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29 October 2014
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Greg Dyke


The George Darnell Memorial Lecture

28 October 2003
Printable version

Thank you for that generous welcome. I always enjoy coming to Manchester but there are two very strong BBC reasons for me being here today – apart from delivering this lecture of course.

Firstly Manchester is the home of the Victoria Baths, the outright winner in BBC TWO's Restoration project thanks to the 282,000 people who voted for the baths.

That figure was twice the number for any other restoration project and it brought a grant of £3.4 million from the Heritage Lottery Fund to restore the baths to their former glory.

Mind you there are some things we discovered about the baths that I don't think would be quite acceptable today. For instance there were three pools – first class men, second class men and then women's and the water flowed that way so the women only got the water after both the first class and the second class men had used it. It would be a brave man who suggested that today.

My second BBC reason for being in Manchester is that it is the home of the BBC's first Big Screen, to be found in Exchange Square.

This was launched in May this year. It is a unique pilot for the BBC and is a four way partnership between the City Council, Phillips who manufactured the screen, The Triangle shopping centre and the BBC.

It has proved to be a great success with up to two million people visiting the screen since it opened five months ago.

Crowds of up to 6,000 turned up to watch the Last Night of the Proms and the final of the Eurovision Song Contest; that's 6,000 people watching the telly, outdoors, alongside complete strangers – such a simple idea and a great way of bringing people together to enjoy a shared experience. Especially when that shared experience is watching Britain achieving nil points in the Eurovision Song Contest.

We would love to have similar screens in big cities right around the UK if we can establish the right partnerships.

Of course I have a third reason for visiting Manchester whenever I can and that is to see my team play - thankfully I wasn't here on Saturday when we were humiliated by Fulham.

One of the downsides of becoming Director-General of the BBC was that I had to stop being a director of Manchester United. My kids have never forgiven me. In their eyes only a madman or a City fan gives up four seats in the directors' box at United to take a job at the BBC.

Of course currently there are all sorts of stories around about someone planning to buy United – will it be the Irish or the Americans? Or is there even a Russian around?

Now I was on the board of United when Rupert Murdoch and BSkyB tried to buy it and I was probably the only director strongly opposed to the deal. I thought it was being sold too cheaply, to the wrong people and for no purpose. Other than that I thought it a good deal.

But in the end I had to vote for the deal – even though I hated the idea. Let me explain why.

I was told by the independent lawyers I consulted that if BSkyB offered what I regarded as a good price – and eventually they did - it was my fiduciary duty to recommend the deal to the shareholders, even if I thought it was the wrong deal.

Interestingly I was told that the law made it very clear that as a director of a public company my only responsibility was to the shareholders – I had none to staff or more importantly the fans. Only the shareholders mattered.

Thankfully the Mergers and Monopolies Commission stopped the takeover. I think they received more than 600 submissions with only two in favour – one from BSkyB and the other from the Board of Manchester United who had decided to sell.

I sincerely hope that we get the same end result if again someone tries to buy the club and that Manchester United stays as an independent entity.

Before I start my lecture tonight I must thank the MPA (Manchester Publicity Association) for inviting me here tonight. I spent some time thinking about what I should talk about.

Being Director-General of the BBC means there's never any shortage of potential topics and of course, the Hutton Inquiry is of great interest to many, though I will disappoint those who want to hear about that tonight. We're not talking about that until after Lord Hutton reports.

And of course I could talk a lot about Granada, your regional ITV broadcaster, and what's happening in ITV but that would be intruding into private grief. ITV's ability to snatch defeat from the jaws of victory never ceases to amaze me.

Instead I've decided to talk about something which impacts on everyone in this country - that is the importance to Britain of having a television system which reflects our society, our culture, our way of life.

Over 50 years we've made a positive choice in this country to have a television system which is fundamentally British, giving us television programmes which reflect our values. That's the choice which has been made by successive governments and we've achieved it largely – but not wholly - because of the BBC and the unique way it is funded.

Let me explain and I'll start with a fact which I suspect will surprise you - the UK spends more per head of the population on the production of domestic television programmes than any country in the world including the United States.

