Professor Jeanette Steemers, Professor of Culture, Media and Creative Industries, Kings College London—written evidence (BFF0045)

House of Lord Communications and Digital Committee inquiry into BBC future funding

Introduction

I am submitting evidence as an academic with an interest in the future of public service children's content and my comments below relate mainly to that. I am Chair of the Users Steering Group for the Young Audiences Content Fund (YACF) based at the British Film Institute. However, this submission represents my own views, and in this instance I am not representing either the views of the YACF or the BFI.

This is necessarily a short submission, because of time constraints, but I am happy to expand further. My response is also shaped by Ofcom's announcement[1] on 10th March (yesterday) about a consultation on the BBC's request to change its operating licence with respect to original productions on children's channel, CBBC. This is significant and requires further thought but should be flagged to the committee as it impacts the future funding of BBC Children's content with wider implications for children's content provision and the production sector in the UK. I am also a Trustee of the Voice of the Listener and Viewer, but the views expressed here are my own.

How will new technologies and consumer habits change the future broadcasting landscape?

It is clear that children and young people are changing their viewing habits and watching less linear television in favour of on demand content on video sharing platforms (YouTube, YouTube Kids, TikTok) and subscription streaming services (Netflix, Disney +, Amazon Prime), necessitating responses by all PSBs, including the BBC. Services like Netflix, Disney + and YouTube provide content of great interest to children, but are not required to commission or support content made in the UK for children from diverse backgrounds that reflects their lives in their localities. This is occurring with the decline in viewing of linear channels by children (Disney is dropping channels), including CBBC a linear channel for 6-12 year olds with a reach currently of 14% (Ofcom, 2022, 2.11).

At a time of economic hardship, the free services of PSBs available as linear channels (CBBC, CBeebies, CiTV, E4, Five/Milkshake) and as free on demand services or content by the same operators (Iplayer, ITVHub, All 4, on YouTube) are a vital resource for those families, children and young people who do not have access to additional paid for services or even broadband, are dependent on Freeview or may be considering curbing their expenditure on subscription services because of inflation. Almost half of children still watch programmes as scheduled (Ofcom 2022, 1.2). Evidence from Ofcom suggests that up to a third of children aged 8-15 believe that there are not enough TV shows that depict children from their locality; 25% feel there are not enough programmes that show children like them (Ofcom 2020).

Children's audiences are fragmenting, but we are living in a transitional period where a balance has to be struck without disenfranchising those who may not have regular access to paid for or online services. Public service provision for children is especially important in terms of reliable trustworthy information and news (Newsround) in very uncertain times.

Reports by Ofcom over many years testify to the decline of spending by PSBs on children's content and a decline in the number of hours of public service content for children. Global players like Netflix and Disney do produce high quality content for children, but this is for global audiences and is largely restricted to internationally appealing preschool series, animation and internationally oriented drama, which does not necessarily reflect the lives and culturally diverse experiences of children living in the UK.

Current pressures on audiences have resulted in BBC Children's wishes to change its stipulations relating to CBBC in the BBC's operating licence so that it can free up resources to invest more in animation (1 to 4 series a year) (Ofcom 2022). The BBC does need to consider its audiences, but the changes also need close scrutiny in terms of financial implications and the balance between internationally fundable children's formats/genres (some animation and drama) and content that is relevant to lives of children in Britain - across entertainment, drama, information and news.

If PSB and the BBC are to have any kind of future, it is vitally important, that as consumer habits change it continues to appeal to children and young people with distinctive content that contributes to citizenship - in line with the BBC's societal remit.

What is the purpose of a national broadcaster?

The UK ecology has supported national provision for children and young people across the range of UK PSBs - the BBC; ITV, Five, Four; and in the nations - S4C, BBC Alba free at the point of use. But as documented over many years provision for children fell substantially on the commercial PSBs because of the removal of quotas in the 2003 Communications Act and the ban on junk food advertising in 2007 making children's content less attractive commercially.

Among all the other purposes of national broadcasters that contribute to a stable democratic civil society, a key and integral purpose should be the provision of diverse and trustworthy content encompassing entertainment, information and education for children and young people in Britain. Free at the point of use this should engage them and appeal to their diverse interests and backgrounds (age, gender, regional production, ethnicity, socio-economic status). This was especially important during the pandemic. Children and young people deserve the same consideration as adults. This provision has been under threat since the early 2000s, and while it could be argued that consumer habits have changed, it is also possible that children left because PSB providers were not catering for their needs. In many consultations provision for children is frequently forgotten or mentioned only briefly.

As a consequence of less commitment from ITV in particular, the BBC became practically the sole commissioner of UK original children's content. One response to this lack of plurality was the Government's introduction of a pilot, the Young Audiences Content Fund, located within the BFI in 2019. This intervention recognised that national provision also requires plurality and competition for ideas. The Government decided in January 2022 to end the pilot without undertaking the full evaluation which it had promised.

What principles and priorities should inform the choice of the BBC’s funding model? And how would any alternative funding models affect what the BBC can provide?

While the future funding of the BBC represents a crucial issue for the BBC and PSB as a whole, the funding of children's content both within the BBC and more broadly has shown evidence of market failure for many years, as documented in many Ofcom reports since 2006 and other studies.

The core principle behind any funding choice has to be universality - that services for all including children and young people are universally accessible across the UK. Without universality the BBC is not a public service institution because it would no longer be representing all.

Decisions around funding should be independent of government, preferably by an independent body (see VLV submission) and sufficient to fund the BBC's commitments over a number of years. Without this independence, it will be seen as a state broadcaster.

