07/03/2008

Scottish TV programme-makers have received a further assurance that the BBC intends commissioning more network productions from Scotland - and not just in name alone.

BBC Director-General, Mark Thompson reiterated comments made last year - when he attended the official opening of BBC Scotland’s new headquarters, at Pacific Quay, in Glasgow - that he wants 17 per cent of network productions to come from Scotland, Wales and Northern Ireland.

And Thompson also sought to reassure local newspapers that the BBC wasn’t seeking to compete with them, but, instead, co-operate.

Responding to criticism that some BBC TV programmes billed as ‘Scottish’ have had little or no creative or financial connection with Scotland, he said the definition of what is ‘Scottish’ needs to change.

A commission into the future of Scottish broadcasting - set up in August by First Minister, Alex Salmond, and being chaired by Blair Jenkins - recently provided the example of schools drama series, Waterloo Road, being ‘wrongly’ billed as Scottish.

Speaking at the Edinburgh Chamber of Commerce, Thompson said: “When we opened Pacific Quay, I committed the BBC to commissioning at least 17 per cent of its TV network production from the three nations and said I wanted Scotland to deliver a proportion at least as large as its proportion of the UK population. 

“Now there’s been a lot of debate and criticism in the Scottish press about the way the BBC has defined the eligibility of output when it calculates the proportions. 

“But long before the criticism, and as virtually the first thing I said to the Jenkins’ commission, I’ve made it clear that I believe that the BBC definition should change - and change substantially.

“There is a debate to be had both about international production and about production commissioned in Scotland and with Scottish talent behind it but which is made elsewhere in the UK. It is interesting that Hope Springs has come directly from the strong creative partnership that delivers Waterloo Road. And there’s little doubt that our recent striking success with drama from BBC Wales has come in part from flexibility about where individual pieces are shot. BBC Wales is rightly very proud of Life on Mars even though it was shot in Manchester.

“Nonetheless, I am quite clear that we need a definition that commands the trust and confidence of audiences and programme-makers in Scotland and Wales and Northern Ireland, so that 17 per cent really does mean 17 per cent.”

As far as local newspapers are concerned, he said: “We hope to use the web and broadband to deliver a much stronger regional service of news, information and comment to Scottish licence-payers: these proposals will go to the BBC Trust later this year. But again, I want to stress that we want to develop this service in partnership and complementarity with the existing players, notably the local and regional newspaper groups. 

“We will never and should never operate at anything like their level of granularity - our offering will very definitely be regional rather than local. They can also be certain that key parts of their online model - classified ads and entertainment listings, for instance - will never form part of the BBC. But more positively, I hope we can convince them that we can actually be of help to them, by directing new traffic towards their sites, as we’ve already started doing.”

Here is Thompson’s speech in full:

“I’m going to talk this evening about the revolution that’s going on in media. About what it means for the BBC. About what it could mean for Scotland and the Scottish creative industries.

I’ll touch on some of the classic debates about the BBC in Scotland: do the services aimed at the Scottish public reflect the full range and diversity of life in this country? Does the BBC commission enough network production from Scottish programme-makers?

They’re fair questions and, as you hear, I believe they deserve not just answers but tangible action from the BBC.  But they’re also questions from the industrial age of broadcasting.

The age we’re entering is a different one.

Last week, I heard one of the global leaders of the music industry talking about the incredible roller-coaster they have been riding.

He showed us a slide of Tower Records on the Sunset Strip, probably the most famous record shop in the world.  Boarded up and closed now. Essentially there are no record shops in America now, they’ve all gone. If you want a CD, you go to Wal-Mart or Barnes and Noble. But fewer and fewer people do. 

Five years ago, digital revenues were negligible. For one global group, they were 60 per cent of all revenues in January 2008. But the margins are a fraction of what they used to be in the physical business. Most important of all, the power in the industry has shifted irrevocably, from the record companies to the artists.

