Welsh Affairs Committee
Oral evidence: One-off session on S4C, HC 621
Thursday 9 September 2021
Ordered by the House of Commons to be published on 9 September 2021.
Members present: Stephen Crabb (Chair); Tonia Antoniazzi; Simon Baynes; Virginia Crosbie; Ruth Jones; Ben Lake; Robin Millar; Dr Jamie Wallis; Beth Winter.
Questions 1 - 36
Witnesses
I: Rhodri Williams, Chairman, S4C; and Owen Evans, Chief Executive, S4C.
Witnesses: Rhodri Williams and Owen Evans.
Q1 Chair: Good morning. Welcome to this session of the Welsh Affairs Committee. This morning we are joined by the Chairman of Welsh language channel S4C, Rhodri Williams, and the chief executive, Owen Evans. Good morning, gentlemen. Thank you very much for your time for this session looking at various issues affecting the channel. Rhodri, you will recall that your pre-appointment hearing, just before you took up the chairmanship of S4C, was the last time that this Welsh Affairs Committee was under one roof together in Westminster. Obviously the pandemic has intervened. It has been an extraordinary period, probably not least for broadcasters.
Over this first period of your chairmanship, Rhodri, throughout the pandemic and grappling with all of the different strategic issues that that threw up, what are some of the most important challenges that you have had to get to grips with as chairman? Give us a sense of your take on where the channel is at right now emerging from the pandemic.
Rhodri Williams: The first challenge that arose at the time of the pandemic was maintaining the programme service. The important thing then, as far as the board was concerned, was to support Owen and his team and the wider creative sector in adapting to unknown circumstances at the time. Nobody knew what content would be available and for how long. There were some large losses to our ability to broadcast. I am thinking particularly of live sport, which is an important aspect of S4C’s offering, but also national events such as the Royal Welsh Agricultural Show, the Urdd Eisteddfod, the National Eisteddfod, which are not only important events in our annual calendar, especially for linear broadcasting, but also provide a lot of material that is then reused at other points in the year and repurposed. That loss of content was the immediate challenge that Owen and his team had to meet.
I noted in our annual report that sometimes difficult situations and circumstances get the best out of people. I am glad to say that I think the team at S4C in the first place responded quickly and vigorously to the challenges. That was reciprocated by the creative sector because, as you will be aware, S4C itself creates very little content directly. We are reliant on others to provide our content. The decisions that were taken to make finance available for alternative content and to do that quickly enabled the programme supply, the content supply, to continue. It also enabled those small businesses, which are the backbone of the creative industries in Wales, to survive the crisis. I don’t think we should underestimate the effect it might have had if that money had not been available and available quickly. That is my starting point.
Secondly, something that moved in another direction was that, when I spoke to you last, I spoke about the need to redefine S4C’s services, to think of ourselves as a completely digital entity and not think of ourselves simply as a linear television channel. We have certainly done a lot of work on that, but of course that could not progress as quickly as I might have liked it to. I would be the first to admit that that was frustrating at times, but it was absolutely the right thing to do not to try to push ahead on that when all hands were at the pump ensuring that what audiences were receiving from us was still there.
Thirdly, and importantly from my point of view, we had vacancies for board members and needed a board refresh. In conjunction with the Secretary of State and his officials, we were able to move forward and appoint four new board members. They have brought a vast array of experience across a variety of sectors—finance, audit, risk management, communications, audience research—and have put the board in a better position to be able to consider what more needs to be done to complete that transition and to complete the vision that was set out by the late Euryn Ogwen Williams in his independent review for S4C. Now, as we are slowly moving out of the pandemic and the effect that has had on our business and on the industry, I think we look forward with great confidence. Once the new financial settlement is in place, I hope that we will be able to complete that work and move forward.
Q2 Chair: Thank you very much. You talk about progress towards a vision. I remember, at your pre-appointment hearing, the last time you were in front of this Committee, you spoke very interestingly about the changing media landscape and the strategic challenges that that throws up for S4C. Would you say that the vision of the future S4C is clearly defined, or is the landscape continuing to change and evolve at such a pace and in such radical ways that no one is quite sure what the S4C of the future will or should look like?
Rhodri Williams: I think it is a bit of both, to be honest. It would be foolish to say that we can foresee the future and say with absolute certainty, “This is what will be required in future.” On the other hand, there are some very clear things that we know will be the case. The last 18 months have been quite a good period for audience use of our linear services. Ofcom reports show that there has been an across-the-board increase in reliance on linear television services, as people wanted to find reliable and relevant sources of news and current affairs about the pandemic, and S4C has seen a similar response. But I think the long-term trend, the move away from live broadcast linear television, is one-way traffic, and I don’t think there is any going back on that in the long term.
The bit of it that is very clear to me is that the S4C of the future has to be an all-digital service that is providing what audiences require on a variety of different platforms and, hopefully, to do that in a context where it maintains a degree of prominence. Perhaps that is something we can come back to later, but that bit of it is clear. The question that remains for us is, at what speed does that transition occur?
For the decision makers—and this is obviously a matter for Owen and his creative team at S4C, not for the board to decide which bits of content are commissioned and how they are distributed—the question is to decide how best to deploy the resources to ensure that, to the extent that it is possible, we are keeping pace with the changes in audience behaviour and expectations. It would be tempting perhaps to try to go too far too fast and to move ahead of the audience.
There is a very loyal audience who watch our linear service regularly and are very important to us. I would not want to give the impression that they are going to be left behind somehow, that we are going to be only distributing content on Facebook or Tik Tok and the new platforms that are very important to us. They are very important side by side with the linear channel, not replacing it. I think there is a degree of clarity needed so that we know very clearly in which direction we are moving, but there will still be practical decisions that will need to be made, and they change on a running basis.
One of the signs that we can look back at, which augurs well for the future, was our decision to establish a digital news service that not only uses material that comes from the existing sources of broadcast news and current affairs—from the BBC and ITV Wales—but also draws content from partners, such as Golwg360 and other sources, which add to the plurality within the Welsh language news media. That is an example of where the decision has been taken, the service has been launched and it is doing well. It is a good sign for the future if we can be as successful with other ventures as we move forward.
Q3 Chair: Thank you very much. That is very helpful. I will bring in Owen Evans, the chief executive. Do you and your team feel that you have enough resources, the financial firepower you need, to be able to reorient the channel towards those new platforms that Rhodri has just been talking about, whether it is your Tik Toks or your Facebooks? Are you geared up to be able to take advantage of the opportunities that these new platforms present?
Owen Evans: There are certain internal challenges and some external challenges as well. Internally, and this is one of the messages we were very clear to DCMS on, linear is still important. As Rhodri said, we still have a very faithful audience who will tune in to the linear channel and expect to have good-quality content available when they want to watch. There is plenty of research that says linear is not quite dead yet. It is still a very important part of the service we provide. However, we have to move. The old adage, “Never be behind your audience, but never be too far in front of them,” is very true here.
We have invested quite significantly in digital over the past four years. When I came in, about 2% of our content was digital. It is up to 20% now, but we are coming to a point where, for the availability of S4C’s online presence, the requirements are such that it is becoming very difficult to maintain what I would call a minimum viable service on the linear channel but, also, to be able to invest at sufficient scale to take the opportunities that are available to us on the digital platforms. Where that becomes important is that we are very good with traditional audiences but, if we go back to what we are here for, which is the furtherance of the Welsh language, we need to be bringing on board viewers who are different now to how they were 20 or 30 years ago.
When I grew up, most Welsh speakers lived in west Wales in villages that spoke Welsh, with parents who spoke Welsh, who were educated in Welsh and who quite often went on to work in Welsh in their local vicinity. What we have now is a quite markedly different trend in the language where, because of the success of the education system primarily, Welsh is now quite spread across Wales. Welsh has a very strong footprint across the nation, but more and more you are seeing households with two parents, one of whom might speak Welsh and one of whom might not speak Welsh, and it is cutting through to the younger generations who, at 9.24 pm, when the kids have been put to bed or their caring responsibilities are over, want to just dial into an easily available app to find content on the shelf that they want to watch, and we need to be moving into those areas. We can do so much of it and we have reprioritised money, but it is becoming quite difficult to invest at the scale that we need to while also maintaining the linear channel. Those are the internal challenges.
On the external challenges, I will probably move towards the Ofcom, DCMS arena, where they are talking about the prominence that public service media providers get on the main digital platforms. That is as important as the content, because people need to find and be aware that that content exists, as well as us meeting the challenge of producing it in the first place.