A range of alternative funding models are available[2] - with governments in Europe resorting to direct government subvention (Netherlands, Denmark, Iceland, Flanders - with implications for independence) or progressive income tax based systems (Sweden, Finland, Norway- which removes evasion) or household fees (Germany - which would solve the issue of viewing on devices other than TV sets). All have drawbacks, although progressive income tax based systems would seem to be the least regressive.

Subscription for the BBC would destroy universality and undermine the societal benefits for all citizens - including children and young people. Syphoning off more popular genres for subscription (e.g. drama, entertainment) leaving market failure genres to public funding (e.g. children's, news) would render the BBC weaker and less effective in maintaining public support. Crucially it would undermine the principle of being accessible to all - it would disenfranchise those who could not afford subscriptions. Advertising would undermine commercial providers.

Any decisions around the funding of the BBC in respect of children's content need to be seen within the wider context of market failure across children's provision within PSB over many years

In terms of context, the YACF was created in 2019 in response to market failure identified by Ofcom over many years since 2006 with production by PSBs of children's content declining by 40%. The YACF has enhanced plurality by supporting diverse content produced across the UK on commercial PSBs, (who had all but abandoned commissioning for younger audiences) and regional content (S4C, BBC Alba). In two years the YACF part-financed 55 productions (with up to 50% of funding) and 144 development grants with a growing array of prizes and award nominations (Broadcast, RTS). It complemented BBC provision.

Closing the fund in 2022, which had a £57m budget to spend over 3 years, reverts children's content back to the situation of an under pressure BBC as virtually the sole commissioning public service broadcaster, under financial duress. YACF funding was originally raised from licence fee funding which had been put aside for broadband roll-out and was not used and therefore returned to the government. The Secretary of State in her recent letter to the BBC has signalled that there will be no deductions from "contestable funding" or top-slicing which would be detrimental to the BBC. But the BBC's own children's budgets face pressures because of a licence fee freeze for two years, inflation and organisational changes. Alternative ways of funding the YACF include levies on streamers (Europe, Canada, Australia) and enhanced Lottery funding rather than any top-slicing of the licence fee.

The government's failure to conduct a full evaluation of the effectiveness of the pilot before deciding to close or continue, as promised to the HoC Select Committee last year undermines the “joined-up government" which gave Ofcom additional powers to regulate the commercial public service broadcasters to commission more children's content and enhance plurality alongside BBC provision. Without this careful balancing of BBC funding and YACF funding this approach is seriously undermined.

How should the BBC change over the next five years to adapt to evolving consumer habits and needs - and what does the Corporation need to do to prepare for the future in the longer term?

The BBC wants to change its provision for children, but there are some concerns about current strategy as signalled in the Ofcom consultation[3] announced on 10th March, which suggest a need for greater transparency and monitoring around financial commitments and the balance around genres so that there is accountability and clarity. Of course, the BBC has to adjust to changes in children's consumption habits, and the shift online, but there also needs to be clarity on budgets and how these are apportioned across different types of programming (animation, drama, information, entertainment, educational formats)

The BBC wants to commission more UK animation and plans "a small increase in acquisitions". It is requesting a decrease in time allocated to original productions for transmission on its CBBC channel (for 6-12 year olds) from 72% of hours transmitted including repeats (but not acquisitions) to 66% in 2022 and 2023 and 68% for 2024. This is in addition to the request granted following Ofcom's consultation on Newsround in 2019, which led to a reduction in first run originations from 400 hours a year on CBBC (excluding repeats) to 350 hours a year. The BBC wishes to increase animation commissions "rooted in British culture" from one series a year (8 hours) to 4 series a year (32 hours) - an increase of 24 hours. This could be very beneficial but there needs to be more detail about how this will be achieved and how it benefits children in the UK.

The proposals need further consideration particularly around the future funding of children's content by the BBC, and animation in particular: how will budgets be balanced across animation, drama, entertainment and factual - if the money is the same will some genres lose out?; where will the money be spent (regional considerations); who will be commissioned (BBC Studios, Independents): and what exactly are the criteria to ensure that animation is "rooted in British culture", a term that needs some definition?

• If the CBBC budget remains broadly the same how will more animation be funded, particularly if rooted in British culture and possibly less attractive to international audiences, and overseas funders - unless local appeal is diluted.

• Does the reduction in percentage of hours of original productions including repeats to 66% take account of the reduced transmission hours of CBBC since the re-launch of BBC3 (700 hours less a year)?

• If the number of animation commissions increases to 32 hours a year (64 half hour slots), and is repeated many times, what proportion will this take of original production transmission and what would be the impact on the wider genre mix with live action, information, entertainment or on commissioning patterns for these types of content?

These are ongoing considerations for the future funding of BBC children's content which have implications.

What actions and consultations are needed from the government to inform its future BBC funding plans?

The funding of the BBC's children's content cannot be seen without reference to the wider ecology of funding for children's content in the UK - encompassing recognition that children are a key audience for PSB and the BBC, the future of the YACF, the position of independent producers and the overall amount of budget available in a difficult market.

The removal of the Young Audiences Content Fund reverts the sector back to what was available 3 years ago, with BBC Children's as the main commissioner of UK children's content, but with restricted financial resources.

Government decision making around children's content currently seems to have lost wider oversight of the need to fund children's content as a whole and lay sound foundations for how provision and distribution is likely to change in future as more young people consume on demand. The future of public service children's content and its future funding needs to be openly debated and properly researched in terms of the developing landscape, impact on children and the trained professionals who cater for this market. The BBC is a vital part of this sector and decisions about its funding and resourcing have profound implications for both young audiences and the production sector.

11 March 2022

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