review, particularly but not entirely things such as how the BBC supports growth, how the BBC supports the wider creative industries, and technology and innovation. There is a focus to what we are trying to do here; it is not exactly the same as there.
Before I move on to questions, could I ask each of you to introduce yourselves and your role as well as to explain very briefly how the work of your broadcaster is funded?
Stephen Lotinga: I am group managing director of corporate affairs for Sky. That means I lead on all our interactions with government and Parliament, and in particular areas of interest such as charter renewal. Sky is one of the UK’s largest media and entertainment companies. We are not a PSB, as already noted, but we do invest hundreds of millions of pounds every year in UK-originated content and what we would refer to as public service media content, such as Sky News and Sky Arts.
We run a subscription business, so we seek to provide the best of both our own content and others’ to our customers. What makes us slightly different from the other people appearing before you today is that we have what we call a vertically integrated business. Not only do we invest in programming ourselves; we also run a distribution platform and we provide connectivity to people so they can access our content and others’.
Mitchell Simmons: Good afternoon. I am vice-president for policy and government affairs at Paramount. I cover our suite of brands that we have in the UK, but I am primarily here to talk about Channel 5, which is one of the smallest public service broadcasters in the UK. It plays a distinctive role in the PSB ecology. It is somewhat of an alternative voice, providing trusted news, original UK drama and factual programming. We also have a unique year-round commitment to kids’ TV programming via “Milkshake!” on the main channel. A key shift in the role of 5 in recent years has been towards lower‑tariff drama in the regions and being a PSB for those in the non-metropolitan areas of the UK. We are primarily funded by advertising, whether that be through digital terrestrial television, on Sky’s platforms or elsewhere.
Martin Baker: I am the chief commercial affairs officer and managing director of Paralympics at Channel 4. My responsibilities include most of our commercial dealings with suppliers—that is to say, independent producers—our legal functions and our regulatory functions, as well as my responsibility over the Paralympic Games. We are the other publicly owned PSB in the UK, the other being the BBC. In that sense, we manifest the existence of plurality in public service media provision that is publicly owned. We are funded overwhelmingly by advertising and sponsorship to the tune of around 90%, with 10% coming from other sources of revenue.
Magnus Brooke: Hello. I am group director of strategy, policy and regulation at ITV. I am responsible for our corporate strategy but also our relations with government and regulators. ITV is a UK-listed company with two divisions. ITV M&E is our distribution business. We are proud to be a public service broadcaster and have been since our inception in 1955. It is also the home of ITVX, our very rapidly growing streaming service. The other bit of ITV is ITV Studios, which is a global television producer. A number of its productions appear on ITV, but we have production businesses all the way around Europe and in the US and Australia.
Q51 The Chair: Thank you all. The Green Paper suggests that the BBC should make greater use of third-party platforms, such as YouTube, to reach audiences where they are. How has your organisation adapted its distribution strategy as audiences move towards streaming, video-sharing platforms, social media and so on?
Stephen Lotinga: I am sure the committee will have heard evidence earlier in your inquiry that one of the key differences with the last time when the charter renewal process happened is that the world has changed dramatically. We are no longer competing with each other; we are competing with huge global platforms for people’s attention and time. That includes social media, streaming platforms and video-sharing platforms.
The way that Sky has responded to that in particular is to launch its own streaming platforms, Sky Glass, Sky Stream and Now, which help us make sure that our content and others’ is available to people in an as easy and convenient a fashion as they desire. That is the major way that we have adapted our business. Success is really about making sure that we provide our customers with a convenient and easy way to access our programming. We cannot rely upon them just turning up and accessing channels in the way that they used to.
Mitchell Simmons: As I noted earlier, 5 is a commercially funded public service broadcaster. While historically that has meant that our revenue streams have come by distributing via terrestrial television on the main TV in the living room, increasingly now it is our duty and obligation to make sure that we get our content to where the customer is.
That means we need to be agile enough to make sure that it is on the main TV in the living room—maybe that is through terrestrial TV; maybe it is through Sky, Virgin or other platforms—but increasingly we are also looking for other distribution models. People might be watching it via their iPad when they are on the move or on a Roku TV. We have built a 5 streaming service, ensuring that our linear content is also available on our streaming service and that we put content on our streaming service that is attractive, reflects British life and does all the things that our linear PSB channel does and more. Over the last few years, 5 has had significant success, particularly in lower-tariff drama, pushing live audience viewers to our streaming services. Our goal is to be in places where we can make a commercial return so that we can make enough revenue to reinvest back into PSB content.
Martin Baker: I would add that streaming, we have to acknowledge, now reflects the majority of young viewing of our services. It is really essential that one goes where the audience is. We adopted an approach some time ago—we were the first PSB to form a partnership with YouTube—to syndicate our long-form content on that platform in order to ensure that we reach them. It is a balance of audience and revenue, as Mitchell has said. This is something that we need to explore.
To answer your question, it is interesting that the BBC should consider that. There seems no reason why it should not, but we would have a reservation about advertising being carried around BBC public service content on YouTube.
Magnus Brooke: To answer your question directly, yes, we really have changed our distribution strategy. Yes, we are still on satellite, cable and terrestrial television, as you would expect—ITVX is now on about 20 connected platforms—but most of our content is now on YouTube. We are also on TikTok and other social media. In fact, out of all the media services, we have the largest politics-themed account on TikTok. We have had to go where the audience has gone. The audience has fractured, as Stephen said, across a load of different platforms and ways of receiving television.
Q52 The Chair: I have a few additional questions around this. First, what trade-offs arise from distributing content through those third-party platforms? There is also the issue of how broadcasters can keep their content visible on third-party platforms. There is a real concern about the platforms’ algorithms shaping editorial and commissioning decisions in ways that would undermine public service objectives. Can you talk about the trade-offs, the pluses and minuses, of distributing content and how, as broadcasters, you can keep your own content visible on third-party platforms?
Magnus Brooke: I will have a go on trade-offs. If you are an advertising-financed PSB, you need to maximise viewing, which means you need to be on the platforms that people are using. I have mentioned what we are doing. Not all third-party platforms are the same. We have had very constructive relationships with the UK-focused platforms, Sky and Virgin in particular, for many years.
The trade-offs are most acute in relation to the global online platforms, the Amazons, Samsungs and YouTubes, which are not particularly focused on the future of PSB. In general, their approach is to maximise the amount of revenue that they can make from the content providers that are on their platform. That is a perfectly sensible ambition from their point of view as commercial players.
