WEDNESDAY 11 JULY 2007 ________________ Present Bonham-Carter of Yarnbury, B Eccles of Moulton, B Fowler, L (Chairman) King of Bridgwater, L McIntosh of Hudnall, B Manchester, Bp Maxton, L Thornton, B ________________ Witnesses: Ms Dorothy Byrne, Head of News and Current Affairs, Channel 4, and Mr Jim Gray, News Editor, Channel 4 News, ITN, examined. Chairman: Good morning, welcome very much to this session. I am sorry to have kept you waiting a few minutes. Are there any declarations of interest that Members of the Committee want to make? Baroness Eccles: I would like to make a declaration for the record, which is that I am an independent national director of Times Newspapers Holdings Limited, which is a wholly owned subsidiary of News International. We have extremely specific and limited responsibilities which do not include any matters concerned with finance or policy regarding the newspapers. Q66 Lord King of Bridgwater: I am doing a thing called The Iraq Commission, at the moment, which is being done by Channel 4, for which they are paying me. Ms Byrne: Watch it on Saturday night at 7.30! Q67 Chairman: Thank you very much. Having got that over, let us start. Welcome. I think you know what we are doing; we are looking at media ownership and the news, but what we are also doing, in coming up to that, is looking at how the agendas of news have changed; the way that people access the news is changing, the process of news gathering – how that has changed – and the impact of ownership, and concentration of media ownership, on the balance and diversity of opinion seen in the news. So it is, at this stage, very wide in its reach. Could I begin, then, as far as Channel 4 is concerned, by asking you this: has the production of news become more or less expensive over the past ten years, as far as Channel 4 is concerned? How do you view that? Ms Byrne: I think it would be good if Jim answered about the costs of news production because he is doing it every day and can explain that perhaps better than me. As far as we are concerned, paying a substantial sum of money for our news is something that we are absolutely committed to. So if some costs have gone down because of technological progress then we have aimed to switch that money into paying more for original journalism. Q68 Chairman: Let me cut through that. The real point is this: we have been told, both in this Committee and outside, that news channels are inherently unprofitable in this country; there is no way you can actually make a profit out of running a news channel. Is that something you would agree with? Ms Byrne: I am proud to say that Channel 4 News loses more money for Channel 4 than any other programme that we make! Q69 Chairman: You are proud to say that? Ms Byrne: Yes. Mr Gray: I do my best! Ms Byrne: I am not sure what the current funding gap is but I think it is about £10 million. I always say to the news: “That shows how much we love you”. 2 Q70 Chairman: Excuse me interrupting, but that is a pretty flip answer, is it not, really? Surely, you would like to have a news programme that was washing its face; that was profitable. People do not normally, in the media industry, like actually running things which are being subsidised by other parts of the business. Mr Gray: Good morning, my Lord Chairman. I should explain who I am. I am the editor of Channel 4 News but, also, the head of the department at ITN which makes all of the news services – that is News at Noon, More4 News, the evening programme at 7 and all the online. It is true, as Dorothy says, it is about £20 million we get to make all those programmes, and I think the ad revenue around those slots is about ten-ish. It could be I could offer to give Channel 4 a programme more in line with the revenue – it could be done; a decent little news programme could be done for half the price. However, it would not be able to do what is set out in the remit, and primarily that is the journalistic parts of the remit. The technology has made the cost of news processing and news gathering cheaper over the last ten years, so in the field we can deploy fewer people to do what we used to do years ago: satellite links are coming down, you can take portable satellites where you used to have to book through foreign broadcasters, and back at the newsroom processing of news, the picture, the graphics and the scripts, are all converging; the technology that does that is becoming very much similar so that an individual can actually do more than one role these days. However, if you just went down that route into a highly effective news processing operation it would look quite good; it would look quite sharp on air, but you would very rarely find out new and serious information, because it spends its money on the processing side rather than the journalism side. So that is the remit we are set - it is very strong on original, revelatory journalism - and the cost of that has not come down; that is people; that is not technology. Q71 Chairman: How many people do you employ? 3 Mr Gray: Overall it has gone up. About five years ago it was about 110 and right now it is coming on 140 because its services have expanded with the More4 News service and online. Q72 Chairman: You are really saying, for the foreseeable future and in the past as well, that with a news programme like what you do with your 7 o’clock news programme and all that, there is no way you are ever going to make money out of that. Mr Gray: I think it is pretty difficult, actually, to say in terms that you would actually make money. You asked Dorothy that you are hearing the received view there is no future for news channels. I think by that you did actually mean news channels not a news programme. That is true; I do not think you can because of the existence of News 24 – they do it for free. ITV used to have a news channel but they got out of the game because I do not think there is the advertising revenue for two news channels, commercial ones, up against the BBC, but when it comes to our form of news, which is a shaped news programme, the premium paid on journalism, talent and expertise – specialists journalists, foreign viewers – it is difficult for me to see that that would make the channel money, frankly.. Q73 Chairman: What that means as far as policy for Channel 4 is concerned is that the money has got to come from elsewhere, either in the Channel 4 budget or extraneously. I suppose there is an implied subsidy from analogue, and once you go from analogue to digital, that implied subsidy disappears. What happens next? Ms Byrne: Our view would be that whatever happens Channel 4 News as it is must continue, so a means must be found to ensure that we have the funding to continue. Overall, at the moment, Channel 4’s average percentage audience is 10 per cent and for the news it is 5 per cent. If we continue, as we must, with our one-hour, serious news programme in which 40-50 per cent of its content is foreign, that programme is not going to make money. But we should not cut back on its seriousness, its quality or its length – I am absolutely sure of that. I am 4 sure that that is right, not just for Channel 4 but, also, for British democracy. I think the existence of Channel 4 News is vital as a very serious competitor to the BBC. Q74 Chairman: We will come on to some of the figures, but tell us, generally, how many people watch the 7 o’clock news? Ms Byrne: About a million. That, since 2001, has held at a time when other programmes have gone down in other broadcasters. We are pleased with that. Mr Gray: What we take from that is – and some people might call it a niche, but a million is still a good number - that there is still a market for serious, in-depth news. Perhaps that is where we should place even more of a premium: the trust, the accuracy and the depth which you do not get in other outlets, even though they are multiplying exponentially. So this is bucking the trend, frankly, for our audience has gone up beyond 6 per cent. It is around about one million and that is stable, whereas other news programmes are running down. Q75 Chairman: Basically, what you are saying is that in the foreseeable future, over the next few years, unless there is some public subsidy, public support – however you want to put it – the kind of news programmes that you are running at the moment, it is not going to be possible to run. Ms Byrne: Channel 4, as I said, has a funding gap. I would always come back to saying that whatever happens the most important part of Channel 4 is its news and current affairs, and means must be found to maintain them at length in prime time.