Examination of witnesses
Marco Pancini and Richard Lewis.
Q160 The Chairman: Welcome. This is a nice, prompt start, and I thank our witnesses for getting here in good time. We have two sessions today. The first witnesses, Richard Lewis and Marco Pancini, are from YouTube and will give evidence to our inquiry into the future of PSB. I will ask you to say a few words of introduction in a moment. The session is being broadcast live and a transcript will be taken.
I am sure you have been following our evidence and the purpose of the inquiry. Perhaps you could start by introducing yourselves briefly and saying a bit about your prospective roles, and giving us your view of the changes in video viewing and the impact and development of YouTube. In particular, what sort of content is driving video viewing on YouTube? We will then move on to questions from members of the Committee.
Marco Pancini: Thank you very much for having me today. I am director of public policy for Europe, the Middle East and Africa, and I am here today because I was involved in the discussion and negotiation in Brussels on the audiovisual media services directive, the legal framework that regulates our sector. I am very happy to discuss it with you.
Richard Lewis: Hi there. I manage the UK content partnerships team at YouTube, which ranges from large content partners such as public service broadcasters to the likes of our large production arms, like Fremantle, Endemol and All3media. I am very proud to work for, or with, our public service broadcasters here.
One of the key aspects of my role is to understand their business objectives and to work with the platform and the technologies to hit their business needs. That can be anything: regular meetings to understand their distribution strategy; growing their audiences, both in the UK and abroad; and using our enriched data sources.
The key thing is that I work very cross-functionally at YouTube and Google, so I work hand in hand with our product and marketing teams and with various other cross-functional roles that we have.
Marco Pancini: Let us start with the specific question that you asked. YouTube is an open platform, and the great opportunity that we provide our users is the free uploading of content that they want to share with the world. We provide them with a voice and an audience.
Of course, that does not mean that YouTube is just a platform for kids on a skateboard or for cats; it is much, much more. Thanks to the openness of the platform, we were able to support the creation of a new generation of media companies, the so-called YouTube creators, which, thanks to this opportunity, are becoming an incredible source and a driver of growth for the creative industry.
Of course, if we stop at what our creators do, that is just a partial picture of our platform. We are indeed very proud of our partnership with the public service broadcasters. For us, it is an honour and a privilege to partner with public service broadcasters. In a certain sense, we share the same values: the value of openness, the value of diversity, the value of trustworthiness of content.
Indeed, thanks to a platform like YouTube and the online environment, public service broadcasters were able to find new audiences, in particular with the new generation, and a new way to make incredible, valuable content available online.
Maybe Richard can say a bit more about what we are doing to work with public service broadcasters.
Richard Lewis: To your question about what makes YouTube popular and the overview of the changes, YouTube has really grown over the past 13 years. It is a global platform. It empowers people to express themselves. It is open. There is a huge range of content, and we match the viewers’ passions with the creators of videos that they make, and we create communities around that. A lot of that, as Marco says, is on the public service broadcaster side. We work hand in hand with the likes of Radio 1 or BBC Three to hit their business objectives and try to create communities to drive their audiences, both in the UK and abroad.
The Chairman: What type of content is driving YouTube’s viewing figures at the moment?
Richard Lewis: As I said, there is a huge and diverse pool of content; entertainment is very popular, music is very popular—as is lifestyle, especially things like beauty tips or technology blogs.
They are all very popular things. But the key thing is how the platform works in matching those creators with the users, matching those passions and interests, and creating communities. That is the key thing here, and that is the opportunity for our partners.
The Chairman: Okay. Let us dig down into some of these issues.
Q161 Lord Bethell: I have two commercial questions. The first is about YouTube Premium. Could you tell us a bit about the priority of that for the business overall? What sort of customers do you envisage subscribing to it?
Secondly, what kind of content commissioned by you will you focus on, and what audiences will buy into it?
Richard Lewis: Thank you for those questions. YouTube Premium is a subscription service, but the ad-supported service and the free service that we see on YouTube today will not go away.
YouTube Premium is a fraction of the viewership. It is an alternative way for users to consume content, and it is a feature-based service: you pay and you do not have to watch ads, you can download videos, and you can multitask—so while you are listening to your favourite jazz, you can do your emails. That is not available in the free, ad-supported version of YouTube. It is really an enhanced viewing experience for users who really love YouTube and want to come back and use it for those services.
