Welcome to this meeting of the Culture, Media and Sport Committee. This is the fifth oral evidence session in our BBC royal charter review inquiry, and we are joined by our first panel: Patrick Holland, executive chair and CEO of Banijay UK, Dino Sofos, founder and CEO of Persephonica, and Nigel Warner, CEO of Pact, the trade body for independent production in the UK. Gentlemen, you are all very welcome. Members, may I remind you to declare any relevant interests when you ask your questions? I will kick off with a question to Nigel and then to Patrick. You have both advocated for the BBC to be funded by a household levy. Our Select Committee has heard a lot of evidence about different funding methods and about whether the current licence fee model works. Why have you both suggested the household levy as the solution?

The same question has been asked in a number of countries over the past decade or more, and places like Germany have come to the conclusion that funding their public broadcasting system largely through a universal household levy is the best approach. It is an important principle that the BBC should be funded universally. I think the evidence is very much still there that it is used in the vast majority of households—more than 95%—but the problem with the licence fee is that now only 80% of households are paying it, and that number is declining. The advantages of turning it into a universal household levy are, first, that the cost per household could potentially reduce—if you remove evasion in the system, it could be cheaper for individual households—and secondly that you could potentially make it more progressive by having a lower levy for less well-off households. There are quite a lot of advantages to moving that way, while preserving the principle that the BBC is for us all and is paid for by us all.

Patrick, why is it your preferred model?

Germany had this difficult discussion in 2013. I am no expert on the German politics of the time but, from looking into it, a very brave and clear decision was made that having a licence on devices, in a world where people are watching on a multitude of different devices, was not fit for purpose any more. The debate that was had was about a broadcast environment, and how what you were doing by paying this levy was paying, as a nation, for a series of standards on the content that you are watching, on a free and fair news environment and on quality. Protection around German culture and language content was also a key thing. As a nation, you might not watch ZDF, but you would think, “Well, I’m funding this environment because it is for the social good.” It is that sense of broadcasting for the social good. We have a brilliant PSB environment in this country—the best in the world, I would argue—so we should have a levy that matches the PSB environment. Finally, the training, the quality of the individuals and the amazing heritage that we have in this country are one reason why we have such a strong streamer presence here. They have come and invested because we have fantastic talent in the UK. I would suggest that the levy reflect that what we are doing is asking people to respond to creating a culture that has enabled the streamers to create shows such as “Adolescence” and those types of piece, which speak to audiences across the UK. As Nigel said, there is the ability to be progressive in how that would be implemented.

Why is having a sustainable BBC so vital for the independent sector? You represent one of the biggest companies in the independent sector. What does a sustainable BBC have to do with your business and how successful it is?

People talk about an ecosystem; the broadcasting and television production ecosystem in the UK, I would suggest, is the envy of the world. At the heart of that system is the BBC. That is not to detract from the streamers and from other companies that have come in and created content for audiences, but the BBC has a unique commitment to British content and a unique commitment to British producers. It has a commitment to truth and impartiality that means a gold standard around the quality of the programme you are watching. For us as producers in the UK, since the 2003 broadcasting Act, the terms of trade mean that we retain our IP. If you look at programmes such as “Peaky Blinders” or “MasterChef”, both were initially made for the BBC. Banijay owns the IP of those programmes, and also of “Black Mirror”, which was made for Channel 4. The IP is retained by the producer, and so when there are subsequent iterations of that programme, a licence fee comes back to the producer. You are able to grow your business based on a long tail of income or revenue from a particular programme, which you can then use as your development spend to invest in further research and development. The growth of companies such as the one that makes “MasterChef” and the one that makes “Peaky Blinders” has all been possible because of that retention of IP and the partnership model that it enables.

Do you think that the BBC cuts will affect its approach to commissioning shows from companies like yours?

Obviously, the BBC has been going through funding challenges and hyper-inflation. Actually, the inflation has started to come down a bit in scripted production in particular, but the inflation in scripted over the last five years has been just astonishing—in double digits. It has meant that the BBC is facing ever more challenges, spending the same amount of money on an ever-increasing amount of production with ever-increasing costs of production. The BBC has said that it wants to preserve the programming budget, and it needs to be thinking about cuts around it. The BBC has a connection that is unparalleled across the audiences of UK, so it is imperative that as much as possible be spent on the programming budget—not for us as producers, but for the audience, because we want to sustain that link between public service content and the audience.

The BBC is very important, in terms of the nations and regions aspect—

We will come to that in a second, Nigel, but I want to ask you, leading on from what Patrick has talked about, whether BBC cuts will lead the BBC to reduce its interest in commissioning some of the less viable genres, such as children's TV.

The decline in investment in children’s TV has been happening for an awfully long time. The BBC remains one of the few places left, to some extent along with Channel 5, where that is happening. So yes, that would be very worrying. To be frank, reducing your programme budget, in an era when audiences are all about content and are all about where that content is, is a bit like cutting off your nose to spite your face. If the BBC is looking to find savings, it should be trying to do so, as far as possible, in ways other than making reductions in its programme budget, in children’s TV and all other areas.

Patrick, you will know that the Government have made it very clear that they support the Creative Industries Independent Standards Authority, and the BBC has also given it very clear support. What is Banijay’s current position on CIISA?

We have always been very supportive of CIISA, and we have always been in dialogue with CIISA. We have had questions during the last few years around the process. How do we make CIISA fit for purpose? As organisations across television and other parts of the creative industries, we are having that dialogue in order to build the best standards authority possible, but our current position is that we are we are funding CIISA. We have convened a group of producers and production organisations with CIISA at Banijay HQ in the last few months, and it was a fantastically productive session—and we move on.

So, in a word, public backing for CIISA?

Yes.

And financial support for CIISA?

Yes.

Good morning, gentlemen. This is just a quick question; it is not homework or a test. The “Watch this space” report has recently been published. Have any of you had a look at it yet? The witnesses indicated dissent.

It has only been out for about five minutes.

We have seen the headlines from broadcast and elsewhere.

Okay. I just wanted to see whether you had any early thoughts. My next question, which is about creative classes and regional investment, is for Patrick and for Nigel. How could the charter process be used to ensure that the BBC commissions and invests in all parts of the UK?

Steven Knight was here the other day. We have an investment with Steven Knight—Kudos Knight, which is in the west midlands. The BBC has regionality baked into its being and its purposes at the moment. Building on what has happened in the west midlands is a really good example of how the next charter should evolve. We are competing for audiences on the world stage, so if the audience watch a show and it is less good than a show that they would get on another service, that means that they will not keep watching the show. It is imperative that you meet the audience need first, but audiences love content that reflects their lives and tells them stories that echo their own experiences. What has happened in the west midlands is that we have moved “Peaky Blinders” there, and we have worked with the West Midlands combined authority to build a really strong production ecosystem, together with the BBC. We have also done a major piece of work to move three series of “MasterChef” a year to a bespoke studio in the west midlands. You are all very welcome to come and visit it any time: it is a sustainable, purpose-built studio in the old Banana Warehouse. It is now in its second year and it is employing over 150 people from the west midlands. What we have done is get a self-sustaining, very successful series that is of the region, and it is a skills base for the region too. To promote growth in particular clusters, you have to have that commitment. You also have to do it over time. You cannot just come in, make one show and then disappear, thinking that that will be transformative. You have to be able to build a skills base that means that, over time, the person who started as a runner ends up as a series producer or the executive producer. I used to work at the BBC, as the head of BBC Two. When I was there, we commissioned a series called “Ambulance”, which was actually on BBC One. That series is made by one of our production companies. It moved to Manchester a number of years ago, and the person who is the series editor started as the runner. That is because of sustained investment and commitment to the show over time. I would suggest that, in the charter, we would be hugely supportive of having that sense of, “How does the BBC drop anchor in particular areas and build those clusters?”

I have been in this job for just a few months, but throughout that time, I have been travelling all around the nations and regions of the UK, meeting Pact members and talking about their experiences and what is happening to them on the ground. The BBC is a really important part of that story. In fact, more than a third of all the commissioning of content in the nations and regions is done by the BBC, so it is a really important player, and it is the only broadcaster that has those kinds of specific obligation in relation to commissioning in the nations themselves. The picture that emerges for me is much more collaborative than I expected. The BBC is a partner, as Patrick says, in a lot of those places. There are other partners, such as the screen agencies, which are becoming a very important part. Ultimately, one of the things that you have identified already in this inquiry is that the funding that is available for commissioning from the BBC and other public service broadcasters is declining. Other people are therefore having to come forward with funding contributions to get productions over the line. More than £650 million went into the public service broadcasting system last year from third-party funders, and most of that is from my members—from independent producers. It is becoming a much more collaborative operation, particularly in those nations and regions where you have the local screen agencies, the local producers and equity funding, and then you have the public service broadcasters. The BBC cannot do everything, and you cannot do it all on your own, so it is becoming a much more collaborative endeavour.