One of the things we have done over the period of Covid, which has led to our submission going into DCMS as part of the settlement process, we hope is a very logical explanation of where we are in retaining the audiences we have, and how we feel we need to invest in the preparation of services and platforms to make sure that the audiences of the future engage with us.
Q4 Chair: Thank you very much. That was very helpful. Before I start bringing in other colleagues who want to ask questions, what is emerging as the most important digital platform for S4C? Is it BBC iPlayer, is it You Tube, is it Facebook? Is there an emerging go-to platform that you are finding particularly successful?
Owen Evans: It is horses for courses. It depends who we are targeting. iPlayer does a great job for us. Clic, our own player, has grown quite significantly—45% in the past year. The benefit of Clic to us, as opposed to iPlayer, is that we collect the data, so I know who is watching and what they are watching. It means I can take commissioning decisions based on that, but I can also market more effectively one to one, as opposed to one to thousands. Clic is very important to us and will continue to be important, as is iPlayer. Facebook is increasingly important for 18-pluses. Tik Tok is very important for us to get the younger viewers under 18 involved. Twitter has its role.
I think where we are moving towards as a broadcaster is not the old days of commissioning to fill a linear channel, but that we are looking at audience segments. We are looking at, first, what sort of content do these people want and, secondly, how do they want it delivered to them and how are they going to find out about it? The majority of young people do not read the old programme guides you see in papers anymore. Frequently it will be through social media that they find out about programmes from friends. This is where you have to bring it all together. I think all the platforms have a role in making sure that we can distribute and engage with the audiences we need to get to.
Chair: This is a fascinating discussion, and there are all kinds of other questions I would like to ask you about how the algorithms of these platforms work and whether they work as effectively for Welsh language content, being able to push suggested content at potential viewers, as for English language broadcasting, but I have got a whole list of colleagues all desperate to come in.
Q5 Ben Lake: Bore da i chi’ch dau. Hyfryd i’ch gweld chi. Mr Evans, I was very interested in some of your comments about the way in which the Welsh language now has a greater footprint across Welsh. Of course, it leads us to an important function that the channel has served for decades now in bridging the gap between those who are first-language Welsh speakers, those who are learning and those who don’t speak Welsh but have a fondness to it. What sort of role do you think that sport, for example, serves in that endeavour? How important is free-to-air broadcast of some international sporting events?
I know from my own inbox that a lot of my constituents are very keen to maintain as much international rugby—and football for that matter—on free-to-air channels. Do you have a view as to how important sport is in that mission of introducing the Welsh language to an audience that is not first-language or necessarily learning the language?
Owen Evans: Sport is important. There is no doubt about that. The audience figures and the reach you get from sporting fixtures, particularly internationals, is of significant value to S4C. In the past when we have had, for example, an international rugby game on we try to weave in, in the adverts between the games, programming that is likely to draw a lighter Welsh speaker, or a non-Welsh speaker even, into some of our programming, whether it is for children or for learners themselves.
It is vital for us to be able to access audiences that are coming to us who might not come otherwise. For example, on Clic we have 3,000 Scottish signatories to the site who all came across because Connah’s Quay Nomads played Kilmarnock. Am I showing to educated Scots in Welsh? Well, probably.
It is vitally important because what we see increasingly, as we understand the data and the stats and who these people are, is we bring audiences to the channel through sports who would not come to us otherwise. The ability to capture free-to-air sporting activities is a vital way for us of bringing new audiences in, and then for us to be able to capitalise on that by introducing them to programmes that will hopefully interest them in Welsh or will spur them on to develop their Welsh language skills.
Ben Lake: Chair, I know there is interest in this so I will cede the floor to anybody else who wants to ask any questions.
Q6 Tonia Antoniazzi: It is nice to see you both again and good luck in your new job, Owen. The 2017 review concluded that S4C could and should do more to deliver greater public value. You have spoken about Clic and the change in the demographic of Welsh speakers, but what steps have you taken to ensure that the channel achieves this? I will go to Owen.
Owen Evans: One of the first things we did after Euryn’s paper was published, and one of the big things we concentrated on, was to deliver better public value to work with partners more effectively. We had worked with partners before, but if I give an example of our learners’ provision—going back to Ben’s question—when I came in, the learners’ provision was in a bit of a ghetto. It was Sunday morning. If you were to look for it, there it was every week—“That is your little bit down there.”
The first thing we did after his paper was published was to start working with the centre for lifelong learning in Welsh in Carnarvon. We said, “Look, guys, this is what you do. Can we work with you? I am absolutely happy to recommission our entire slate for learners and align with the provision you are making to the 40,000 subscribers to your service.” That was one example where we brought Welsh language learner programmes to the mainstream and tied it in with the provision of some of our partners. We have also worked with Mudiad Meithrin. We have worked with the national theatre. I think we have worked more effectively across the board, through the Welsh Government quite often, which was one of the recommendations made and accepted by Euryn and DCMS. In the first context, we have done that.
One of the other things that Euryn was very strong on—and Rhodri alluded to this earlier—was that we can’t be seen as a channel that is only securing the support of one audience. We need to be more diverse in what we are doing, both who we are representing and who we are seeking to engage with, but also across the various age groups and interests across the nation.
I think we have done a lot of that through our service Hansh, for example, which when I joined was getting about 40,000 views a month. We have brought in new presenters from all sorts of backgrounds so they are engaging with new audiences, which means that it is regularly hitting 1 million views a month now and at its peak during lockdown was hitting 1.4 million. I think, across a range of activities. that we have invested in areas and worked with people, which is delivering more value to the public than we would have done before.
On the brass tacks of, whether we are an efficient organisation, one of the things that has been recognised by DCMS is that we have stripped out as much cost as we can. We have relocated our HQ to cheaper premises. We have outsourced our broadcast to the BBC, and I think we are a very efficient organisation with our overheads, with less than 4% now, which is low for any organisation of our type. I hope that you will see that the real focus is on the screen, whatever screen that may be, the audience and providing good value to the citizens of Wales.
We are a public service media provider, which means that we do stuff that is sometimes not going to get huge viewing, but people engaging with us is important. That is why, for example, we are moving away from simple overnights, which have been growing, which is good, to engagement through the social media as well, just to check if people are engaging with what we are doing or whether it is more of a passive engagement, which probably doesn’t deliver as much value to the language.
Q7 Tonia Antoniazzi: How confident are you that, if an independent review were to be conducted today, it would conclude that S4C is delivering a greater public value? It sounds like you are quite confident, Owen.
Owen Evans: I hope—and I am touching wood seriously here—that it would say that we are delivering better public service value. Have we done it all? No. As Rhodri mentioned, the discussions we have been having with DCMS recently, about how we think S4C can move into a place that will secure its importance and relevance in future, are critical. There is definitely more work to be done.
Q8 Beth Winter: Diolch yn fawr a chroeso. Diolch am ymuno gyda ni bore ‘ma. Mae’n biti ein bod ni’n methu gwneud y sesiwn yma drwy gyfrwng y Gymraeg, ond efallai wnawn ni wneud e tro nesa’. My question relates to the Welsh language specifically. As we know, the Welsh Government have made a clear commitment to achieving 1 million Welsh speakers by 2050 and the review recommended that S4C should look to develop partnerships to promote the learning of the Welsh language. Can you tell me a bit more about your work in that area, please?
Rhodri Williams: As Owen has outlined, it has to do with rethinking how people use and engage with the language. I think it has been a temptation for many people who are keen supporters of the language to somehow think that everybody is either like them or should be like them. Of course, what we have learnt—and it is not particularly recent; I think it has been realised for many years now—is that the Welsh-speaking communities are as diverse and as varied as any other community in Wales. There are people from different social and economic backgrounds and different ethnic backgrounds, and people who use the language in completely different ways.
The starting point for us, as Owen outlined, is to realise that and to secure content that people can engage with in ways and on platforms that they find useful. Doing that with expert guidance for people who are learning the language—and partnering with the National Centre for Learning Welsh in Carmarthen is a key element of that. It is also about wider partnerships with other organisations within Wales. I am thinking of Young Farmers, for instance, or the Urdd, which also plays a key role here in making ourselves not only visible but accessible. There is a kind of Welsh language high culture—if I call it that—that can be absolutely unintelligible to people from different backgrounds.