We have a fraction of content behind the paywall—and thank you for pointing this out—but we announced a couple of months ago that we will commission and license content only for content in front of the paywall, so only the ad-supported side of things, and we will focus primarily on the unscripted-content genres.
Q162 Lord Gordon of Strathblane: You mentioned your very good relationship with public service broadcasters. I am trying to work out what is in it for them. After all, they have their own broadcasting channels. Why would they use YouTube in addition?
Richard Lewis: As I said before, the key thing for my role is to work with broadcasters and content providers to hit their business objectives. There is no obligation on broadcasters to upload content on to the platform, but sometimes they feel that it is beneficial for them. Take Radio 1. That is in its charter. It tries to entertain and delight users of between 15 and 29 years old.
Ben Cooper and I have worked for the past six years growing that audience on YouTube and trying to maintain relevance within that demographic. We have concentrated predominantly on clips of elements from their shows, such as “Live Lounge”. Katy Perry or Miley Cyrus might sing in their studios, which is amazing. They will put clips of that on YouTube and then say, “If you’d like to watch the full-length episode, come over to iPlayer”. They have their own channel on iPlayer.
Since then, they have coined their own phrase: “Listen”—which is the only thing you can do to a radio station—“Watch, Share”, because that is what consumers are doing; they are using functionality to do that.
Lord Gordon of Strathblane: Equally, what is in it for you, because you are helping them to build an audience that will therefore be unavailable to YouTube in future?
Richard Lewis: Public service broadcasters here have a unique place in our community in the UK. They create incredible content, and we want to partner with them to help them achieve their business objectives. There are others as well. Take ITV, which has ITV Studios, and BBC Studios. We look at helping them to grow relevance for their shows abroad.
Marco Pancini: There is also another very important area where we have a huge interest in working with the public service broadcasters: information, news. We share the values of public service broadcasters from that point of view, and we really value the presence of their trusted brands and their trustworthy voice on our platform. When a user looks for information on YouTube, they can find content that comes from public service broadcasters. It is a win-win for us. It is very important to have them, and for a public service broadcaster it is an opportunity to reach a new audience.
Q163 Lord Gordon of Strathblane: Just to complete the close linkage, would you welcome the same degree of regulation as public service broadcasters?
Marco Pancini: That is a very good question. When we discussed the audiovisual media services directive in Brussels, we spent a lot of time with the representative from the UK Government, and it was an incredible job to find the right balance in that new piece of regulation. We discussed doing it with more regulation, doing it through self-regulation, doing it with less regulation.
Actually, the broader community that was involved in this discussion decided on some sort of deregulation for public service broadcasters in some areas. For the advertising sectors, for example, there is now less regulatory pressure. So in looking at the legislative framework we should be very open to considering when to regulate, when to deregulate, when maybe to rely also on the industry self-regulating.
Lord Gordon of Strathblane: One of you referred earlier to commissioning programmes. Is this not getting you very close to being a public service broadcaster like Channel 4, for example?
Richard Lewis: I think it is slightly different, because we will allocate a small amount of budget to match YouTube creators—people who already have a following and a community on the platform—to a professional content producer; take Jack Whitehall and Fulwell 73, get them together, create content around football and release it around the World Cup. In that way, we are empowering creators to fulfil their creative ambition.
Q164 Lord Gordon of Strathblane: Finally, if this is wrong, please correct me, but we were told that in 2017 you applied to BARB, the Broadcasters’ Audience Research Board for accreditation, and they declined. Is that correct?
Richard Lewis: I do not think they declined. I was not too close to that, but they did not prioritise us. That is what I hear.
Lord Gordon of Strathblane: But you applied.
Richard Lewis: I think that sharing data—the more data we share with our partners, the more effective they are, being content creators—and understanding where their content works is a good thing. There is a very holistic creator ecosystem. Those content creators do very well on TV as well.
Take Joe Sugg—ThatcherJoe. He was on a little-known programme, “Dancing with the Stars”, and did very well; he turned out to be quite a good dancer. He was able to do that because he has a very big following online, which is how the ecosystem works.
Lord Gordon of Strathblane: A final supplementary. You were not at all worried that if you had been accepted by BARB you would be regulated as a broadcaster?
Marco Pancini: Our approach to regulation is not that we try to escape it. I want to make that very clear. Our approach to regulation is that we believe that the same services should be regulated in the same way. However, in the context of originals and the legislative framework, when we produce a video we have a certain liability, which is the classic liability of somebody who is producing a video.
It is completely different when it comes to the open platform. When users upload a video, we offer the infrastructure to make the video available but we do not publish: we are not publishers of that video.