Nigel, you mentioned collaboration, and Patrick, you mentioned regionality, which I liked, and the relocation element. There are certain pressures on funding these productions and the set-up—for example, the fixed costs, because the facilities for producing this kind of content are key. How important are local and regional government in the commitment to spreading the regional voice?

It is really moving forward, particularly in some areas. You might have seen that in recent weeks Greater Manchester announced a £10.5 million fund to contribute towards supporting development and production costs. There are funds in the devolved nations that are established with the screen agencies—Creative Wales, Northern Ireland Screen and Screen Scotland—and then it is a patchy picture in the English regions. Some areas are further forward on some of this than others, but a lot is going on where you have combined authorities, such as in the west midlands and in the north-east. There is a lot going on there and those local authorities are very involved in supporting development and production. It is becoming a very important part of the mix.

The growth potential is significant. Thinking about regionality and growth, one thing I would warn against is having the BBC with lots of fixed quotas around regionality, thereby making it less competitive with the streamers, which have no such compunction. You need a level playing field. We argued for an improved tax credit for mid-range dramas, because that is the level that the PSBs are commissioning at—around the £2 million or sub-£3 million an hour mark. That would really help the PSBs that are competing against the streamers, who can move a show to London. If extra costs are associated with being in Birmingham, Manchester or Glasgow, that could be really helped with an improved tax credit for mid-range dramas.

This is my last question; please be as concise as possible. Are you seeing more commissions taking place outside London?

Massively.

Do you see that increasing?

From the BBC, our commissions from outside London are over 70% now. We make over 1,000 hours of television a year, and 70%-plus from the BBC is commissioned out of London. Some of that is about portrayal—it is about the commitment to regionality and regional voices. James Graham talked about “Sherwood”, and “Blue Lights” is an astonishing piece from Northern Ireland—unfortunately, neither of them is a Banijay show, but “Peaky Blinders” will be. If you are the BBC and you are the public service voice of the country, it is imperative that you reflect the voices of the nation, and that has increased.

We would very much like to see more decision-making authority and resources devolved to the BBC’s operations locally in the nations and regions, to streamline the process, if nothing else—to help to accelerate the process of commissioning, to prevent our members from spending lots of time in development, at their own cost, to make decision making much faster, and to avoid getting into lots of back and forth among different editorial teams. That would make a significant difference in speeding up the process and improving and reducing costs for our members.

Dino, have you anything to add?

I run a production company based in Sheffield in South Yorkshire. I worked at the BBC for 14 years, and when I decided to set up my company, as I am from Sheffield—

Do you know what? We are literally coming to a question specifically on that, so hold fire for a second. Otherwise, Jeff will be after me.

Great! I will hold my thought.

I should mention, for the record, my role as chair of the all-party parliamentary group on the BBC. Good morning, Dino. I am going to ask about your experience. I want to get into thinking about the importance of the BBC to the independent podcast sector. Can you talk to us about your experience of getting the BBC to engage with what I suppose started as a relatively small independent company based in Sheffield?

Absolutely. It was a heart and a head thing to open in Sheffield. I worked at the BBC for 14 years, and it became apparent from working at the BBC in London that voices like mine—working-class voices, people from outside London—were not being represented, especially in news. I was aware of the burgeoning scene and talent that is prevalent in South Yorkshire, which is an amazing region. I also think we have a competitive advantage in the podcast sector. It has been amazing to hear from the big TV companies, and I am aware that they need big, expensive studios and warehouses. It was interesting to hear from Steven Knight about what is happening in Birmingham, which is fantastic. The competitive advantage for podcasters is that, post covid, a lot of shows are made remotely. We make some of the biggest podcasts in the world. We make podcasts for Dua Lipa, Zoe Ball and Jo Whiley. A lot of those presenters, because they want to, present from their homes. As an independent company setting up my HQ, why would we do that in London, where office space is expensive? What we have done is base that HQ in Sheffield. Through that, we are controlling and producing the shows from the region. That means that we can tap into the amazing talent coming out of colleges and universities across South Yorkshire. I spoke to the chap who runs the university technical college in South Yorkshire that is training kids in media. He came to see me, and I said, “In the last two years, how many of your students have gone on to jobs in the media?” He said, “None.” It is a scandal, basically, because there are no jobs in a lot of the areas in which people are being educated and trained. They have to leave the region or their home city to go and get a job in the industry they want to work in. We are able to do something about that. It is in a small way initially, but it presents a massive opportunity, especially to the BBC. I will give you an example. As well as producing shows where the presenters are based around the UK and around the world, we are tapping into the creator economy in South Yorkshire. Because I was based there and on the ground, I was aware of the comedian Chris McClure, who has created a character called Steve Bracknall, who is a fictional Sunday league football manager. He was blowing up on social media with billions of views globally. I went for a drink with Jonno Wall, who is the director of BBC Sounds. I said to him, “Look, this guy’s amazing. He’s blowing up on social media. I think there’s a bigger thing here. I think he could have a podcast.” It is a visualised podcast, and we can talk a bit about that. Our worlds are blurring now, because podcasts are now visualised. YouTube is the biggest podcast platform globally. The BBC took a risk on that show. It commissioned 80 episodes off the bat. We built a studio in a derelict classroom in Red Tape Studios in the heart of Sheffield city centre. We can talk a bit about how I work with the council and the combined authority there. There is a great opportunity. We are employing an entirely local team of working-class producers, camera operators and runners. We are giving them their first jobs, working on a BBC production. Crucially to your points, it is an always-on production. It is not just a six-episode run; we can provide sustainable jobs not just for producers, but for talent. In fact, one of our talent came off benefits to present this show, and it is now providing regular work for him, which is incredible. We have worked with the council, and I have to say that Sheffield city council, Kate Josephs, who is the chief executive, and Oliver Coppard, the regional mayor, have been incredible. You are hearing a pattern of this in Birmingham, where they have money and are willing to support the creative sector. That is because they have a problem in that millions of pounds-worth of investment is going into cities like Sheffield to regenerate them, and there are no jobs there. They think, “We need to create jobs, so how do we do that?” One way is for the council to hand over space to people like us. This is something to plug into the conversations about what the next charter looks like, but it is probably unreasonable to expect, given what is happening with the licence fee, the BBC to be able to build another MediaCity or to build what is happening in Birmingham. However, I am not really asking the BBC for that; I am asking the BBC to commit and to devolve commissioning power. We have what we have done with Steve Bracknall and what we are doing with other shows. If they were to say, “There is clearly a podcasting centre of excellence developing in South Yorkshire.” If they were to devolve x per cent of that money to the region, we would be able to commit to more productions, to hire more people and to work with the private sector and the regional combined authority. Another example—and we can talk about the broader ecosystem of podcasting here, because it is not just content—is the Crossed Wires podcast festival, which is taking place next weekend in Sheffield. It is the biggest podcast festival in the world and is going into its third year. That was made possible by funding from SYMCA, the combined authority in South Yorkshire. It gave us a loan to start that festival. Last year, the festival brought £1 million-worth of investment to the city across one weekend. It is also creating jobs across the weekend, not only for podcasters, but for set designers and for hospitality; I think we heard from Steven Knight the other day about the soft power and broader economic effects of creating investment in regions in a certain sector. For the BBC, it means recognising where clusters and centres of excellence in a specific genre or medium are popping up—like podcasting, in our example—and doubling down on them and working with creators. It is also about recognising that there is an opportunity to work with local government to fund and to find space that we can inhabit.

That is really interesting. What can the Government do, as part of the charter process, to support podcasting in the ways that you have talked about?

We have heard a lot about tax breaks, but that is about broader investment and broader Government policy. When it comes to the BBC, I think it means encouraging it. To be honest, you are pushing against an open door, because the BBC wants to represent local communities more. It means doing anything that you can to encourage the BBC to find places to do that. It is fantastic what is happening in Birmingham and Salford, but the north is a very big place. There are people in Sheffield who will not watch “Look North” because it is filmed in Leeds—“Look Leeds”, they call it. I remember that when I was working at the BBC—I had just moved to London and was enjoying living there at the time—they took a coach-load of us to Salford to see what was happening and convince us to live there. They were talking about the north as this homogeneous area. Things have moved on a lot, but to commute from Sheffield to Salford is a massive pain. It is expensive and the trains don’t work. I would rather go to London, to be honest with you. We need to create opportunities in places like South Yorkshire, where there are so many colleges and universities—and talent, frankly. We need to provide opportunities where those people are living and growing up.

Will the partnership that the BBC has built with YouTube be helpful in building the podcast sector and building audiences?

