Mr. Morrison: Granada Media Group is the most successful television company in the U.K. It's increased its profit by five times since 1993, so between 1993 and 1998 it increased its profit from under GBP 50 million to over GBP 250 million. This growth has brought about a presence in three discrete businesses within the Granada Media Group, and just last week we launched a fourth. The three businesses are free- to-air broadcasting in which we own four of the ITV stations: Granada Television, Yorkshire Television, Tyne Tees Television, and London Weekend Television, which is about a third of ITV, which is Britain's most successful network. The annual revenue for ITV as a whole is about GBP 1.8 billion, of which Granada earns about GBP 600 million. The second business is program production, in which during the last five years we've become the largest commercial television program producer in Europe. We produce 5,000 program hours per year. We sell 14,300 hours to 124 foreign territories per annum. We sell 380 program titles abroad. And this year we will have 118 video titles, 150 merchandising licenses, 850 education titles. Every year we contract over 20,000 talented individuals per year to our programs. We produce 85% of all the programs on ITV, delivering to audiences of over 10 million. So we produce about 55% of ITV's program output, the network, and that is all decided on merit by an independent commissioning body at the ITV Network Centre. So our programs are not constrained by our size in ITV, they're purely determined on merit. And we are basically Britain's premier commercial producer, and Europe's largest commercial producer. In the program business there are 11 separate companies, which include Granada Television Productions, London Weekend Television Productions, Yorkshire Tyne Tees Television Productions, Granada Film, Granada Studios, which includes the London Studios, which is London's leading television production studio, Granada Entertainment USA, which is our American company based in Los Angeles, which in its very short two-year history has had two network series: Cracker, on ABC, and Cold Feet, which have just been picked up for this autumn by NBC. It's also in the middle of production of a 22-hour drama series for Show Time called 'Beggars and Choosers.' We've also bought the third most successful production company in Australia called Artist Services, and we're currently considering starting a production company in Germany. So it is our policy to start local production companies in selected media territories abroad. We also have an international program catalogue distribution business called Granada Media International. On the licensing and publishing side, which is also part of Granada Productions, we have an education company called Granada Learning which has over 850 educational titles on CD-ROM, and is present in over 90% of Britain's schools. We also have publishing, video, music and merchandising companies, an animation company and a feature film company called Granada Film, which produces about five feature films a year, and whose next film has been recently premiered. 'Rogue Trader,' starring Ewan McGregor and Anna Friel, is the story which I'm sure you'll be familiar with of how Leeson brought down Barings Bank. So that is the second business, Granada Productions, which is the television program producing and selling business. The third business is our pay television interests. Granada's interests in pay TV are very well established and very well positioned in the U.K. We have been for a long time an investor and partner in Sky Television. We've now reduced our stake in Sky to a 4.3% indirect stake. We own 50% of the new digital terrestrial platform, which is called ONdigital. We started a joint channel company with Sky called Granada Sky Broadcasting, in which we own 50.5%, which produces three channels: Granada Plus, Granada Men & Motors, and Granada Breeze. And latterly we've started some new joint venture channels: an interactive shopping channel called SHOP! which is a joint venture with Littlewoods, which is Britain's second largest mail order catalogue business, with 9 million customers. And we started a joint channel with Manchester United Football Club and Sky called MUTV. We also have an international channel called Granada UKTV, which is up on the Star platform in the Far East and in the Middle East, and is transmitted to about 15 territories in that part of the world. And we own a part of a comedy channel which we manage in Australia on the Foxtail platform. So that's the third business which is basically pay TV platforms and channels. The fourth business which we just announced is called G-Wizz. We claimed that this was Britain's first entertainment service provider. It's an Internet service provider, but it's based on a definition model rather than a revolving door portal. So the idea is that there is enough sticky content in it to keep the user happy and occupied across four broad range areas of content. The first is exclusive program content delivered online, which is not actual programs, but information and pictures around programs. So for example, there will be a site called Coronation Street Confidential, which is an inside track of exclusive material about the world's most popular soap opera, 'Coronation Street,' which is transmitted four times in the U.K. to an average audience of 16-17 million viewers. And we will do something similar with our second highest rated soap, and the site will be called Emmerdale Exclusive. And we will form little groups of sites which we call channels around our other top 10 popular programs such as 'This Morning,' which is Britain's premier daytime program, 'Better Homes & Better Gardens,' consumer programs like 'We Can Work It Out.' So there will be collections of sites around our most popular programs. The second content level of G- Wizz will be an educational service where we will use the base of our 850 educational CD-ROMs to develop online courses which will march hand- in-hand with existing courses in the British educational system. So you'll be able to follow GCSE or other courses online at your own pace. You'll be able to take revision periods online, mock exams against your computer. You'll be able to get source material for educational sources which are useful for your course, and you will even if you want to have your own personal electronic tutor. These courses will be subscription- based either for the whole course or for individual usage. The third area of content will be regional. Because our television stations are the most popular media companies in the various regions of the U.K. that we're in, we will use our screen time and our popular presenters to provide local news, local TV listings, regional TV listings, what's on guides, cultural events, current affairs information, local sports, an in-depth, online service about the region in which we are the main TV broadcaster, and we'll link the two together. And the fourth area of content will of course be e-commerce, where either on our own or with partners we are providing a lot of services which are of use to the consumer, whether they're to do with travel or with purchasing various things. Obviously this will be linked to our interactive shopping channel, which we already have on broadcast and digital TV. I believe that a media company, particularly a free-to-air broadcast company, has huge marketing advantages in developing this online business. Really the media companies see very clear advantages. Firstly, we are a great content creator. Content creation is really the genius of Granada. In that respect we're a bit like Disney. We have program creation stamped through us like it's stamped through Brighton Rock. So we'll be able to create content online which is original, exclusive, and related to our top 10 program brands on TV. Secondly, we have this huge advantage of having a massive marketing platform which we can come out of our mainstream broadcast programs with millions of viewers and promote that we are continuing this program service online. So for example, a week or two ago we got to the end of a program series called 'Stars in Their Eyes,' which is a competition between look-alike singers such as Elvis Presley versus Madonna versus Chris de Burgh, or Celine Dion. And in the live final 2.2 million people in the U.K. phoned or registered online their vote for the winner of this final. So the potential for free-to- air broadcasting to market online services is huge. Thirdly, we have the advantage that our air time sales organisation, Granada Media Sales, has long-standing, regular relationships with all of the U.K. and the Western world's major advertisers who advertise on mainstream U.K. TV, and produce our GBP 600 million of ad income. Those relationships will help us offer advertisers online packages for targeted online users more demographically targeted than is available elsewhere, as well as their mainstream advertising spend. So we believe that the era of freeserve, which was launched by Dixons, is now well established, but we are moving on to the next stage, which as well as offering free access to the initial content, we're offering other layers of sticky content which will make G-Wizz a destination site rather than a revolving door. We think this business will be very valuable and will grow with the exponential increase in Internet commercial usage, until it will separate itself to become the fourth key business in the Granada Media Group. So that's the third and fourth businesses. Basically these businesses all add up to being a deeply vertically integrated series of media companies, probably about 18 different companies in all within the Granada Media Group. And we are now about a quarter of Granada Group, our parent company's turnover, but a third of its annual profit. So that's really a description of Granada Media Group.
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