To your question, wherever we perform the same service as a public service broadcaster, of course we should be regulated as a public service broadcaster.
The Chairman: Can I just be clear about the situation with BARB? You applied to BARB, but they did not say yes. Is that what happened?
Richard Lewis: Yes.
The Chairman: So in fact they said no. Presumably they responded. You sought BARB accreditation, and either they did not reply to the letter or they said no.
Richard Lewis: They replied publicly, and our view was that they did not prioritise us at the moment.
Q165 The Chairman: Another question about your commissioning plans. How significant will that be in business terms? Are you building a significant commissioning team, and what kind of content will you focus on commissioning?
Richard Lewis: Yes, we think there is real creative talent here, on the platform and with all the producers and the talent matching—those two together.
This is a fantastic opportunity for the creative ecosystem here. Music, for example, is very big on the platform. Creating a music doc that might delight and inform our users, both in the UK and abroad, is something we are focusing on. Personalities is another one. Learning is a key bastion of YouTube; it is the second biggest search engine, so there is a big thirst for knowledge on the platform. We see that, and matching creators such as AsapSCIENCE or CGP Grey with a production partner would be fantastic for us.
The Chairman: Are you hiring commissioners from the BBC and other broadcasters, or recruiting creators to commission from other creators? How will you build this function?
Richard Lewis: We have a small function here in the UK. We are actually quite light on the ground, despite being YouTube and part of Google. We operate quite light infrastructure, but we will get some specialists in. We have done so; it is a very small team of specialists.
Marco Pancini: Our strategy is to create a new opportunity for our creators, with longer formats and a different way to interact with their audience, through YouTube Originals. It is also an opportunity to make something and show where we can take our platform. We see this more as a way to complete our offer.
We are also seeing a different phenomenon that is very interesting. As Richard said, we are seeing more and more creators becoming stars with traditional broadcasters and public service broadcasters. In a sense I would say that the online environment allowed the creative ecosystem—I think you should be proud of the creative industry here in the UK, which is something we admire around the world—to experiment, to try different formats and to find new audiences.
The Chairman: I am interested in the contribution you make to the development of those skills. Commissioning is a skill that is developed, mainly in the BBC and other broadcasters. That is where most commissioners come from, and those broadcasters invest very heavily in training them. You hire them from those broadcasters, which have made that investment. Where is your contribution to the development of skills in the wider industry that you feed from?
Richard Lewis: That is an interesting question. One of the ways we partner with broadcasters is on talent. We recently hosted BBC Studios at the YouTube Space in King’s Cross. It has a new label called TalentWorks. We invited some creators in. They had Caspar Lee there, who is a very prominent UK creator, talking through his story. That allowed them to speak to the BBC and pitch some of their long-form ideas. The BBC is very pro talent and is looking at the talent on the platform to see what it can transfer over. I mentioned Joe Sugg earlier, but there are other examples too.
Baroness Quin: Mr Pancini, you said that you were looking at using this as a way of completing your offer. Are you aiming at local content with this commissioning, or content with a more global appeal? How does that work?
Marco Pancini: Thank you for your question. I will start and then hand over to Richard on the content and feedback on the relationship that we have with our partners.
I said “completing”, but I would like to correct myself if I may. We are actually adding or multiplying the opportunities for both of us. We are very interested in the regional content. Looking at a platform like YouTube, it is striking to see how the vast majority of the views in every country come from outside, not inside, the country. Creators can reach a very wide audience. Thanks to the English language, the audience for UK creators really is worldwide. We have a huge interest in that.
We are seeing this in other regions of the world. We are seeing, for example, the booming of the creative industry in Nigeria, and other parts of the world, where you can grow a new generation of media companies and have a global audience, with most of the views coming from outside that country. That is very different from the dynamics in linear broadcasting, or even VOD. That is quite new.
Richard Lewis: That is right. Just to reiterate, it is the same in the UK, especially with public service broadcaster content. Some 80% of content is viewed from outside the UK. That is an interesting phenomenon. It is an opportunity for us, as the UK creative ecosystem. Two billion people are coming online in the next three years, and being able to get audiences for our UK creative talent, be it broadcasters or stars, and making them famous outside the UK is a real benefit. That is the opportunity that we should focus on.
Baroness Chisholm of Owlpen: Following on slightly from Baroness Quin, do you not think that the danger is that you are using British talent, but using it to make programmes that are global and are not particularly for the UK or the regional market?