I think so. In fact, interestingly, the Steve Bracknall podcast that I referred to is the BBC’s first YouTube-first podcast commission. It did not go on iPlayer; it went on YouTube. Again, that was a big gamble for them, but it is paying dividends. There is an element of going where the audience are, and if you want to reach young audiences you have to go there. Believe it or not, Steve Bracknall has created such an amazing community and audience that we staged a fictional live Sunday league game that 300,000 people watched on the livestream. What was incredible was that 10% of the audience was under 18, and 65% was under 35. On that platform specifically, I just do not think that they would be getting that audience on BBC Sounds—maybe on iPlayer, but it is really important to go where the audience are.

That is really interesting. Obviously this is Dino’s specialist subject, but I just wondered whether Patrick or Nigel had any thoughts on BBC support for the podcast sector.

Some of our companies make podcasts, but we are not podcast specialists. However, I will just say two things. First, it is obviously a hugely growing part of the entertainment sector. On the BBC’s relationship with YouTube, when I was at the BBC there was always a fear that YouTube were not necessarily your friends—that they were your competitors, and why would you put your content on a competitor’s platform? Increasingly, we see data that suggests that audiences do see attribution. There was always fear about attribution—will audiences see your podcast and think, “That’s a BBC podcast,” or will they see it as just a podcast? Attribution is really important. Secondly, it is about going where the audience is, but also being able to bring them back. The success of the “Traitors” podcast has brought audiences back to “The Traitors” on television. We are talking to the BBC at the moment about doing some “MasterChef” content just for YouTube, but at the moment there are restrictions, because it is monetised and it would be original content for YouTube. With this charter, we will need to see YouTube as a place where you put content that brings audiences back to iPlayer and Sounds.

Dino, you used the word “blurring”. We are talking to our members and a lot of them are exploring other opportunities to raise revenues on third-party platforms, setting up YouTube channels or exploring podcast opportunities. All of that comes into the point about building a mix of funding around a piece of content and a piece of IP, which ultimately is what matters most in all this. With YouTube, the BBC is clearly exploring new opportunities. We need to talk to the BBC in more detail about its commissioning approach to that content, about how producers are being remunerated for providing the BBC with content for its YouTube channels, and about how those commissioning deals are structured, because we do not want it to become a back door for the BBC to commission content that then goes on other platforms. It is an emerging area, where there are certainly more conversations to be had between ourselves and the BBC.

Dino, what you have talked about very much resonates with me. My constituency is right on the south coast. People talk about the south, but they really mean London. In the same way that you describe in the north, there are not the opportunities for youngsters from Southampton and Portsmouth. One frustration of mine is that the big BBC studios—the HQ—in Southampton feels quite empty, even though it is prime piece of real estate, right next to the Guildhall and very glamorous. One of my constant moans is that they do not seem to be sweating the assets. What would you do if you had premises like those, with those sorts of facilities? What do you think they could do with them that would be beneficial not just for the BBC, but for the wider ecosystem?

That is what I am pitching for in Sheffield—I would love that. It is a mixed ecosystem, and it is creating a cluster. It is probably important that it is not just the BBC in that building; by having some people from the private sector and other independent companies in there, you create a bit of healthy competition. The BBC building in Sheffield is incredibly sad. There have been a lot of job cuts, and it doesn’t look very sexy, to be honest. I really regret that. As for what we would do, if you are asking me for specifics, we are doing a lot of live podcast events in Sheffield, so I would have a Radio Theatre North. We are going to have about 40 BBC shows recorded and filmed for iPlayer next weekend; I would make that a regular feature. I would have shows happening every month at least, so that you were training people in live events, filming live events and becoming sound engineers. I would also have studios that are bookable and open to people who are training, so we can develop skills. It is really important that it is not just giving people more work experience, but actually giving people job opportunities. That is what we would like to do: we would like to have indies working there, and we would like to have studios. We do not have this in Sheffield and South Yorkshire, and you can’t be what you can’t see. In London, you can walk past Broadcasting House and think, “I’d love to work there—I could see myself working there.” We need places up and down the UK that are accessible and where you can walk in. Next weekend, we are going to have Greg James walking around Sheffield. I saw two lads from Barnsley, the first year Greg came. They didn’t know he was going to be there. They came up to him and asked him to record some radio jingles for their college radio show. They wouldn’t have got that opportunity otherwise. We have to have talent there, and we have to have opportunities.

I will just touch on the cluster scenario. The festival you are producing is amazing—I think that is going to generate and help the ecosystem. You are based in Sheffield. Are you seeing any rival companies, or collaboration, depending on how you look at it? Are there other new versions of your organisation setting up in Sheffield?

No, frankly, and I think that is because there is not the commissioning power there. I took the decision to move my company there, but there are not really incentives for other companies to move to the region yet. As we talked about, that can be helped by BBC commissioning power, but also by incentives from the combined authorities. That is what we are talking about here. If we took over a site that was partly funded by the combined authority and had the BBC—Steven Knight talked about the importance of having the BBC and the confidence that gives other people to move in—other companies would move, if there were work there. There needs to be work for companies to move; that is really important. In terms of collaboration, we have talked about the blurring of the lines. “Adolescence” was produced in Sheffield by Warp Films, an incredible company that we have a really strong relationship with. We are talking constantly about exploiting IP and opportunities to work together. The BBC has cottoned on to that. There is another production company called Smoke Trail in Sheffield, which is doing amazing work. There are not enough, frankly, but that is because the conditions have not been created for that.

I want to get you out of here by 11, because it is boiling, so could you keep your answers nice and pithy? Thank you.

Good morning. The Government’s Green Paper said that it would look to maximise the potential of British IP, including how BBC Commercial works with the independent production sector. It also said that it wants to empower BBC Studios to continue to grow. Do you see BBC Studios as competition or as a potential partner?

It is both. It is a collaborative partner for many of our members in relation to co-productions, but it is also in competition. The important thing about that competition is that it is fair, open and transparent and that we can see from the outside that where decisions are made, they are made entirely on the merit of the production and the merit of the IP, rather than in any sense favouring BBC in-house production. As I said at the beginning, the trend in production, particularly in relation to the PSBs over the next few years, is definitely going to be towards more collaborative endeavour, because the resources are not there for the broadcasters themselves to pay for it all. They are going to be increasingly reliant on working more closely with other producers in order to make things happen.

A healthy BBC Studios that creates great IP that sees a return on investment that means that there is then more money going into BBC funding as a result is to be welcomed, if that can happen. There is that element, but there is also the element of growth that comes from having a healthy PSB ecosystem, with the BBC as a commissioning body. Here is an example, in terms of the amount of money that is going into the PSB ecology, but also in terms of growing jobs and growing great shows for export to other territories. Banijay has invested more than £100 million over the last three years in content for the PSBs. The PSBs commission their shows, mainly drama. They commission a show and they will be paying less than half of the cost per hour of that show. We will put the rest of that money in. We take a risk in putting that money in. That risk is then based on the idea that we sell it across the world and we might have a return on investment. It takes a long time to get that return on investment. This comes back to the point I made at the beginning about the PSB ecology, in terms of IP retention and then in terms of being able to share; 20% of the money that comes back into Banijay for paying back all of that goes to the BBC. They have a share in the revenue. You have a long tail of value. If you are making shows like “Blue Lights”, which is made in Northern Ireland by the Scottish company STV Studios, or “Peaky Blinders” in Birmingham, you have spend happening in that region. All that extra money is going to the region. The Government have identified the creative industries as a growth sector and in terms of IP retention and growing jobs and value this is a huge opportunity. However, when you invest extra money into your programme, you have to borrow that money. It is very strange that it is quite hard to get UK banks to do that. We go to the Bank of Montreal and banks outside the UK. The idea of there being a creative industries resource for us is quite risk free. I am not trying to sell it to you, but it is quite risk-free, in terms of seeing a return on investment and interest payments. It would also be a real benefit to drama companies.

I just have to say that I have got no money.

From our point of view, the relationship with BBC Studios is quite limited. They commission content, so we could work with them to commission a show, but we have not had the need to do that yet. They monetise BBC podcasts ex UK. If you are listening to a BBC podcast on holiday in France, you will get an advert and that is sold by BBC Studios. Tim Davie tried to float the idea of selling ads in podcasts in the UK, which was met with a lot of scepticism by many people in my industry. In the long term, I am slightly more open-minded about that because, realistically, with budget slashing further down the line, we will have to look at a model where some entertainment podcast content is monetised partly by ads, as long as the production company is benefiting from that as well.

Do you see it as a vehicle for exploiting the BBC brand overseas and amplifying some of your shows?

When you have a show such as “SAS Rogue Heroes”, because it is a BBC show created by Steven Knight, the risk of the deficit financing is lower because the BBC brand is so strong. If you go to the US and say, “This has been commissioned by the BBC,” that puts another quality mark on it. Broadcasters across the world look at performance on the BBC. If a show has done well on the BBC, that data is gold dust. The question is how to build the BBC brand outside the UK. Look at “The Traitors” and the way it is moving across the world: it was not a British IP, but it was the British version that made it a global success. Talking about brand BBC and sharing that across the world, whether you are working with the BBC or for the BBC, is essential because it is just a fantastic added value.

