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From Ofcom's updates:
Today, Stewart Purvis, Partner, Content and Standards, gave a speech
http://www.ofcom.org.uk/media/speeches/2008/09/rts_wales_psb at a joint
Ofcom and Royal Television Society seminar in Cardiff on Ofcom's Public
Service Broadcasting (PSB) Review. The seminar considers what the PSB
Review will mean for Wales and the rest of the UK.
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12|09|08
RTS Wales PSB Event
Speech given by Stewart Purvis, Partner, Content and Standards, Ofcom
University of Glamorgan , Cardiff 12 September 2008
INTRODUCTION
Those of us in or around broadcasting love anniversaries. They are the
chance for a celebration of some kind: a lunch, a dinner, a reception, a
party. I remember attending a lunch at one of London ’s most fashionable
restaurants to mark the 18 th birthday of Channel Four on the basis that
it had now ‘come of age’.
This year is the fiftieth anniversary of the first transmission by an
ITV or Channel Three company in Wales and there have been occasions to
mark that.
But few, if any I suspect, to mark the anniversary of the start of what
was meant to be a golden period in Welsh television.
On 20 th May 1968 Harlech Television went on the air as the licensee -
or franchise holder as they were known then - for Wales and the West of
England. Earlier that year the regulator the ITA had taken away the
licence from TWW and given it to a company which was chaired by Lord
Harlech and included a galaxy of Welsh talent on its board including
Richard Burton and Stanley Baker. Among the programme promises was that
Burton and his then wife Elizabeth Taylor would make films in Wales with
their own production company.
On the much-hyped opening night there were a number of technical
mishaps: a section of pre-recorded material went missing in a journey
across the Severn Bridge and one part of the launch programme was
somehow transmitted twice within a few minutes. Burton and Taylor didn’t
appear at all and were rarely sighted again on Harlech.
In one minor and slightly bizarre development a 20 year old from West
London who appeared briefly at the start of a series about students at
local universities - well it was 1968 - was chosen to present the rest
of the series and then to present a new arts magazine series. The
student shared presenting shifts with the famous Welsh actor Kenneth
Griffith. An unusual double act.
Nothing much more was heard of the student, Stewart Purvis, as a
presenter. When the series finished he went back to university to do his
finals but he turned up later as a regulator.
If that’s what happened to me, what became of Harlech Television?
Well Harlech Television with all its promise begat HTV, which begat part
of United News and Media, which begat part of Granada but then the Wales
service became part of Carlton which begat part of the merged Granada
and Carlton entity now known as ITV plc.
No wonder that Elis Owen, Managing Director and Controller of Programmes
for ITV Wales says that his staff are becoming experts at take-overs.
Of course in the past forty years there have been some wonderful moments
on screen on Channel 3 in Wales despite the constant changing of the
guard backstage. Documentaries from John Morgan and Colin Thomas, drama
from Alun Owen and Ewart Alexander. And in the 80s following the arrival
of S4C, both BBC Wales and HTV Wales responded creatively and there
began a mini-boom of independent production companies, raising Wales ’s
profile internationally.
Most recently the cornerstone of PSB in this nation, BBC Wales under
Menna Richards, has witnessed an extraordinary renaissance in
programming with a truly world-wide reach.
And always there, day after day, a solid service of news about Wales
from the newsrooms of the BBC and the Channel 3 licencee.
So if the structure that we call public service broadcasting has a proud
if somewhat complicated history in Wales , what of its future? And what
of the future of PSB in Scotland and Northern Ireland too. And if more
money is needed to ensure the future of PSB in the nations, where is the
money to come from?
THE PSB REVIEW PROCESS
I’ve now been with Ofcom for ten months and I’ve spent some of that time
focusing on the future of television in the nations and regions of the
UK as part of what is Ofcom’s second review of public service television.