A good example of the trade-off is YouTube, which is rapidly becoming a pre-eminent TV platform in the UK, particularly on the main screen. More than half of its viewing now in the UK is on the main television set. The truth is that its standard terms are to take 45% of revenue from anybody who is on the platform. You get a better deal, as we do, if you are a slightly bigger player, but the truth is that we pay it a material percentage of all our advertising revenue on YouTube, many millions of pounds every year, just for being on its service. That is the most acute trade-off that we have.
In the short term, we think there is an incremental benefit from being on YouTube. In other words, we are reaching viewers we might not reach via ITVX on a variety of other platforms, but, as YouTube grows, the danger is that it starts to cannibalise viewing materially from other platforms where we do keep 100% of the revenue because other people are not asking us for a percentage of our revenue. This is a non-trivial problem, looking forward. From an ITV point of view, our margin is 12% or so in our M&E business. If you are STV, it is somewhere between 6% and 7%. If you are making a much higher percentage of pay-aways and revenue, that is clearly unsustainable over time and really does pose a medium or long-term threat to the sustainability of commercial PSB.
It was a threat, of course, that was recognised in the Media Bill conversations that happened in this place and in the Commons. There was a recognition that commercial PSB would not be sustainable, if those pay-aways continued. The legislation, which is nearly coming into force, does deal with that in relation to a number of connected platforms, but not YouTube or other forms of social media.
Stephen Lotinga: There are significant benefits, particularly—Martin referred to this earlier—in terms of the reach that you can gain on these platforms. You can reach new audiences, particularly younger ones, who tend to be on there. Because of the nature of our business, we are quite selective about what content we put on other platforms and what we use them for. For example, with Sky News, we very much embrace the importance of being able to distribute content very widely, but a lot of our content we keep for our subscription business, so we do not necessarily always put it on there. The trade-off is the fact that you have lower revenues and potentially less control over the access to the data related to the audience who are watching it. There are lots of reasons that you have to be concerned.
The original question was potentially about the BBC and YouTube. We would be supportive of the BBC seeking to make sure that its content is available as widely as possible, particularly recognising the fact that there are particular audiences it can reach by going via YouTube, but our key concern would be making sure that it is consistent in its approach and therefore that that content is also available on UK-based platforms such as ourselves. Something that we think the whole charter should be looking at is ensuring that the BBC has a duty to make its content available as widely as possible and scrutinising the way that it distributes that.
Martin Baker: The primary trade-off is between reach and control. You can access audiences that you might find hard to reach in other ways. For a publicly owned public service media publisher, as we are, that is really important. You do not have control in the same way as when you are operating your own platform or even when you are in a long-standing and established distribution relationship, as we have had with Sky for decades. You have to balance those two things together.
Q53 Lord Kirkhope of Harrogate: To what extent do you do research into how much of the content that we are talking about, regardless of the platform that it may be on, is still being domestically viewed on what we would describe as a television set as opposed to on smartphones, iPads or other forms of viewing and listening? Is it differentiated between you? Do you all have the same statistics, presumably from the different platforms that you are associated with?
Magnus Brooke: We have quite a lot of information, particularly in relation to the use of television sets. Barb is an industry currency that measures more or less all viewing in the home. There is a pretty common industry currency. We have first-party data in relation to the use of our own services. For us, that is ITVX. We know exactly who has used ITVX and we can work out how that links into the Barb data. We have quite good visibility of who is watching our services.
Martin Baker: With YouTube distribution, we can tell whether it is in the UK or outside the UK.
Magnus Brooke: The other part of your question was about how much of it is on the TV set. One of the really striking things is that an increasing amount of viewing is on the TV set. Viewing of YouTube on television sets has doubled in the last three years and more than 50% of YouTube viewing in the UK is now on a television set, which is a genuinely startling statistic. The assumption has always been that it is people on phones with cats in washing machines or whatever. It is just not that at all now. We have about 30 YouTube channels with long-form content. A lot of our content is now published on YouTube.
If you like, YouTube is becoming a television platform. Its explicit aspiration is to get away from it being cats in washing machines to being a long-form television platform competing for viewing and revenue with both us and with other television platforms. It is both a channel selling advertising around content and a platform on which lots of people are aggregating and selling content.
Mitchell Simmons: To your comment about the differences between us, we all have slightly different remits, which leads to people consuming our content in differentiated ways. For example, in terms of linear TV, we have a children’s TV block every morning as “Milkshake!”. That is very heavy linear viewing because parents want to put their children in front of that environment early in the morning. There are real differences between the PSBs because we have different remits and different strategies.
There is also variance in when people might watch our content via streaming and which content they watch via streaming. Drama might be more popular by streaming, for example, than other types of content.
Q54 The Chair: Part of the question that I asked earlier was about how you keep your own content visible on those third-party platforms and the concern about allowing those platforms and algorithms to shape editorial and commissioning decisions. I do not know whether you have any thoughts on that particular aspect of it.
Martin Baker: They do not have any direct say over our editorial decision-making or what we publish. There is a clear distinction there. We have no material control over how they decide to surface it. There is definitely a challenge around being visible on those platforms.
To my point about the trade-off between reach and control, one is not able to influence, practically speaking, how one’s content is surfaced. That is why it seems appropriate to be talking about the possibilities for the prominence of public service media to be advanced in this space. Public service media exists for all sorts of reasons, but one of them is to create a diverse and different type of programming, as you have heard my colleagues talk about. That exists not through accident; it exists because of regulatory requirements on platforms—the old platforms, as they were. It seems logical that it would be good to ask the question as to what role regulation can play in this space.
Q55 The Lord Bishop of Winchester: This question covers a lot of the areas you have already touched on but perhaps takes them a little further, particularly picking up your last comment there, Martin. We have heard that public service broadcasters’ reliance on a small number of global platforms and infrastructure providers may present a strategic risk to the UK, given their power to set the terms on which public service content reaches audiences. How serious is this risk?
I also have a supplementary, which I will give you now because you will probably want to cover it all together. What action should broadcasters take to reduce that risk? Where, if anywhere, might further regulatory intervention be required?
Magnus Brooke: It is serious, and it is serious for two reasons. First, the content choices of UK audiences are being shaped and mediated by a small number of global players. As Martin said, we have much less control over how content is surfaced and made available to UK viewers. Secondly, the economics of UK content providers, such as PSBs, are affected by the operation of these platforms, as I mentioned before. We start the year with a bill for £150 million for our news services, which none of the global streaming platforms has. We have to cross-subsidise that by making money. The more money that is extracted by platforms such as YouTube, the less money, frankly, there is going to be to spend on original UK content and news. This reliance is a practical and economic necessity because of the way in which people’s viewing habits are changing. We have to be on those platforms.