And that points us to the other half of the story. Music itself is bigger than ever. If anything, the digital revolution has increased the public appetite for musical performance of every kind - we can see that at the BBC with everything from T in the Park to Glastonbury to the Proms. Touring and merchandising are both growing strongly. More than that, artists and their management companies are learning about how to create multifaceted brands with many different avenues to consumers. Recorded music, music videos, radio still play an important role in the story, but no longer a dominant one. The whole model is changing.

As recently as two or three years ago, my friends in the record industry would say that digital piracy was their main problem. Now piracy and illegal file-sharing continue to play their part. But the heart of the matter is the changing consumer behaviours enabled by the new technologies.

And in broadcasting?

Until quite recently, bandwidth constraints and limitations in technology from compression algorithms to the quality of small mobile displays meant that the pace of change in broadcasting was slower. The first phase of digital meant more choice - Sky, Freeview, cable, digital radio - and a little more flexibility in when you could watch a given programme - Sky+ and all the other PVRs - but little more than that. 

Even this, though, has been enough to drive profound disruption of traditional broadcasting business models. The multiplication of channels and the fragmentation of audiences is challenging all of the established advertising-funded television companies:  ITV, SMG, Channel 4, Five.  And behind that is a fear of what PVRs might one day do to the entire spot advertising model.

Commercial radio has had a high margin run for many years as a cost-effective and fresh-feeling alternative to TV advertising. Now it has to compete against what can feel like an ever fresher and more effective upstart: advertising on the web.

But the second phase of digital will have a far more profound impact on broadcasting and it’s already upon us.

One example. Some nine weeks ago, we launched the BBC iPlayer, which enables you to catch up on the past week’s TV and radio on your PC. For streaming there’s no client to download, it runs in the browser so within maybe five seconds of entering the site you can be watching a programme. And you can easily mail the link for that programme to a friend: again, within five seconds, they can be watching it too.

So far we’ve served nearly 20 million streams and downloads of BBC programmes, now with over 500,000 programmes streamed or downloaded daily. Well over two million people in the UK have tried it so far. All in nine weeks.

If the first wave of digital was about more linear choice and convenience, the second wave is about on-demand, personalisation, sharing and communicating, portability and creating, in other words making your own content and then broadcasting it over the web.

What the take-up for services like the iPlayer and YouTube demonstrates is that public appetite for all of these things is immense. 

And what I think we’d predict is something very like what has happened to the record industry in the US:  massive further disruption of existing business models but also amazing creative opportunities for people and companies of real talent. 

This is the age of talent and of truly exceptional content.  You don’t have to be a big broadcaster to create a hit. You can be a small independent production company based here in Edinburgh. You can be a semi-professional stand-up comedian. You can be a student.

Many of you, perhaps most of you, will be familiar with this story of digital disruption. It’s happening in financial services, it’s happening in retail, it’s happening in newspapers and in many other sectors. I’ve laboured it in the case of broadcasting, because it is the right backdrop against which to talk about what the BBC can and should do both across the UK and here in Scotland over the next decade.

And the first thing to say is that the BBC’s public purposes, its mission to inform, educate and entertain, seems to make as much sense, perhaps more sense, to the new digital audiences as it did to the old analogue ones.

Take news.  We reach over 80 per cent of the UK population every week with BBC News, not to mention more than 233 million people worldwide. Some of the traditional ways of reaching the public with news - scheduled news bulletins - reach smaller audiences than they once did (though it’s interesting to see how resilient our Ten O’clock News is proving, despite the fact that News At Ten is now head-to-head against it); but these traditional means are being supplemented by new consumer channels, like the web and mobile. 

And the multiplicity of channels almost seems to have emphasised the public appetite for outstanding content, whether it’s comedy like Still Game or drama like Cranford.  Our strategy is a radical one about platforms and technology.  In many ways, it’s a rather conservative one when it comes to quality and what audiences wherever they are in the UK expect from the BBC.

But what is changing - and what I believe needed to change - is the BBC’s role in the wider broadcasting ecology. Once the BBC could see itself, and the public could see it, in splendid isolation. Somehow apart from and irrelevant to other broadcasters and the wider creative industries.