To give you a concrete example of something that appears on our services, Jonathan Davies’s programme “Jonathan”, which is broadcast before international rugby matches, is a programme that has wide appeal to people who do not necessarily read and write Welsh as a matter of course. They happen to speak it; they like to speak it and they enjoy being entertained in Welsh. That is something that we need to be able to replicate on a wider scale, and I think there are examples where we do that. Our primarily digital service Hansh, for younger viewers, is also an example of where we have been able to reflect far more diverse and various facets of Welsh life than what was the traditional approach many years ago. That is my take on that.
Owen Evans: Not to repeat what Rhodri has said but, as you would expect, we have sat down with the Welsh Government and a number of partners across Wales and said, “How can we help?” For example, in discussions with the Welsh Government, one of the big things they said is, “We need to get you involved in education more.” To give you concrete examples of what has happened there, I have personally met with Welsh heads and teachers and, for the first time ever, we are now commissioning children’s programmes where we involve newly qualified teachers. They are there to help us develop materials for Welsh as second language teaching, which can be a struggle in Wales.
One of the things that was thrown up through that was that many of the teachers teaching Welsh as a second language are not proficient in Welsh themselves, so there was an onus on us to produce material that was better tailored to them, as well as the pupils, to provide them with more materials to support that teaching. We did that as a pilot that worked very successfully. We are also using the children’s programmes, for example, through Cyw to better reflect audiences. We have started mandating, for example, the use of more diverse presenters, the use of more diverse people behind the camera as well.
Education is clearly one area. The other is the economy, of course. One of the key things about S4C, as Rhodri mentioned, is we are commissioning broadcasting. We produce very little, so in terms of a pound into S4C, most of that money goes out the door, frequently to some of Wales’s most deprived areas. We have worked with suppliers in those areas to make sure that we can build the sector. We have also worked very closely with TAC—Teledwyr Annibynnol Cymru—the representative body for the sector, in producing more training. We need to make sure that, as we move from a traditional model to a model that is more based on all platforms and engaging with all audiences, we have the skills to do that. I am quite proud of the fact that we have had over 3,000 people through training programmes last year, through a fairly nimbly formed partnership with TAC, which I think has been a great success, particularly over Covid. The last bit is that we are currently working on an MOU with the Welsh Government with Creative Wales on how we can support and dovetail with some of the activities that they are doing.
I hope that we can prove that we are moving towards being an inclusive organisation that is happy to work with others. I will be quite honest and say this is not my money; it is money given to me by Government to do things to help the Welsh language. Let’s see how we can come together and do things.
I think the news is another example of that. As Rhodri mentioned, we could have launched our news service and done it ourselves, but let’s work with others, using content from other people. We are attributing that content to those people; the links go through to their websites. Rather than duplicate, we are trying to aggregate more and to work more seriously with our partners.
Q9 Virginia Crosbie: Bore da, gentlemen. I have been learning Welsh since I was elected. I sound English but I am actually half-Welsh. Bangor University and Nant Gwrtheyrn, who you mentioned, have been exceptionally helpful. The chair of my NFU, Brian Brown, suggested I watch S4C to help my Welsh, and you have an excellent farming programme. On that programme I saw some of the farmers whose sheep had been attacked by dogs. I realised it was a huge problem for farmers, not only in Wales but across the UK and so, because of S4C, the Dogs (Protection of Livestock) Bill was published today. I want to say a big diolch yn fawr to you and your team. Without S4C, this Bill would not have been published and it will make a huge difference to the farming community. I also got 95% in my Welsh exam, so thank you very much for that.
Owen Evans: 5. Llongyfarchiadau—da iawn. I think that “Ffermio”, which is our farming programme, is the last remaining programme in the UK that is focused purely on farming, and we are quite proud of that. I think it is an excellent programme, as an ex-shepherd myself. It is a programme that really does reflect and engage with a community that is potentially under-served occasionally across the nation. We are very proud of that and I am very proud as well that we have been able to contribute like that. Thank you.
Q10 Ben Lake: I don’t think I ever had 95% in any Welsh exam, so I clearly need to watch more S4C. On the topic of the way in which the channel helps Welsh learners, we have just heard—I apologise for going back to the subject—about the role of sport. As you have already mentioned, the medium of sport as broadcast on S4C introduces the language to new audiences. I am sure we all have rugby clubs in our constituencies who have contacted us with concerns about losing Welsh international matches from free-to-air TV, but should we also be concerned that it will have an impact on the wider effort of boosting the number of Welsh speakers and the valiant efforts that you are already doing to bring the Welsh language to new people?
Owen Evans: You are probably alluding to what is going on at the moment about the autumn internationals as much as anything. It is a loss if this type of programming goes behind a paywall. It is a valuable tool for us to bring people to the channel. This is not a criticism of Amazon at all, because they will take their own commercial decisions, but the loss of the crown jewels, effectively, for Wales in bringing viewers to the channel does not help the cause.
While I absolutely understand Amazon’s decisions behind potentially making their own Welsh language programme, the weakness is that you have something that is sitting behind a paywall and is not going to be any use to channel people into other engagement with the language that they might develop an interest and, hopefully, competence in. I think it is an issue. I do understand why Amazon might make decisions like that. I am not criticising them, but I think, in the framework of one big push to make sure that the Welsh language gets all the support it can get, it is something where I would not want to see a strong precedent developing.
Q11 Chair: Owen, for the benefit of the Committee, could you help us understand this clearly? For previous autumn international rugby matches, S4C has been able to negotiate a carve-out—a portion of the rights—so that S4C could run those matches. For this year’s autumn internationals, Amazon has an exclusivity deal that prevents that from happening. Is that correct?
Owen Evans: If I give an example of the Euros, Sky had the rights to that. They were encouraged to provide a Welsh language opt-out and S4C was successful in negotiating that opt-out. Compared to the figures Sky gets, we are not of that volume but we provide a service that has brought a lot of people, and we got very good viewing figures and, as importantly, a very good reach through that.
With the autumn internationals, it is a commercial bidding round. Amazon has won it in partnership with Channel 4. Within that they have to provide a Welsh language opt-out, but it can choose to do it itself. Normally what would happen is that a broadcaster would say, “Okay, we’ve got a Welsh language opt-out. S4C, let’s negotiate”. It is not a freebie. We would pay for that content and we would develop a suite of programmes based on that and integrate it into our schedule.
What is potentially happening with the autumns for the first time—this is not the first time that the Welsh language opt-out has not been granted, but it is the first for the autumn internationals—is that Amazon itself will create the Welsh language programme of coverage for the matches. We have been negotiating with Amazon to get the highlights package, but it means that we would not be showing the free-to-air live games that we would normally use to bring in viewers to the channel and then try to engage them.
Q12 Chair: As a consequence there may be Welsh language provision for the relevant matches that we are talking about, but that would be behind the Amazon paywall, correct?
Owen Evans: Yes.
Q13 Chair: Is that a negotiation primarily between the individual rugby unions and Amazon?
Owen Evans: It would be between ourselves, the Six Nations, who co-ordinate the bidding rounds for the autumns, and the winning bidders. It will be between Amazon, Six Nations and ourselves. If Amazon and the Six Nations decide, “No, we are perfectly happy that Amazon is going to provide this Welsh language service,” there is very little that S4C can do about it, unfortunately.
Chair: I speak as somebody who uses Amazon Prime and enjoys that platform, but I would regard it as an enormous loss for Welsh language coverage particularly for Welsh international matches to be lost from free to air. I think free-to-air provision is vital in sustaining the grassroots of rugby in Wales.
Q14 Ruth Jones: Thank you very much to both of you for your time today. It is good to hear the work you are doing to encourage new viewers but also to retain your existing ones. I am looking at your annual report for 2021 and I see that your figures are up to 823,000 from 702,000, so that is great, but a majority of those are from outside of Wales. Why do you think that is?
Owen Evans: We measure reach on both a Welsh and a UK basis. We are increasingly finding that, in the same way that Welsh language patterns have changed in Wales, they have changed across the UK. There are now a lot of people who are parents and have gone to work in England who have retained a very strong interest in the language. We are growing quicker outside of Wales than we are inside of Wales, as people seek to retain that link with the language. Where we are seeing the interest predominantly is sport but also, very interestingly, in young children’s programmes.
We have done a little bit of research anecdotally on this, and we find that parents, or a parent, who live somewhere across Scotland, England or wherever are very keen to engage their children in the Welsh language. We see a very strong demand for that type of configuration across the border, and long may that continue. Again, if we can draw them in that way and engage them with content, as parents and as children, it is a way of thinking of the Welsh language as something that is not just community based anymore but is based across the digital diaspora, and that we can contact people wherever they are and engage with them. I think it is a positive thing.