In April we published The Digital Opportunity, the first phase of the
review. During the summer we held numerous events in Wales conjunction
with the Institute of Welsh affairs, the IWA. We conducted a round-table
discussion with key industry stakeholders and a series of public
consultation meetings in Llandudno, Aberystwyth and Cardiff.
The consultation document was also debated extensively by the National
Assembly’s Broadcasting Committee, which was established in March, and
Ofcom gave evidence at the beginning and the end of the committee’s
scheduled hearings.
There have been similar processes in Scotland and Northern Ireland , and
as part of those I’ve appeared with colleagues before the relevant
committees of the Scottish Parliament and the Northern Ireland Assembly.
We have spoken to stakeholders throughout the nations and more
importantly we have listened.
By the time the consultation closed in June we had received over two
hundred and seventy formal submissions from stakeholders across the UK.
However, given the high profile of public debate in Wales , the volume
of responses specifically from the television industry here was perhaps
disappointing although it was good to hear from organisations as diverse
as the National Eisteddfod, the Welsh Rugby Union and the Wales TUC.
In the second phase of our Review, which we are due to publish later
this month, we will seek to move the debate on in several key areas and
we will set out new research and analysis that we have carried out,
partly in response to some of the issues and arguments raised by
stakeholders.
There are issues for the short term: Ofcom has to decide on a number of
significant matters affecting the commercial PSB channels in order to
ensure that their delivery of public service broadcasting continues to
be sustainable.
And there are issues for the longer term: Ofcom will have to report to
Government and Parliament next year on the options which exist for
maintaining and strengthening PSB after digital switch-over.
THE ISSUES ACROSS THE NATIONS
Turning first to the short term issues across the nations of the UK ,
it’s no secret that ITV plc wishes to reduce many of its PSB obligations
immediately.
Our analysis, set out in Phase One, shows that well before digital
switchover is complete, the cost for ITV of meeting its PSB obligations
will exceed the value of any benefits. Let me explain what we mean by
that. We are not saying that ITV plc which holds all the licences in
England and Wales will go into deficit. We are comparing the costs and
benefits of being a PSB broadcaster with those of not being one and
instead being a fully commercial broadcaster with no PSB obligations,
such as Sky One and Virgin One.
Programming for the nations and regions is one of the things that makes
Channel 3 so different from those fully commercial channels but it is
also one of the biggest PSB costs. Now undoubtedly with these licences
and these costs come many benefits such as gifted spectrum. The
short-term issue is whether a fair balance between these benefits and
the regulatory costs can be found for the remainder of these licences
which run until 2014. The long-term issue is whether another model is
needed after that.
In Phase One we recognised that the costs of holding a PSB licence in
relation to the ITV Wales service would theoretically exceed the
benefits by next year.
However, the true costs of the ITV Wales service are contained within
those of ITV Plc as a whole, where we estimated that the tipping point
would be around 2011. But the situation is more acute in Scotland where
the Channel 3 licences are held by a separate company ‘stv Group’ and
where the licences are likely to be in deficit somewhere between next
year and 2010. In Northern Ireland , UTV is likely to continue to
receive benefits from its PSB status a little longer.
What all the licensees in the nations have in common is that they are
seeking reductions in what is called ‘non-news programming’ to try to
bring the costs and benefits of PSB status more closely into line.
THE NEW DEVELOPMENTS
While the process of considering these proposals has been underway this
summer a new and very relevant issue has arisen.
ITV plc announced that it was considering the option of handing back its
Channel 3 licences, including the licence currently held by ITV Wales,
thus releasing itself from all obligations other than the minimum
standards which all broadcasters have to accept. It would mean giving up
the access to both the analogue and digital transmission spectrum which
it receives by right as a Channel 3 licence-holder and rely instead on
alternative distribution. One of those alternatives is a company born in
this city, SDN, originally S4C Digital Networks, which ITV now owns.
We should all be in no doubt that licence handback could be a realistic
alternative option for ITV plc but with that strategy would come
enormous risk and uncertainty, possibly unquantifiable risk and
uncertainty for ITV plc and specifically for the Wales (and west of
England) licence which they currently hold. But if it happened it would
also create risk and uncertainty for the other Channel 3 licensees stv,
UTV and Channel TV.