If you look at the success of things like BritBox in the US, that gives evidence to the point.

The BBC wants BBC Commercial to have an increased borrowing limit. Would you support that?

It depends on what it wants to do with the money. Anything that supports the BBC’s ability to monetise content across its platforms has to be useful. However, this must all be governed by fair principles and elements of transparency so that we can see how this money is being spent and if it is being done in a way that benefits all the different partners in the BBC world and not just the BBC itself.

We have invested significantly—£30 million—in new production companies in the last few years. That is jobs—you invest that money. If you think about the BBC increasing its borrowing limit, that borrowing will be going into creating jobs, because what do you do with it: you spend that money on people to come up with ideas to get new shows away. I think that it is fantastic and I definitely support it.

Patrick, the Chair talked earlier about CIISA, the proposed regulatory body for bad behaviour, although it is not fully enforceable. Banijay came across our desk when the whole Gregg Wallace/“MasterChef” thing happened. Do you think it is satisfactory that often there are two complaints procedures in parallel? The average viewer just sees it as the BBC. They cannot differentiate, although so much stuff is made by independent production companies.

The BBC has a robust complaints procedure. You cannot really complain against a production company as a viewer. You complain about it if you are an employee. Are you talking about the HR processes within the BBC, and then—

Yes. There are two things going on. I think you instructed a solicitor, the BBC had its thing, and the viewer just thinks it is the BBC, then the BBC’s reputation is tarnished and the DG goes eventually.

I don’t think that was my fault! We are independent producers. We have our duties and legal responsibilities to our staff that work for us as producers. Lessons have been learned through that process that, historically, the communication between production companies and the BBC was not as good. Over the last five to 10 years, it has become much stronger. As producers, it was completely right that Banijay did that investigation and instructed the third-party solicitors, because it was an investigation into one of our shows. I think the BBC was quite clear at the time that this was a Banijay investigation. I think it is quite hard. With CIISA, having an overarching standards authority as the figurehead across the producer and the broadcaster could be a way in which we evolve. That will be hopefully less complicated for the audience to understand.

Dino, you have a long background in BBC radio. I started there, learning the Uher machine, so I also have a background there. What do you think of these cuts? You have done things like “Pienaar’s Politics”.

You were a guest when I was the producer.

I remember.

I think you did a rap.

In French.

It has stuck in my mind.

Once heard, never forgotten.

I think this may call for a short reprise.

I don’t think so. We are limited on the clock, aren’t we? The Chair is counting down the seconds.

Sadly, we are very limited on time, but otherwise—

Another day—happy days. That programme has gone, and there were big cuts described the other week. “The World Tonight” is going, and the “Today” programme is going down to a lot less presenters and the weekend thing will be a lot lighter. Do you think news is always the casualty of these sorts of things? Are your entertainment shows cheaper? “The Traitors” gets prioritised.

I don’t think so. I think there are cuts across the BBC. When I was at BBC News, I created the BBC News podcast division. I was working in radio, but I saw an opportunity. There was a trend emerging in podcasts in 2017, and we launched a podcast called “Brexitcast” with Chris Mason, Laura Kuenssberg, Katya Adler and Adam Fleming. That has now morphed into a whole range of podcasts. There is “Newscast”, which is the BBC’s daily podcast. That goes out on BBC One. It was a team of just me when I launched it, but it is now a huge division within BBC News. More people are listening to podcasts increasingly, and it is right that the BBC diverts investment into new mediums. The BBC constantly has to innovate. Cuts are hard, but sometimes they are an opportunity to look at where the audience is and where it is best to prioritise. News is incredibly important. I was a BBC News journalist for 14 years. I travelled the world with the BBC, and I know about the importance of its soft power and the doors that opens for you. It is a huge, important thing for us as a country. I would not like to see BBC News decimated further, but when it comes to certain radio programmes, tough choices have to be made. Unfortunately, it cannot be the case that every time a cut is mooted, everybody is up in arms. Sometimes, I am afraid, as an industry and as independent producers, when advertising revenues are cut, we have to make tough decisions; the BBC is not exempt from that, but I hope it continues to invest in the right areas and in BBC News.

Hopefully independent journalism stays, and it is not all just clickbaity stuff.

Absolutely. I do not think it is that at the BBC at all.

Apparently Broadcasting House felt like a morgue last week when those cuts were dropping.

It is tough, but Paddy O’Connell appears on weekend “Newscast” and I think he is brilliant, so he is always going to have an opportunity.

I want to ask you about BBC Sounds, because you work with BBC Sounds on the other side. What do you think could be done better in BBC Sounds? Have you heard the idea of opening it up to third parties and creators? What did you think of that?

It currently is opened up, on a certain level. The BBC can licence third-party content for BBC Sounds. It will pay you a licensing fee to do that. That is not something that we have done, but some of our peers have. BBC Sounds is a great platform, particularly live. Yesterday, with the breaking news here, you just go straight on, click on the live radio and listen to 5 Live, Radio 4 or whatever it may be. More could be done, tech-wise, around curation to make sure that specific audiences find and discover podcasts. I think that iPlayer is ahead of BBC Sounds in that regard. The challenge that the Sounds app has had from day one is that younger audiences mostly consume podcasts on Spotify and YouTube. It is a charter obligation of the BBC to reach new and young audiences, so the BBC is commissioning content for YouTube. It has probably done that a little bit late to come on board but with the new DG, Matt Brittin, being an ex-Google employee and very pro-YouTube, I think you will see more of that. But Sounds is really important. There will be some interesting developments around visual podcasts because BBC podcasts are being filmed; I mentioned that some will be filmed at our festival next week, and we are going to have a channel on iPlayer for live podcasts that people can watch. The BBC has an interesting challenge in how it pushes people watching podcasts back to BBC Sounds to listen to them. The BBC has to think about 360° commissioning. Podcasts are no longer something that people just listen to on their headphones. They are brands, live shows, merch, blogs, newsletters and experiences, so the BBC has to get it together. I think that there are smart people at the corporation who are currently thinking in that way.

What do you think about opening up iPlayer to other platforms and people, not just the BBC?

In Banijay UK’s submission to the Green Paper, we were very supportive of the idea of opening up iPlayer. Think about the successes, given all the challenges. For broadcast video on demand, iPlayer is best-in-class. Banijay is in lots of territories across Europe. My French, Spanish and German counterparts cannot believe the penetration and the numbers that iPlayer manages to achieve. It is often said that iPlayer, as broadcast video on demand, is not as good as Netflix or not as good as something else; it is brilliant. It can get better, obviously, but you have a platform that is in so many houses—the penetration is really strong—and you have the idea of being able to aggregate PSB content on that platform; surely there are ways in which advertising could still sit around commercial PSB content on that platform? The threat from the other, non-UK providers—the streamers—is so huge and significant that I think you need to be able to create the biggest platform possible to serve public service content to the nation.

I do not think that the other PSBs are terribly enthusiastic, because they like to have their own proprietary channels, but to the extent that it maintains and supports investment and competition between the PSBs, in terms of commissioning, we will encourage it.

“Snog, Marry, Avoid”—that was your show, wasn’t it?

That was the feature, yes.

Happy days.

I can’t remember who you said you were going to snog—

I’m not revealing that.

We will move on, in the interests of time.

One thing to be very aware of—Patrick talked about this at the beginning—is that one critical source of revenue for independent producers is the international exploitation of their content and IP. It is very important for this not to cut across that set of arrangements, if it were to be looked at. Again, we would have to talk to the BBC about it and ensure that there is consistency in the way the rules are applied. It is effectively the same with the BBC putting content on YouTube. If it takes away the opportunity to exploit those rights, which is what independent producers do on an international basis, that would be problematic from our side.

It is the secondary value that builds those shows. With “SAS: Rogue Heroes”, you have the BBC licence and the tariff they are paying. On top of that, the way the business case is made for all the extra investment is, “This is how much we’ll sell the show for in France,” and, “That is how much we’ll sell the show for in America.” The streamer model is that one fee pays everything. If you see something like “The Buccaneers” on Apple TV, which one of our companies, The Forge, makes, that is on Apple platforms across the world from day one, in terms of the job, so there are no other secondary rights, but Apple pays a premium for that show. As Nigel says, it is about how practical this would be, because you would need to guarantee that there was at least the same level of income to justify the cost of that programme.

As we have been saying, that is now a much more collaborative endeavour between the BBC and the producers than it has been in the past, and that might be difficult to sustain under that model.

Gentlemen, thank you very much for your time. We will let you escape into the balmy weather outside. We are grateful for all your evidence today. Witnesses: David Abraham, Helen Jay and Dylan Sparks.

