This is taken from The Observer:

We must change again, says White City's radical

BBC boss Mark Thompson is making massive job cuts, fighting for a huge licence fee hike - and trying to meet the challenges of the digital age. James Robinson talked to him at the start of a pivotal year

Sunday January 8, 2006

Mark Thompson is standing in the BBC's vast new media centre, nonchalantly leafing through some papers. Dressed casually in open-necked shirt and black jeans, the famous facial hair now more designer stubble than fully-fledged beard, he looks more like an off-duty university lecturer than the director-general of the BBC. There's a slight paunch as well, perhaps acquired over the Christmas period, much of which was spent entertaining visiting members of his wife's American family.

We meet on the first working day of the year, and a 'back-to-school' atmosphere pervades White City. But Thompson is in combative mood, as befits a man who flies aircraft in his spare time.

Given the recent tumultuous history of the BBC, every year feels like an important one for the corporation. But 2006 will be especially pivotal, according to the director-general. 'It is a particularly big and important year for the BBC. It's the year when we hope to get a new charter. It's the year we hope to get a new licence fee. We've also got these big trials and launches this year.'

The corporation's interactive media player, which allows users to download seven days of programmes over the internet, is likely to be rolled out nationwide later this year - subject to the approval of the BBC governors. This is no gimmick: new technology is transforming the TV industry, and broadcasters that don't embrace the internet may ultimately become extinct.

That is the future, but what of the past? It has been a bruising year for Thompson. One major battle was won; the government green paper on the future of the BBC recommended renewing its 10-year royal charter. He has put the case for a huge hike in the licence fee (from £126.50 to £180) to a hostile committee of MPs. Most painfully, he is (slowly) pushing through the first tranche of up to 7,000 job cuts, a plan that prompted strike action and picket lines outside Television Centre.

Some have criticised his aggressive management style, comparing it unfavourably with his predecessor Greg Dyke's more inclusive approach. Is this really what the BBC needed so soon after it was mauled by Lord Hutton's critical report into the death of David Kelly? One senior industry source claims that high-profile executives 'left directly because of him' and complains that he 'criticises in public, not in private. He's one of a new generation of managers who try to be matey but really pull rank when they need to'.

Thompson is certainly combative, but then so was Dyke. Off-the-record asides are abrasive and to the point. But he is also approachable and unpretentious. One former senior BBC journalist summoned to his office was delighted when Thompson produced two glasses, a corkscrew and a bottle of red wine.

There is a mythology surrounding every director-general: Birt was an automaton surrounded by management consultants, Dyke a messianic populist. An allegation that Thompson bit a BBC colleague early in his career is part of BBC folklore, but many regard him as cerebral - not a characterisation he relishes. 'I never used to be [described as] intellectual, I used to be a "safe pair of hands". I'd quite like to go back to being a nice, rather dull safe pair of hands actually,' he says. 'I've spent as much of my life worrying about programmes like Watchdog and That's Life as I have about Panorama. I'm a much more instinctive broadcaster and instinctive manager than the egghead stuff, which is new.'

So what did he read over Christmas? Not The Da Vinci Code? 'I'm going to let the side down slightly now. I'm reading the Robin Lane-Fox book about the ancient world. (The Classical World: An Epic History From Homer To Hadrian)' It's a 'doorstop' of a book, he concedes.

Friends claim he felt fated to do the top job, and is glad he got it, but he isn't sure he is enjoying it. 'It isn't very creative, but then he knew that when he took it,' says one. The inference is that he regards it as a duty rather than a pleasure to be in charge of the BBC at such a crucial time in its history.

Maybe so, but few doubt he is the right man to tackle the technological challenges ahead. 'The reassuring thing is that other director-generals have always had their eye on being a politician or the head of a major corporation,' says one. 'Mark is a visionary. Part of him wants to be a Steve Jobs or run a Hollywood studio and live in LA.'

Traditional broadcasters are watching their audience share sink as multi-channel TV becomes more popular. BBC1's audience fell by nearly 6 per cent last year, for example. The corporation has to offer more services simply to justify the licence fee.

Thompson talks in radical terms, about 'a migration from an organisation you associate with TV and radio to an organisation which produces lots of content which we get out to people on lots of different platforms and devices. Ultimately the internet's going to be the most important medium we operate in and it's going to be an important way of delivering TV and radio. It already is ... The BBC's had an extraordinary ability to re-invent itself repeatedly. It's a time when it needs to change again.'