In terms of action, it goes without saying that we have to continue to make the best content that people want to watch. That goes without saying. Initiatives such as Freely, which is the online PSB platform that we have launched together with all the other PSBs, reduce the risk and give us more control. That is only one option, among many in the market, for online television content.
There is a role for regulation. We have talked a little bit about the Media Act. The Media Act will help. It is taking quite a long time to come. It is going to be probably around three years after the Act was passed before we get substantive implementation of the most important provisions. Haste is important, but regulation has to evolve. PSBs need parallel guarantees that they will be promoted and protected from value extraction by video-sharing platforms such as YouTube. To be fair, the Government have expressed sympathy with this, but we need to move to action quickly. A gap has opened up following the Media Act. There is a new set of platforms, particularly YouTube but others as well, that are not covered by the Media Act regime.
Martin Baker: We also need to learn from the data. We need to watch what is actually happening with audiences. Magnus made the point about cannibalisation earlier. We are not sure that there is evidence of cannibalisation yet, but it is a thing to track very carefully.
As to what we can do without any other intervention, we can be selective about what we do. We can track the data and learn. We do not have to publish everything on YouTube. We will continue to be selective about it.
Mitchell Simmons: PSBs have a choice about how they distribute their content. They need to be able to distribute content on a fair remuneration model on reasonable commercial terms. As I alluded to earlier, as commercial PSBs, that is how we and ITV can reinvest money into UK-originated content.
As 5, we have made a decision that, while we have a limited amount of content on YouTube, we have not entered into a specific partnership to create first-run content for YouTube because the financial remuneration model is not sufficient, given how we are delivering our remit elsewhere, that we would think it a good use of our resources. Clearly, if the terms of that relationship with YouTube and others were to change, we would be more than happy to distribute via those channels.
As Magnus alluded to earlier, we have to recognise that we spend a significant amount creating a brand and brand equity around what we do as PSBs, and therefore it is correct that we are fairly remunerated for that in terms of discoverability, prominence and so forth, if we are to distribute via some of these third parties.
Stephen Lotinga: I will not repeat what the others have said, much of which we agree with. We have a slightly different perspective as a business that operates a platform directly. Our key concern is that we have been a strong supporter of the idea of giving prominence to public service broadcasting content. I am grateful for the kind remarks others have made about their relationship with Sky. We feel that the Media Act is a significant intervention into the marketplace, but, at the same time, it puts us at a competitive disadvantage.
We are a UK-based business that is seeking to build our business here and build constructive relationships with certain global platforms, which have been referred to already, that are not under the same regulations. That has an impact on our ability to invest and innovate. As a business whose customers are largely both accessing PSB content and paying specifically for certain additional content that they want to watch, the fact that we are required to give greater prominence, while others are not, puts us at a disadvantage in our ability to monetise that content on our platforms.
Q56 Viscount Colville of Culross: Magnus, you have just talked about the Media Act, but that deals with prominence on digital TVs. It does not really deal with prominence and discoverability on platforms. Demos has just come out with this report on online prominence for PSBs, which talks about having some sort of intervention on algorithms and recommender systems so that, every now and again, a PSB piece of content does appear. Albeit the Media Act is being rolled out rather slowly, would you like to see an addition to that that covers online content and the way that online content is rolled out in favour of the PSBs?
Magnus Brooke: Yes, there should be a degree of preference for PSBs combined with an intervention around the commercial terms. There is no point having preference if it is uneconomic to put the content on the platform, or if you cannot afford to make the content in the first place because you have to pay away the money, which was the insight of the original Media Act. The original Media Act was about prominence, inclusion and fair value. You need those three elements together. If one of those is missing, the regime does not work.
To the algorithmic prominence point, we already have that in the Media Act. That is not a massive development. In effect, the Media Act says that, where an algorithm is deciding on a regulated connected platform that particular sorts of content ought to be served, prominence still applies in relation to the content that is surfaced algorithmically. So this is not a Rubicon. We have done this before. YouTube already provides a degree of preference for certain news providers and certain kids’ content. Again, there is nothing terribly revolutionary about this.
Q57 Viscount Colville of Culross: Could you see prominence going further, though?
Magnus Brooke: Do you mean in the sense of covering more platforms?
Viscount Colville of Culross: No, going further in pushing PSBs and their content online.
Magnus Brooke: The Media Act goes quite a long way in terms of the prominence obligation. Stephen may want to speak to this as a platform operator, but it is quite comprehensive in the ways that it thinks about the mechanisms by which content may be surfaced.
About 80% of our content shown on YouTube comes through algorithmic recommendation. That is a platform that is fundamentally driven by algorithm. You need to over-index on preference within the algorithm because it does not have fixed tiles and app-based presentation to anything like the degree that Samsung, Sky or others have. It is slightly horses for courses depending on the nature of the platform. There are certain platforms where algorithms are very important. You have to regulate appropriately for the particular platform, but many of the tools or concepts are there in the Media Act regime.
Q58 Viscount Colville of Culross: Stephen, you seem to think that it is a commercial barrier to have these recommender systems that push content in favour of PSBs.
Stephen Lotinga: They need to be very carefully designed. We need to think long and hard about what we are trying to encourage and incentivise in the marketplace. For example, lots of really important content is produced by the PSBs, but also by commercial providers.
We would not want to be in a position where we had to give much greater prominence to, for example, PSB news channels than we would for Sky News. We think Sky News is very clearly public service media content and therefore we do not think it should be put at a disadvantage on the basis that it does not originate from a PSB. If you were to do that, you would create a situation where people were less inclined to invest in that, if they were not going to receive the same kind of prominence.
If we were in a situation where we were not able to promote our own Sky News channel on our own platform, that would be quite difficult to manage commercially.
Q59 Baroness Owen of Alderley Edge: We have heard a great deal about the need for collaboration between UK broadcasters to respond to the dominance of global streamers and technology companies. Do you agree with this? If so, what specific areas present the strongest opportunities for collaboration?
Stephen Lotinga: I will take the second part of the question first. There are lots of areas for collaboration and we collaborate in many areas already. We collaborate on skills and particularly on making sure that we have an industry that is fit for the future, for example around AI. We are currently collaborating with the BBC to make sure that we are able to respond to the way that our news content is being used by AI companies. There are lots of rich areas for collaboration.