The important thing is that they are growing in both. I would not want to see one growing at the expense of the other. It is not a specific focus for us, but it is something that has been interesting to note and that we are keen to encourage. The availability of Clic with buttons in it, for the children’s viewing but also for learners, is an example of us trying to make every effort possible to make it easier for people to engage with the content they need to.
Q15 Ruth Jones: That is interesting. It is obviously quite a strong export from Wales. Going on from that, your news coverage and the numbers who access your news is a much lower percentage than for sport, for instance—only 6% maybe. What do you think about that? Do you think you will be able to grow that percentage? I will ask Mr Williams that first.
Rhodri Williams: Like all other public service broadcasters, use of news, current affairs and more serious factual content is always going to be less than sport and wider entertainment programming. What is important for us is that, like our other programmes, our news services, whether they are on the linear channel or on our digital platforms, are accessible to people. There is always a need to keep the style and openness under review, as well as the kind of language that is used and the way that information is presented.
A key aspect of that is not relying simply on the linear main news programme that is broadcast daily and the headlines at other times during the day, but also making sure that there are shorter clips that are available on a variety of digital platforms, which can then attract people if they want to see more. Perhaps that will be sufficient for them. If it is a headline about—well, it doesn’t really matter about what—something that is of interest to a user, perhaps that is sufficient. Others might see that, come across it through social media and then decide, “I’d like to see some more of that” and be able to access it via the iPlayer or Clic.
There is an onus on us to make sure that that content is not only accessible but is well signposted and also, as I referred to earlier, to develop our own digital news platform that, again, draws material from a variety of sources and signposts people to further information. Some of that will be from outside. Some of it will be to our own content, whether it is “Newyddion” produced by the BBC or some of the current affairs series “Y Byd ar Bedwar” and “Y Byd yn ei Le” produced by ITV Wales.
It is never going to be the most popular kind of programming but, overall, my take is that it compares well with the usage of news services on other public service platforms. The audience appreciation of being able to access reliable and independent news on S4C in Welsh has proved to be very important during the pandemic. We have certainly had a very positive response from our users about that provision.
Q16 Ruth Jones: Thank you. Mr Evans, do you want to come in on your optimism or otherwise about growing the percentage?
Owen Evans: Yes, maybe just to build on what Rhodri said. Euryn was quite critical in his paper about news provision at the time, and over the past four years one of the key things we have done is build more of an identity to our news provision. Traditionally it has been supplied by the BBC, who did a good job, but the importance for us is making sure that people understand it is now an S4C service that is provided. It is important; identity is important, and I think we have improved that.
One of the best providers of news in the UK at the moment is ITN. It provides the news services for Channel 4 and Channel 5. When we were looking at news, probably about three years ago, I met with the chief executive of ITN and we brought in a team from ITN to S4C to look at our offering and to work out what we needed to do to improve the way we provided the news to our audience. This alludes to what Rhodri was talking about—providing more relevant news in more relevant formats to them.
That was a very useful exercise and they published a report, which we then enacted. In terms of what it has led to, the linear news service, with Covid, has clearly been in high demand. The traditional news service provided by us has been a very strong part of our offering. But the average age of people watching that news provision is 67 and, particularly as a public service media provider, we needed to make sure that we were fulfilling our obligation for young people engaging with trusted news sources. The app, for example, is one way that we are doing that.
One of the big changes we have had over the last two years is that, when Covid came in, you could see that people wanted news, they wanted to know what was going on, and that was quite a watershed moment for us because that was the first time we decided we were going to employ our own journalists. We have gone from having no journalists on the payroll to eight now, providing a news service digitally, but it is engaging with new audiences.
When Covid came in, the demand for our digital news service went up by 180%. When we started employing our own journalists, it went up by 600%, which just shows the appetite for a different type of journalism than existed in Wales, and we are bringing audiences considerably younger than the ones we had engaged with in the past. The app is the next iteration of that, and the engagement with that has been very strong. I think there is still more to do but, as Rhodri says, news will never be “Love Island”, and thank God for that, but we can do the most we can to make sure it is a relevant service that works with partners and that packages news in a way that people want to engage with and they can trust.
Ruth Jones: Thank you both.
Q17 Simon Baynes: I want to follow up on the point that you have been touching on, which is the effect of the pandemic on S4C. Looking at the annual report, Owen, you said that over £8 million-worth of programmes was lost from the schedule overnight as content failed to be delivered. I imagine that includes things like the broadcast from the Llangollen International Musical Eisteddfod, where I have to declare an interest as not only the MP but also a former trustee of the organisation. I have had a lot of experience of the importance of that content for broadcasting and the ways in which you have had to cut back on it in recent years. To focus on that particular point at this stage, I will start with Owen. It would be very helpful if you could describe the impact of the pandemic on S4C more broadly.
Owen Evans: I will start broadly, and I will come on to Llangollen. I remember that, when we met, it was a very big interest of yours, and ours as well.
I think there were three main areas when this hit. I am lucky, I went to the police gold command training for civil contingencies, so when this hit the biggest message was communicate, communicate, communicate. We were quite lucky in the move to Yr Egin, where one of the first things I did was turn S4C into a flexible working organisation. We invested in the equipment needed for people to work from home, so even before lockdown came I had actually sent people home on a trial run to see if we could cope, and luckily we could. Whenever something like this happens, the first thing you have to do is work out what is our purpose in this, what are people expecting from us, and start with the audience.
We lost 150 hours of drama immediately. We lost 150 hours of sport immediately. We lost all the major events, as Rhodri said. We had very big gaps to fill. We are a small organisation; we didn’t have a shelf full of new content that we could use and we had a relatively small archive compared to broadcasters like the BBC. We had to be quite clever in working with the sector to keep as much live provision going as possible. The BBC did an excellent job in keeping news going. Companies like Tinopolis did wonders in keeping some live programmes like “Heno” going. We kept those going.
We spaced out whatever stock we had but we made increasing use of the archive. People were demanding that we provide that little bit of life to them and we focused around a campaign called Yma i Chi, “Here for You”, and did an engagement exercise with the audience about what they wanted to see. We like to talk to the audience.
Historically, we do events in village halls across the nation but we couldn’t do them, so I started doing Facebook lives with the audience. I am not sure, I think I am probably the only PSB chief executive who does Facebook lives with the audience, and we have continued to do them, frequently getting around 10,000 views a time. We listen to the audience. The audience was saying they can’t go to chapel, for example, so could we put something on on a Sunday morning? Within two weeks, we had “Oedfa Dydd” on Sunday mornings. We listened to what they wanted from the archive. We listened to the fact that they were struggling with mental health, and they were struggling with fitness, so we ran campaigns around that.
I hope we listened to the audience about what they wanted. The sector reacted fantastically, as we said, in supplying that. The sector was important. We talk about £8 million being sucked out of the sector. There was a point with some of these firms, with lots of employees who have mortgages to pay off, where it was, “What is coming over the hill? What work is there?” We took a calculated risk and we released £7 million-worth of commissioning within three weeks of lockdown coming, really as a statement to say, “We are still in business. We still have to find ways to create content to satisfy the demand of the audience, to provide the type of stuff that they need at the moment.” Hats off to the sector. They reacted fantastically, but we did put a lot of money into the sector to keep it going in those dark months.
The last bit is around staff and operations. We are a broadcaster. Our people have had to come in to man equipment to keep the service going. I want to say a huge thank you to the teams that have worked throughout keeping the service going. We did lots of things—as I suspect many others did—in engaging the staff and keeping them in a good place. We ran mental health courses for staff. We had clog dancing, fitness, a virtual disco, quizzes and all those types of things to engage with the staff. I ran dip tests then annually to see how they were feeling, how we were coping with technology and how we were coping with the isolation, and we communicated very frequently and, I hope, effectively.
For the majority of the Covid period, for example, I would run a weekly all-staff call where I would tell them what was happening and what the concerns were, and I provided an avenue for them to raise any concerns with me personally, to make sure that we could keep things on an even keel. There was a lot of communication, a lot of working with the sector and a lot of dialogue with the audience, and I think, what we see in the annual report was that, by and large, that was welcomed.
On Llangollen, I think, in fairness, Llangollen and Rhondda have done wonders over the past few years in re-energising our content on that. The performance of our coverage of Llangollen has improved greatly over that period, so long may that continue.