There is nothing to stop a wholly commercial ITV channel containing all
of the familiar ITV1 content such as Coronation Street and Britain’s Got
Talent being broadcast on a fully UK wide basis, but there would be no
obligations at all on that UK wide channel to carry any content
specifically for Wales, Scotland and Northern Ireland or the English
regions.
When ITV first publicly announced the handback option Michael Grade said
on the Today programme; “The real problem of us handing back the licence
…is that it would be disastrous in Scotland and disastrous in Wales ”.
At the same time ITV plc made another public announcement which shows
the stressful times inside the Channel Three system. It claimed that it
effectively subsidises stv, UTV and Channel TV to a total of £25 million
pounds a year. Those companies counter-attacked in public claiming that
in fact value was moving the other way.
Now is not the time or place to explore this debate which goes to the
heart of the viability of the licences in Scotland , Northern Ireland
and the Channel Islands. But it explains why the question of the future
services to viewers in the nations is one of most complex issues we face
short-term and long-term in this Review. The issues are imminent and
sometimes acute.
THE ISSUES IN WALES
In Wales there are specific further issues to be considered.
Our Communications Market Reports for Wales show a heavy reliance by the
public on television, and to a lesser extent radio, in order to receive
news and information about Wales. As Alun Davies, Chairman of the
Assembly’s Broadcasting Committee put it in the introduction to their
report:
“The place of the Welsh language and the role of the broadcast media in
fostering and defining a sense of national identity in a country that
lacks a national press and whose geography mitigates against easy
communications leads to a political salience that is wholly different
from any other part of the United kingdom ”.
In Wales there is currently vigorous competition between ITV Wales and
BBC Wales in the provision of English language news and current affairs.
In our research ninety one per cent of respondents thought it was
important for ITV Wales, as well as BBC Wales, to provide nations
programming.
In the Welsh language, although the BBC provides the news service for
S4C, there is plurality in the supply of current affairs programming
which is sourced from ITV Wales as well as BBC Wales.
In the short-term, we firmly believe that it is strongly in the
interests of viewers in Wales to retain public service delivery from ITV
plc at a realistic level rather than risk losing such delivery altogether.
THE PRIORITIES
We believe that providing competition to the BBC in prime time news and
current affairs is the priority in the nations.
This is not the personal view of an old ITN newsman who spent 31 years
competing with BBC News in television, radio and online. It is based on
the research which Ofcom has done.
LONG TERM SOLUTIONS
With all the uncertainties about Channel Three we have had to consider
other long-term solutions in order to provide plurality in Wales and the
other nations.
It is important to emphasise that any solutions may well have to be
different in each nation to meet effectively different national
circumstances.
In terms of media distribution, Wales ’ geography provides unique and
difficult broadcasting challenges. Currently, digital terrestrial
television services reach only fifty seven percent of households
compared to 73 per cent in the rest of the UK.
Broadband penetration in Wales is currently only forty five per cent and
there are access and speed issues, particularly in rural areas.
Consequently, in the short to medium term, television will still be the
main way public service content is delivered to mass audiences in Wales.
We cannot rely on an online only solution.
THE FOUR MODELS
The four possible long-term models for the future we set out in our
first document were:–
Model 1: Evolution of the status quo (the only one in which Channel
Three is still a PSB). This got the most support in Wales but its
deficiencies were also recognised by some.
Model 2: we called the BBC only option and there was no support for this
in Wales.
Model 3: where the BBC would compete with Channel 4 with some additional
competitive funding. A measure of support for this, slightly less for
Model 4: where all publicly funded PSB outside the BBC would be provided
through broad competitive funding.
For clarity I should immediately explain that in Wales we envisaged that
in all these models S4C’s services would continue. In fact we are
interested to see if S4C can play a greater role in providing quality UK
television for older children in English. But the IWA and Ofcom’s
Advisory Committee for Wales thought S4C was not a substitute for the
need for plurality in the English language in other programming.