Again, going back to my initial point in the hearing, where we would like to see the greatest collaboration is around the distribution of BBC content. We think that we can play an incredibly important role in that. We do that with all the PSBs, but there are areas where it is not always easy. For example, we do not currently have BBC content on our Sky Go app. We have recently been asked by the BBC to reduce the amount of what is called native VOD content, in effect real-time native digital streams, on our Sky Q platform. Again, these are not to do with commercial arrangements. This is to do with a preference from the BBC to have people accessing content via iPlayer.
We want to see a consistent approach. If they are using platforms such as YouTube, we think that should be made available to as many people as possible. As a British-based business, we think that should be through our platforms as well.
Mitchell Simmons: It is worth taking a slight step back. We absolutely welcome the idea in the framing of the BBC charter by the Green Paper that this next BBC charter should not just be about the BBC, the role it plays and sustaining it for the next 10 years, but also the wider collaboration and benefits that the BBC charter can have for the wider PSB ecology and the broader audio-visual sector in the UK. That is absolutely welcome. If there were one thing to come out of this charter, this would be one of the most important things that we see in terms of a new obligation.
As Stephen said in the earlier part of his answer, and we would completely agree, in areas such as accessibility, training standards, digital infrastructure and technology, there are presumably lots of areas where we could collaborate more effectively. Clearly, we are also fiercely competitive when it comes to having the best content, reviewing the overnights the next day and checking who got the best ratings on what type of content. That is important because that is healthy, but at the same time there are clearly areas where we can collaborate. We welcome the idea that the BBC, as part of its obligation, should ensure that it can collaborate with other PSBs.
Martin Baker: I would agree with that completely. In fact, we have had a relationship with the BBC in terms of partnering on other activities for a considerable period. We act as the airtime sales agent for advertising on the BBC’s commercial suite of channels in the UK, UKTV. We have been doing that since 2010. There is a long record of collaborating in areas where the viewer will not notice.
It is important that what one does in those spaces does not imperil the benefit that comes from the plurality of public service media provision and particularly publicly owned public service media provision, but there is plenty of scope for more. The rule would generally be that it does not touch what the audience sees.
Magnus Brooke: There is a long history of particularly partnership and distribution, so Freeview, Freely or Freesat.
The key criteria for a successful collaboration are sharing risk, control and finance. Those are proper partnerships. You are most likely to find those in distribution because none of us can do that by ourselves. The BBC cannot do it by itself. In order to set up a TV platform, you need to have some friends. You need to share the costs and the risks. Those have been the most successful partnerships.
There are definitely other areas. We are in conversations with the commercial PSBs and Sky around a potential joint online advertising platform for SMEs, for example, which is in the public domain. There are lots of things that we can do.
Q60 Baroness Owen of Alderley Edge: Stephen has touched on this briefly already, but it would be helpful to just go over briefly the barriers that have prevented deeper collaboration to date.
Stephen Lotinga: We are very different businesses, in the fact that we have different funding models, different obligations and different commercial incentives. As Magnus said, collaboration works best when there is a genuinely shared objective. I have already touched upon the importance of distribution, but there are other areas where we could collaborate more in the future. We are all considering what the next switchover process is going to look like. There are clearly going to be areas where we really need to collaborate to make sure that we take all audiences with us.
As I say, competition is a really healthy thing. We do it every single day. Competition achieves some really great results, and it is one of the reasons why we have such a wonderful and varied media and broadcasting sector in the UK. We are in favour of the BBC collaborating more. The barriers to achieving it are not that significant, but there is a really important role for competition that remains within the sector.
Mitchell Simmons: Yes, I sort of agree with that. The historic barriers were because the media industry was at a certain place and time in the way that we distributed and we reached our audiences. That has radically changed over the last 10 or 20 years. The PSBs and the BBC are much more open to collaboration, as Magnus has alluded to. Looking forward, there are lots of challenges, such as the future of IP distribution, that we will be required to work together on. I do not see the historic barriers having any impact on future collaboration.
Martin Baker: The barriers probably come down to competition concerns. Some of us bear the scars of Project Kangaroo from the late 2000s. There are probably some concerns that are driven by the need to conserve plurality, which leads people to think, “No, we can’t really share in certain spaces”. The overall approach has probably been a bit conservative. It is a fair challenge.
Magnus Brooke: There are different incentives. The BBC tends to prioritise reach and attribution. We tend to be interested in monetisation and cost savings. That can be an issue. Again, it is important to be aligned. If you are aligned on the objective, those other things make less difference.
There are also some practical things. We have legacy tech; we have different contract durations. The other thing to say is that anybody who has ever done a four-way commercial negotiation knows that they are not straightforward. There are personalities and all those sorts of things. It is non-trivial, which is why it is so important that you have that alignment on the objective to start with. If you have a shared objective, all those things can be overridden.
Q61 Viscount Colville of Culross: Mitchell, you have just talked about how there have been historic barriers between PSBs and distribution, but now you see a bright future of collaboration. However, the BBC has always stuck pretty firmly to having the walled garden of iPlayer and BBC Sounds, and has not wanted to open those up to competitors. It has also traditionally liked to have its online distribution put through those two portals. With the YouTube partnership, that has now changed to an extent. Should iPlayer and BBC Sounds be opened up to other PSBs?
Mitchell Simmons: We definitely welcome the conversation that has been started by the Green Paper and the concept of opening up the iPlayer. That is my first response.
There is a slight question. When we talk about open iPlayer, there needs to be some question about the design of that. What do we mean by open iPlayer? The Government talk about open iPlayer; the BBC has mentioned open iPlayer. We have a number of broadcasters in this room who probably all have a slightly different version of what open iPlayer should mean. How should content be remunerated? Where should it sit? What will it be?
From our perspective, the idea of iPlayer being much more open to other PSBs and being more of a PSB player would be welcome. Within that, we think it is important that there is some kind of delineation between the commercial PSBs, who will want to have advertising and sponsorship around commercial content, and the BBC’s core ad-free environment. Protecting that is very important.
The other question we have around the open iPlayer model is that there also needs to be a separation between the BBC’s pure public service remit operations and its commercial elements. For example, if we are going to have more PSB content on iPlayer—we would welcome that and we are open to that discussion—we also must recognise that BBC Studios and UKTV, which exist as commercial divisions, should not have any kind of preferential access to iPlayer that the PSBs have. The design of open iPlayer needs to be something that we as PSBs and the BBC can all agree to. We are not yet at that stage, but we are certainly in favour of engaging in that conversation.