Richard Lewis: “Top Gear” is syndicated to something like 150 different countries. There are a lot of very big TV shows, which, in success, translate extremely well outside the UK. “Top Gear” is a big channel on YouTube as well, and they use it for that. It is the same with “The X Factor” and the “got talent” format.
We are not using talent; we are commissioning it in a similar way. The nature of a global platform means that we can garner audiences outside the UK, for sure. That is the slight nuance.
The Chairman: Before we move on, I would like to jump back to a technical question about ratings. You are not rated through BARB. When the BBC produces ratings figures for its content, does it include the people who have viewed that content through YouTube? Are they included in the BARB figures for a programme?
Richard Lewis: I will pass the question about ratings to Marco. First, there is no obligation for the BBC to upload content. If it has something that is not suitable for everyone, it does not necessarily have to upload it—
Marco Pancini: It is included in the rating in terms of measuring the audience.
Richard Lewis: Oh, I am so sorry.
The Chairman: Yes. You use clips of BBC audio and video, and people view them through YouTube. You are not registered with BARB, but do those YouTube impressions count in the BBC’s audience rating, which is a BARB rating?
Richard Lewis: Apologies, I got the wrong end of the stick. I was thinking about ratings in a completely different way. I do not know how the BBC values a YouTube view over a view on iPlayer. In fact, we help it to grow audiences around its shows so that it can sell them better outside the UK, with BBC Studios, or so that they resonate better on its linear or iPlayer app. We would like to have more data and have a closer relationship in that way, so that we can understand linear and YouTube audiences better. We would welcome that.
Marco Pancini: We have some data on the presence of public service broadcasters on our platform. We have something like 42 million subscribers, and that number is growing by 60% year over year. In a sense, if you put these two pictures together—the audience plus the information we provide on the viewership on the platform—you have quite a positive picture of the presence.
Richard Lewis: The data that we share, just so you know, is a really important part of our partnership with everybody, whether broadcaster or creator, because it is intrinsic to the success of their content. It shows them how to optimise it, what their channel strategy should be, what content works, where it is being viewed, who is viewing it, how they should edit it and what the content’s view-through rate is.
We share all that with the BBC, teach them how to assimilate it and tell them where the sources are from. Then they can go back and apply it manually to their ratings, or not. But this is not the type of thing that you will see from BARB.
The Chairman: Understood. Baroness Bonham-Carter has a question.
Q166 Baroness Bonham-Carter of Yarnbury: Both of you, but particularly Mr Lewis, have talked about commissioning and employing commissioners. Picking up on something Lord Gordon said rather a long time ago, would you concede that you are a publisher?
Marco Pancini: I can answer the legal part of this question. As I mentioned before, when we produce something, and are part of the production team making editorial choices about a piece of content, then of course we are already regulated as a publisher. That is very different from saying that the whole platform should be considered to be a publisher. That would not be correct, because we do not have editorial control over the content uploaded by our users.
Baroness Bonham-Carter of Yarnbury: When you employ commissioners, there must be some kind of control.
Marco Pancini: Of course, in the process of producing a piece of content, and deciding together what kind of content will be available on YouTube Originals—again, this relates only to that part of our service—there is control. On top of that control, these activities are regulated under the AVMSD, according to the existing legal framework. The whole platform is regulated, but as an online service not a publisher.
Baroness Bonham-Carter of Yarnbury: Okay. You also said earlier that you are trustworthy, and that you want to be perceived as trustworthy. So why has YouTube not committed to implementing the BBFC’s You Rate It classification?
Marco Pancini: That is a slightly different issue, because the You Rate It service actually proposes allowing users who are uploading content on the platform to rate what they are uploading. We have our own ratings system on the platform, and for the kind of interactions that we want on our platform we prefer to implement our own ratings system. That gives us the opportunity to make sure that if a user is not respecting the ratings system that we have in place, we can take action and enforce our rules, so we have more control over our policies.
Baroness Bonham-Carter of Yarnbury: So your problem with the BBFC classification is that it gives you less control?
Marco Pancini: No, it is just a different way of rating the content and is not exactly in line with our philosophy on the platform. It is not a qualitative judgment. We know that You Rate It is being tested on other platforms and that the BBC is using its own system. We are in dialogue with them, but at this stage we prefer our own system.
Lord Gordon of Strathblane: But, in a way, you can apply your system only once the content has been uploaded, whereas the person uploading it knows in advance which category it fits into.