Q18 Simon Baynes: Thank you very much. Rhodri, to finish off on this particular point, what are the lessons that you have learnt as a result of the pandemic?
Rhodri Williams: I think one of them is what Owen touched on there about speed of response. I can just about remember from my early days as an independent television producer how we as producers were always critical of broadcasters for being slow to respond. You would send in your ideas, somebody would say, “Thank you for your idea. We will get back to you in due course” and then months would go by and you would hear nothing. There are certain cases where, of course, you need time to consider proposals that are made, but I think that due process in commissioning must be balanced by due pace. One of the things I hope we have learnt from the pandemic is that it is possible not only to respond very quickly to some ideas but to actually get it going and that that is worth having without the conditions that brought it about it.
To give you an example, a Tinopolis programme called “Sgwrs Dan y Lloer”, which is a fireside chat, was recorded outside to be able to maintain it during Covid. It was commissioned specifically in response to the conditions of the pandemic because it was not possible to safely carry on recording that kind of programme indoors. It turns out it has been remarkably successful and has subsequently been commissioned by the commissioning team at S4C to continue. I think that is a great example of a new idea, a rapid response, getting it on screen and finding that it was a good idea. I ask the question, why did we not commission this before? The answer probably is that it was not offered to us before and that people maybe had not thought of it in that way.
Likewise, when the first of the two Urdd National Eisteddfod was cancelled, Avanti, the production company that worked with Urdd on the broadcast of that came up with Eisteddfod T and produced a week of equally fierce competition across all areas of activity that usually featured in Urdd Eisteddfod, but did it virtually. But the second Eisteddfod they had moved to Llangrannog, the space there, as a production base and did it even better.
There are lessons there about speed of response and about creativity that hopefully will not be lost going forward. As is often talked about in response to the pandemic, it is not a question of going back to doing things as we were before, but of there being a new normal, a new way of doing things, where we have that approach of considering new approaches and seeing, as Owen mentioned, the benefits.
When I joined the S4C board originally, I was never a fan of our public engagement, our meetings in village halls that Owen referred to, because we tended to hear from staunch supporters of our services things that we probably already knew and were told already. I was not a fan at all, I must say. I did not find it a particularly useful experience.
Having said that, the move to pandemic conditions brought about the use of Facebook Live where we engaged with far more people, a far more diverse group of people, and learnt a lot more about that. That, again, is something where I do not want to say, “Now that we can go back to village halls, let’s go back and do that.” I think we need to blend our engagement. Yes, we should have real live events where people can talk to us face to face, but it is essential that we maintain our digital presence in order to get more people to engage with us and to be able to engage with us on a more regular basis. Those for me are the key lessons of the period, which hopefully we will take forward to the future.
Q19 Simon Baynes: Thank you very much for that. I want to move on to the economic impact. Your annual report says that the economic impact in 2019-20 was £197.4 million in the UK economy, which translates into £1 of income received by S4C producing an economic impact of £2.03, which looks very encouraging. Owen, could you give us some idea of what the economic impact would be for 2020-21?
Owen Evans: I suspect it will be similar. The interesting pattern will be where the money is spent. One of the things that we have done is we have engaged, because of lockdown as much as anything. We tend not to commission very much over the borders anyway. The beauty of S4C is that, because we are a commissioning broadcaster and it is in the Welsh language, £1 to S4C means 80 pence plus goes out of the door almost immediately to the sector. That has always been the case. During lockdown that money has gone to areas in Wales that we have not used before, because we have been looking for those ideas to get out there and do things.
The economic impact of our expenditure over the past year will be largely similar and will be very Wales-focused, which is where the multiplier effect in Wales is so strong. The nature of that spend on the sector will start to have an impact because we have invested more, as we have been doing for a few years, on the type of digital expertise that we have been talking about. It might be moving away a fraction now from the old traditional suppliers towards some of those suppliers who are more adept and who are engaging in the new types of platforms we are spending on.
This is why we have engaged with TAC, for example, and are providing more training to make sure that the sector has the support needed to rationalise and to refocus on the new types of skills that we are all going to need. Whereas the patterns of expenditure might not be that different, the type of expenditure and the type of development economically that that stimulates might be starting to change. That would be something that we would be keen to look at and monitor over the next few years.
Q20 Robin Millar: Welcome, gentlemen; good to see you both again. Before I move on to questions about the money—I am sure everybody is waiting for those—I want to pick up on the previous point about economic impact. We have an inquiry scheduled for the coming months that looks at the cultural impact of some of the UK Government’s policies: climate change policy, environment policy and also economic trade policies. We have decided to take a look at the cultural impact of those. We are looking, for example, at the impact on those family farm communities that are so important to the Welsh language and carry so much of that culture and tradition.
In terms of your work as a broadcaster and a content producer—we have already mentioned Ffermio and the demand that is coming through—do you have any particular links, impact or clear sight on the cultural impact of your work in specific communities like those family farming communities?
Owen Evans: Let me take two examples, one which is very close to our doorstep, Carmarthenshire, and then I will talk a little more about Welsh communities and how we support them.
Welsh culture and S4C are inextricably linked. We cannot survive without Welsh culture. One of the things that we are quite proud of, from the economic impacts report for the past year, was how much impact we had in Carmarthenshire. Remember we moved to Carmarthenshire partly to make sure that we could ensure that our spend was going to some of the heartlands as well as places like Cardiff. It is good to see that almost £1 million of activity was generated in Carmarthenshire because of our activities there that would not have happened otherwise.
We are all critically aware that there has been almost a retrenchment of highly skilled jobs into the urban areas over the past few years. We have been quite keen—and it is one of the strengths of the conversations that we have had with DCMS—that we continue to make sure that the money we get leads to economic impact outside of the urban areas and supports the communities where the Welsh language is still very strong.
Some of the work that we have been doing in ensuring that that money goes into supporting the types of activities that keep a lot of Welsh cultural activity going has been important. There was a report by Professor Ian Hargreaves back in 2011 or 2012 that effectively said that if you pulled S4C out of Wales, the independent production sector in Wales would largely collapse. That is still highly relevant today because we are a broadcaster, we fill a channel, we fill digital platforms and we are engaging in new technologies. We are looking at how we can get Welsh language on Alexa and apps like this—oh, Alexa has just buzzed off in the background. We are looking at developing these areas, so we are a huge stimulant in developing the type of technologies and the type of skills that we are going to need to make sure that the Welsh culture remains relevant. I am very proud of that. Do we do enough? I am not sure yet, but we will continue to invest in that area.
Remember that Welsh culture is very porous. Somebody who works in the TV industry is likely also to be involved in possibly craft and possibly art and in many other of the Welsh cultural strengths. So S4C’s role in maintaining Welsh culture as well as the Welsh language is vital, and it is one of the strong bits that we try to tease out in our discussions with DCMS over why what we do is so important.
We also mentioned that we do invest in areas of Wales that others naturally probably would not. We have strong engagement with the north-west of Wales, producing high-quality jobs with people like Cwmni Da, Rondo and Darlun, companies that are very locally based and employing very locally and yet pay good wages for high-quality jobs.
The role of S4C in the Welsh culture is inextricable. To some degree we have to be aware of that. That was one of the reasons, for example, why we were very keen to pump money into the economy when lockdown came down. But also in the music industry we were very, very aware of both plight of venues and performers. Through programmes like “Stafell Fyw”, again, we innovated to be able to produce programmes in venues using local artists to keep that going. There is a big weight on our shoulders, which we are happy to carry, to make sure that, yes, we are a major supporter of Welsh culture—not just the more traditional ones, such as Urdd Eisteddfod national in Llangrannog, but on the ground of the communities that we serve as well.
Q21 Robin Millar: Thank you very much. Rhodri, would you like to add anything to that before we move on?
Rhodri Williams: Just one short thing. The role we play in reflecting Wales to itself is a very, very important one there. You mentioned agricultural communities, and I am thinking of Meinir Howells, one of our presenters, who is a working farmer. Through our programmes, we get to see her and her children, interestingly, going about their business.
The role we play in not just agricultural communities—it is wider than that—in reflecting communities to themselves and giving people an ability to talk about their circumstances and to share their experiences with others is a key one. A very important part of our success is that we do that and we do it well, and audiences in all parts of Wales and even beyond, as Owen was referring to earlier, appreciate the ability to do that and the opportunity they get to do that through our content production.
Q22 Robin Millar: Thank you. That is very insightful and, as ever, I feel I learn something every time I speak to you about these things. Thank you for that.
