Canadian Heritage Committee on Jan. 29th, 2008

[Maria Mourani, Bloc, Ahuntsic, QC]

Thank you, Mr. Chairman.

Mr. White, I would like to go back to funding. You spoke of a licence that the public pays for in order to have access to the BBC. I am not sure I understood correctly, and I would like some clarification. In Great Britain, does each person pay for a licence or a tax per channel? For example, here, one can access several channels through different distributors by paying a monthly amount. At home, do you have to pay a certain amount per channel, so much for the BBC and so much for another channel? How does it work?

[Wilf White]

The licence fee is a fee imposed per household regardless of what channels you watch. Under British law you have to pay a licence fee even if you never watch a BBC service. That's not very likely; almost everyone does use the BBC to some extent. But even if you don't, the licence fee is essentially a tax on the use of a television for any purpose.

We don't make any incremental charge for our services. They're then provided free to air. We're on every digital platform, so whatever digital service you have, you will get our services, and of course we're also available, or at least our principal channels are available, via analog.

Other channels, commercial channels, divide between the free-to-air channels like ITV, Channel 4, Five, and a number of others, and those that charge a subscription. If you want those channels, then you do pay an extra monthly sum, but you won't get any of them through Freeview because Freeview has no monthly subscription and is provided entirely free to air. The BBC does not, itself, operate any services by subscription.

[Maria Mourani, Bloc, Ahuntsic, QC]

From what I understand, there are licence fees that exist, and the funds collected go to the BBC. In addition, the people who want to get other television channels must pay additional fees. In the end, how much do households pay to be able to watch television in the U.K.?

[Wilf White]

The majority of people pay only the licence fee, £135.50. But those who choose to pay a subscription will pay up to about £45 a month on top of that. The subscription packages start at around £10 or £12 a month and go from there to £45 a month. If you are a sports fan and you want all the movie channels, then you are paying £40-something. If you want fewer channels and you don't want the premium sports channels, you are paying more like £15 or £16.

Of course the situation is somewhat complicated by the fact that now both satellite and cable operators include broadband access in their subscriptions. So as well as getting television, in most cases you are getting broadband and very often a telephone service too. So it is quite difficult to draw out all these costs to say this is the cost of watching television. But for the majority of people the cost is very simply the licence fee and nothing more.

[Maria Mourani, Bloc, Ahuntsic, QC]

As far as programs, series, television, films etc. are concerned, do you have a certain amount in your overall budget that is allocated to producers in order to create these productions or do you have access to funding from other sources?

For example, here we have the Canadian Television Fund. It allocates 37% of its budget to producers of the French and English networks of the CBC. Is the situation the same for you or are you in a position to produce your own programming through your own budget?

[Wilf White]

We don't have any access to a fund similar to the Canadian Television Fund. There is no equivalent in the U.K. But what we do, particularly with some of our more expensive productions, is we look for co-producers, for other broadcasters, who, in return for the rights to show the programs themselves, put money into the program to help us make it. I gave an example earlier: the CBC co-funds Doctor Who, but we also have support from the Discovery Network in the U.S. for many of our natural history productions. Increasingly, we look to maximize the value for licence payers by getting money from third parties, who essentially are buying the rights to the programs in advance by co-funding them. But there is no U.K. fund other than the licence fee.

[Maria Mourani, Bloc, Ahuntsic, QC]

My colleague asked you earlier on if there were many people who did not want to pay the licence fee. You talked about roughly 5%, but you said that earlier on, it had been much higher. At the outset, when the government set up that system, did people protest a great deal, or did they accept to pay these fees?

[Wilf White]

The licence fee goes back so far--right back to the 1920s--that I am not quite sure what the reaction was when it was first introduced.

What I would say is the evasion rate, the 5% figure, is the people who don't pay. I guess it would be honest in answering your question to say the 95% who do pay probably pay with varying degrees of willingness, some because they know they have to by law and some because they genuinely feel we're offering good value.

I think the majority of British people do think the licence fee offers good value for money and I think the majority of members of Parliament think that. But of course some people will pay the fee rather less willingly than others.

[The Chair, Conservative, Gary Schellenberger]

Thank you.

We now switch to Mr. Siksay, please.

[Bill Siksay, NDP, Burnaby—Douglas, BC]

Thank you, Chair.

I want to come back to the six public purposes that are outlined in the charter. At one point I think you mentioned purpose plans. Is there a specific plan that corresponds to each of those six public purposes?

[Wilf White]

Yes, there is. You'll find them on the BBC's website, if you're interested in that. If you go to the section of the website that's devoted to the trust, you will find all the documents that explain how purpose remits and purpose plans are implemented available on the website.

[Bill Siksay, NDP, Burnaby—Douglas, BC]

How are those purpose plans developed?

[Wilf White]

Let me explain. There are actually two things here. At a high level there are purpose remits, which are written by the trust. We get to see them, but they are very much the trust's proposals to us.

The purpose plans, if you like, are the executive's response to the purpose remits. So the remit sets out in broad terms that if you're going to promote education and learning, this is what we think you guys should do. The purpose plans are, okay, fine, now let's put some flesh on the bones. You've told us to do this, this is how we propose to do it.