Marco Pancini: That is a good point, but when a user uploads content on the platform, he has to tell us whether or not the content is suitable for an audience under 18. So we already offer an upload system today that allows users to rate content. We automatically integrate the feedback that we get from users in the system, so if you are not 18 years old and you want to watch this content, you will not be able to.
Baroness Bonham-Carter of Yarnbury: I think you referred to this earlier, but I just want to press this point. What steps is YouTube taking to comply with the requirements under the revised AVMS directive, which after all protect young people?
Marco Pancini: Thank you for your question. Indeed, there are two specific areas in the AVMSD that include a specific set of additional liabilities for online service providers such as YouTube. These areas, which include hate speech and child safety, are very important to us. We have already made specific commitments with regard to core regulation in these two areas. We have a code of conduct on hate speech in place, and we have also made commitments, both industry-wide and specific, on child safety, which we believe go in the direction of complying with the rules of the AVMS directive. But it is a dialogue.
As you know, the AVMSD is in the implementation phase, so we are in dialogue with all the regulators across Europe, and especially in Ireland, to discuss whether this is enough. Of course, we are open to discussions, presenting what we are doing and understanding the gaps so that we are fully compliant by the end of the process.
Baroness Bonham-Carter of Yarnbury: But your instincts are that you are heading in that direction.
Marco Pancini: Towards compliance? Yes, of course.
Q167 Baroness Bonham-Carter of Yarnbury: Right. A slightly gentler question now. You have a very young audience; you have clearly tapped into young people. It may be too early for you to know, but do they stay with you as they get older?
Marco Pancini: That is a very good question.
Richard Lewis: We are only 13 years old, but the key point is really that sense of community and transparency that people find, and their ability to share things with each other. I love cycling and I will carry on cycling certainly for the next 13 years—
Baroness Bonham-Carter of Yarnbury: Do not drive into a wall.
Richard Lewis: I have managed to avoid most walls so far. There is a fantastic content producer called Play Sports Network that was born and bred on YouTube. It has a fantastic channel called Global Cycling Network, which I follow and will continue to follow as long as it continues to produce great content that matches my passion. Long may it continue. I think it was founded in 2012 and it has recently gone through lucrative second-round investment with Discovery.
ITV has done the same thing. It has invested in Channel Mum, which is a load of creators and mums who upload content about lifestyle and share their experiences of having young children. It becomes a very relatable community that allows people to go in, watch, listen, share and comment. As long as there is content that people can relate to and that sense of community, they should grow up.
Baroness Bonham-Carter of Yarnbury: It is presumably something that YouTube is conscious of.
Richard Lewis: It is tough to control. It is one of those things. We work with them for their specific content strands, for their business objectives. It is Channel Mum’s business objective to create that sense of community, and it is Play Sports Network’s business objective to create a community around cyclists. They may want to appeal to a younger or an older audience, but this is really about working with them and hitting their business objectives.
The same thing is there for the BBC. BBC 3, Radio 1 and Radio 1Xtra are all vying for a younger audience, but other channels and shows are not necessarily doing that. That is the key thing for us; it is about using the platform and the technology available to allow them to achieve that.
Marco Pancini: I would like to add something on this. It is a very good question. We are in a very competitive environment. The main focus for us is providing a safe, open platform for our users that allows them to find what they want when they want it. That is the main goal for us. The question we put to ourselves is not, “How can we keep them on the platform?”, because we have seen in the past that this kind of approach does not lead anywhere.
The real focus for us is making sure that we create a healthy environment. There are the four freedoms which I mentioned before. As Richard says, they are freedom of expression, freedom of information, freedom of belonging, and freedom of opportunity. We want to provide a place where users can meet, share their passions and find engaging content.
From that point of view, it is an incredible opportunity for public service broadcasters, because in this kind of open environment the content of public service broadcasters can have the right engagement with and the right level of interest also from younger viewers.
The Chairman: In order to understand this a little better—we will not spend too long on this—I have a perhaps more theoretical question rather than a specific question about your products and values, the community in which you operate, and why people your kind of content.
We know that there is a shift away from linear television to people choosing to view on the device they want, when they want, and to find content. Some witnesses say that they think that will decline as people get older; that they may in fact revert to a more traditional form of viewing content. Others say that, on the contrary, older people will start to behave like younger people, because they will learn about this stuff from their children and grandchildren; it will come the other way and speed up, and there will be a faster shift among older people away from viewing linear content rather than a shift from younger people to linear content as they get older.