Let’s talk about money. The recommendation from the 2017 review was that S4C’s public funding should be provided entirely through the licence fee from 2022-23 onwards, so we are getting very close to that. How would you describe the current set of licence fee settlement negotiations with the DCMS? I am thinking about pace, about direction and about whether the right people are involved—all of those sorts of things. I will leave you to decide who is closest to it.
Owen Evans: It is an obvious policy risk. In terms of some of the big changes that this is going to bring about, historically we have been funded on an annual basis. For the Committee’s understanding, we receive about £6.86 million from DCMS and £74.5 million through the licence fee, which is ported through the BBC. What will happen as of next year is that everything will come through the licence fee. The Secretary of State will decide and the BBC will hand over the cash.
One of the major differences is that so far we have been negotiating on an annual basis. This is the first time that we have been negotiating for a settlement that is five years, so the importance of getting the settlement right, and aligning it to what S4C’s purpose and promise is, is vital to us, because if we do not get a good settlement, the type of activities that we have been talking about—the type of activities that Euryn gave the direction for all those years before—we are really going to struggle to deliver.
The negotiations we have had with DCMS have been very positive. It has been very engaging. I think it has a good understanding now of what S4C does and how important we are. In fairness, that was demonstrated to a degree in recent discussions we have had with DCMS and Treasury over a VAT issue we had about a year ago where, coming straight from the Chancellor, the importance of S4C was voiced both in terms of the economy but also the Welsh culture. We are in a good place. Who knows, of course, because the settlement has still yet to be decided. These are big decisions. We have produced a compelling case to DCMS. We have also provided a huge amount of information to them, quite rightly, backing up some of the case that we have made.
Thus far the dialogue we have had with both Ministers and officials at DCMS has been positive. It has been challenging, but it would lead me to look at the settlement outcome with some degree of optimism, although I do of course accept that we are in financially constrained times. That does not stop us from making the case that we are important; the Welsh language is a vitally important link to the Union that we need to pursue if we are to make sure that S4C delivers its promise and delivers what its remit is over the coming years.
Q23 Robin Millar: Rhodri, would you like to add anything to that?
Rhodri Williams: Yes, briefly. I would certainly like to reiterate what Owen said there about the case that we have presented for our funding for the next five years. Owen and the team at S4C did an excellent job of pulling together our arguments for funding and presented the evidence for them and a clear indication of what we would do with available funding.
The second thing I would mention is the support that we have received from the wider community. Obviously, independent producers who rely on us for their business have been supportive, but so have the wider community and so have many of you and your colleagues in Parliament. We appreciate that. The fact that the Committee itself wrote to the Government on this was of great importance. That was particularly important to us to be able to garner wide support, not just ourselves arguing out of self-interest—that people accepted the important role that we have to play, as we have been talking about already.
The other thing that is worth noting is that, since his arrival at S4C, Owen has ensured that the organisation has an excellent relationship with the team at DCMS. Teams come and go. They change as time goes on. Ministers also change. Throughout all of that, throughout Owen’s time as chief executive, he has maintained a trusting and open relationship with DCMS, which has already been important, as he mentioned, in the case of the VAT changes that posed an existential threat to us at one stage.
That was reflected also when I worked with the Department to appoint the new board members that I referred to earlier—the fact that there was clear understanding of our needs as an organisation and we were able to strengthen our board by adding new members with a wide range of expertise. I am glad to say the Department has also agreed to appoint a further two members, and that recruitment process is already under way. That relationship with Government, regardless of the final outcome of the funding decision, remains in place. I certainly hope it will remain in place for the foreseeable future.
Q24 Robin Millar: Thank you. I am sure colleagues will come to the relationship with the BBC in a moment. Owen, could I just press on a couple of particular points? I am heartened by your description of the relationship with Government. I know many colleagues will have made comments to Ministers and others on the corridors and in writing, so it is good that that seems to be working and having an impact. Specifically, though, have you heard from the DCMS since the submission on the application in March 2021?
Owen Evans: We continue to have fortnightly calls with DCMS.
Robin Millar: Wonderful. That is fine, that is all I needed to know, to make sure that that was not all pre-application and it had gone quiet since then.
Owen Evans: No, there has been a huge amount of dialogue.
Q25 Robin Millar: Could you offer a couple of comments specifically on the issue of a flat-cash settlement? What would the implications been for S4C on that, and do you think you will avoid that? A few tight comments would be great, thank you.
Owen Evans: I think it is essential that we avoid it. The impact of a flat-cash settlement on us would mean over the five years in real terms a cut of about £9 million—£8 million or £9 million. The crux of our case is that we commission at a rate that is about 25% to 30% of everyone else, so already, for the programmes we make, the sector does wonders to create the quality of programmes it does for that money.
We are very efficient. We have taken most of the costs out of the organisation, so there is very little latitude for us to cut any further, if I am to be honest. That means that offering, which I would consider a minimum viable linear service—which is still important and will be for the next five years—is a challenge. Put that on top of the fact that, if we are to fulfil what our remit is, which is to support the development and the life of the Welsh language, we are not going to be able to invest in the areas that we need to, to engage with new audiences while maintaining that minimum viable service online. So if we were to get flat cash, it would make our ability to fulfil what we were set out to do very difficult.
Robin Millar: Thank you; you make the case well.
Q26 Chair: Thank you, Robin. Before I bring in Ben Lake to continue the questions, can I come back to the discussion around your relationship with the DCMS? Owen, you describe what sounds like a viable, very healthy, open, frank and direct relationship with DCMS in Whitehall. Where might the role of the Wales Office fit in? Do you look to the Wales Office to be a conduit for your views into DCMS and other parts of Government? Is it used as an additional voice to try to reinforce your arguments? Where does it fit in within the Government architecture that you need to relate to?
Owen Evans: In fairness, we have a number of supporters, many of whom are sat around the table. We are very grateful for letters, for example, from the Chair, but the Welsh Office is certainly a strong advocate for us. We have had several meetings over the period of the settlement with both Simon and David and their teams. I know that both have been vociferous in their support of S4C’s ambitions with Ministers of DCMS. So, yes, the Wales Office is almost a centre point for people coming together, and I am grateful for the support that both Simon and David have given us over their periods in office, not just over the period of the settlement.
Whereas officials are important, and to have an open and honest relationship with officials is very important, the fact that there is clearly political support for our ambitions is equally important. I would like to reinforce Rhodri’s words in thanking everyone for the support that they have given us thus far, because it is vital in putting the argument forwards—the support—that we are important and our ambitions are ones that we should support.
Q27 Ben Lake: I am interested to get a better understanding of your relationship with the BBC and initially to understand what sort of relationship or input it had when you were doing the work in preparing your submission for the licence fee settlement. Perhaps afterwards we will dig a bit more into the day-to-day operations and how BBC Wales and S4C work together. Owen, could I turn to you first?
Owen Evans: In terms of one of the things that we fought for quite strongly at the beginning of the process, and I am glad that DCMS went along with it, what we feared was that the licence fee negotiations would be conducted through the BBC. There is nothing wrong with the BBC but, at the end of the day, it competes for the same money as S4C does. We argued very strongly from the start, and we had a number of supporters in doing this, that there should be a twin-track process, a separate process for S4C and a separate process for BBC. In fairness, that is what has happened. For example, Minister John Whittingdale has met separately with us in the same way that he has with the BBC. We have had fortnightly meetings with DCMS officials, and so has the BBC. We supplied our own submission. Therefore, the BBC will have had very little input into the S4C submission going into DCMS.
In delivering that ambition, of course the BBC is a partner as well as a competitor and is important to us. The relationship we have with them is one that I place as a priority, in the same way that I suspect that Rhodri Talfan Davies has as well. But, no, the BBC has had very little role in our submission going into DCMS.
Q28 Ben Lake: Thank you, Owen; that is very useful. In terms of the operational relationship and the day-to-day running of things, could you explain to the Committee what the relationship with the BBC is and particularly BBC Wales? I know that the new building in Cardiff seems to be featured on S4C programmes as much as the BBC programmes, so I would be interested to understand how you work together on a more day-to-day basis.
Owen Evans: It is an odd relationship because we are both a partner and a competitor. We compete for many of the same viewers and yet it is the supplier of our technology. It supplies some of our most valued programmes and it supplies our news service, which is absolutely fundamental to the service. We have regular meetings on an official basis with the BBC. I meet fairly regularly with Rhodri Talfan and now with Rhuanedd as well, and the quality of what it provides us is good.