Just think about that for a minute. That's more money spent per person on new, home-grown television programmes than in countries like the Netherlands – where the figure is almost half that of the UK - or France – a country which is so proud of its language and heritage.

As I say even more than the United States where the total spend is obviously much larger because of the much larger population; but the annual spend per head on home-grown production in Britain is still $10, or 13%, more per head than in the USA.

Now before I joined the BBC I used to run a large international production company with bases in 20 odd countries. The one thing I discovered was that in every market around the world viewers preferred indigenous programmes – programmes made in that society for that society – rather than imported programmes, which due to the huge economies of scale are of course overwhelmingly American.

Buying US drama or comedy programmes is much cheaper than making your own – so it all comes down to economics.

For example 24 cost the BBC £140,000 per hour to acquire – compared to a home-made drama like The Project – a uniquely British drama about the early days of New Labour – which cost £1.1 million per hour for the BBC to make.

Although not directly comparable, it gives an idea of how tempting it is to buy high quality, proven US imports instead of making risky and expensive UK drama.

Commercial broadcasters spend as little on television programmes as they can get away with regardless of what viewers actually want. It's just like any other market - that is unless the relevant government has decided that there is a role for public funding to ensure that the television system more reflects their particular culture.

That is precisely what successive governments have decided to do in Britain by supporting the BBC – an organisation funded by a compulsory licence fee with the sole aim, as we say in our mission statement, of "enriching the lives of everyone in the UK with programmes and services which inform, educate and entertain".

The interesting question is if the BBC were not here would anyone invent it today? The answer is I doubt it. I suspect we now live in a market driven world in which the lobbying power of commercial organisations is so great that they would undermine the idea of a BBC from the very beginning.

Imagine trying to sell a proposition to Rupert Murdoch that you collect £116 from every household in Britain to pay for television, radio and online services and if the consumers don't pay they can be fined. And yet this has been the foundation of our whole broadcasting system – a system which is envied right across the world.

Today the licence fee funds 40% of all original television production in this country. Of course it funds a lot more besides television – BBC radio, BBC online, BBC local radio, five orchestras, and a whole range of education initiatives.

But today I am talking about television production. And the reason we spend more per head on original television production, more than any other country in the world, is because of the Licence Fee and the BBC.

But the funding of the BBC has also had a positive effect on the amount of original television programming we see on the commercial networks in the UK.

Because of our tradition of publicly funding popular as well as minority programming on the BBC – funding Only Fools and Horses or Cutting It as well as Panorama and Newsnight – commercial networks have had to spend more of their income on original programming to compete.

This has clearly been to the benefit of viewers although not necessarily to the benefit of shareholders, which is why there is now commercial pressure to change the system.

The licence fee funding of the BBC is the main reason why ITV spends considerably more on original production than any other commercial network in Europe – 40 per cent more than its nearest rival RTL1 in Germany.

And it's why Channel Four is the fourth biggest commercial spender on original production in Europe. They have to do this to compete for audiences and the benefits are felt by British viewers who as a result get more indigenous television programmes.

So what does this add up to? Well what is certain is that whereas in films, music and games US originated material dominates their sectors, in this country that is not true in television. In our industry three-quarters of network television output is still home-made reflecting the values and attitudes of the UK.

So why am I talking about this tonight? Well I believe our whole system of broadcasting could be under threat.

With the BBC's charter up for renewal in the next couple of years the massed forces of commercial television led in particular by Rupert Murdoch and BSkyB are circling and their argument is superficially attractive.

With so many channels now available through BSkyB why do we need such a large BBC? Why not cut it down in size and reduce the Licence Fee and give greater opportunities to commercial broadcasters?

This position is already being supported by John Whittingdale, the Shadow Secretary of State for Culture, Media and Sport, who only two weeks ago said he wanted to see the Licence Fee cut by 50%.

Of course what the likes of Sky fail to mention is that outside of news and sport, pay television has so far failed to add anything meaningful to the indigenous output of British television.