Without going again into all your products and what you do, what is your view?
Richard Lewis: Back when I started in 2012, I think that the UK viewership on mobile—do not quote me on this—was around 35%, 40%. Now it is up to 60% on mobile, and PC viewing as a share has declined.
Our role is really to work seamlessly on our platforms—for it to be seamless for our users to interact with that content, and seamless for our content creators to upload a video and find that community on whatever device they get viewed on. It is changing. The device viewership is changing. But for me to get my crystal ball out and tell you what will happen in the future—
The Chairman: But you are an expert in the industry, and you will have a view as to which of those two scenarios is more likely.
Richard Lewis: I think it will become more ubiquitous between all those devices. It is more of a convenience thing; you may be on the bus, but you have 4G—even 5G, I read the other day—in the UK. That is a step change for streaming, not just for us but for all public service broadcasters and anyone streaming content. It is a means of delivery, and users are expecting it to work more and more seamlessly.
Q168 Baroness McIntosh of Hudnall: Just before we move off this question, it is clear that your demographic is mostly young. Certainly my observation is that it is mostly very young. You clearly take a very careful, responsible attitude to the fact that you have such a young audience, and I do not wish to imply in this question that I do not accept that.
I wonder, however, knowing what responsibility that confers on you to monitor the content and to be sure that everything is carefully curated, what keeps you awake at night, knowing that your audience is that young?
Marco Pancini: That is a very, very good question, and thank you very much for raising this issue. Let me explain our responsible approach to this challenge.
We need to find the right balance between keeping the platform open and at the same time making sure that every user who comes on to our platform has a safe experience. That is even more important for families and children.
That is why we have a three-pillar approach to security, and we try through this approach to be sure that we are on top of the issue that you mention. First and foremost, we use the best of our technology to make sure that we create on one side a safe harbour for families and children. YouTube Kids is an application that we created where families can have their children engaging with entertaining content, educational content, content that is for an audience below 13. We understood the challenge that some parents have online to be fully in control of what their kids are seeing, and so built this place, this safe harbour, this specific destination for kids.
That is the first technological solution. On top of that, across all Google services we created something called Family Link, which allows parents to link their family members’ Google and YouTube accounts and, in a sense, to control their experience online, to limit it if needed, and to be in control of the experience together.
The second pillar is policies. We have clear policies in place on what content is not acceptable on YouTube, and we enforce these policies with the best of our technology and human intervention in order to make sure that, if something is not okay on our platforms, on top of users reporting to us, and thanks to our technology, we can identify this content, send it to our people, preview it and then take action quickly to limit views of it as much as we can.
Just to give you an idea, since the first quarter of this year we have been able to take down content that is child abuse material or controversial with no views at all or with very few views in order to make sure that nobody can be exposed to it.
The third element, the third pillar, is digital literacy. We can put the best technology in place, and we can implement and enforce our policies, but if we do not share with families, children, the whole community—including teachers—best practice and good advice on how to deal with the online environment safely, we will not find the solution to the problem.
That is why we have two programmes in place that reach out to all the different age groups in every school in the UK. We have invested £1 million in these programmes in the last two years, and through these programmes we want to make sure that children, teachers and families are aware of these tools and can use them effectively.
Baroness McIntosh of Hudnall: Thank you. That is very helpful in one sense, but I do not think you answered my question.
Marco Pancini: It is about us being able to find the right balance between leaving YouTube as an open platform where everybody can post their content, grow their passion and become creators, and on the other side making sure that this open platform can be a safe place.
Q169 Lord Gordon of Strathblane: I have another supplementary. I do not know whether you are familiar with the concern about DoH—DNS-over-HTTPS—
Marco Pancini: Yes.
Lord Gordon of Strathblane: —and Mozilla in America, which is also, I think, supported to a very large extent by Google.
Marco Pancini: Yes.
Lord Gordon of Strathblane: Would you be concerned about people using that to bypass all the controls that you have talked about exercising?
Marco Pancini: That is a very good question. That is why I say that digital literacy is very important, because parents need to be aware and to understand all the nuances and the functioning of the technological tools in order to make sure that when they put a specific safety tool in place it cannot be overcome.
Then, again, it is a matter of balance, because some of the tools that you described, like HTTPS, can be deployed to make sure that we have a safe connection. If we want to perform a financial operation or to share personal information, it is very important that that information is safe and that nobody can interfere with the connection. Finding the right balance between making sure that the online experience is safe but at the same time cannot be used to avoid the right filters that parents can put in place is one of the challenges that still keep us—
Lord Gordon of Strathblane: I’m relieved.