I am on record as saying that the relationship with the BBC is frequently like two brothers or two sisters. We get on a lot of the time but we do scrap every now and again. I think that is quite healthy. I am here to defend S4C’s identity, and I am here to defend S4C’s editorial integrity, and I will continue to do so. The BBC supplies valuable programming to us. It is our technology partner and reacted well, and we are very happy tenants in Central Square now. I would like to thank Rhodri, Gareth and the team at BBC for all the work they have done in facilitating that move, as we have moved from Llanishen and moved our technology support and broadcast services to the BBC’s offices in Central Square.
Q29 Ben Lake: Thank you. Very briefly on that specific point about the move to Central Square, you mentioned the relationship is very much a familial one where you have the occasional scrap. Do those scraps arise more on practical issues, where perhaps the S4C is in need of using a particular technology or service but it has already been allocated to the BBC? How do those challenges get resolved?
Owen Evans: Those happen occasionally—not very often. I have to say that the BBC has pulled out all the stops in trying to facilitate what we have asked for, technology-wise. If you have one set of resources, occasionally there are questions of priority, yes, and we do discuss those.
I have to say that the BBC never tries to encroach at all on us, which is again a good thing. The BBC is a very, very, very big beast. It is a big bureaucratic beast, and when you are a smaller organisation trying to deal with a big bureaucratic beast, tensions arise. Normally they do not come to my attention and, if they do, Rhodri and I have a very good relationship and we can normally smooth things out very quickly, so I think we have a very good functional, operational relationship as well as a good strategic relationship.
Ben Lake: Thank you. Rhodri, did you want to add anything to that?
Rhodri Williams: The only thing I would add is that I was very heartened that on his second day in post Tim Davie, the Director-General of the BBC met with us in Cardiff. We had a very open discussion about the nature of our relationship and what we can do to make it even better and more effective for viewers. That was a very clear demonstration of what Owen has been talking about.
When we do discuss with the BBC—certainly this has been the case where Rhodri Talfan Davies has been involved and also Tim Davie—I do not get the impression that the BBC is throwing its weight around, although, as Owen says, we are very much smaller. I very much appreciate the co-operation and understanding that we get as fellow public service broadcasters. In that sense we are the closest two organisations in terms of our role and remit in the world of television and multimedia production in the UK. It is natural and beneficial that we do work closely together.
Ben Lake: Thank you to you both. That is very, very reassuring. Diolch.
Q30 Beth Winter: You have covered this in previous questions so please feel free to keep your responses brief. I want to dig a bit deeper in terms of the more significant changes you have seen in people’s viewing habits in the last 18 months during the pandemic. For instance, Owen, you have commented previously that there has been a major shift in people’s viewing from linear to catch-up. Has that accelerated during the last 18 months? Do you want to go first, Owen?
Owen Evans: What the last 18 months has done is accelerate everything. We had already seen the shift towards SVODs, towards catch-up, over the past 18 months; there have been several jumps. We have seen huge increases in both our own services being used online and of course all the competition as well.
There are some changes over the past year and a half that we have seen decline now but there are some that are inexorable and they will continue to rise. The shift from linear to digital platforms I think will continue apace. That is not to say that linear is not important to us, because it will continue to be a major part of what we can do in the forthcoming years. There has been a huge peak, as you can imagine, in the interest in news over the past year. That is starting to tail off back to pre-pandemic levels.
This is where we have to react to some of the challenges. People now expect to have a slate of content on your player that is not just catch-up. This is why, for example, we raided the archive heavily over the past year. One of the things we are very interested in doing now is ramping up what we do on the type of content that I would describe as having a digital tail that can sit somewhere and have repeated use by new viewers. Typically, that is more along the lines of drama, factual documentaries and film. For example, S4C has not made many films over the past decade, because they are very expensive. There are areas that we would be looking to invest in to keep pace with the way that viewer trends are moving, but you are right that over the past 18 months we have just seen those trends accelerate.
Q31 Beth Winter: Did you want to add anything, Rhodri?
Rhodri Williams: Only on the question of prominence. One of the most significant changes, as the Netflixes and the Apples and the Disney+s of this world are taking up more of people’s viewing and engagement, is that the question of the prominence of not just S4C but of UK-based public service broadcasters who provide not only entertainment but key information about the way in which we live our lives is essential. I have been very much heartened by the approach that both Ofcom and the UK Government have taken. There is an intention to legislate in order to try to ensure, to the extent that it is possible—and there are limits on what is possible—that the prominence that publicly funded content gets in the new digital environment is as close as possible to the prominence that it has received in the past in the traditional television environment.
Without that prominence, not only ourselves but any UK-based public service broadcaster is going to see an erosion of the use of their services. I look forward very much to engaging with that process to ensure that PSB content—"public service media content” perhaps is a better term for it—gets the prominence that it needs and deserves in order to be able to keep it in the eye of the viewer and user.
Owen Evans: If I can follow on from that, one of the key points in our submission to DCMS was that the importance of prominence is vital, as Rhodri says, but the ability for us to be able to invest in the platforms to seek access to the prominence afforded means that it would be—and DCMS accept this—a shame to guarantee prominence and then not have the ability to exploit it.
Q32 Virginia Crosbie: I was lucky enough to visit S4C’s “Rownd a Rownd” set at Porthaethwy recently, and I met one of the young stars, Meredydd Rhisiart. I also went to the Llangefni studios, and I saw first hand what you are doing to attract young people there with your shows. You have spoken quite a bit this morning about Clic, about your app and about what you are doing to attract young people, but what have you learnt from them? How have they steered what you are doing now? They are clearly our future. How are you safeguarding your future with this important audience?
Owen Evans: One of the things we have learnt is what is possible. As we pull a new generation of TV-makers into the sector, these people are not imbued with having big cameras and big crews and things like that. They are very, very sharp at putting quite nifty clips together and shooting on phones or shooting on the type of equipment that traditionally you probably would not have used. The ability to create content rapidly is one thing, which makes it very contemporaneous and very relevant.
Secondly, because the type of people that we are bringing into the new digital format, particularly from younger backgrounds, are far more diverse, it means that we are getting the type of subjects we have not covered before. That means it is bringing the audiences to the channel, which is a fantastic thing, so we are learning from that as well about some of the stuff we can do to promote local talent.
Thirdly, on talent, it has identified a whole raft of new talent coming into the sector. One of the worst things you want to find out is that a lot of the people who are trained in the sector are retiring soon, but we do not have them. We have a huge raft of new talents that we are identifying through digital means and then exploiting across all our platforms. For example, we have had people going from linear to digital and we have had people going from digital to linear because of the types of talents they have had, meaning that they can cross those divides.
There are a number of things we have learnt off young people as they come now. The knack for us now is getting into these communities and making sure they understand that there is a career in television for all. That is one of the reasons that we appointed our first ever diversity officer over the past year, Nia Edwards-Behi, who is doing a great job at making sure that not only the representation that we make on screen is strong but that we can ensure that the people making the content are also as diverse as they can be. That could be race, it could be disability or there could be a range of other factors. That has been one of my focuses over the last few years—how to improve that element.
As Rhodri said, we reflect. We always like to think or ourselves as a mirror to our communities, whether it be digital of physical. The work that we have done with young people has really brought that on. Twenty years ago, who would have thought we would be running a short-film competition for LGBT+? We are doing the type of things now that are engaging with young people and the subjects that they think are important.
Virginia Crosbie: Thank you, that is very helpful. Rhodri, would you like to add to that?
Rhodri Williams: Only very briefly, on barriers to entry. I joined the television industry when S4C was established in 1982, at which point the barriers of entry into the television industry and into content production were extremely high. The geographical location of almost all the industry in Cardiff did not help, but also there was a decided inbuilt bias towards recruiting and appointing people who looked like itself. The industry was very inward looking and kept people at bay. The kind of equipment that was needed cost tens of thousands of pounds before you could to do anything that was deemed to be good enough.
Getting rid of those barriers to entry and opening up the industry to people who are genuinely creative and filled with enthusiasm to create the kind of content that they want to create, to tell their stories regardless of the nature of the equipment and how it is put together, is very, very important. When you see how young people in particular respond to content, they do not care a monkeys what kind of camera the material was shot on. What they care about is what is being told, the story that is there and how the story is told.
As Owen is outlining, that has the potential to help transform not only S4C but other public service broadcasters in the UK as well, to allow far greater access to the industry and, as a result, far greater diversity in the content that is then distributed.