The remits are rather more general than the plans. The plans put specific proposals together to meet the remits.

[Bill Siksay, NDP, Burnaby—Douglas, BC]

All right, that's helpful.

Can you tell us a little bit about the specific purpose plan for reflecting the U.K.'s nations, regions, and communities?

[Wilf White]

Well, I can give you some examples of what we're expected to do under it. I think that might be the best way to do it.

One of the things they expect us to do is commission a good deal of our content from outside London. The trustees are very concerned to ensure that we cover regional news adequately, that we commission programming from all over the U.K., that we try to promote access to the airwaves from minority communities, and in particular that we look to ensure that a reasonable proportion is not only made outside London but also outside England. The trust is very keen to ensure that a good deal of programming is made in Wales, Scotland, and Northern Ireland.

At the risk of sounding obsessed by Doctor Who, just because I have a nine-year-old son who watches it all the time, Doctor Who, for example, is made in Cardiff, in Wales, not in London. At the moment, we have a big push on to commission more from outside London and indeed to move a large body of BBC staff from London to Salford, which is next to Manchester in the north of England. That's something the trust is strongly supportive of.

Those are just a few examples of how they expect us to serve nations and regions. We also, of course, have a good deal of work online in the nations and regions. Every local community has a “my local” website, which they can go to; it's called “Where I live now”. You get local news, local weather for your area.

[Bill Siksay, NDP, Burnaby—Douglas, BC]

Are there specific targets related to regional production or development of production outside of London? Can you tell us what percentage did exist in London and what the goals are with regard to that change in where production happens for the BBC?

[Wilf White]

Yes. The quota that's been around for some time is that one-third of our production should come from outside London. The director general, talking about the quota only last week, said that he expected in a few years' time it would be more like 50%.

[Bill Siksay, NDP, Burnaby—Douglas, BC]

You mentioned earlier some other language production in the western islands of Scotland. Can you tell us a little bit more about other language work that the BBC does?

[Wilf White]

Yes. On television, we support Welsh television through versions of BBC Two in Wales and through a Welsh radio station. In Scotland, we have a Gallic radio station and website, to which we're now adding a Gallic television channel. We also have radio and online services in those languages and other minority languages.

We have, for example, a digital radio network, called the Asian network, which produces programming in Asian languages like Urdu, Bengali, Gujarati, and other languages of that kind.

We have quite a wide-ranging language proposition. Of course, separate from the main BBC, there's also the BBC World Service, which covers another, roughly, 40 languages.

[The Chair, Conservative, Gary Schellenberger]

Thank you very much.

Mr. Fast.

[Ed Fast, Conservative, Abbotsford, BC]

Mr. White, I'd like to ask you a question about your library of programming. What portion of your archive material do you make available over the various platforms you serve?

[Wilf White]

Well, the aim is to make all archive content that has come out in the last seven days available free to air via broadband. In some cases, we simply don't have the rights to do that. For example, if we've shown a Hollywood movie, we're not going to make that available on demand because the Hollywood studios would rather do that themselves. Frankly, I think there isn't the same argument for doing that as our own programming. We have a similar issue with sports rights, where the sports bodies would rather hold the rights themselves in some cases and offer their own on-demand service.

In addition to that, we're developing a commercial on-demand proposition that will make available a reasonable proportion of our content--yet to be determined, because it depends on how it works out and it hasn't yet launched--after seven days in return for a small charge. We're doing that in collaboration with our fellow public service broadcasters, the commercial broadcasters--ITV and others.

[Ed Fast, Conservative, Abbotsford, BC]

Actually, one of the pieces of testimony that we heard here was from the creators of content who complained about the difficulty they've had in negotiating program rights for multiple platforms. I think what I hear you saying is you have a similar challenge.

How do you propose to address that challenge, especially since you have all of this material that has been produced for BBC or that you've purchased? It's shown once and could have significant value and yet it can't be shown because of disputes over programming rights.

[Wilf White]

This is something that Daniel has been looking at, so if I may, I'll pass the question to him.

[Daniel Wilson]

I think the way we've tried to do it really is to work in partnership with the independent producers and the other rights holders that we have to work with and try to take them through the journey of how people are accessing content now.

To begin with, and this was a couple of years ago now when we last negotiated the terms, it was a matter of really demonstrating how usage had changed, how on-demand was very much more important to audiences, and also going back to this point that the committee has mentioned about audience fragmentation. I think once we raised those issues with the rights holders, it became clear that it was in everyone's interest to have a more flexible approach, where we had platform-neutral access to rights and, for instance, things like the ability to show our programs on mobile phones, even if produced by independent producers, or for catch-up services, as Wilfert mentioned, factored into the deal.

So in terms of where that left us in terms of the value for money, I think it's fair to say we paid a little extra for those additional rights we were being granted for being able to have the catch-up services. But we didn't pay too much more because we recognized a lot of people using the additional on-demand service would be watching that as a substitution for watching it on traditional television channels.