Welcome, all of you, to our second panel this morning. We will hear from David Abraham, the CEO of Wonderhood Studios, Helen Jay, a researcher at the University of Westminster, and Dylan Sparks, the UK director of Reset Tech. I will pass over to Rupa Huq for the first question.

This is one for Dylan. In the previous charter, the BBC led the way with iPlayer, R&D and the digital switchover. But in the current charter, it seems to have lost its lead in new platforms and technology. It used to be genuinely innovatory. Why do you think that is, and can that lead be restored?

The first thing to mention, which I think was in our Green Paper consultation, is that the public purpose on technology and innovation should be brought back; we saw good results in the 2007 charter, with the iPlayer creation. I think it is not a controversial thing to say that we are operating in a totally different environment, with rapid technological advances. The BBC, like other broadcasters, has to compete for audiences and meet them where they are. We think bringing in a public purpose on technology and innovation would help and force the BBC to meet those challenges a bit more ambitiously. I also think it should be separate from the growth one, because the BBC has a role to play in making sure that technology is accessible to all. It should be about not just technology in the back end or optimising for efficiency, but how the BBC can use technology to reach new audiences and increase trust at a time when it is in decline.

So you would support a sixth public purpose?

Yes.

Helen and David, would you agree that the BBC charter should have a proper, defined public purpose on innovation and emerging technologies?

Absolutely. I would just say that the last charter took place in a context where anything that was not content investment was viewed with suspicion and subject to huge lobbying from commercial players saying, “Don’t venture too far outside your lane.” I saw somebody had written a post on LinkedIn yesterday saying that, last time, the question around the charter debate was, “How do we stop the BBC from getting too big?” Now, it is, “Is the BBC big enough?” In that time, the technological landscape has absolutely shifted, so I welcome that there is a more positive conversation around the BBC’s role in tech innovation this time. I think there is an opportunity here to reframe the debate around technology away from, “How do we minimise the bad?”, and towards, “What is the positive information environment that we want?” Last week, the Government announced that they were going to ban social media for young people; I think that is very characteristic of a technology policy in this country that is focused on minimising harm rather than asking, “What does good look like? What levers do we have that can support good information environments?” Public service media is one of the levers we have, so I would absolutely support that purpose.

I agree. The BBC, and indeed Britain, have an incredible tradition of innovation in media technology, going back over 100 years. To give credit to the BBC, they innovated and led the way in streaming, and they continue to focus their resources on tech innovation in terms of how AI, for example, is affecting the workstreams of production. There is lots of good work going on, but the gap, I think, is really in the ecosystem thinking. We are keeping up with silicon valley in terms of tech deployment, but we are not thinking systemically about what the future ecosystem might look like.

If all three of you were drafting this sixth public purpose around innovation and technology, what would you want to see in there? This is blue-sky thinking.

I do not think that the public purpose itself has to be incredibly prescriptive; just signalling intent from Government about its expectations of the BBC to innovate and think outside the box, and to make sure that that is a priority going forward, would be positive. I do not think you need a treatise for each public purpose. In the past, it has been very short and punchy, and I think that is probably a model to learn from. As we know, technology changes, so an incredibly prescriptive public purpose now might not be relevant in seven years, but if you keep it broad and high-level, I think it will stand the test of time.

I think that is right. You do not want to be too prescriptive about the types of technology or the specific technologies. As Dylan says, that ties you to something that ends up being outdated very quickly. I would emphasise technology in the public interest. Perhaps there are questions around how that reconciles with growth, but I do not think they are mutually exclusive. For me, technology in the public interest is where the real gap is, and is why you would ask the BBC to play a role in this space rather than other, commercial players. A purpose can only do so much; you also need to fund it accordingly. It is important to set out, “We have a mandate. We have an expectation that you should do this.” But you also need to fund it to deliver it; otherwise, it is just an empty purpose.

The wall of capital that is hitting America in AI is going to lead to a huge battle between the main AI players. The question for the UK and the BBC is what future it wants to determine for itself in that future ecosystem. The consumer experience today of discovering content in the UK and around the world is not an end state, so in the national interest we should be deciding whether we can frame and define what that ecosystem might look like.

You are all clear that you support a public purpose for innovation in tech. Is it necessary, then, to have a separate and additional public purpose on driving growth?

I think there are other ways the BBC can support growth. You heard in the last panel about the BBC’s contribution to the creative industries; potentially, it could do similar for the digital economy. So there is a wider context in which the BBC can support growth, outside tech and innovation. As I say, I do not think that growth and the public interest are mutually exclusive—they can support each other—but I would want any wording around charter purposes to emphasise that public interest, as well as growth.

This is a question for you, David: what is Project Logie?

Project Logie, in its current form, is a piece of blue-sky thinking, developed independently, to imagine what the future ecosystem for UK public service media might look like at the point at which the next digital switchover occurs. I was involved in the earlier iterations, when we went from analogue to digital. National priorities were set over a decade-long period to ensure that inclusion was delivered and the new technology rolled out. As per this morning’s Green Paper, we are currently contemplating a digital switchover in less than a decade, but we have not defined, as a country, what ecosystem is going to replace that. Project Logie simply asks that question, rather than the questions that seem to be preoccupying broadcasters currently: how much content should be shared with YouTube, Meta or Anthropic. It is asking the question from a different starting point: what ecosystem do we think best serves the key principles of public service media in a world that is going to be driven by AI, and do we have the resources within the UK—I would argue that, yes, we do—to at least reframe that as a brief to ourselves? Project Logie, in a sense, is a brief for a technological solution that has not yet been invented. But prior revolutions in UK media, whether the development of radio, live broadcast, HDTV or Freeview, started as briefs, and technologists then answered that brief. At the moment, we have not written the brief for the national interest. We are simply, as it were, going along with the reality that all the content is going to be consumed by IPTV, but we have not asked ourselves what the fundamental consequences of that are for the sustainability of the PSB system.

In your opinion, what is the timescale for that to happen?

In my opinion, if you have nearly a decade, and you get on with it, get the brief into the system and put some proper firepower behind it nationally, and that is matched with a commitment among the public service broadcasters, you can get a very long way very quickly. We are talking about hundreds, not tens, of millions of pounds, but that is the amount of money that is being spent on the current infrastructure, so it is about redeploying resources with a very clearly defined mandate and organising it at national level. As a former broadcaster, I know that the remits of each of the public service broadcasters limit their ability to imagine a reinvention of their own ecosystem, because the mandates of the boards and the governance of each of those institutions are defined by the current system. We therefore have to take ourselves out of the system and frame the question differently.

You spoke about mandate. Would you be able to elaborate on any other barriers to the successful run-out of this?

There are several. Clearly, financial resources is one. Also, the governance structure needs to be clear. There have been examples in the past where the broadcasters have collaborated successfully; one thinks of Freeview, and more recently of YouView and Freely. The governance structures of co-operation need to be clearly defined, and they will clearly have to be set by Government. Then there are the timeframes. Critically, the interplay between the UK’s academic and technology sector and the media sector needs to be elevated. Currently, we are sitting in different channels and not collaborating in the way that previous generations did. It was scientists who cracked the distribution of live radio and live television; it was engineers who did that, in collaboration with the institutions that existed at that time. We have to create a new kind of partnership between the different public bodies and stakeholders in this game, in order to operate at a higher level of collaboration.

Dylan, how does Project Logie compare with your ideas for collaboration with the BBC and public service media?

Project Logie sounds great. Our thinking was probably a bit more limited. If you look at where people get their news today, the percentages Ofcom reports every year show that they are getting their news from social media and non-traditional news platforms. The way we have been thinking about this is to come up with innovative partnership models. For example, the BBC could make sure that all news and audio content is distributed widely on third-party platforms as a way to attract audience members to the iPlayer or other BBC products. But that has to come with a rethinking of the funding model. I think that the licence fee, as it stands, is in decline; fewer and fewer people are paying it, which means that there is less money to invest in content. Also, it is a very outdated model. On the one hand we are talking about a new public purpose on technology and innovation, but on the other hand the licence fee model is from another age, where it was literally a licence to operate a TV. If you look at where so many of us get our information or entertainment, it is not from a TV; it is from devices in our pockets, backpacks and things like that. We should reimagine the licence fee as an audiovisual fee that brings more people into the scope of the licence fee. If you are clever about it and diversify funding in sustainable ways, you could also lower the licence fee, while broadening the scope of the people who would pay it. For example, if you watch Netflix or YouTube currently, you are obviously out of scope. Is that something that should be looked at as a way to ensure the financial sustainability of the BBC going forward, while also acknowledging the new kind of news ecology and ecosystem that we live in today?

David, I was very interested in what you said about bringing the broadcasters and the engineers and scientists together. In the early days of the BBC, there was probably a shared public interest, or a shared public interest ethos, that drove that. Do you think we still have that in the 2020s and 2030s?

