HC Deb 28 October 1998 vol 318 cc303-10 12.59 pm
Mr. Brian White (Milton Keynes, North-East)

It may seem strange to introduce what may be thought of as a rather marginal debate, but I believe that its subject will grow in importance, and that we shall come back to it.

Last week, at the all-party group on cricket, Tim Lamb, chief executive of the Test and County Cricket Board, said that the awarding of the contract for broadcasting cricket to Channel 4 might be the last such negotiation between broadcasters and sports bodies.

As pay-per-view and digital television grow, there will be a complete change in the way in which not only sports coverage but other coverage is negotiated. As David Elstein, former director of programmes for Sky, said, in 10 to 15 years' time, when pay-per-view is fully developed, we shall be paying for each individual programme. I am not sure that that is the way in which we should be developing. Is that really what we want?

At the moment, the scope of pay-per-view is limited by economics—how to make it pay—and technology, but, with the convergence of technology, it will spread. It is estimated that 10 million homes will have digital television in the next 10 to 15 years. As shown by the Select Committee report on the convergence of technologies and the Government's response to it, which I welcome, the debate will be more important in future.

Companies are now looking at ways of broadcasting visual images along old-fashioned copper wire—the old telephone links—so the ways of distributing visual images will change. It is not only television that will be affected. I have heard one person say that there will soon be pay-per-listen radio. All the hottest and latest releases—not that I can remember them—will be on pay-per-listen radio, and the rest of us will have to wait a few weeks or months to hear them.

There is great uncertainty about the way in which technology in general, including pay-per-view, will develop. I shall concentrate on football today, but what I say applies to other sports and other types of television too. The Office of Fair Trading is now investigating the deal between the Football Association and Sky Television, alleging that a cartel operates, and that each club should negotiate individually. I cannot understand how a cartel can be operating when 31 clubs have appeared in the Premier League over the past six years.

If we take that idea seriously, however, and the Office of Fair Trading gets its way and clubs start negotiating individually, a series of questions will arise. What happens if clubs negotiate with different broadcasters operating different systems, with one on pay-per-view, one on digital and another on terrestrial television? When will sport be televised, and will pay-per-view get the premier slots? If we take that to its logical conclusion—

Mr. Gareth R. Thomas (Harrow, West)

Does my hon. Friend share my opinion that pay-per-view is just one aspect of the growing concern among football supporters about the commercial exploitation of their game? Does he agree that pay-per-view is one element of the increasing commercialisation of sport, and of football in particular, that the football task force must address?

Mr. White

I certainly agree that the football task force should address that question. It is interesting that, in Italy, where the four top clubs have renegotiated their contracts to obtain a higher percentage of the revenue, that has led to a widening of the gap between those clubs and others. I fear that, were that arrangement to be replicated in England, we would see the same phenomenon. Lower division clubs are already struggling, and that would exacerbate the situation.

I shall not dwell upon the proposed BSkyB takeover of Manchester United, but it raises many questions about pay-per-view. The Sky contract ends in 2001, and I suspect that much of the background to the Sky takeover is connected with the fact that it wants a place at the negotiating table then. It is conceivable that Sky would have been outside the negotiations on multimedia promotions and suggestions for a European super-league, but the purchase of Manchester United will give it a place at the table.

Pay-per-view for the top clubs in Europe would lead to a diminution of choice. As I have said, some Italian clubs have negotiated their contracts. Italy and a couple of other countries are further down the road than Britain in terms of digital and pay-per-view television. Before pay-per-view becomes fully established in this country, we should look at the effect that it has had in other countries.

In Italy, for example, supporters of a club can subscribe to pay-per-view and get all the away matches, but one cannot switch teams. Ordinary football supporters who are not avid fans of a particular club cannot mix and match; they are tied to one club. That limits choice.

I do not oppose pay-per-view television, but I want it to add to choice. As I have already said, the primary reason why pay-per-view has not yet taken off is economic—the problem of making it pay. If it is to make money—and there is no other reason why companies should introduce it—it has to take the market away from current broadcasters.