Over the summer we have examined some options within models including
the idea of a Channel Three affiliate system suggested by the IWA, and
that of a separate licence for Wales , remembering that the present
licence includes the West of England. We have also looked at hybrids of
the four models and we will report on those at the end of the month.
Today let me summarise what the long-term choices appear to be from the
perspective of the nations:
One is to stop regulating for content in the nations and leave the
decisions to what the Channel 3 licensees like to call ‘their own
commercial risk”. The issue which then arises is why these licensees
should be given the public subsidy of gifted spectrum if they are not
required to commit to specific public purposes.
The second is to provide new funding to sustain the Channel 3 licensees
in providing programming for the nations. ITV plc has rejected the
concept of direct public funding but has left the door open for indirect
funding via some independent intermediary.
And the third is to introduce systems of competitive funding where
interested bodies other than Channel 3 could bid.
This option could possibly accommodate, for instance, the idea from the
Ofcom Advisory Committee for Wales of a funding agency specifically for
Wales to fund non-BBC PSB content on television, radio and on-line.
Similarly the Assembly Broadcasting Committee’s recommendation that some
of what we at Ofcom call the BBC’s switchover surplus could be used to
fund what it called ‘a mainstream service in Wales ’.
In all the competitive tender options the process of specifying the
content which would be required and the method by which it should be
delivered might not be quite as complicated and bureaucratic as some
people fear. Just across the Irish Sea , the Republic of Ireland
operates such a system with relatively little fuss. And programming for
the nations is at least relatively easily described for the purposes of
a tender, unlike some other public service content.
The award of a competitive tender to deliver content for Wales might not
just mean the award of money, but also perhaps the award of high
coverage DTT capacity on which to deliver the service and a suitably
prominent position on the EPG in Wales so that viewers can find it.
In the nations of the UK the bidders for competitive funding might range
from producers to channels, from websites to institutions. The framework
put in place by Ofcom for future access to spectrum, and the potential
for broadband delivery where appropriate, offer greater prospects for
local content providers than ever before so new local TV services and
community media organisations may also wish to join the bidding.
The Welsh Assembly Government and others believe that peak time slots on
ITV1 remain the best way to provide reach and impact for Welsh news and
non-news programmes.
However the Broadcasting Commission set up by the Scottish Government
has this week recommended establishing a new channel for Scotland ,
preferring this over a solution based around Channel Three. The SBC
report describes ITV licence hand-back as “every likelihood…in the next
few years” and says that it would “not be sensible to rely on the ITV
system to deliver Scottish public service content in future”.
FUNDING OPTIONS
So whether the funding for quality content in the nations is to go to
sustaining the old or creating the new, where is it to come from?
In Phase One we identified four sources of additional funding:
* regulatory assets;
* support from the BBC licence fee;
* industry levies; and
* direct government funding.
In our next consultation document we will set out our thoughts on these
in more detail. In advance it is worth highlighting the debate around
direct government funding especially because the Scottish Broadcasting
Commission looks to the UK Government to fund its suggested channel
which it estimates will cost between 50 and 75 million pounds a year.
It may well be that the SBC was influenced by events here in Wales where
there is already have a successful example of direct funding of public
service content, in the shape of S4C’s funding from the DCMS, where
arms’ length oversight has ensured that independence has been retained.
And it is to the UK Parliament and Government that we will look for
final decisions on all this. Ofcom is of course only able to regulate
within the existing legislation.
This also applies to some of the more wide reaching constitutional
questions regarding accountability and regulatory structure raised by
both the Assembly Broadcasting Committee and the SBC. But for now, we
welcome a continuation of the vigorous, well informed and lively debate
about these issues that we have already seen here in Wales during Phase
One. Thank you for input so far and we look forward to receiving your
further views during the Phase Two consultation that begins at the end
of this month.
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