He visited California before Christmas on a fact-finding mission, meeting executives from Google, Apple and Hollywood studios, among others, to 'swap ideas and experiences. I certainly didn't feel that anyone there was ahead of our thinking'. In broadband homes, the BBC website is already the second most popular service after BBC1.

Once the BBC's TV channels are streamed live over the internet, its interactive media player will become the corporation's answer to Sky Plus, allowing viewers to save programmes and download the previous week's schedule, as well as access its extensive archive: 'Like a Sky Plus or a Tivo which can also travel back in time' ...

All this costs money - lots of it - which is one reason the BBC wants an inflation-busting licence fee settlement. 'The government wants the BBC to significantly improve its existing services (cutting repeats), to launch various new digital services and effectively pay for most of a major piece of national infrastructure (the multi-billion switch to digital TV). The majority we can do ourselves, but we can't do it all. That's the equation the government's got to think about.'

Thompson claims the public will swallow a £180 charge, despite the collective gasp of horror that greeted the proposal in the national press. 'There wasn't a big public reaction to it at all,' he insists. We got a total of 50 phone calls expressing anxiety or anger. The same week we got 150 complaining we hadn't put highlights of the Burleigh horse trials on the interactive [service].

'When you look at the licence fee as a proportion of disposable income, it's falling as a burden.' This is true of the poorest 10 per cent of households too. The test, says Thompson, is whether 'we deliver enough value to every household that they believe the licence fee represents good value for money.'

A similar logic underpins the job cuts, which will also free money for investment in new programmes and services: 'When I look at the speed of take-up of these new digital devices and services I don't think we're moving too quickly.'

In programming terms, the BBC had a good 2005 - Little Britain, Bleak House, Doctor Who and The Thick of It ensured that. This year's highlights are likely to include Planet Earth, which 'looks astonishing' and the World Cup.

But Thompson drops the heaviest hint yet that live Premiership football will not be returning to the BBC, despite a recent deal which means Sky will lose its monopoly on live matches. 'It's not obvious to me that ... devoting a very large chunk of the licence fee to securing live premiership action - taking money away from something else - is the best use of that money.'

News will also be a priority. A vicious ratings battle is currently raging between Sky News and BBC News 24, which Thompson believes the corporation has finally won. 'We have effectively overhauled Sky in audience terms [and] opinion formers who think about it for a second will accept that in terms of credibility and accuracy we are the best bet out there.'

There is a tantalising hint, too, that the BBC's news operation - still under intense scrutiny in the post-Hutton era - is about to be overhauled. 'We've been doing some thinking about the future of journalism at the BBC. I think we're on the brink of potentially a major leap forward. Traditionally people inside the BBC have been extremely cautious as to facts, and they should be. But saying on a day when a very big story's breaking, "X number of deaths have been confirmed" doesn't quite tell the whole story. People are interested in what's being speculated about. If you're not careful - and we are the BBC - you end up going on one flyer after another but at the same time the public are interested in being let into the newsroom.'

He also bats away the age-old criticism that the BBC exhibits an institutional left-wing bias. 'I don't believe that. Look at the way we covered the Tory leadership contest last summer.' It was 'open-minded, fair-minded coverage. If you talk to senior Tories, certainly privately, they'd agree with that.'

News is the area that best demonstrates the way the BBC is moving, says Thompson. Look at how people used it on 7 July: 'The BBC News proposition is a TV, radio, web, broadband proposition and people use it like that already.'

In a decade's time, they may be using their remote controls to record last week's Eastenders, then watching it on their mobile phones or emailing it to friends. Thompson will hope that - rather than job cuts or biting allegations - will be his legacy.

Oh, and the beard, by the way, 'is staying for a while'.

In his own words

On Greg Dyke

'I would never say "well of course I'm not a terrible populist like that dreadful Greg Dyke".'

On his intellect

'You don't want to be too cerebral in Britain.'

'I never used to be one of the eggheads. Tim Gardam was an egghead and David Elstein was an egghead. I never was.'

On competitor complaints

'Some of our competitors would like the BBC not to do anything and to remain a traditional linear radio and TV broadcaster. I don't think that's in the interest of the people who pay for the BBC.'

On public perception

'Everyone has got their list of grievances about the BBC - me included. It's like the NHS in that sense; they genuinely feel a sense of ownership.'

'People talk about the BBC and political correctness. [There are] more enemies of political correctness than proponents: Jeremy Clarkson, John Humphrys and Libby Purves.'

'I don't get any sense that public fascination with and love for the BBC is diminishing.'

On repeats

'One hour a week of extra drama is £600,000; [over a year] that's 2 per cent on the licence fee. It's economics.'