There are already 16 live football matches available, and if the Nationwide league suggests setting up a few extra pay-per-view matches later this year—that is, if pay-per-view is additional to what is already available—I do not oppose it. For my sins, I am a Tottenham supporter—somebody has to suffer. If I want to watch Tottenham, I can watch the team live on a Saturday afternoon, or if I am lucky and the live match is on Sky, I can watch it at home. If neither of those options was possible, and pay-per-view was available in addition, that would be a reasonable way to progress. It would make for additional choice.

However, if, on the contrary, pay-per-view replaced the live broadcasting, or, worse, if the time of the match were changed and moved from Saturday afternoon, when I can get there, to a prime slot at 4 o'clock on Sunday, say, when I cannot, that would lead to less choice.

Mr. Derek Wyatt (Sittingbourne and Sheppey)

I do not share all my hon. Friend's views on pay-per-view. However, I am not sure whether digital television will work commercially. We already have pay-per-view pop concerts on the internet, and it is not clear how regulation in the United Kingdom would affect regulation of the internet.

Secondly, I hold shares in Charlton Athletic on behalf of my son Jack, and I would happily pay for a season ticket to watch all the away games, because I cannot travel to see them. That would give me more choice. If there is a concern about cash, with digital television as with the American National Football League, for example, screens can be blacked within 60 miles of a game, so takings will not be affected. Has my hon. Friend considered that?

Mr. White

My hon. Friend has obviously read my speech, because I was about to make that point. He is right to say that, in the United States, NFL games are not allowed to be shown live unless the ground is full. There are also deals whereby merchandising and television rights are shared between clubs. Pay-per-view would therefore be an additional choice there.

If you wanted to watch Charlton, that would be reasonable as an additional choice. My fear is that the economics of pay-per-view would mean that, although you might get your way on that issue, the choice for everybody else would be diminished. That is the kind of regulation that I am looking for. You also mentioned—

Mr. Deputy Speaker (Sir Alan Haselhurst)

Order. I remind the hon. Gentleman that, in using the second person, he is referring to me. If he is talking to his hon. Friend, he should use the third person.

Mr. White

Apologies, Mr. Deputy Speaker.

My hon. Friend mentioned the internet. One reason why I introduced the debate is that the converging technologies mean that the traditional way of broadcasting programmes is changing. I am not opposed to pay-per-view on the internet or television, but I want a level playing field so that pay-per-view can compete with the internet, terrestrial television and digital television.

Pay-per-view is not only about sport—it also relates to films, although it is probably too late to stop the rot for films. However, a number of social questions need to be raised. The proponents of pay-per-view have said that paying for films is just like going to the video shop. I am concerned that, if pay-per-view becomes the norm and video shops go out of business, people who do not have access to pay-per-view and cannot afford it will suffer. There are suggestions that, in those areas where pay-per-view is available—some cable companies have been running it for about six months—people are choosing five or six movies a month, and their habits are becoming quite regular. That may be true for some, but others might not be able to afford it. We must get the balance right.

There is also the question of what happens in clubs and pubs showing sport or films. If pay-per-view becomes the norm, the deals that pubs and clubs have at the moment might become much more difficult to sustain.

I have referred to the principal reasons why pay-per-view is not prevalent in sports broadcasting at the moment. However, there is one exception—boxing. I am not a boxing fan, but ITV used to have a good Saturday night fight programme. Now the only place one can see a decent boxing match is on pay-per-view. Sky subscribers who pay £30 or £40 a month for the full package will have to pay £10 extra to watch McCullough beat Naseem on Saturday night.

When I became involved in the debate, I was happy to say, "Let's ban all pay-per-view television, because it is absolutely disgraceful." However, I was quickly brought up by my researcher, who said, "Hang on, I like watching pay-per-view. I am quite prepared to pay extra for a film or sports match. I don't want the whole package—I want the additional choice." That emphasises the point I am trying to make. If it is a question of additionality, pay-per-view is reasonable.

If the economics of pay-per-view means that the existing broadcasters of sport and films lose—if all we are left with is a 10-minute highlights programme—there will be a problem, and the quality of broadcasting that we have become used to in this country will be diminished. It is easy to destroy what we have, but it is hard to rebuild it. If pay-per-view destroys some of our broadcasting quality, I would hesitate to say that we could get back to where we are now.

