Source:
http://www.ofcom.org.uk/media/speeches/2008/09/vlv_psb
02|10|08
Public Service Broadcasting - Putting the People First
Good afternoon. When Jocelyn and I spoke about today a week or so ago,
she said in her characteristically forthright way “Philip, of course VLV
will want to know where you have got to with your PSB Review but I think
they will also be interested to know why Ofcom has been in existence for
five years and only now has it got around to putting out a document on
citizenship”.
The News Release for this afternoon’s Conference covers both our Public
Service Broadcasting and our consultation discussion document, from
earlier this Summer, about our performance in discharging our primary
duty to further the interests of citizens.
As ever, Jocelyn asks a good question and I hope you’ll allow me a
couple of minutes to answer it. Because it provides a broader backdrop
to where we are in PSB.
Ofcom’s twin duties to the citizen and the consumer are a bit like that
combined Oxford degree subject PPE. The consumer part is the “E” for
economics in that. The citizen part is the PP, for Politics and
Philosophy. One is a science the other two are arts.
And Parliament reflected that distinction in the Communications Act.
The Act tells us how we are to meet our duties to the consumer: “by
promoting Competition where appropriate”. It provides no such guiding
principle for how we should meet our duty to further the citizen interest.
The Act is clear about the factors that make up what ‘good’ would look
like for consumers: in terms of choice, price, quality of service and
value for money. It is silent about what factors constitute ‘good’ for a
well functioning civic policy.
I do not object to this. It is immensely difficult to set out a
comprehensive but concise list of components of the citizen interest in
any way that is meaningful. So we have had to approach our prime duty to
the citizen in a very pragmatic, British way. We go through the various
provisions of the Act and work back to some guiding principles and areas
for action.
The key guiding principle is equality. Of course, that is true for the
consumer: my pound is as good as the next man’s. The difference is that
the next man always seems to have more pounds than me. And that
disparity is a feature of any modern economy.
But in citizenship we are all equal under the law, with the same rights
to participate, to have our voice heard, to have our rights protected
and the same duty to meet our civic obligations.
Where that takes you in Communications is to a practical agenda that
addresses equality, inclusion and plurality. That is:
* Promoting the widespread availability of key services whether
broadcast or broadband.
* Enhancing access to services and content by all groups in society,
with particular focus on the disadvantaged.
* Ensuring that the wireless spectrum is used for the benefit of all
citizens.
Specifically, that has translated as:
* Implementing the current universal Service Obligation for telephony
and the internet and working with Government on the next USO for the
broadband era.
Secondly
* Managing the spectrum to make the most of the reach of the public
service channels at digital switchover.
* And, with the spectrum dividend from switchover, carefully going
through the social value as opposed to the economic value of all the
possible uses identified.
* In media literacy we take very seriously our duty (though would always
welcome more by way of powers and resources to go with it). Even within
the limited resources available, we have become one of the research
centres of excellence. We have been a key sponsor for Adult Learners’
Week and Silver Surfers’ Day. These encourage, particularly, older
people to gain confidence and familiarity in using digital and internet
technology. And we provide ongoing support for UK Online Centres.
* With industry, we have designed content filtering and classification
systems to help parents and carers protect children online. We are
actively participating in and supporting the UK Council on Child
Internet Safety, set up following the Byron Review, and which was
launched earlier this week.
* And let’s not forget the substantial increases in broadcasters’ quotas
for subtitling, signing and audio-description. And a range of other
access services for disabled people such as text-relay.
If that sounds a bit of a laundry list I make no apology. It is
citizenship work in those parts of our responsibilities with which the
VLV will be less familiar.
Coming closer to home we have:
* modernised the standards codes. Citizens today benefit from
broadcasters’ freedom of expression; but still need protecting from
harm, offence, unfairness or invasion of privacy. Dealing with these
issues is one of the bedrock functions of the Content Board.
* And we have punished those who betrayed the viewers’ trust in
broadcasting through the phone-in scandals. We have also put in place
systemic remedies to prevent any re-emergence of the culture that led to
those scandals in the first place.
And, of course, public service broadcasting, where our concerns are
focussed almost entirely in citizenship issues. Why? Because, in
economist’s speak, the growth of market provision that digital and the
internet have enabled, have dealt with most of the classic consumer
market failure rationales. In plainer English, as a consumer you can
get, at what is for most people an affordable price, more or less what
you want in television.
So the answer to Jocelyn’s question: why only now put out something in
citizenship? It is this: we have been doing a lot on it. But it has been
piecemeal. And citizenship, unlike economics, does not have a unifying
language or set of themes that can simply be lifted off the shelf.