Marco Pancini: Yes.
Q170 Lord Allen of Kensington: I declare my interests: I am chairman of Global Media & Entertainment and advisory chair of Moelis & Company, which advises media organisations, and I have a declarable shareholding in ITV.
I want to come back to regulation, which was raised by Lord Gordon earlier, and probe whether there genuinely is a level playing field for broadcasting, advertising and regulation. You may have read the evidence we have been given, and specifically I would like to give you the opportunity to respond to two pieces of evidence, one from Claire Enders, of Enders Analysis, and the other from Sky.
I will start with Claire, who says, “Is there advertising regulation online, anyone? It does not even exist. The ASA will tell you that it does, but look at what you can find on YouTube”. Ali Law commented: “The gap between us and SVODs definitely exists, and it manifests itself in compliance, regulatory burden and so on, but it is nothing like the gap between those regulated entities and the likes of YouTube, which do have a competitive impact on us”. Do you want to respond to those comments?
Marco Pancini: Yes, and thank you for raising this issue, which is very important. The whole discussion on the so-called level playing field was really hot during the negotiation on the audiovisual media services directive. I have to say that the community of regulators, plus the Commission, plus the member states, including the UK, found the right balance. The balance that they found does not make the internet the Wild West, or a place with no rules. That is not the case.
The solution that they found was to have a specific set of regulations for the different services provided in the media ecosystem. If you are a linear broadcaster, you are regulated as a linear broadcaster; if you are VOD platform, you are regulated as a VOD platform; and if you are a video online service provider, you are regulated as a video online service provider. That is a very savvy approach, because it makes sure that we can find a fit-for-purpose measure to tackle the issues in front of us.
As I said, in looking at the rules for broadcasters, the regulators analysed the situation and decided to deregulate advertising for linear broadcasters. However, for video online service providers, they looked at the ecosystem and decided to apply a specific set of rules to those providers.
Under the present legislative framework, the AVMSD—not the future one, because we are in the implementation phase—linear broadcasters were deregulated and video online service providers were put under the scope of the regulation. We feel comfortable with this situation and feel that it was the right decision. Why? Because the regulators looked at the different services and found a fit-for-purpose solution.
Lord Allen of Kensington: But surely that was not universally accepted? We were told that you can pick and mix what you want to be. Are you a platform, a publisher, a broadcaster or an SVOD? That all blurs. I understand the point you are trying to make, that they are all individually regulated, but your service is an amalgam of all those things, so how can you pick and mix, choose, what you want from a regulation perspective? That is we are very confused about.
Marco Pancini: We are in conversation with the regulators across Europe. Indeed, when we perform a VOD service, we are regulated like a VOD platform. There is no discussion about that. If we perform video hosting, or act as a video online service provider, as on YouTube main, we are regulated as a video online service provider.
I understand the complexity, but if we look at the legislative framework of the AVMSD it is clear how the different services, and bits of services, fit into the different buckets. Even the BBC iPlayer is regulated differently from the BBC’s linear broadcast services.
I think we will see more and more of these cases because of the diversity of the media and the diversity of the approach of different audiences vis-à-vis content. It will be a bit more difficult for the regulators, but dialogue with them helps to find solutions.
Q171 Lord Allen of Kensington: It is even difficult for the public, because they have no idea what is being regulated and in what way. That is a major issue.
Sticking with the idea of the level playing field, I want to turn to HFSS. What is your view of the Government’s proposal? Is this not another example of you having an advantage over the broadcasters, because you are regulated only in respect of audiences who are under 16, where there is over 25% of the viewership? Is that not dramatically different from Channel 4, Channel 5 and ITV? Surely it is a blatant example of a complete difference in how they will be affected compared to you.
Marco Pancini: Of course, we are part of the public consultation. We are preparing our submission and will outline our position on that. To summarise, in offering an open platform on YouTube main, our approach vis-à-vis advertisers is to provide them with the flexibility and the tools to comply with existing rules. This is the way we are dealing with the rules you mentioned.
In relation to these rules, in full respect of the standards and our policies, we are offering every advertiser on our platform the tools to decide what kind of target they want to reach and to comply with the rules. Of course, regulators are there to make sure that the rules are enforced correctly.
We also go a step further. I mentioned YouTube Kids earlier. We decided, as our own policy, that we did not want any advertising for food and beverages on YouTube Kids, because of the environment we have created. That is our own policy, which goes beyond the standards set for us.