Before we go much further, we need to debate the appropriate level for pay-per-view, and its regulation. We must discuss the content versus the technology. If we do not regulate, we could end up in an anti-competitive position, and we would all lose. If we get it right—and if pay-per-view is competitive and adds choice—the new technologies will give their full benefit. However, I urge my hon. Friend the Minister to consider the Select Committee report, and to ensure that, when new technologies are discussed, the question of regulation is brought up.

1.13 pm
The Minister for Tourism, Film and Broadcasting (Janet Anderson)

I congratulate my hon. Friend the Member for Milton Keynes, North-East (Mr. White) on securing a debate on pay-per-view television, and on setting out his views with such clarity. He speaks with some authority on the issue, as I understand that 40 per cent. of people in Milton Keynes are already on line—a figure far in advance of other areas.

My hon. Friends the Members for Harrow, West (Mr. Thomas) and for Sittingbourne and Sheppey (Mr. Wyatt) also contributed to the debate. My hon. Friend the Member for Harrow, West rightly pointed out his concerns about the increasing commercialisation in sport, and the need for the football task force to look at that matter. I can assure him that I will pass on his comments to my hon. Friend the Minister for Sport, who will take them on board.

My hon. Friend the Member for Sittingbourne and Sheppey spoke with great authority on the issue. He referred to regulation of the internet and how that might be achieved, and he mentioned the situation in the United States. He eloquently set out some of the important issues that we will face in the future.

This subject is of interest to many hon. Members, and many people outside. In discussing the matter, we should remember that pay-per-view is not only relevant to sport—other pay services, including films, could well be vital in television's digital future. My hon. Friend the Member for Milton Keynes, North-East referred to that. However, he is particularly concerned with sports broadcasting.

The Government's main concern in sports broadcasting is to ensure that everyone has access to those events which have a clear national resonance, and we have recently reviewed the protected list to achieve just that. Having said that, we do not believe that our responsibilities to viewers end there. Our public service broadcasters have a responsibility to provide programming for all tastes and interests, and sport should clearly be part of what they offer. We will continue to monitor the position as the television market develops.

The shape of that market is starting to become clear. Digital satellite broadcasting has already begun, and digital terrestrial will follow shortly. Viewers will have a wider choice of channels than ever before. Those services may well include specialist sports channels, and pay-per-view may be one way for broadcasters to fund these new services for the committed sports viewer.

Pay-per-view may also bring benefits to sport, with new services covering events which broadcasters would not be able to transmit on a general channel, because of the costs of coverage or the small size of the likely audience. I shall return to that point.

My hon. Friend the Member for Milton Keynes, North-East is concerned—he is not alone—about the possible consequences of BSkyB's takeover of Manchester United. He feels that this may lead to United's fans being asked to pay for access to coverage of the club's matches in the premier league after 2001. I can assure him that his concern on that point has been noted.

As the House is aware, the Director General of Fair Trading is presently considering his recommendation on the merger to the Secretary of State. He will announce his conclusions before 2 November. It is right that the Office of Fair Trading should be left to make an independent assessment of the issues involved, and the Government should not speculate on the outcome at this time.

My hon. Friend also noted that the restrictive practices court is considering the validity of the premier league's collective broadcasting arrangements early next year. He will understand that I cannot comment in detail on that for the same reasons. However, it is clear that the shape of the market for the rights to top league football may be very different come the spring. Given those uncertainties, we need to come to a balanced view on the subject of pay-per-view services for all sports—not just for football.

Pay-per-view sports services in this country are in their infancy, and have so far been confined to boxing matches. There has been much talk about pay-per-view in other sports, but it seems that the industry is still not sure about who will watch them, and how much they will be prepared to pay.

I believe that broadcasters and sporting bodies are right to be cautious. The issues involved in pay-per-view are complicated. It is not enough for a broadcaster to identify a potential audience for an event. Sport is an equal partner in any contract, and it must find a balance among a number of considerations—the need for wide exposure of flagship events, the impact of television coverage on attendances at grounds, to which my hon. Friend referred, and the requirements of sponsors and advertisers.

All sports wish to stay in the public eye, not least to encourage the interest and participation of young viewers. I speak with some authority on that—I have three teenage children who are fanatical Blackburn Rovers fans. Sponsoring companies often demand the exposure that only free-to-air television can bring. As a result, many sports organisations, including the International Olympic Committee and UEFA, have publicly committed themselves to free-to-air coverage.