Q62 Viscount Colville of Culross: To realise what you have just said, it is going to involve completely rebuilding the whole technology behind iPlayer. Should part of the charter ensure that there are funds available for an open iPlayer that has the features that you have just described?
Mitchell Simmons: This is definitely not part of this committee’s work, but we certainly want a well-funded BBC that can deliver on its remit and has the funds to engage in innovation in the market. In the shorter term, whether a wholesale rebuilding is required or not, we should start working together on small steps of market testing and seeing what content can be shared. We should start that conversation. What the funding around that might be is not necessarily a question for today, but it could be a possibility in the future.
Q63 Viscount Colville of Culross: Martin, do you see an open iPlayer? If so, how would it manifest itself?
Martin Baker: We find it a very interesting idea. We noted with interest when S4C was taken on to the iPlayer at the beginning of the year. We wondered whether that was the beginning of potentially an opening up. We know that a public interest test process has to be gone through. It is not something that the BBC can just decide. It is definitely interesting. It feels like, “Why not?” One should start with, “Why not?” as opposed to, “Why?”
Q64 Viscount Colville of Culross: Magnus, it is quite a delicate time for you. I know we cannot talk about it, but would ITV be interested in that?
Magnus Brooke: The challenge that all of us face is that we are national players in what is becoming a global market, and all our global competitors are amortising their costs across the whole world. There is some theoretical logic in a single PSB streaming destination, but the truth is that it is one sentence in the BBC’s Green Paper response. It is very difficult to tell what it has in mind.
It does not seem to be a proposal of shared control, as far as I read it. In particular, it is an invitation to become a tenant of the BBC on iPlayer. It is clearly possible that all our own players would wither as a result of that, so we need to be careful. Going back to the point that I made earlier, the partnerships that work are the ones with shared control, shared risk and shared funding.
Those are the sorts of things that we are interested in understanding, but there is also a big commercial challenge. In a world of dynamically served and data-rich advertising, iPlayer is not currently set up to monetise content. That is clearly fundamental for anybody with a commercial PSB business. There is a set of questions about, even if you could sort out all the other elements around control and so on, how long it would take to get to a position where this was a commercially viable proposition, bearing in mind that you have the commercial negotiations, the technical build and implementation, and so on. Frankly, that could take years, and we do not really have years. I am not ruling it out completely, but we have a lot of questions.
Q65 Viscount Colville of Culross: Stephen, if the suggestion is that iPlayer becomes a UK public service broadcaster platform, I imagine that it would exclude you. Would you have an objection to that?
Stephen Lotinga: We have the view that the UK benefits enormously from having a variety of distribution channels. I imagine everybody in this room accesses content in different ways. That is one of these wonderfully rich areas. That competition drives innovation. We would have concerns about any approach that concentrated too much control over discovery into a single platform.
To the point that you were making, my noble Lord, the minute that you start talking about carving out parts of the licence fee to pay for this, you are distracting from what we believe is the core purpose of what we should be doing, which is investing in content of the greatest public value. We would be very cautious about this as an approach or a solution. If we are trying to address global competition issues by removing domestic competition, that would not be a good outcome.
Q66 Lord McNally: The most expensive item for most you is news. Is there any scope for co-operation on the delivery of news or is that out of the question? I once worked for ITV and it stays in my mind that one ITV captain of industry said, “Why is it costing us £500,000 to send Sandy Gall to Afghanistan?” News is expensive, and yet I bet I could tell whether I was watching ITN, Sky, BBC or Channel 4. You have managed to keep a distinctive face, but there are clear pressures on delivering a comprehensive news service. Are there any cheap ways of doing it?
Magnus Brooke: If you take Channel 5, Channel 4 and ITV, we are in effect already sharing an awful lot of the overhead of providing our news services through ITN. We have the same office and single management of ITN, but each programme coming out of that structure is completely distinct and different, and is serving a different agenda and a different audience. Editorially, they are very distinct, but the infrastructure behind those news services is, to a large extent, shared. We think that is a very sensible model.
The harder thing for us, I have to say, is in regional news, where it is just us and the BBC. We have looked in the past at whether there is a possibility of sharing some of the cost. About 10 or 15 years ago, we looked at whether we could save money by collaborating with the BBC. Broadly speaking, we found that we could not. In fact, what we discovered is that we could save the BBC some money, if it collaborated with us. It is not easy in regional news, but, as I say, in national and international news, we are doing what we can. Obviously, Sky and the BBC are separate, but that cost-sharing model is a potential model.
Q67 Baroness Caine of Kentish Town: To continue on collaboration, the Green Paper, as Mitchell already has touched on, suggests that the BBC should play a stronger role in driving growth across the UK, particularly in the nations and regions, and in supporting the creative economy. Do you agree that a new BBC public purpose focused on that would be a good thing to have emphasised? If so, what do you see as being the most important areas for you to collaborate together on, not just with the BBC, but with other partners in the nations and regions? Who would like to start? Mitchell, you were saying that this was very important earlier on.
Mitchell Simmons: In terms of the nations and regions, 5 has really leaned into that over the past few years. As I mentioned earlier, five years ago 5 had six hours of drama on its service. Last year, it had 100 hours of UK-originated drama. This year, it will be about 120.
We think it is really important that our sector works together on skills and training, and that we push things out to the regions where we can. We have a big programme in the north-east at the moment where we have made a number of dramas. Interestingly, the BBC has also pushed into the north-east.
The way I would frame the question is, “What comes first?” Is growth the goal for the BBC charter or is growth, as one of your previous witnesses said, a positive externality of the BBC delivering what it is supposed to do in the regions? If you work with more independent producers in the regions and invest in training programmes in the regions, economic growth will follow. I worry slightly about a BBC charter that almost tries to put the cart before the horse and suggest that the BBC should be thinking about economic growth before it should be thinking about its PSB remit.
I worry slightly that the BBC could end up tying itself up in economic commitments and spending in regions rather than just thinking, to Stephen’s point earlier, “What are the best stories that need to be told? Where are the best places to make UK-originated content?” The economic growth and the growth in the sector will follow.
Q68 Baroness Caine of Kentish Town: Just on that point, though, they are not mutually exclusive, are they? They are not in two boxes.
Mitchell Simmons: No, absolutely not.
Baroness Caine of Kentish Town: Doing exactly what you have said arguably could drive the growth of the sector and the economy.
Mitchell Simmons: Yes.
Martin Baker: I completely agree with that. It seems axiomatic that, if they do more, it is likely to lead to growth, particularly if they spend more with independent producers and particularly if they do more in the nations and regions. It seems like that would follow. If there were a specific duty around economic growth per se, you would need to understand precisely what that was trying to get at that you could not already get.
