Restricted: For Committee use onlyBRO0006




Written evidence submitted by the Welsh Government


I am writing regarding the Welsh Affairs Committee’s inquiry into broadcasting in Wales.


The broadcasting sector is hugely important to the civic life of Wales. It contributes greatly to the Welsh cultural, economic, social and political landscape, plays a unique role informing, entertaining and educating audiences and is vital to devolution and to our ambitions for growing the Welsh language. Public services broadcasters are key partners in the growth of our creative industries, creating jobs, boosting the local economy and contributing to the emergence of the Cardiff region as one of the top three media hubs in the UK. Broadcasters also play a hugely important role supporting the diversity of the creative industries, providing accessible career pathways and skills and talent development. This role is vital in supporting a sector that promotes equality, diversity and inclusion, in front of and behind the camera, and delivers content which reflects the lives and landscape of the nation.


It is a critical time for broadcasters and citizens. The rapidly changing broadcasting landscape and ongoing evolution of digital innovations have created a fundamental shift in the way in which audiences are consuming content and connecting with broadcasters.

These changes, which have been accelerated by the global COVID-19 pandemic, have highlighted the need for urgent action as the pace of change increases, to ensure our public service broadcasters can continue to serve the needs of Wales.


The Welsh Government recognises the broad consensus in Wales that the current broadcasting and communications framework is inadequate. Recent UK Government announcements only serve to highlight the flaws in the current system and the need to take urgent action to develop a fit for purpose framework that is delivering for the people of Wales. In line with the commitments set out in our Co-operation Agreement with Plaid Cymru, we have formed an expert panel to explore the establishment of a shadow Broadcasting and Communications Authority for Wales. The panel will consider a range of issues, including the scope and remit of any proposed Broadcasting Authority, financial implications, transparency and accountability. The panel will engage with a wide range of relevant stakeholders, experts and partners throughout this process to identify a robust and credible evidence base to take forward our actions. Its work will inform the development of a strong evidence base to support the case for the devolution of powers to Wales.


The panel has noted the launch of the Welsh Affairs Committee’s inquiry into broadcasting and would be keen to understand how you are defining broadcasting for the purposes of this work.


I enclose a response to the inquiry on behalf of the Welsh Government.


Yours sincerely,


Dawn Bowden AS/MS

Dirprwy Weinidog y Celfyddydau a Chwaraeon, a’r Prif Chwip

Deputy Minister for Arts and Sport, and Chief Whip



Annex A – Welsh Government Evidence Paper


Restricted: For Committee use onlyBRO0006


Annex A





Are the current models of funding for public service broadcasting in Wales sustainable to ensure the future of a successful and dynamic broadcasting industry in Wales?


The Welsh Government recognises the need to ensure funding models for public sector broadcasters remain fit for purpose as the broadcasting landscape evolves. With the rapidly changing nature of broadcasting, declining reliance on linear TV and the shift to online, digital viewing consumption we acknowledge the need to engage in meaningful discussion around the means to which broadcasting is financed. However, with traditional linear TV still playing an essential role across many parts of Wales and the uncertainty of future viewing habits, it is clear that public service broadcasters require the security of stable funding models. Wholesale or fundamental changes to funding models risk placing the sector in a precarious financial situation at precisely the time when stability and consistency is needed, and we have shared our concerns regarding the potential impact of fundamental changes to future funding arrangements on broadcasting in Wales with the Secretary of State for Digital. Culture, Media and Sport.


Any future model must protect essential services and provide the sustainable funding that allow broadcasters to fulfil their public purposes and objectives. It must also provide sufficient funding and a certainty of income streams so that broadcasters can continue to be innovative in their approach to future service delivery, protect their independence from government and ensure the provision of a universally available service, covering the broad range of services and programming expected by citizens. It is essential that any funding arrangement ensures adequate services and programming in the Welsh language. We would caution against a move to a ‘core’ and ‘extra’ model of services, which would have a disproportionate impact on those unable to pay for or access wider services, especially given the increasingly challenging environment for citizens with rising costs of living and examples of declining subscriptions for streaming platforms.


Any work to consider options for future funding arrangement has to consider all available options, including a licence fee model. It must also consider the full value of public service broadcasting in its broadest sense, covering not just broadcast content and economic impact, but also its essential role supporting skills and talent development across the UK, diversity and inclusion, international reach and influence and ongoing sustainability of the sector.


Given the significant potential impact of changes to the funding model, genuine and meaningful engagement and consultation is needed as potential future arrangements are explored. This should include consultation with stakeholders across all parts of the UK.