Yes, I think we do, and I think this meeting is a reflection of that. However, where we are framing the debate at the moment is pulling up the drawbridge, regulation and this morning’s Green Paper. One can see all those things being important, but regulation without innovation will ultimately lead to stagnation. So we need to think more positively. Having worked in America, I know that Americans respond to innovation. If British innovation is brought to the table in the conversation with big tech, you start the conversation at a different level. At the moment, we are tending towards doing things that they are going to circumvent, or do their best to circumvent, and certainly that they have said they intend to circumvent.

When the British Government commission the building of a warship, they leave gaps for technology that has not yet been developed to go in relevant spaces, because the commissioning period for building a ship lasts longer than the tech that goes in it. That is effectively what you are talking about.

That is a brilliant analogy.

Thank you!

I have worked with technology teams throughout my career. Quite often, the job of the board and leadership is to define the problem—to say, “Here is the problem that we are trying to solve”—and to get behind and, frankly, have some fun with coming up with a load of different potential responses to that. So much of the infrastructure that we are currently deploying in the IPTV space—whether that is cloud technology, or data functions—is quite generic. There is no real black box. Indeed, given that DeepMind was formed by people who grew up watching public service broadcasting and were educated in the UK, if you look at its importance to Google, you can see that we have the raw potential in this country to crack this problem in a way that could be world-beating. We do not seem to be setting ourselves that goal.

To add to that very quickly, it is about thinking about these things in the round. I would be thinking about multi-pronged strategies: giving public service media a clear mandate to invest in technology, regulating and asking things of the platforms—maybe we will come on to discuss prominence and what that looks like—investing in British technology, and being confident and ambitious about what British technology can do.

We are coming on to a question about prominence, but not just yet. Hold that thought for now.

During this inquiry, we keep hearing the new phrase, “public service algorithm.” It also appears in this morning’s hot-off-the-press publication, in which the Government say that they are “supportive of PSM providers developing algorithms in line with public service values, that strike the right balance between offering audiences personalised services while still ensuring they are exposed to a wide range of PSM content” and so on. That got me to thinking about what we really mean by public service algorithms, or any algorithm. In a media sense, you need to think about two groups of things with an algorithm. The first group is about what data you use: whether you look just at the basic demographics of the person using it and the context, so saying “a programme like this is this”, or whether you try to get more complicated and look into psychographic profiling and behaviour, tracking people across the web, making look-alike audiences and that kind of thing. The second group is about what you are optimising for: whether it is to maximise retention, time on the site, engagement or something else. I do not know who to direct this to, but I am inviting a critique of that model to say whether I am right and what is missing. Also, crucially, to what extent does a public service algorithm already exist in iPlayer or in the platforms of other public service broadcasters?

I can definitely speak to that; others can chime in. “Public service algorithm” is perhaps best understood as shorthand. It is not a literal, single, “Here is your algorithm.” It refers to approaches to recommendations and discovery that are shaped by public value objectives rather than commercial ones. In practice, that involves a combination of algorithmic systems and what goes into them, and lots of things that might sit outside that algorithm piece, such as human and editorial judgment and curation, transparent data practice and lots of things that might go alongside it—

I am sorry to interrupt, but we are short on time. If you have a human creating it, by definition, it is then not an algorithm, right?

Exactly, but in terms of the public service approaches to algorithms, there are different ways you can do it. Absolutely, you are right. The key difference is that commercial algorithms are built to optimise for attention and engagement, which sometimes means providing more of the same. That is different from the role of public service media, which are there to provide breadth, serendipity and new ideas, so what is the equivalent of that hammocking we have in broadcast scheduling, where you expose people to a broader palate of content? To the question of whether it already exists, there are experiments in this space. VRT in Belgium have developed a taste-broadening algorithm, which is specifically designed to expose you to a wider range of genres. Georgina Born at UCL has developed a commonality metric, which is about what you expose to people in common: a common set of categories and shared cultural exposure. Then there is a bridging algorithm, which is about bringing people together. These are experiments; they are not widespread.

When people talk in a scale context about a public service algorithm, what do they mean? The iPlayer has an algorithm. It might be a really basic algorithm, but it is definitely an algorithm. When children go on it and click “Kids”, they get content that is not shown when an adult goes on it. If someone has been watching “Blue Lights”, they will be recommended other things like “Blue Lights”. So what do we mean? Do we mean we are evolving this by tracking people through third-party cookies and serving things up because people like you like things like this? What do we mean?

Certainly you are looking at people’s preferences. You are looking at what they have watched and then saying, “You might like this. If you have watched that, you might like this.” That is what algorithms do.

They already do that?

Yes.

How is it going to change? How is it going to become more of a public service algorithm?

I guess the question is: are you pointing people to what they might click on normally, or are you going to expose them to a wider range of content in different ways, with a wider range of genres and different types of programming? Diversity is really what you are talking about.

So it is not really about the data used; it is about what you are controlling and what you are optimising for, which is some variety, not just time spent.

Yes.

That leads to another question. Why don’t we let the punter make their own choice in advance and say, ”Thank you very much, BBC or whoever you are, for deciding what would be good for me. I think this would be good for me”? And probably when you do that in a cool setting, rather like with social media, if you ask people, “Do you want to spend your whole life on Twitter looking at people beating each other up?”, generally they say, “No, I would like to find more interesting things.” Is an algorithm really what we want, or do we want a pre-set profile that I can decide—show me stuff like this—and I could decide the mix between things that appeal, such as what I have already seen or something new that I will be exposed to. And maybe I need to know something about news and what is going on in the world as well.

We know that audiences would like people to be given more control, exactly as you have just articulated. The more you can empower people to make their own choices, that feels like a positive trajectory.

I guess you have a sliding grey-scale thing where on the one hand you have perfectly personalised algorithms and on the other hand you have BBC One. In the middle, the more you have more channels, the closer you get to something that is personalised to this individual. You have seven different Absolute Radio channels. All the BBC Radio channels seem to have their own little sub-segment thing going on. I have been boring my Committee compadres during this inquiry by banging on about why no one is making the argument for channels. We talk about the value of having human curation alongside the machine. What is wrong with channels? In a world where we pay people to make our lives easier by stopping us having to make decisions ourselves, why is it that in this part of the economy and society, nobody is trying to make that work?

That is a great point. I have joked sometimes that when you look into the future, people will invent the channel. They will call it BBC One. It will have a curated schedule that everyone can watch together. There is a vision of the future there. There is something in that. I think the trajectory in media is towards personalisation. In a world of overwhelming content curation, people want to find what they want easily. To your point, they absolutely want shared experiences, common culture, the ability to know that what I see is what you see, and we can all talk about the football or the music or whatever it is together. Audiences know that that is something they want from public service media, because it is not something they will get from lots of other avenues, so maintaining that sense of shared experiences is really important.

I have just one thing to add: when we talk about AI now in big tech, we are talking about large language models primarily, but there is a technology coming after that. I think it will be particularly pertinent for public service media because it will not be involved in scraping the past. It could have a higher form of thinking attached to it, which might be relevant. And back to your point about channels—channels are brands. If we have a higher framework of trust and recognition of public service media wherever it exists, stored within the UK, and the metadata layers are all consistent, it is an ecosystem that is empowered by AI, but AI is not the answer to it.

Finally from me in this little segment, when people talk about a public service algorithm, do they just mean on iPlayer or on ITVX, or is the ambition a little bit deeper? Let us take Instagram, as it is the more extreme version because YouTube is fundamentally about videos, even though they are often quite short. If you have lots of people on Instagram, for all the microcontent that they are consuming, whether it is news and factual, a crazy dance or some silly dare, is the ambition to somehow have a role—God knows how you would make it work—for this different algorithmic approach?

Thank you for your question because that is one of the other key points that I did not mention. We focus a lot on what the iPlayer should be doing and whether the public service algorithm exists on these platforms. Public service content is increasingly distributed through YouTube and third-party platforms where the public service media do not control the algorithm; it is the platforms that control the recommended systems, the curation, the user experience, and the ranking. For me, it is about how we are ensuring public service outcomes on those platforms.

We are going to talk about prominence later in the session. I am trying to assess, from your compadres in the academic world and the people you all mix with, are people thinking about the owned platforms as we know them today, or is it something more ambitious?

Something more ambitious than versions of those platforms?

The BBC can put an algorithm on the iPlayer—that is easy to manage. Notwithstanding the great stats for the iPlayer, most people are not on it for a large part of their day. They are on commercial social media platforms.

On a hot day, I do not want to talk about the phrase “algorithmic plurality”, but there is a concept that I think speaks to what you are asking about, which is that we might be on a platform where, rather than just being mandated by the set platform, you can choose from lots of different ones. There are third-party algorithms that you could choose from, and you might say, “Maybe I will have the public service one today.” That is quite a radical idea that looks long term; you could not do it at the moment, but there is work being done on that.

If I can still get “RuPaul’s Drag Race”, we will remain friends.