Ofcom can, equally, be caricatured from the other direction about
over-intellectualising the citizen interest. We had some of that a month
or so ago in Peter Fincham’s McTaggart lecture. Now, he was having a bit
of fun to jolly up the producers in Edinburgh. In the process he was
skilfully pitching ITV’s case to retain PSB privileges but with no
matching obligations. “Trust us, get rid of all that unnecessary
regulation and we will make great programmes” was the message. He didn’t
think much of our attempt to define public service purposes and
characteristics either. “What is wrong with Reith’s ‘Inform, educate,
entertain?” he asked.
Well, nothing - save this: the market does quite a bit of informing,
educating and entertaining. So if you wish to justify a substantial
public intervention to provide the citizen with something that the
market will not provide them as consumer, you need something a little
more precise than ‘inform, educate, entertain’.
Let me try you with two questions. Name me a programme that meets every
single one of our PSB characteristics?
* High quality
* Original
* Innovative
* Challenging - making you think
* Engaging
* Widely available
Now who commissioned it?
Answers: Life on Mars and Peter Fincham.
Ah, he would argue, but that was entertainment. How did that get tangled
with your dull and worthy public purposes? Answer: purposes 3 and 4. It
was an iconic (and ironic) reflection of UK cultural identity. And it
represented diversity and alternative viewpoints. It reminded us just
how far as a society we have evolved on issues such as diversity in one
generation. And as for alternative viewpoints, nowadays they don’t get
much more alternative than those of DCI Gene Hunt.
So public service broadcasting can meet public purposes and civic needs
without being the niche, the worthy and the dull. But there are two
truths. First such programming does not get made by the market - even in
entertainment - in any quantity. Second, outside the BBC which
(thankfully) appears to be in reasonably rude health, our PSB system is
under pressure as never before and needs a fairly radical overhaul.
That statement can elicit two conflicting responses. First, well if we
have the BBC how much does the rest matter? Second, you, Ofcom, have
clearly been asleep on the watch instead of holding the commercial
public service broadcasters to their obligations.
To the first I reply we must, indeed, keep a strong BBC. You do not make
PSB stronger by weakening the BBC. But you also do not make the BBC
stronger by weakening PSB. Audiences tell us they value a choice of
providers of PSB. Not everywhere. Not in every genre - religion for
example, audiences seem content to leave to a combination of the BBC and
the market. But in most genres - entertainment, drama, children’s,
national and regional news, serious factual current affairs - they want
choice. Many groups who do not normally watch the BBC watch public
purpose programming on other channels.
We have tested that audience preference as many ways as we know how,
including a willingness to pay survey. The answer is a robust desire for
choice in public service programming.
To the second response, my reply is: do not confuse the messenger with
the message. We warned three years ago that the old system of commercial
PSB was becoming unsustainable. It is now broken. It is not that ITV or
five or the other Channel 3 licensees are bust. As commercial entities
they remain profitable. But they are just that: commercial entities
answerable to shareholders. The pluses of holding a PSB licence will
shortly be outweighed by the minuses. As early as months from now in the
case of some Channel 3 licences. And that means it could make sense for
Channel 3 to hand its licence back and stop being a PSB.
That means that tough choices about the priorities for ITV and five now
need to be made.
Argue, by all means that we have proposed the wrong set of choices and
offer alternatives. But do not argue that choice does not need to be made.
Even Channel 4, which is not subject to shareholder pressures is subject
to commercial imperatives. To break even, Channel 4 would need to cut
their investment in public service content, year on year from here to
2012 to the detriment of the viewers’ interest.
Our best estimate of the overall gap that needs to be replaced is
between £145 and £235 million a year by 2012. That assumes that the
residual value of the regulatory assets at our disposal - privileged
access to spectrum and favourable positioning or carriage rights -
remain worth about £185 million a year.
So if the old system is broken, what are the key issues?
They are:
1. What is the best set of choices for what we, as a society want?
2. Who delivers it and how?
3. How is it to be funded?
Let me take these in turn.
Again we have been guided by what audiences say. They tell us that the
existing PSB institutions command values of familiarity and trust. In
turn this plays on to reach and impact. If your objective is to ensure
that public service content delivers public purposes as widely as
possible, these are key metrics.
Audiences say that they value original British made content across the
range of genres. Those PSB genres that are most under pressure are so
not because they are worthy, or dull, or (except possibly for children’s
television) niche. But because they are relatively risky. And relatively
costly compared with the safer, commercial genres that the market or a
wholly-commercial ITV would seek to provide anyway.
Thirdly audiences are increasingly getting public service content online
and on-demand, not just from the traditional linear broadcast schedules.
The latter remain powerful. We are not blinded by technology. But we
need a system that allows both existing and new providers of public
service content to use the new media to reach and engage with the public
in a new way.