Magnus Brooke: That is the point. What is the BBC going to do differently with this duty than without it? What is going to be the practical effect of imposing the duty? We would need to understand that. The BBC’s role in driving economic growth is about the scale of its spend across the UK, fundamentally. That is about driving activity and investment in the UK creative industries. There are really only two things that matter there. One is the scale of its funding and the second is the efficiency with which it translates that funding into actual spend on content. Those are the two things that matter. Neither of those will be affected by a growth duty, in truth.
I see the point that Mitchell makes, which is that there is a danger that it is used as a way of retreating further from niche public service content, which the market now finds very difficult to provide, in the name of growth. If it becomes less of a PSB and more of a growth engine, that could be a subtext for more entertainment, more mainstream programming and none of the other genres that we cannot provide.
Stephen Lotinga: I am afraid we are in wild agreement. We are of the view that this should be an outcome of the BBC’s activities rather than a primary purpose. You heard from previous witnesses in previous sessions about the possibility of a skewing where the BBC is thinking about commissioning content that could be a very successful export as opposed to its primary public value purpose.
Q69 Baroness Caine of Kentish Town: You are all aligned and aggregated around your response to that, but alignment and aggregation is also something that earlier you were saying you could all do better in order to drive the best interests of our broadcasting and creative economy. That being the case, to take one example, you all mentioned skills and training, yet there are significant skills gaps and shortages right across the film and TV industries. We know that at the moment there is also quite a lot of underemployment. Take that as an example. If growth is left as it is, what can be better achieved by you aligning and aggregating your work, particularly in the nations and regions?
Martin Baker: The answer to that is a degree of efficiency, in truth, over who you are reaching, how you are reaching them and where you are doing it from. It is probably a good list of practical stuff that we have not done. That is the honest truth. We would need to go and do that.
You are right to note training. We have all mentioned training. In our own case, having established offices throughout the nations and regions of the UK since 2018, we see more and more of that activity, and it is great. You are also right to point to the challenges of the casualised industry as it is and how dependent it is upon consistent flows of production work. That has been horribly interrupted in recent years by the pandemic and the effects of that, and now by a very tight and difficult ad market.
Magnus Brooke: The BBC is a sort of superpower in training and development in our sector, in terms of the amounts that it can spend. That is terrific. It is one of the areas where the BBC can and does make a big difference, to be fair. As with any superpower, the question is whether it can collaborate in an international organisation, so to speak, with other PSBs.
We do have within the sector ScreenSkills, which you will be very familiar with. There is an important question about whether ScreenSkills can do more to help co-ordinate, identify where the gaps are and ensure that funding flows into those gaps. Above all, we need to make sure that we are training people for the jobs that actually exist, to the point about underemployment, and indeed retraining people to move from one genre to another. Classically, that would be to move out of factual production and into scripted, for example. That is an area where there could be more industry effort.
We need to be realistic about the amount that we will have to spend on that versus the BBC, but acknowledge the fact that we probably do need more co-ordination about where that money is directed.
Stephen Lotinga: All I would add is that, out of the 20,000 people that Sky employs in the UK, half of those are outside London and the south-east. We actively seek to employ right across the UK. We all have our own initiatives. In our case, we have Sky Up Academy, where we make sure that there are, on all our major sites, opportunities for young people to come in and have access to the experience of working in our sectors, which we think is really important.
Clearly, the best way to do that is to build upon existing examples of collaboration. ScreenSkills is a very good case in point. We have also collaborated around apprenticeships and some of the issues that we were facing in terms of the nature of how programmes are produced and how we could better do that. We should be building upon those. It is a real challenge for the whole sector.
Mitchell Simmons: I will just add something that was mentioned in a previous session. The BBC is a leader in this, but we need greater co-ordination between the screen funds, whether that is North East Screen or Creative Wales. We are all working with those bodies independently. That is probably an area where we can direct conversations and collaborations as well.
Q70 Baroness Caine of Kentish Town: The other part of the growth agenda is the Government. The industrial strategy identified film and TV media as one of the priority sub-sectors along with computer games. We just received from the Minister the one-year-on report on the tech industries industrial strategy. Significant investment and significant developments have gone on right across the piece. I just wondered about your reflections in relation to the progress of the industrial strategy for the creative industries, particularly the sub-sector plans to partner with you all in relation to moving forward the growth agenda in a variety of ways. Do you have any thoughts or reflections on that, as we are doing one-year-on moments?
Stephen Lotinga: My CEO, Dana Strong, sits on the advisory council, so I am going to be incredibly supportive of the work that the council has been doing. Broadly, her reflection would be that we need to be much more urgent in our response. We have recognised the sectors that are going to achieve growth for the UK. We have to make some hard decisions, and that requires making choices. We are very much up for that. We recognise the fact that we may not always be the beneficiaries of that, but we would support both Parliament and the Government in driving forward that activity. We think it is incredibly important for the long term.
Baroness Caine of Kentish Town: There is urgency and a sense that more needs to be done more quickly. That is what I am getting from you.
Magnus Brooke: Yes, I would agree with that. Think big and think quick. That is what the rest of the world is doing; that is what all our competitors are doing, and we need to do the same. That includes Parliament as well in terms of the speed with which you address questions, some of which we have talked about today, because they are probably the most important bits of ensuring that our sector continues to be sustainable in the UK and that commercial PSB continues to be sustainable.
Q71 The Chair: I pick up your doubts about this new public purpose of driving economic growth for the BBC, but the Green Paper does suggest putting research, development and innovation back at the centre of the BBC’s public service activities. Bearing in mind your doubts about having growth as a new public purpose, what role should the BBC play in supporting research and innovation across the UK media sector?
Mitchell Simmons: You may end up with a similar answer to the one you had before, I am afraid. The broader question that we have touched on is about a well-funded BBC. Why has R&D fallen under the last BBC charter? Is it because there is not an obligation in the charter or is it simply because of BBC funding more broadly?
The BBC has a revenue model that means it can take risks in terms of R&D that we as commercial operators may not be able to make because we will not have those resources. You might need to have as many failures as successes.
We absolutely think that this ties, therefore, into the concept of collaboration. If there is innovation or R&D that can benefit not just the BBC but PSBs or even the wider broadcasting sector on areas such as accessibility, discoverability or audience protection standards, clearly, we think that is a benefit for the BBC. In an earlier session, Gill Hind commented that we would not want the BBC to have to ring-fence a certain amount of money each year for R&D. It could be better spent on developing content or putting money into training in the regions.