Virginia Crosbie: Thank you. I particularly like your description of mirroring your communities. Thank you.
Q33 Tonia Antoniazzi: Ofcom has recently carried out a review called “Small Screen: Big Debate” into how to renew the UK’s public service media for the next decade. What is your reaction to these recommendations?
Owen Evans: First of all, we had a lot of dialogue with Ofcom as it was consulted on. In fairness to Ofcom, we had a number of conversations with very senior people in Ofcom about what our views were. We broadly welcome it. We welcome the emphasis it makes on regional and national investment. We welcome the fact that it recognises that the landscape of broadcasting has changed fundamentally in the past 20 years. We welcome the fact that it is recognising that prominence, as Rhodri has been talking about, is absolutely vital for the PSBs.
We welcome the challenge it places. If we are going to get these advantages that PSBs do have in having prominence, we need to deliver on those. Broadly, it is a process that we engaged in and that we were positive about. We broadly welcome the paper, and some aspects of it we were very much in keen support of. We look forward to the next step, the enactment and the whole period of that in legislation over the coming year.
Rhodri Williams: it is very encouraging, I think. I should declare an interest as a former employee of Ofcom for many years. The quality of Ofcom’s data gathering, research and interpretation of that data is hugely beneficial to all of us who are working in the industry. In terms of the picture that “Small Screen: Big Debate” has painted of the changes in the landscape in the UK, as always, Ofcom is on the money. It has its finger on the pulse, and I am particularly encouraged, as I suggested earlier, that the Government are in agreement on that and that we will see legislation.
As we have talked about in various contexts during this session, public service broadcasters—and we are one of them—are central to the UK’s creative economy. Everything that can be done needs to be done to secure the future of public service media and to ensure that it remains accessible and relevant to audiences.
I am very optimistic, to be perfectly honest, about that future. Sometimes you can fall into the temptation of thinking Netflix can spend more on one episode of a drama than S4C spends in a whole year on everything. Then you have the likes of Apple and Amazon and Disney+ with huge budgets to throw at content creation, and you can become despondent, saying, “What can we possibly do in response to that? We can never compete with them financially.”
That is true, but there are things that the UK public service media organisations can do and are doing. There is a wealth of high-quality but far lower-cost content that is produced, not only by ourselves but by the BBC, ITV, Channel 4 and Channel 5. The creative community in the UK and in Wales has the ability to be able to respond, maybe not with the blockbuster series such as “The Crown”, whose total budget I could not possibly imagine, but there is still excellent quality material being produced by ourselves and by the outer public service broadcasters. With a modernised legislative programme that updates the legislative framework for the digital age, all of us as public service broadcasters can continue to serve audiences in the way that we have traditionally.
Q34 Robin Millar: Gentlemen, I sense that the conversation is drawing to a close and it is broadening out. I was very interested in your use of the word “landscape” because one of the questions I had for you was about the landscape that we are in, and one of the Government’s jobs is definitely curating that landscape in a way that preserves innovation, preserves diversity and encourages development. Perhaps through the conversations that we have had, I have always had in my mind’s eye S4C as something of an innovator. I have always felt that with smallness and constraint comes a requirement, a necessity, to be agile and innovative. You have mentioned, for example, the use of small cameras and the ability to produce high-quality, low-cost content.
Two quick questions flow from that. Is there anything missing from that landscape that the Government should be aware of and need to give thought to in the future? Secondly, are there one or two points that you would say are essential to allow you to keep innovating within that landscape and keep developing, albeit in a different way to Netflix? For reasons of time, I will pick one and I will go to you, Owen.
Owen Evans: If I can answer the second one first, yes, small organisations can be nimble. There is no doubt about that. Covid is probably a good example of that. I was meeting every morning at 9 o’clock with a team who were making decisions quickly that had major implications for the content we were commissioning and the way we were broadcasting.
Allied with that is your appetite for risk. One of the things that has been positive has been the ability of Governments to accept risk in broadcasting and to stay away from editorial and to stay away from value judgments on what people are up to, to allow people to take those risks, some of which come off and some of which do not. As long as we can keep that environment where innovation is rewarded but failure is accepted, that is a major, major, major thing that Governments must protect.
On the flavours of what allows you to do it and what are the things that we would focus on in making sure that we can do it, going back to risk you need to have that balance of risk-taking and the ability to innovate. That takes time. When we were talking about the new skills that young people are bringing in, one of the nice crossovers is where you have older heads who sometimes are used to more compliance, and bringing those into contact with young people. The synergy you can get between both is very important.
One of the things I am looking forward to coming out of Covid is that ability to get people together again to create. Although digital is fantastic and Zoom is wonderful, getting people together as partners, as innovative workers, will be one of the key things that broadcasters and also Governments can facilitate over the coming months.
The second thing is perspective. Look at what is happening in China and what is happening in some of the Asian nations at the moment, and most of the Scandinavians to a degree, in terms of the way they are using new technologies to engage with audiences. Of course, Amazon is very strong in this. We need to keep track of that. It is about that ability to have very local innovation but also to keep an eye out over the hill and see what is coming over towards us and thinking how can we get ahead of this. Those two bits, from a UK perspective, are very important.
Q35 Chair: We are drawing to a close now. You have made a number of very compelling arguments this morning about the evolution of S4C and where you are trying to get to. Can I play devil’s advocate for one moment? Owen, a few a moments ago you were describing your relationship with the BBC in response to questions from Ben Lake. You described the BBC as a big beast. You had previously talked about S4C being a very lean organisation. Why is that model the best model for protecting the interests of Welsh speakers in Wales and protecting and growing Welsh language broadcasts in Wales? In terms of the model that we see, for example, in Scotland with BBC Alba, why is that not the right model for Wales? Why is S4C the answer?
Owen Evans: I think you can have a national identity within a Britishness. One of the issues that the BBC sometimes has—and this is no criticism of the BBC; it is just a fact—is it is trying to balance the fact that it is portraying the UK as a supra-nation while also trying to carry out very distinct national identities. The one asset that we have that perhaps Alba does not have is that we have this ability to focus simply on Welsh identity.
I think the USP of S4C as a national broadcaster for Wales is strong enough to be worthy of protection. The independence of S4C as a body that just looks at this audience is very strong. We must remember that BBC Wales is an opt-out service. It provides opt-outs in a national programme catalogue. We are not that. We have eyes on only one audience and that is all we serve. Although Alba does fantastic work in doing that on, as we said, less money than we have, there is a critical mass that you need to be able to deliver that remit effectively, which is why I do think that the model that S4C has at the moment is one that is probably worth protecting.
Rhodri Williams: Could I add to that, Chair? If we look back to what the television industry in Wales looked like before S4C, it was almost totally Cardiff-centric and the content came from two places, from the BBC and from ITV. It if was not for the foresight I mentioned earlier of the late Euryn Ogwen Williams, if it was not for his foresight in encouraging and enabling small production companies to start up across Wales, we would still be like that. It is S4C, over and above everything else that has happened, that has allowed that tide to develop and then to sell on its skills and sell back its skills to the wider UK and international market.
As in many other contexts, diversity is not a good thing simply as a principle. It actually leads to better performance. The fact that S4C buys in its content from a wide variety of small businesses in various parts of Wales, some of which come and go over time as new entrants appear, contributes hugely to the quality and to the success of the service. So I absolutely am convinced that this is the best model for serving not only the Welsh-speaking audiences in Wales and beyond, but also the creative industries in Wales.
Q36 Chair: Thank you, I do agree with that. Thank you both very much. Owen, of course, your time as chief executive will be coming to an end in a few months, and we wish you all the very best for your next role. Maybe you could leave us with a final few thoughts on what advice you would give to your successor as chief executive.
Owen Evans: Be ready for some long hours. For someone coming into my seat in a few months’ time, if all goes well with the settlement, they can come in with a sense of optimism that they will have a level playing field ahead of them, hopefully a strong strategy and a great team working with a sector that has shown its worth over the past 18 months in particular. For someone coming in, I would trust those around them, I would work with the partners to make sure that they were truly embedded in the Welsh language framework, but I would probably leave them with the old advice, which is, never be behind your audience, but never be too far ahead of them either. We have a very loyal following, but the challenge is always retaining that following while developing new audiences that will make sure that we are relevant for the future.
Chair: Thank you very much. Best wishes to both of you. It has been an interesting and genuinely useful and enjoyable session this morning. I hope it has been for you as well. Thank you.