Dylan, you have proposed a public service AI service called ChatBBC. What would that do and why do we need it?

This goes back to the question at the beginning: what does an ambitious BBC that reaches audiences where they are and takes full advantage of the competitive advantages that it has look like? What the BBC has that no other broadcaster in the world has is more than 100 years of incredibly high-quality, rich data. That is why, despite the fact that not all the AI companies are being built in the UK, they all want the datasets that are available here, whether it is the NHS, the BBC or whatever. The thinking behind ChatBBC was considering how to reach new audiences using the BBC’s comparative advantage and focusing on innovation and technological development. We think it could be a neat way for the Government and the public sector to test whether something like a larger sovereign LLM and the technological feasibility behind it is worth pursuing. Sovereignty is the word on everyone’s lips right now. We saw Anthropic’s move not to export its latest models 10 days ago. There has been a lot of soul searching over the past few years about what the UK has to offer when it comes to AI. The answer is that we have a lot to offer and these small types of limited, high-quality, high-trust LLMs could be something that we become very good at. There are two issues here. The public are sacred of AI; many people use it but only 30% to 40% of people trust it. On the other hand, despite everything, the BBC still enjoys incredibly high trust levels. If the Government are serious about AI literacy and domestic AI innovation, this is a great way to test that and push the envelope of what is possible and what the UK can offer to other people. There is lots of discussion about social media bans and how kids spend their time online, but I think what the Government have not yet addressed is chatbots, because we have seen some pretty distressing cases of children harming themselves based on relationships with chatbots. What if there was a kids’ version of ChatBBC where parents and teachers—Bitesize is obviously still used a lot, but what does the Bitesize version of an LLM that teachers and parents can trust, where children and pupils know that they can get trustworthy information and that they can rely on in their studies, look like? I think this would be an interesting thing that could address a number of questions that the Government and we, as a tech sector domestically, are trying to answer.

So you see it initially focused very much on the BBC as a service, rather than being, potentially, a competitor to ChatGPT, Copilot or something else.

Yes, I think so. If it goes really well, what’s to say that there isn’t a much larger, sovereign LLM that is general purpose and built on all the incredible datasets that are publicly held in this country, whether it’s NHS data, National Archives data, British Library data—I am spitballing here, but you get the point that this would be good, especially given the timelines for charter renewal and kicking it off. Even though the BBC has not necessarily been at the cutting edge of technology recently, it definitely has a track record in the past of quite innovative research and development. And I think, going back to some of David’s points, bringing in engineers, technologists and other people from outside Broadcasting House to think creatively about ways to achieve an ambitious project like this would definitely be worth pursuing.

It certainly sounds ambitious. Is it realistic for the BBC to resource it?

There would need to be a budget earmarked specifically for it. There has definitely been a decline in the research and development budget over the past decade, which would need to be addressed in order to do something like this, but I don’t think that it would cost hundreds of millions of pounds.

To go back to the defence analogy, if you look at what is going on in drone warfare, it is not about conventional financial might anymore; it is about innovation. When Britain has jumped ahead in this area, that has rarely been because it had the most money behind these projects; it has actually been because we had a better idea and a better breakthrough.

That is an important point, but it would still cost some money. Do you have any idea how much?

I mean, breathing costs money. It will just be a question when the funding conversations are happening. I can’t give you a line-item budget about what it would cost them. There would have to be a constructive discussion between—

The public service broadcasters, between them, spend several hundred million on distribution currently, so if that system is going to be reset, one would imagine at least that amount of money. If it was match funded by Government—I understand huge amounts of money are going into AI R&D from the Government currently. I am not aware of where it is being deployed. To answer the question of the future ecosystem that all the public service broadcasters rely on, it is going into other areas, which is, for me, quite a big question.

That’s interesting. Have you had any discussions with either the BBC or the Government about this, and if so, what have they said?

I think people are interested. They probably have similar questions to you, but I don’t think any of them are insurmountable. To some of David’s earlier points about future-proofing innovation and the direction of travel, I think the BBC’s own response to the Green Paper didn’t really have much technological ambition, but something like ChatBBC would obviously have a use case in terms of the same use as people would have of any other LLM. We cannot predict what will happen in the market in five or 10 years, but it is definitely the type of thing that—to combine Helen’s and David’s points—if everything that we see is actually curated by different AI agents that we give instructions to, this could be something that is an LLM now, but down the line could also be translated into a future where everything that we see is curated by agents that we give specific instructions to.

Thanks. Helen, don’t feel obliged, but I am going to give you the opportunity to say anything about this that you want to.

The BBC has already said that they are experimenting with AI in different ways. Specifically on Bitesize, I think there is a pilot around some sort of chatbot personalised learning companion that the BBC is developing. That work is in train. The only caution I would observe, other than the funding one that you raised, particularly with a chatbot, is that generative AI is prone to hallucinations. That is just the nature of the technology. Absolutely, we want to work towards a world in which people can go to a chatbot and get authoritative, trusted and accurate news, and I would love to see the BBC be a part of that, but at the moment, there would be real risks to the BBC saying, “This is your fact-checking, accurate source of accurate news”, just because the technology does not allow for that. I do not want to introduce too much realism. The ambition is good and proper, but yes, I think that that is just the nature of the technology, which is important to acknowledge.

To a lot of people, quite a lot of what you guys have spoken about today would sound like gobbledegook. No offence; it is very intelligent, interesting and fabulous gobbledegook, but it would sound like that. I have been looking through this document—to be honest, it was only published at about 9.45 this morning, so I have not read every word—and it looks as if there is reference to media literacy, but not to AI literacy. To your point, Helen, AI does hallucinate and come up with information that we cannot 100% trust, so to what extent do you think we need more of a focus on AI literacy, alongside media literacy, in a document like this?

Absolutely. I have not read the document, so maybe AI is covered underneath the media heading, but I think, yes, when we think about media literacy, we think about it in quite conventional terms. People want digital literacy, people want AI literacy, and I think it is important that that is a conversation not just about children and what happens in schools, but about all adults. All adults are trying to navigate this strange new world that we are about to enter with AI, so I think, yes, that media literacy is not just for kids, but for everyone.

Let us remember that the ecosystem of public service media also relies on advertising, and that the television advertising industry has developed an open and responsible relationship with the public in terms of truth, honesty and accuracy—but what drives a lot of the algorithms? The Cannes advertising festival starts today, and OpenAI is there selling advertising on ChatGPT. It reckons that will be worth $100 billion within a year or two, so we have to get wise to the role of a new advertising model in supporting this ecosystem to deliver public purposes. That is also part of what we have been thinking through on Project Logie.

I want to talk about prominence, as promised. Some parts of this are more uncontroversial than others. In Committee, we have talked about enhancing prominence for children’s PSB TV content, for example, which I think most people are on board with. With news, I think most people accept that in a world of disinformation, misinformation and some of the risks inherent in trying to intervene in other people's news content, prominence for trusted sources is an important thing. Yet again, from our new document this morning, we hear that the Government “will explore legislative options to require social media to make news content from PSM providers, and potentially also national and local news publishers, prominent and easily discoverable.” Personally, I am rather doubtful about that “potentially”, as I do not see how they can possibly say that we are going to give prominence to a handful of news outlets on social media, but not to national newspapers. Does any of you have a comment?

Who the public service media organisations are is clearly mandated—we can point to them clearly—so it is easier, from a legislative point of view, to say, “These are the organisations that exist. They already have some rights and obligations for that.” But I agree; I think that there are wider conversations about who else is involved in that tent.

Helen, you anticipate my next question. Of course we all want to see local newspapers having prominence, and everyone could probably agree on a small number of publications. I have just looked this up: we abolished licensing of the press on 3 May 1695. In the modern world, who would decide, “This is a real newspaper, but that is not”?

That question came up in the Online Safety Bill legislative process, where there was the media exemption—I forget what the exact definition is. I am not going to get into this debate, but there have been ways to address defining the media without defining the media in the digital age. I think it would probably require a bit more than what they have put out today.

Could you say that again? That sounded brilliant. There is a way to define the media without defining it. You should be drafting legislation. That is brilliant—if we can figure that out.

I am just saying that the Online Safety Act did not totally open up the definition of journalism, but they did find a way to make sure media was exempt from content moderation under the duties in the Act.

Indeed. Sorry, my memory is not perfect, but there were different stages in the passage of the Bill, and there were clauses that people anticipated were going to be in the final Online Safety Act that were not, in the end.

The media exemption survived.

Yes. Media and whatever they called it—content of democratic importance—were always going to be exempt. The question is more what they were going to be exempt from. In the final version of the Online Safety Act—sorry, we are not here to discuss the Online Safety Act, but some of the clauses were not in the final Act. I would suggest that linked to prominence is remuneration. You have already alluded to that. Which is more important—some regulation about prominence, which is probably quite difficult to nail down when you get to it, or fair share on ad revenue? What is the role of news snippets, including on AI, and bots scraping news sites to create their own content? That is a shout-out for my own private Member’s Bill, available in all good bookshops in a couple of months’ time. What needs to go with regulation on prominence to make these news sites viable?