We need to think carefully about simply saying, “Here is an issue that we have a concern about. Let’s introduce a new obligation in the next BBC charter”. We could end up in a situation where, again, the BBC feels it has to meet that objective when it may not be strategically in the best interests of viewers.
We are absolutely supportive of R&D at the BBC. It should be collaborative and those two areas go well together, but whether it needs to be a strict new obligation in the charter we are not sure.
Lord McNally: Surely, the history of the BBC has been one of research and innovation.
The Chair: Indeed, but, as we have heard, it has fallen away under the last charter period.
Martin Baker: That is the point that I was going to make. The BBC is the cornerstone of PSB in the UK, and a cornerstone of the BBC has always been its work in R&D. It would be curious were it to turn away from that, although I am not suggesting that it is. I do not know whether it is sensible for it to be written into the charter expressly, but it would be a strange thing if the BBC were to deprioritise its work in that area.
Magnus Brooke: You do need to take care, though. This is a world in which there are a lot of companies around with an awful lot of capital to spend on R&D. You do need to be very targeted, as the BBC, and to work out where you want to place some bets and why that is going to be in the interests of both the BBC and the broader sector in the UK. That is the critical question. You could waste an awful lot of money very quickly on innovation and not really end up producing something that was of much use. It is about being really focused and probably having external scrutiny and input into the way that you run it and the way that you make decisions about what you are going to fund.
The BBC was the original inventor of television transmitters, which were a way of getting lots of information very quickly to everybody. There is a new version of that: “How do you get enormous amounts of data down wires?” It is the World Cup problem; let me put it that way. Is there R&D that could be done there by the BBC? Yes, maybe. Is there other R&D about—I do not know—editing in the cloud using AI, for example, that it could potentially make a contribution to?
It is about being really focused on specific areas and then making sure that the industry comes together and has a degree of input into what the BBC does.
Stephen Lotinga: I very much firmly echo Magnus’ comments. Yes, the BBC definitely does have a very proud and rich history of innovation, and nobody would deny that, but we are operating in a global marketplace now and, therefore, competing against companies with enormous R&D budgets. Sending the BBC off to try to innovate what is already being provided very well by the marketplace would not be a sensible way to do it. That would be a very easy way to end up with a substandard product that cannot compete in the marketplace and significant amounts of public money have been spent on.
There are great examples of BBC innovation. There are also examples of announcements that have been made that have not been so innovative or necessarily a good use of public money. I will not list them now, but I would be happy to. We have to be quite cautious in terms of what we are trying to do. Every time that we are talking about using public money in a different way, it distracts from the investment in the nations and regions, and the wonderful UK-originated content the BBC is capable of producing.
The Chair: We would be interested if you wanted to send us that list afterwards.
Q72 Viscount Colville of Culross: Inevitably, what you have just talked about leads to the suggestion that has been made that the BBC should be the core of any kind of UK sovereign AI fund. It should use its massive data to create something that is specifically based on UK data with public service values. The Dutch have just done this with their public service broadcasters in collaboration with universities, libraries and museums. It is called PublicSpaces and it has been quite successful in giving the Dutch public some sort of feeling that there is an AI mechanism that is for them and has their values rather than just the values of profitability.
For this to happen, I imagine it would have to be in collaboration with all your companies. Is that something that we should be doing, or would we be, as Stephen just said, recreating something that is already there and is supported by global companies with billions of dollars to throw at this issue?
Stephen Lotinga: I will pick that up. I would not claim to have an incredibly good insight into the development of LLMs, but I can see the amount of money that is being spent every single month by the companies that are driving this forward and I would be very cautious about suggesting that the BBC or any of us would be able to replicate that.
I can see the attractiveness of reassuring the public that there was a model out there that was built in the UK and has UK values, but we should be focused on seeking to influence and make sure that AI companies are behaving responsibly, that they are using our content appropriately, where companies allow it, and that they give great prominence to UK values and the response of the people here.
I would focus more on trying to make sure that AI companies are acting appropriately as they exist rather than the BBC trying to replicate their technology.
Magnus Brooke: Our experience of the market is that you can pick up tech down the track really quite affordably. The BBC was well ahead of its time. It is fantastic that it blazed a trail with iPlayer, but the BBC built it by itself. That is terrific in many ways. When we came into the market, we spent a lot less money because it was quite easy to pick up a lot of the tech that we needed.
There is a question for Britain about whether we could now have the BBC spending money to create iPlayer in a world where, as Stephen says, people are basically spending trillions of dollars to create the same thing. You might be better off being a fast follower and picking up an awful lot of this stuff when it gets commercialised, because in the end it will. It will have to be commercialised because there will not be models otherwise. They are putting so much money into it. There is a question there.
That takes you back to what we were saying before. Where are the niches? What are the bits that other people are not going to do? That is where the BBC can make a big difference and where we can, frankly, feed into the BBC’s decisions around what it decides to do and what it does not. A degree of external oversight and input would be really important.
Q73 Baroness Fleet: I was really interested in the caution both from Magnus and from Stephen. I would absolutely agree, personally, that the BBC may in the past have been leading in technology, but the world has changed very dramatically in the last 20 years, let alone the last 50 years. Using data from the past makes sense. What you already have is the value as opposed to competing with the big tech companies globally to do something. Bright ideas may pop up, but the BBC would have to invest people and time to try to have a bright idea. Being a fast follower seems to be a much more plausible course of action. I would be very concerned if the BBC suddenly were to see itself as an innovator, when it does not really have that traction any more. It has many other things, the core values and the core product, but I am pleased that you have that caution about it.
Magnus Brooke: It is interesting, is it not? It almost begs the question, “Where is the BBC a world leader?” The BBC is a world leader in creative content, in initiating content that genuinely changes the world. If you had that franchise, you would say, “That is where we need to go because there are loads of other people doing all these other things in tech, AI and all the rest of it. We have a unique franchise here where we lead the world, and that is where we should double down”. It is genuinely world class at doing that.
Q74 Baroness Caine of Kentish Town: As you were saying at the beginning, it is about how you then distribute that world-class information to audiences. Making world-class content is what justifies you being a public service broadcaster. This is Martin’s point, really. There is an issue here about control, is there not? One can be a fast follower and speed off the rails. The balance that Martin was talking about between doing those deals and control is where the greatest risks and opportunities are. Managing that, from what you were saying earlier, is what you see as the path forward.