For example, the governing body for the formula one championship has also indicated its preference for free-to-air coverage. That is despite surveys that suggest that a substantial number of viewers in the UK would be prepared to pay to watch grand prix races.

Sport must also guard against eating into its own audiences by rushing into pay-per-view. Football still takes the largest part of its income through the turnstile, and it must guard against alienating the fans who make the effort to attend matches.

As my hon. Friend pointed out, football must consider the lessons learned by overseas leagues. He mentioned Italy. When the Italian football league embraced pay-per-view, its attendances fell by more than the number of viewers watching the games on television. I am sure that my hon. friend the Minister for Sport would put that down to the decreasing appeal of the Italian league compared to those of other nations, such as our own premiership—much of Italy's national team now plays here, after all. British football must be careful, and the Government are sure that the point is not lost on those deciding future broadcasting contracts.

Broadcasters themselves acknowledge the complexities of pay-per-view. BSkyB decided against charging viewers to watch a specially arranged snooker tournament earlier this year. Although top snooker players have great appeal for viewers, BSkyB and other broadcasters realise that people want to watch meaningful and established championship events. In making arrangements for their flagship events, sports bodies usually want a balance between revenues and maximum exposure.

The tendency to self-regulation in the broadcasting market is reassuring, but we should recognise that there is a market for pay viewing of certain sports events, and that pay-per-view can bring benefits both to sport and to the armchair fan.

Mr. Wyatt

My hon. Friend may be interested in a number of other pay-per-view events—the Spice Girls were on BSkyB. However, I am more concerned with the launch of the digital channel, Film Four. If the Hollywood moguls decide to launch a film on pay-per-view ahead of its theatrical release, it will seriously affect the economics of television and of the multiplexes that are being built throughout the world. Given that Sony produce wide-screen computer screens and television sets, one can envisage which way it will go with its films. I would welcome my hon. Friend's comments on that.

Janet Anderson

My hon. Friend is right, and I am sure that he would agree that, throughout the world, we are embarking on a broadcasting revolution. We will have to wait and see how it develops. I am sure that his concern about the likely effect on theatrical productions is well founded. We shall have to guard against that, and I thank him for raising the issue.

Matches shown on pay terms will be additional to the 60 games a year shown by BSkyB. The league believes that coverage of those matches will reach a new audience of football fans committed to—dare I say it—less fashionable clubs. Those fans may be unable to travel around the country to follow their teams' away matches. Of course, there are fans who, for one reason or another, cannot get to matches at all. Many of those matches would not be shown on BSkyB's general subscription service— or anywhere else, come to that—because the potential audience is small. Pay-per-view may have the potential to bring a new choice of services to football supporters, and there is no reason why that should not apply equally to fans of other sports.

We have to consider the position of top sports events, especially in football, which will, at least initially, attract broadcasters and sports bodies wishing to experiment with pay-per-view. Listing offers a good level of protection for free-to-air access to the very top occasions in the sport, such as the world cup, the European championships and the English and Scottish FA cup finals, but there are many other important matches. In considering the case for pay-per-view, football must be sure that it is not alienating its core audience. The Government believe that sport can and should act responsibly in making its broadcasting arrangements.

Finally, it is important that we consider the possibilities for pay-per-view football in a proper perspective. Live coverage of club football in this country is a comparatively recent phenomenon, but the free-to-air television viewer now has access to a larger number of matches than ever before. Last week, the free-to-air viewer had access to live or full delayed coverage of five top European club matches, including Manchester United's match in Denmark, which was shown by the ITV network. Two of the matches were broadcast simultaneously, but, armed with a video recorder, the viewer could have watched more than 16 hours of top football. All four of the universally available channels—and Channel 5—contributed to that figure.

The Government believe that it is important that pay-per-view should not develop at the expense of the general viewer, although we are not opposed to pay-per-view in principle. However, we also believe that free-to-air channels will continue to offer first-class sport, whatever the future shape of the broadcasting industry.

I hope that that will reassure my hon. Friend the Member for Milton Keynes, North-East. I am grateful to him for giving me the opportunity to set out the Government's position, and I again congratulate him on securing this important debate.