Our approach is to empower advertisers to be fully compliant with the rules.
The Chairman: We are running out of time, but there is one further area that we want to talk to you about: the prominence of PSB content.
Q172 Baroness Chisholm of Owlpen: I want to ask about PSBs and prominence. Should prominence be protected for them, and should the PSB content on YouTube receive some kind of prominence?
Richard Lewis: The public service broadcaster content on YouTube is doing really well. It is growing by 60% year over year. They have in excess of 250 channels. Our system matches users and their passions to the show they may want to watch or listen to, be it “The Graham Norton Show”, “The Night Manager”, “Live Lounge” on Radio 1, or the BBC news.
We know which users like that content and we are constantly recommending that content to new users as well. Indeed, over 70% of the discovery of that content is from platform recommendations, and less than 10% is from people coming and searching for it. We are really trying to add to the audiences that public service broadcasters get in the UK and abroad. For all of them, but especially for the big studios, ITV Studios and BBC Studios, the opportunity is abroad.
In that way, we are trying to grow the audiences and communities around that content. I will hand over to Marco to comment on prominence.
Marco Pancini: Thank you, Richard. Indeed, the real point I want to stress is that users interact with the content on a platform such as YouTube in a different way to the way they interact with content on television. Why? Because users come to find the content they want when it is convenient for them, and in a very flexible way.
Quality content from trustworthy sources such as public service broadcasters automatically gets more traction and interest in a specific sector, news. As Richard mentioned, 75% of the views that public service broadcasters get on YouTube come from our own recommendation system, which means that the users were already interested in that kind of content and we want to give them more. On the other hand, only 10% is coming from search. That gives you a flavour of why it is in the joint interests of platforms and broadcasters, including public service broadcasters, to work together to make their content available.
I will mention a couple of other products we have launched that are going in this direction. For news, we launched a special set of visibility features. When a user searches for news, they get a sort of breaking news shelf where they can see news from public service broadcasters, for example. On top of that, we want users to know when the news they are watching comes from a public service broadcaster, so we also launched specific labels for this.
Richard Lewis: We need to remember how amazing public service broadcasters’ brands and shows are, and their strength in our society. On an open platform like YouTube, it is incredible to see them growing so fast, with the clips they are putting on the platform. So let us not forget their resonance with the UK population.
Viscount Colville of Culross: I understand what you say about the search algorithms that you have already, which are already drawing people towards public service broadcaster content. However, public service broadcasters have told us that prominence is crucial; it is a goldmine for them. We are talking about disaggregated content, but if you can change the algorithms in their favour so that PSB content is more prominent, surely that would bring even more people? After all, it is public funded content that you are providing. Do they not have a point?
Richard Lewis: The system we have is working very well and that growth is fantastic. If public service broadcasters want the only place to find anything to do with “The Graham Norton Show”, or whichever show it is, to be on their services, there is no obligation to upload to YouTube. That is the key thing to get across. We will work with them to meet their business objectives. Our system of trying to create audiences, fan bases and communities around that content is working well.
Marco Pancini: On top of that, one important principle on a platform such as YouTube is freedom of opportunity. I mentioned that it is in our joint interests to make sure that users looking for news, for example, find trustworthy sources like the public service broadcasters.
We also want to keep the user at the centre of the experience on the platform. We want to provide them with what they need, when they want it, and without interfering with their decision, and we want to offer every creator the same opportunity to reach our audience.
Again, finding a balance between the different needs and situations is key for us. As much as we want to work with the public service broadcasters to make sure that their quality content is visible, we cannot create an artificial situation in which we provide users with answers to what they are looking for that are not in line with their interests.
Richard Lewis: To go back to a previous point, I did not mean to say that this is not important. They do not need to upload content if they do not want to, but I meant to say that if it is within their business objectives and it is useful for them to utilise YouTube in that way, that is how we want to work with them. We respect the frameworks that they work towards with their distribution policies, et cetera. That is the main point I wanted to get across.
The Chairman: Thank you to our witnesses. We promised to let you out on time and we are just coming to the end of the session. Thank you very much for your evidence. There are one or two areas on which you gave us quite detailed evidence and we may want to write to you for a little clarification—on some of the regulatory and level playing field issues. We will do that very shortly. Thank you very much for the evidence and making time to meet the Committee.
Marco Pancini: Thank you for having us.
Richard Lewis: Thank you very much.