Audiences were, as I have said, less concerned about choice of provision
in some genres. And certain types of programming have become relatively
expensive to make for the audience numbers they attract, or the value
those who do watch ascribe to them. Regional programming that is not
News and Current Affairs is perhaps the most salient of these. Regional
cookery - valuable though it is - is less essential to audiences, and
thus to us than regional news.
In a world of hard choices, the choice we propose short-term is that we
focus spending and effort in regional and Nations programming on news,
which audiences value. On newsgathering specifically, which means the
capacity to report original stories about where people live not just to
package and present them. And on news in peak which audiences watch
most. A focus on news in peak aligns ITV’s own incentives with public
purposes. It is in their self-interest to invest in good quality
programming to hold their audiences into the next programme against peak
time competition from others.
In short, our aim is to squeeze every last penny of public service value
from the declining worth of ITV’s licence to use the airwaves.
In the longer term we believe that the provision of content for the
Nations - and in particular dedicated news - remains an essential
requirement for any future model.
How is PSB to be delivered in future? The BBC is and must remain the
cornerstone. We face a crossroads with Channel 4. You either believe it
has a significant public service role in the digital age or you do not.
We believe it does have a significant role alongside the BBC, building
on its current contribution; and enhancing its remit where that can play
to its core strengths. More out-of-London production, programming for
older children and new media partnerships each potentially fit that bill.
It needs an economic model and funding mechanism to support this. Our
estimate - which Channel 4 believes is too optimistic - is that they
will need replacement funding of between £60 and £100 million a year by
2012 to deliver their current remit. More if elements of their Next on
Four Proposals are adopted.
We have always argued that Channel 4 can go some of the way through
self-help. Though we have never pretended that is an easy course. Since
they are not a producer but simply a commissioner, they have not had the
programme library and rights that are the mainstay of BBC Worldwide. So,
for Channel 4, self-help can be painful, as it is proving with last
week’s cutbacks.
ITV1 and five should in our view focus between now and 2014 on their
core strengths: UK origination and news and (for ITV1) news in the
nations and regions. Beyond 2014 - the end-date of their current
licences - the arguments for retaining their public service benefits and
obligations are more finely balanced.
We also believe that the current system - whereby all PSB delivery is
exclusively tied by statute to a limited number of institutions with
hard wired privileges and duties is outmoded and inflexible for the
digital age.
We believe that, in the medium term, there may well be a place for
contestable funding.
Alongside existing public service institutions it would allow new
players, with new ideas, to enter the public service arena. [Could be
new media. Could be existing newspaper or news gathering organisations.]
Innovation has always been the lifeblood of a vibrant PSB system.
And that is what we want to see.
As to how it is paid for, the decision, ultimately, is one for
Government and Parliament. Our job is to provide them with credible
options from which to choose. We believe that all the funding sources we
set out in our first consultation remain credible. During Phase 3 we
will flesh them out in detail.
To be clear, we do not support top-slicing the BBC where that would
reduce its core programme and services budgets.
We also welcome Mark Thompson’s repeat of the offer made some months ago
for the BBC to engage in partnerships with others to enhance PSB. This
is one BBC repeat we don’t mind in the schedules. But we look forward to
seeing the actual programme!
In this regard at least 3 principles are important
* significance
* autonomy
* fairness
When we all do see the detail of the BBC's proposals, we owe it to the
viewer and the rest of the sector to ask three questions.
* First, are these partnerships on a big enough scale to make a real
dint in the £145-235 million gap identified? Responses from other
stakeholders suggested the BBC'sinitial ideasdid not have that big an
impact.
* Second, is the partnership meaningful? What to the BBC is genuinely
meant as a warm embrace can feel to the receiving party as a bear-hug.
* Third, when does amiable co-operation become anti-competitive cartel?
We are no longer in the cosy world of just four broadcasters.
'Partnerships' can have unintended consequences for the wider media
ecology or foreclose new entrants who will provide content that meets
public purposes.
As a competition authority as well as an organisation that cares
passionately about public service broadcasting, we must be alert to that.
None of thismeans partnerships can't potentially play a role in funding
public service broadcasting in the future, and we welcome any new
contributions to the debate.
But we all need to be realistic. It may prove to be a taller order in
the delivery than in the saying.
We have also set out our position on a number of short-term issues.
In particular, in relation to ITV’s specific proposals to us in relation
to new and other programming. Our decisions flowed not from any
“negotiation” but from a rigorous, evidence-based look at audience need,
economic practicality and consistency with our longer-term assessment of
the best model for PSB.
I conclude with two points:
* This is now about deciding what our priorities are for the future. The
current system is not sustainable. So, looking at the options, we must
consider what we value most.
* What we are trying to do here is deliver programming that is
innovative and original, that ensures that the public purposes are
delivered by really great programming and content that has impact and
reaches people.
Thank you.
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