Well, no longer. Although the licence-fee represents a far smaller proportion of total UK broadcasting revenues than it once did - it’s around a quarter - in a fragmenting industry, in many ways the BBC’s influence is much greater.

This is why the issue of market impact is so important and why the new BBC Trust is required to commission [broadcasting regulators] Ofcom to conduct an independent ‘market impact assessment’ before deciding whether a proposed new BBC service should be given the go-ahead or not.

But I want to cast the same point into a more positive light.  The £3.2 billion which the UK public give the BBC each year should be an engine of creative investment whose benefits go far beyond the BBC’s own needs and beyond its own services.

We needed a new headquarters for BBC Scotland and that’s why we spent £188 million building Pacific Quay. But PQ was never just about the BBC. We built it there - and I was closely involved in the decision myself - because we knew that it was potentially a critical piece in a wider jigsaw of regeneration in Glasgow  and that it could become the heart of a new cluster of the creative industries in Glasgow. 

From Day One, we consulted with the other broadcasters and agencies like Scottish Screen. Wherever possible, we wanted to share and partner to deliver a better result not just for ourselves but for them. And for Glasgow. And for Scotland.

Indeed right now, stv are shooting The Postcode Challenge in PQ Studio A.

Scotland needs a strong, vibrant independent sector with access not just to commissions for Scottish audiences but to UK networks and global markets. Again, we’ve tried to work in concert with Stuart Cosgrove and Channel 4 and other broadcasters to help support that sector and, in particular, to ensure that there are some companies big and diversified enough to compete with their counterparts in London and elsewhere.

Scotland needs a strong craft and technical base. BBC Scotland’s first response to devolution in the late 90s was the right one: comprehensive, well-resourced news and current affairs coverage of the Scottish Parliament and Government across all platforms. Within a few years, though, we came to realise that this exciting and challenging new era required a much broader cultural response from the BBC in Scotland:  in documentary and arts programming but also, yes, in entertainment, comedy, drama.

River City, Scotland’s first primetime long-running drama serial, is an important part of that story. And it’s led to another new creative hub in Dumbarton. And, we’ve just finished shooting a new network drama there, God On Trial, with Anthony Sher. Again though this represents new facilities and a new talent base which we hope others can use.

When we last asked the Scottish public what they most wanted from our news and current affairs offering in Scotland - and where the biggest gap was - they didn’t focus, interestingly enough, on the vexed question of the relevance of the UK network news offering, but on the lack of sufficient news about life in their part of Scotland. Metropolitan bias, it turns out, is not entirely restricted to London.

So, as you may know, we hope to use the web and broadband to deliver a much stronger regional service of news, information and comment to Scottish licence-payers: these proposals will go to the BBC Trust later this year. But again, I want to stress that we want to develop this service in partnership and complementarity with the existing players, notably the local and regional newspaper groups. 

We will never and should never operate at anything like their level of granularity - our offering will very definitely be regional rather than local. They can also be certain that key parts of their online model - classified ads and entertainment listings, for instance - will never form part of the BBC. But more positively, I hope we can convince them that we can actually be of help to them, by directing new traffic towards their sites, as we’ve already started doing.

We want to use partnerships of every kind to make the £90 million we spend each year in Scotland on Scottish services to go as far as possible and to support as much talent as possible. And we want these services to go on telling the story of Scotland with more consistency and more passion than ever before, and across a broader range than any other broadcaster could contemplate.

That’s why we’ve partnered with the Gaelic Media Service to launch a digital channel in a few months time. That’s why we’ve commissioned Scotland’s History, perhaps the single most ambitious commission that BBC Scotland has ever undertaken. The heart of it is a TV series which will be shown across 2008 and 2009 across the UK, but most importantly here in Scotland. But that will be complemented by a number of radio series, by concerts by the Scottish Symphony Orchestra in various locations across Scotland, by audio walks, by a website and learning content, by Gaelic materials, by events and a host of outreach activity.

But the question I most often hear in Scotland - and which I think it’s fair to say has been most prominent in my conversations so far with Blair Jenkins’s broadcasting commission - is not about the BBC’s commitment to Scottish services or to physical investment in Scotland. PQ offers rather substantial evidence of that. It is rather about our commitment to network and especially television network production from Scotland.