According to an independent report by consultants Oliver and Ohlbaum, which was published in October, only four per cent of the massive new pay television income in Britain is actually spent on British production – just four per cent.

That's around £120 million out of a total pay television income of £3 billion. The rest is spent on American programming, sport, repeat British programming and movies.

That four per cent compares with an average of 55% of income spent on British production by the traditional networks run by the BBC, ITV, Channel Four and Channel Five.

And there is certainly no sign of the British pay television system ever creating the equivalent of Home Box Office in the United States, the pay channel responsible for those big budget, quality programmes like The Sopranos, Sex and the City, and Six Feet Under. But even HBO only spends 10 per cent of its $760 million programme budget on domestic drama and comedy.

So my point is this. If we want to sustain the British nature of our television system there is no obvious alternative to a publicly funded BBC.

The Oliver and Ohlbaum report makes that very clear. The report says if you cut the amount the BBC spends on television programming and I quote, "the incentive for commercial broadcasters to invest any extra revenues in programming would be likely to decline. While commercial markets might increase the diversity of offering they would be very unlikely to do this by increasing programme spend."

But does this matter? I for one believe it does. When we all talk about the globalised world we tend to believe it's something to do with internationalism.

But that's simply not true in the world of media, entertainment and communications. In my world, as in many others, globalisation means Americanisation and that I believe is the threat we face and it is why I believe passionately that this matters.

I think it matters enormously to this country that we have a public service broadcasting system on both the BBC and commercial television which reflects our society.

It matters that we spend significant amounts in this country on television drama which gives us different insights into our society and not American society. Drama from different parts of the UK which reflects the culture and lifestyle of those regions to other parts of the UK, drama which tells you about Britain.

It matters that in the future we produce further comedies in that long line which runs through from Steptoe to Fawlty Towers to The Likely Lads to Absolutely Fabulous and now to The Office, all of which poke fun at our lives, our culture, our eccentricities.

The commercial market in Britain has never provided this and is even less likely to provide it in the future. Over 40 years virtually every memorable situation comedy in this country has come from the BBC.

Finally I believe that a strong, well-funded, vibrant and independent BBC is vitally important when it comes to television news - which to the public is overwhelmingly the most trusted form of news.

In Britain we have a commitment to impartial news, free of political and commercial bias. But you'll struggle to find that in the United States today.

Just look at what happened during the run up to and during the Iraq war. In this country BBC News tried to reflect the full debate and was widely criticised by some for doing this – we were accused of being unpatriotic. It wasn't true - we were just trying to offer fair and balanced output which was important - particularly given the significant opposition to the war in this country.

Research undertaken by the University of Cardiff since the Iraq war backs up the view that the BBC was and is independent.

Academics at Cardiff undertook detailed analysis of news bulletins during the war looking for signs of bias for or against the Government – and their findings show, and I quote, "the accusation made against the BBC of an anti-war bias failed to stand up to any serious or sustained analysis."

The British public do care about impartiality and they want the BBC to be, and to be seen to be, an independent broadcaster.

Contrast our attitude to the news with that in the USA, where most of the electronic media abandoned impartiality in the rush to wave the flag.

In fact, of the 840 experts interviewed in the USA during the war only four were actually against the war. Even Walter Cronkite – the most famous of all US newscasters - now believes that US journalists live in fear of being branded unpatriotic and consequently are failing to ask the difficult questions of Government and others.

So to sum up, I believe the evidence is clear that if you cut the funding for the BBC you inevitably cut the total amount spent on British programming and that, in turn, fundamentally changes the nature of British television from drama through entertainment, right through to news.

While that may be in the interests of some commercial broadcasters who could make bigger profits, I would argue it's not in the public interest or in the interest of viewers overall.

We have created something special with our television system in this country, and that is something recognised right around the world.

The danger is that in Britain today, we don't recognise this and begin to believe the arguments put forward by free marketers.

Personally I believe we have a broadcasting system which has served us well and we tamper with it at our peril. Believe me, it's a system which is worth defending.

Thank you.


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