Martin Baker: There probably is at least a question about the role of regulation in that and designing it to upweight the discoverability of UK-produced PSM. It was a legitimate question 70 years ago and it remains the same. Although the platforms and the environment are entirely different, it is the same question.
Baroness Caine of Kentish Town: It is interesting. Martin, you just said “PSM”. In other words, you follow the content, not the broadcaster.
Martin Baker: Yes, it is public service media.
Baroness Caine of Kentish Town: If Sky is producing public service media, that would be within that.
Martin Baker: I have to acknowledge some of the new players beyond Sky. “Adolescence” is a Netflix show. It was produced by a company in which we are partly invested, by the way. You would recognise it where it is. It is just that, with the honourable exception of Sky, the new platforms are not spending very much on originating new content in the UK. We still create the vast majority of that.
Magnus Brooke: There is also no news, and you have to pay for it.
Q75 Lord Tarassenko: I have hot-footed it in because I have just been in the House to ask a question about sovereign AI models. When doing my homework before this committee meeting, I noticed that, at the bottom of page 11 and page 12, the ITV written submission deals with that issue. It talks about the Green Paper anticipating the possibility of new opportunities to generate commercial revenue, including partnerships in AI.
As a broad question, do you all agree with that and working with the BBC on that? The supplementary is the question that I asked in the Chamber just now. At the top of page 12 it says, “The BBC’s archive of high-quality AV content is unmatched”. I completely agree with that. “Were it to make this available on a commercial basis either to AI developers (e.g. to train their large language models) or to audiences via third-party platforms, this would have a profound impact on the ability for other rights holders to do the same”.
I do not quite understand that, especially as what this committee has proposed as one of its recommendations on AI and copyright, recommendation 6, and what was being discussed in the Chamber, is the fact that, especially with the US having stopped access to Claude Mythos and Fable, we cannot rely forever on US big tech. We should not see Chinese open source models as an alternative for other reasons. The UK needs a sovereign AI model.
The BBC and the other PSBs have fantastic material with which to train such models, data that we would consider to be data assets. The BBC would be the one that provides that data. There will be some payment back to the BBC for however much data it supplies. For ITV, if it supplies data, it might be less and so there would be less of a payment. If it were for a sovereign UK model, where the model will be trained according to UK legislation, with transparency and respect for copyright, I cannot quite see why you are arguing against this.
The Chair: Can I just say, because you missed the first part of the question, that we have covered quite a lot of the ground here? If you want to add to what you have already said, we can take it at this point.
Magnus Brooke: I will answer that on the basis that it came out of the ITV submission. The other panellists may not know what I am talking about. There are two questions, which we talked about before. First, who is the proprietor of the model, who is funding it and who is developing it? We have covered that. Secondly, what are you using to train it? Is that a global model or a UK model?
Our simple point there was to say that the BBC could make the market for that training. Imagine a situation in which it did a deal at terms that may be disadvantageous from the commercial market’s point of view. There may be no opportunity then for the commercial market because the content library is so enormous that, if you feed all that into an LLM, there is really no need for anybody else’s content because in essence you have everything. It is a narrower point about the sort of deal that the BBC might do, the basis on which it might do that and whether it would preclude ITV or other producers that have archives from monetising those archives, in the event that we could sort out the underlying rights issues that we inevitably have with licensing the archive to LLMs.
Q76 Lord Tarassenko: It is the other way around. The BBC data, however big it is, is nowhere near big enough to train a state-of-the-art or near-state-of-the-art frontier AI model. If you think about it, they go through the whole of the internet plus all the Facebook or Meta messages and so on that there have ever been. The BBC archive is sizeable, but not enough to train a model on its own. Therefore, having data from other PSBs would be very useful.
Magnus Brooke: You are making a slightly different point from the one that we made in our submission. The concern that we had in our submission was about licensing to global LLMs. If your point is about how you train a UK LLM, I would agree. Then we have a different problem. How are they going to get enough data? Even if they got all our archives and, frankly, every archive that exists for every producer, it would not cover a fraction of the 400 hours that are uploaded to YouTube every single day and all the rest of it.
That is a profound problem with creating an effective model in the UK. Will it ever have enough data to train itself effectively? I am right at the edge of my knowledge here about how much data you would need to train an LLM, but my impression is that you need everything in the world—that sort of thing.
Q77 Lord Tarassenko: There is a halfway house where you do not, but it would be useful to have data from other sources. There is also the fact that you can use an app such as Whisper to translate audio content directly to text and increase the amount of text available. There is also the fact that the next generation will probably be a vision language model where video data is really useful.
Could we aggregate PSB datasets or even the datasets from everybody represented together here for a UK LLM with UK rules? No large language model has been trained in this country because of the copyright rules that we have. This would be a first, showing that it could be done while having full respect of UK laws. That is why it is very important.
For full disclosure, as a senior adviser to the Alan Turing Institute, I have been to the BBC to talk about this. I met Peter Archer, the head of AI. We are proceeding with the discussion, but I would it would be even better if other broadcasters joined it.
The Chair: We will leave that there.
Q78 Lord McNally: It was worth doing, though, because we were in great danger of just accepting the evidence that it was all beyond us and we had better get into one of the back carriages. The debate that you have just outlined is still alive. I do not think this committee should rush.
The Chair: I do not know whether there are any final points you wanted to make about the mandate that we suggest giving to the BBC around R&D. Is there anything to add? Lionel was not here to ask his question and I had to put it. It is this question that we have jumped around a bit on. Is there anything else that you want to add around that? Clearly, the panel sees R&D as a core part of what the BBC should be doing, but the extent to which that and growth go into the mandate is a point that you have all expressed your views on. Is there anything else to add on that?
Mitchell Simmons: To that point, Chair, the BBC has to be audience-first. Therefore, R&D that could clearly benefit audiences and can be shared with the wider sector, whether that is PSB or non-PSB, to lift everything, is clearly a benefit. We are hesitant, as you have heard from us, to push the BBC down a road where it is required to entertain expensive R&D that leads nowhere. If there is audience-focused and viewer-beneficial R&D that we can all share or work on together, that is clearly a benefit. To be clear, we would absolutely support that. If you are forcing the BBC to move where there is a questionable benefit to audiences that is outside the current charter, we would question that.
The Chair: If nobody has anything else to add to that, that is fine. All those questions were really worth exploring with you all today. There is a transcript that will be available. We will just leave it there.
Thank you very much. We look forward to hearing more about this as we go ahead with our policy letter. We will not be producing a report at the end of this. A policy letter is going to be produced after we have had our meetings with the leadership of the BBC. Thank you very much for your input.