Are people right to focus on this? Yes I think they are. The amounts of money - and of potential inward investment - are substantial, running into many tens of millions of pounds. If you want a strong indie sector in this country, UK network commissions are critical.

But there’s more to it than that. Network production will only ever be a relatively small segment of the total Scottish creative industries which perhaps between them turnover some £5 billion a year. But like the film industry, network television is potentially an amazing shop-window, not just for Scottish talent, but for Scotland as a whole. 

As Scotland redefines itself, perhaps re-invents itself, network production is a brilliant way of keeping not just the whole UK but potentially the whole world in the picture.

And for the BBC, there’s something else. As other broadcasters pull back from some of their historic patterns of production across the BBC, the commissioning of content from Scotland, Wales, Northern Ireland and from the rest of England offers us an interesting creative competitive advantage.

This country is bursting with talent: talent which we can use to delight audiences across the UK; talent which our commercial arm, BBC Worldwide, can bring to audiences in markets all over the globe.

In some areas - network radio, television factual - we are already pretty strong. Others, I think of comedy in particular, seem to defy all attempts at industrial planning -– though again some of the finest comedies BBC Television has ever shown have come from Scotland. But there are other areas, notably the critical genre of television drama where both I and Kenny MacQuarrie, the Controller of BBC Scotland, believe we need to do more and to do better. In Anne Mensah, we have a brilliant new Head of Drama in Glasgow. We have a slate of new network commissions like Hope Springs, which Shed Productions will start shooting in Scotland soon. But we’ve got plenty more to do.

We are shifting a large part of the BBC out of London. Three quarters of BBC staff used to be based inside the M25. By the end of this Charter it will be less than half. Less than half the estate will be based inside the M25. And only around half the network production by Ofcom’s definition.

When we opened Pacific Quay, I committed the BBC to commissioning at least 17 per cent of its TV network production from the three nations and said I wanted Scotland to deliver a proportion at least as large as its proportion of the UK population. 

Now there’s been a lot of debate and criticism in the Scottish press about the way the BBC has defined the eligibility of output when it calculates the proportions. 

But long before the criticism, and as virtually the first thing I said to the Jenkins’ commission, I’ve made it clear that I believe that the BBC definition should change - and change substantially.

There is a debate to be had both about international production and about production commissioned in Scotland and with Scottish talent behind it but which is made elsewhere in the UK. It is interesting that Hope Springs has come directly from the strong creative partnership that delivers Waterloo Road. And there’s little doubt that our recent striking success with drama from BBC Wales has come in part from flexibility about where individual pieces are shot. BBC Wales is rightly very proud of Life on Mars even though it was shot in Manchester.

Nonetheless, I am quite clear that we need a definition that commands the trust and confidence of audiences and programme-makers in Scotland and Wales and Northern Ireland, so that 17 per cent really does mean 17 per cent. We will be sharing a new proposal with the BBC Trust in a few weeks.

We’re also going to continue to look closely at commissioning and specifically at where the network commissioners are located. Although the complexity of running channel and multimedia portfolios argues for having your commissioners as close to each other as possible, there is also a powerful argument for distributing at least some more widely. If commissioners are closer to the talent in a given part of the UK, they are more likely to spot it and to be able to support it.

Although the BBC is going through its own revolution - of which our Out of London plans are a significant part - compared to the rest of the media sector, we represent at least for the present a rock of relative certainty. Our income and our ability to invest in content is less subject to the vagaries of the wider economy and to business model disruption than anyone else’s. It is because of this fact that we can play such an important strategic role in building a digital UK and in stimulating and sustaining the creative industries here in Scotland.

But if we fail to serve the public, if we squander the wider potential of the licence-fee and our own creative heritage, then we will not deserve to keep this very privileged position. 

This is why the strategy we adopt and the choices we make are so critical. I believe that is true of every part of the UK, but nowhere more so than here in Scotland. 

Thank you.


* Send your Scottish media news and gossip, in the strictest confidence, to  info@allmediascotland.com