What impact will the privatisation of Channel 4 have on the broadcasting sector in Wales?


The Welsh Government has set out its significant concerns regarding the privatisation of Channel 4 in correspondence to both the previous and current Secretary of State for Digital, Culture, Media and Sport. These concerns reflect our conversations with key stakeholders in Wales, who unanimously agree there is little evidence to justify a change in ownership and that the sale would only be to the detriment of Welsh audiences and the independent television sector in Wales.


Restricted: For Committee use onlyBRO0006


Specific concerns, which were set out in detail in our correspondence, include:


Impact on Channel 4’s unique publisher / broadcaster model

Channel 4’s unique public service model and remit as both a publisher and a broadcaster is hugely important to the independent production sector in Wales. With all content commissioned from a currently vibrant independent television sector its remit encourages independent programme making. The role the channel plays in offering distinctive, innovative content that appeals to diverse communities and to young audiences in particular is hugely important as we seek to increase the diversity of content that meets the needs of all viewers. This is also the case in areas such as news, where the relatively weak indigenous news infrastructure in Wales is supplemented by UK broadcaster news services.


It is likely that under new private ownership the organisation would have new motives, new goals and be ultimately driven by profit. This would inevitably lead to a reform of the current operating model, with a significant proportion of production output brought in-house. Should this happen there is a real risk that we would lose independent companies across the nations and regions of the UK.              As highlighted in the independent EY report on the possible consequences of privatising the Channel, published by Channel 4 on 10 September 2021, up to 2,400 jobs could be at risk in the creative sector, which could significantly reduce Channel 4’s economic contribution in the supply chain (with value of around £2bn being transferred from SMEs in the creative economy, to a new private owner). The report suggests most of that impact would be felt in the nations and regions of the UK.


Intellectual property

Stakeholders in Wales have also questioned how any new owner of the Channel would deal with Intellectual Property. Whilst it has been stated that this would be protected under new ownership, the independent production sector in Wales would need firm guarantees that this is the case to ensure producers can continue to exploit their IP in overseas markets, as the current model allows.


Free to air content

There is a risk that much of the free to air content would be lost if the Channel is privatised. The universality of public service broadcasting is of significant importance in Wales as a means of ensuring all audiences, regardless of circumstances, can access content. Loss of universal access would be devastating in some circumstances. For example, Channel 4 was the only channel to air the Paralympics 2021 on free to air terrestrial TV.


The recent 4 all the UK Strategy has seen a marked improvement in how Channel 4 supports our independent sector in Wales. We have seen an increase in commissioning content from within Wales, an increase in direct company investment, and a real commitment to work in partnership to address the skills issues in the sector and most importantly equality and diversity. This includes exiting partnerships with S4C which is resulting in programming in Welsh being aired on Channel 4. Whilst some of these actions are aligned to core parts of the Channel 4 public service remit, they are not commercial or indeed profitable activities and are unlikely to appeal to a private buyer. It is also considered that they would be very difficult to enforce in the event of a sale.


We are hugely disappointed that this decision appears to have been taken despite the significant concerns that have been raised since the potential sale of Channel 4 was first announced. We have urged the Secretary of State to listen carefully to the voices of the independent sector across the UK and not to underestimate the damage that privatisation of Channel 4 would do to the sector.


Restricted: For Committee use onlyBRO0006


What should the future of public service broadcasting in Wales look like given the growth of global streaming platforms and changing viewing habits especially of younger generations of consumers?


The Welsh Government recognises the fundamental shift that is taking place in the global broadcasting market. New options for delivery and changing content consumption habits are having a significant impact on the way in which public service broadcasters reach and connect with audiences in Wales. Viewing across traditional models of linear broadcasting is declining. The Media Nations 2021 Report for Wales indicates more than half of households in Wales (59%) have a subscription video-on-demand (SVoD) service and around four in ten households (41%) in Wales used YouTube to watch programmes, shows or films at the beginning of 2021. Ofcom’s News Consumption in the UK 2021/22 report shows that, for the first time, Instagram is the most popular news source among teenagers – used by nearly three in ten in 2022 (29%).


However, there is no doubt as to the continued relevance and importance of public service broadcasting. This has been particularly apparent during the COVID-19 pandemic and was clearly set out in Ofcom’s Small Screen: Big Debate findings. Television services are still of essential importance to Welsh audiences. The 2022 News Consumption Survey by Ofcom found that 77% of adults in Wales use TV channels the most out of all the platforms for obtaining news outputs, 4% higher than people in England.