Access to data and a fair share of revenue. All those things are part of the package. If your question is what is more important, I personally think that prominence is more important than the fair share of revenue, because the public interest issue is not about the return.

Okay, let’s talk about newspapers. If I make prominent a little snippet of text that I have just copied from thetimes.com, The Times gets no remuneration for that at all, because nobody has any need to go to The Times website or app or what have you; I have just consumed my news and no journalist has been paid. How many years does The Times stay in business?

I agree that that is absolutely important, but from an audience perspective and a public interest perspective, the issue is about discoverability, how you are discovering that content and whether you are discovering it at all. Yes, if you click on it, there is a conversation about the returns back and sustainability, but I think the biggest question is whether that content is coming up for you at all. Are you discovering that content? How can you make sure that there is trusted news, information and high-quality content at all? Then there are questions, but I think that is a second order of question.

Technology plays a huge role. If you go to John Lewis today and buy a TV set, and you want to watch live television, you can find it; but what you will experience is a battle with the operating system of, let’s say, a Sony TV that has Google TV embedded in it. What it tends to do, particularly with the remote, is to pull you back into streaming, even though we have legislation that has made the public service channels more prominent through YouView. So even when you legislate, you find it is a hugely confusing thing for the consumer.

Should it be a button on the remote?

That would definitely help. That is why we need to think of the ecosystem in a more systemic, fundamentally different way. The experience of watching your television in 2026 is vastly inferior and more confusing to the average person than it was 30 years ago. We can see that. There is so much friction and confusion in following your favourite shows and understanding where things are coming from. It is a subset of the audience fragmentation that the internet has created. This is not an end state. Where we are today in the interaction between social media, streaming media and linear media is not an end state. We are in the middle of a revolution. Let’s start defining what we think the end state might need to look like for ourselves.

Are you at liberty to give your own thoughts on what the end state looks like?

No, because I am not an engineer, but we know what the problem is and we need to go away and get the best minds in the country to go and reimagine this, just as is happening in Silicon Valley. These companies have sprung up there in a short period of time, run by small groups of people who are thinking big. We are not enabling and empowering our best minds to think big in the national interest. Why aren’t we doing that?

Finally from me, I said at the start that when it comes to prominence, some things are more controversial than others. Kids’ TV and news are at the very uncontroversial end; is that the extent of the ambition, or do people mean prominence for lifestyle content and lifestyle programmes on Pinterest?

It depends on who you speak to. I think the public service broadcasters would say that all their content is public service content in different ways, and therefore it all should be included. Then you can have conversations about that—

What do you say, Helen?

I have never been a snob about what public service content is. I have always advocated that sport, drama, entertainment and lifestyle programmes are public service content.

You say that you have never been a snob, and I certainly will not accuse you of being a snob, but that is about what counts within public service broadcast content. There is another question about whether something else on Pinterest, or any other platform that one might think of, has an equal call on people’s time and attention.

Maybe a helpful way of looking at it is that the public service broadcasters spend a lot of money on commissioning content that is not profit-maximising. Then they do commercial things that help to feed the system, if they are ad-funded, as Channel 4 is. It is the decision making around delivering to the remit that Ofcom and Parliament set. It is a system that works, but it is not profit-maximising. All these other platforms are profit-maximising, through ad models or through very expensive subscriptions—Anthropic has been described as a tool for rich people at the moment, because Claude is very expensive. The easiest way of looking at it is that this is a remit of cross-subsidy of news, current affairs, documentary, education, kids, religion and so on—my company is making a series for the BBC at the moment, a religious programme. These are not profit-maximising programmes, but they have public value.

To be fair, they also were not what I asked about. I don’t think people would put religious programming in the same bracket as lifestyle programming, or gameshows or quizzes.

Without a public service system, those programmes would never be commissioned and made. They would just not be made. We have to be very clear about that. News and current affairs are not profit-maximising.

Yes, but I was specifically not talking about the things at that end of the spectrum. However, I am done. Thank you

The Government Green Paper asked whether a licence fee payer could be asked to enter their licence details to access iPlayer. Do you see that as viable? I will start with David.

I genuinely feel unqualified to answer that question. It is not something that I have thought about deeply. Sorry.

I have not seen the wording, so I don’t know the detail. I think that there is a risk in that model that you end up with subscription under the radar—having a subscription without saying so. If you are saying, “Right, you have to enter this information in order to be able to access it, and therefore prove that you have paid for it,” then you are entering into a world in which the BBC becomes a subscription service by default. I would be concerned about that, even if it is possible. The principle of public service media is that it is free at the point of access. At the point where you start saying to people, “Enter your login details in order to be able to access it,” you have challenged that principle.

Thank you, Helen. You have also answered my second question, which is great. Do you have anything to add, Dylan?

I am going to take David’s approach: I defer to Helen.

Okay. How would it work if what qualifies as licensable content is widened out to include any other broadcaster, video on demand, streamers and video-sharing platforms? Do you see that connection?

Do you mean if iPlayer was opened out more broadly? Jo Platt indicated assent.

I think it ends up going back to the conversations you had with the last panel, and in previous sessions, about how you are updating the licence fee and what it stands for. Is it a household levy? Is it for television? Is it for access to all of the streaming platform? I think you would be able to answer those questions. I have nothing more to add on that point.

My goodness, that was quick!

Can I say one thing about funding? There are big questions to be answered about what sustainable funding looks like over the next decade. I feel that the pace and sense of urgency from DCMS could perhaps be accelerated, because there is probably much bigger and more complicated thinking about funding to do in respect of this charter review process than there has been in the past.

One final thought is that funding models have tended to emerge adjacent to technological developments, whether that is radio or television licensing, and so on. Let us answer the question when we have the technical ecosystem questions answered, because that might help us to resolve your questions about funding.

Once we get to the stage at which what qualifies as licensable content is widened out so broadly, where does that end and a household levy begin? The boundaries between the two then merge: yes or no?

They could, but of course future technologies may be out there that allow metadata to embrace public service content in new ways, for that to be measurable in new ways, and for that then to connect with the funding model through a new framework. For me, it is about an ordering of the question. We are trying to answer the question while the ecosystem is being re-engineered to us, or on our behalf, rather than saying, “Here is the ecosystem we see”—framing the whole system—“and we are then going to get the payment system to match that.” I think it should be in that order.

But in the meantime we are facing a systemic issue. The number of people paying the licence fee is declining and BBC costs are going up. All we are going to see is the salami-slicing of what the BBC currently does—death by a thousand cuts. We all know that there are people out there who are accessing BBC services but not paying the BBC licence fee. What is wrong with getting someone to type in their licence fee number the first time they use the iPlayer, as you would if you were using literally any other kind of website or service?

At a transactional level, that is something people are used to doing, but I think it would make public service media and the BBC just a transaction—“I want to watch this so I’ll put in my details and enter”—so you lose that sense, which the previous panel talked about, of being part of a system that is for the social good. I think it is just harder to differentiate those things.

As opposed to someone getting a letter saying that there is a magical van driving up and down their street with a special detector that can tell whether they have a licence.

As we have two minutes, David, you talked about getting the brightest minds together to make this vision of a future ecosystem. Who should be in that conversation?

We are starting those conversations now. There are academic and university bodies that are very advanced in their work in this area, and there are start-ups that are adjacent to a lot of these questions. Personally, I have a day job, so I am hoping that the Government will get behind this as a matter of priority and we can then galvanise the industry and make this plan happen.

We have one minute left, so I am going to give you the opportunity to leave us with a final message. Is there anything you feel that we should include when we write up our report? Dylan, what is your parting message for us?

The Committee plays an important role in making sure that DCMS stays on track. There is a hard and fast deadline for getting this over the line by the end of next year, and it is important to hold the Government to account on that. Broadly, I think what you have heard today, and in your many other sessions, is that we live in a different world and it is time to be ambitious and realistic that the “same old, same old” game is not going to cut it.

Very good—thank you.

On the point about platforms, we talk about going where the audience is. That is important—I understand it—but you are putting decisions about how public service content is distributed in the hands of companies that have literally no interest, incentive or obligation to care about that. That is why we bang on about the regulation of platforms, because at the moment they have no interest to care about this. I would want to land that.

Very useful—thank you.

The creative industries are a hugely important employer and bring economic value to the nation. The creative industries in the UK rely on an ecosystem that has helped to support them over decades. We need the national ambition, commitment, prioritisation and resources to rebuild that ecosystem; otherwise, jobs will increasingly be at risk and the information environment in which politics happens will be affected by global forces that we will not be able to deal with.

Very good. Thank you all very much for your time today.