Reforms to the regulatory framework are urgently needed to ensure public service broadcasters can remain relevant and continue to deliver essential programming and services as the broadcasting landscape continues to evolve. Any new framework must be sufficiently flexible to ensure broadcasters can effectively meet the needs of different audiences. It must support greater investment in digital interventions and meet the needs of younger audiences alongside a continuity of service on the TV transmission model, which is still valued by many members in society. This is of particular importance to vulnerable groups and those with no or limited access to the internet who may not have the ability or choose to access both linear and online content. Any reforms must also ensure public service broadcasting remains a universally available service, covering the full range of services expected by citizens.


Broadening and protecting prominence and discoverability of public service broadcasting content to secure prominence on the platforms of the future must be a key element of this, and we welcome the related plans in the UK Government’s Media White Paper. Changes are needed to ensure public service broadcasting can be carried on digital platforms on fair terms, to support sharing of data, fair value for content and to mitigate the impact of digital advertising practices. Fundamentally, these changes also need to ensure services made available across these platforms meet the needs of Welsh language speakers in Wales and are easily visible and discoverable for audiences. Our stakeholders have been clear that action needs to be taken urgently on these matters to enable public service broadcasters to compete and keep pace with change.


Broadcasters are vital contributors to the growth of our creative industries and the Welsh economy, sustaining the development of content in Wales by our independent production companies, and supporting diversity and future sustainability in the sector through skills and talent development. In addition, effective broadcasting is essential to devolution and sustaining and growing the Welsh language. The framework they operate within must allow them to continue to make this vital contribution. It must also be sufficiently flexible to meet the needs of the different types of broadcasters operating across the UK, and to adapt to ongoing changes and future proof arrangements in line with evolving innovations and an increasingly global environment.


Restricted: For Committee use onlyBRO0006


An effective public service broadcasting structure for Wales must give Wales an adequate voice in decisions on broadcasting if we are to protect and serve the best interests of the people of Wales. What this structure should look like and what the future of public service broadcasting in Wales should look like will be an important consideration of our expert panel on broadcasting.


What steps need to be taken by the UK Government, sporting bodies and broadcasters to ensure the survival of free-to-air broadcasting?


Access to free-to-air sports broadcasting is important to both Welsh citizens and broadcasters. Exposure through broadcasting can generate an interest and enthusiasm in sport that encourages participation in physical activity. It can provide role models that inspire our future generations of athletes and sporting professionals. The availability of sports programming through the medium of Welsh is also essential to the Welsh Government’s ambitions for the Welsh language as set out in our strategy, Cymraeg 2050, and plays a vital role promoting the language to traditional as well as non-traditional Welsh language audiences. For broadcasters, sports programming is a vital component of their offer, and a popular element of provision that can attract new and bigger audiences to wider programming and services.


Moving sports matches and events behind a paywall would have a fundamental impact on broadcasting, sports and the Welsh language. It is essential that a framework is put in place that enables broadcasters, government, streaming services and sporting bodies to work in partnership to develop positive arrangements that ensure we are able to realise the significant benefits that free-to-air sports broadcasting provides.


The Media Bill provides an opportunity to do this. We would urge the UK Government to enter into a meaningful dialogue with us and broadcasters to review the listed events regime and explore how a new regulatory framework could support a specific list of Welsh events that could be prioritised for protection. This would protect sporting events that are of significant national and cultural significance to Wales and that support our ambitions for sustaining and growing the Welsh language. It would also support a more sustainable solution to challenges that are being mitigated on a case-by-case basis at present, such as the recent example of S4C broadcasting of Welsh international football matches, to ensure free-to-air Welsh language commentary is available as a fundamental part of the framework over the longer-term.


Would a move away from free-to-air sports broadcasting ensure more investment in grassroots sport in Wales?


The Welsh Government recognises that this is a complex issue and there is a balance between maximising availability of sporting matches and events on a free-to-air basis and the financial advantages that can accrue to certain sports from being able to negotiate exclusive television contracts.


This balance has to consider the full range of impacts of sporting events going behind a paywall, particularly where those events or tournaments are a significant part of our culture and heritage. It should also consider any evidence available that increased revenues as a result of lucrative pay television contracts does result in increased investment at a grassroots level in a way that mitigates any impact of a reduced opportunity to watch sports. In addition, this should consider the potential disproportionate impact on some groups in society less likely to have access to subscription services.


Restricted: For Committee use onlyBRO0006


Previous examples of sporting events going behind a paywall, such as cricket, suggest there may not be a firm link that this approach supports an increase in investment in grassroots sport.


18 August 2022