Written evidence submitted by BBC Cymru Wales
- The BBC is a vital part of the fabric of the UK used by almost 100% of adults every month and paid for by 25.2 million households. It is part of our daily lives. For many the BBC is part of the family. The BBC’s job is to inform, educate and entertain all audiences and provide great value for everybody. In Wales, it does so in two languages. It is founded on the principle that everybody pays, sharing the costs, so that everybody gets great programmes and services. This principle of universality, providing a service for everyone across the UK, makes the BBC a mission driven media organisation and a great Welsh and British asset.
- In Wales, the mission of the BBC is uniquely important in defining national life. It is the only national broadcaster providing a range of content across television, radio (BBC Radio Wales and BBC Radio Cymru) and online, in both English and Welsh. The content offer brings the nation together and includes news, sport, entertainment and education, as well as the only full-sized professional orchestra in Wales, the BBC National Orchestra of Wales, in partnership with Arts Council Wales. The Welsh language television part of our mission is delivered in partnership with S4C. Many of the BBC’s functions in Wales are not provided for at all by the commercial marketplace.
- The BBC welcomes the debate on the future of the funding model. It is important that all the options are considered. Our view is that the public should be at the heart of this debate – we are in effect owned by the public and belong to them. Any process must win the confidence of the public and the UK Parliament. It must be based on evidence not assertion. It must also be sustainable in what will be a very different media landscape in the 2030s, not just answering today’s questions.
- It is worth being clear at the beginning of this debate to say there is no perfect model and there are legitimate questions to be addressed about the current model. The BBC can of course be funded in different ways, but the result could be a fundamentally different BBC. This has profound implications for audiences and the UK’s creative economy. As part of this debate, it is vital to understand what audiences want and expect from the BBC in Wales, in the UK overall and in terms of the UK’s place in a global media market. Currently the BBC is the only British media organisation that operates at scale in the UK, globally and with a public mission at its heart.
- The BBC has set out five principles which a funding model should meet in order to support the BBC as a national and global asset:
- Does it deliver the Mission? – providing a universal public service in the UK, to inform, educate and entertain. Everybody uses and benefits from our trusted impartial news, quality British content, and education services.
- Does it safeguard impartiality and independence? – championing free democracy in the UK and globally. Operating without fear of or favour to political or commercial interests.
- Does it provide a sustainable financial model? – supporting a BBC to innovate and modernise to meet new audience demands. Enabling the BBC to be ambitious, operate at scale in a global digital marketplace.
- Does it help the creative economy grow? – enabling the BBC to invest and work in partnership to grow the world-leading UK creative industries, develop British talent and export British content and services globally. Creating a strong UK brand valued across the world.
- Does it deliver fair value for audiences? – ensuring a system that is fair for our audiences, offering good value versus the market and is widely supported.
- The United Kingdom has an incredibly successful creative industries and broadcasting sector. We recognise and welcome the fact that Channel 4 plays an important role as part of that success UK-wide and in Wales.
- The plurality of providers and increased competition in the broadcasting ecosystem has seen more choice for audiences and a drive in competition for quality. In Wales, this is helpng develop a stronger and more resilient independent sector.
- Along with the BBC, Channel 4 has championed smaller independent businesses and production companies with commissions and given them opportunities to develop which is important for the creative industries.
- In Wales, the BBC works alongside Channel 4, other PSBs and other independent companies in developing the wider sector. One of the key initiatives encompassing BBC Cymru Wales, Channel 4 and S4C is the Factual Fastrack scheme. This is designed to grow the next generation of factual creative leaders and addressing the skills and experience gaps in senior editorial production talent.
- The ownership of Channel 4 is a matter for the UK Government and Channel 4.
Future of Public Service Broadcasting
- The concept of Public Service Broadcasting has been vital to the national life of Wales for many decades. In exchange for regulatory benefits, PSB broadcasters have, through delivering a defined set of obligations, helped make much of what is recognisable as modern Wales on-air. It has nurtured a vibrant informational environment, provided audiences with content reflecting their lives back to them and helped nurture a generation of creative talents, both on and off-air. In the absence of many commercial alternatives focused on Wales, in both English and Welsh languages, PSB is disproprortionately important in Wales.
- The digital trends we have seen over the last few years are becoming embedded and to a degree business as usual. The UK media market is now global and digital with more choice for consumers than ever before. This in turn has of course shaped consumer behaviour and expectations of how they consume content. Digital change is inexorable but will continue to be shaped on delivering the best, most convenient services for people when and where they want to consume. In the market this is likely to see continuing developments of smart devices, and the operating systems they run increasingly gate-keeping what we view, what we listen to and the types of information we receive.
- Wales is, directionally, no different to the rest of the UK in terms of digital take-up and choice. Indeed, in certan areas, it is leading the change as measured by consumption. Ofcom’s recent Media Nations report for Wales (2022) demonstrated that people are spending an increasing proportion of their viewing time watching on-demand content, including services provided on a subscription basis (e.g. Netflix), free-to-view from broadcasters (e.g. BBC iPlayer) and on social video platforms (e.g. YouTube).
- Whilst the pace of technological change in the last few years – with the rise of Big Tech - has been faster than in the entire history of media, it does take place in an industry where innovation and change is commonplace. From the development of pay operators in the UK market, the advent of the internet, to digital switchover, to today’s world of on-demand, the BBC has always been at the forefront in driving and adapting to those changes. In this context, the BBC iPlayer plays a key role for audiences with 6.5 billion streams in 2021 and is a leading VOD player in the UK market. During Christmas 2021 the BBC was consumed more than all the SVOD offerings put together.
- Ofcom’s research also indicates that social video platforms are competing for viewing time and are particularly popular among younger age groups. Internet users in Wales aged 15+ spent on average 34 minutes per day on TikTok, the most of any nation, and 39 minutes per day on Facebook and Messenger in March 2022.
- As digital choice expands, the nature of linear television viewing for all channels in Wales is changing but remains strong. On average, the people of Wales spent 3 hours 8 minutes per day watching broadcast TV on the TV set in 2021, the second highest of any UK nation. BBC One Wales TV is the main source of news for people in Wales and the most watched programme in 2021 was the Wales v France Six Nations rugby union international with an average audience of 890,000.
- However, Wales also experienced the largest decrease in daily viewing of all the UK nations. Proportionally, this was a 12.6% decrease between 2020 and 2021, compared to the UK average decrease of 9.9%. Between 2016-2021, the average daily minutes of viewing per person in Wales for all broadcast TV channels fell from 244 minutes in 2016 to 188 minutes in 2021.
- Only PSB television channels are responsible for fulfilling the PSB remit in a formal, regulatory sense. However, radio and online are vital in delivering many PSB objectives. In Wales, these include BBC Radio Wales, BBC Radio Cymru and BBC Radio Cymru 2, BBC Wales News Online and BBC Cymru Fyw.
- Despite significant financial pressures, BBC Cymru Wales has responded to these challenges in a variety of different ways. In video, it has focused heavliy on ensuring that its content delivers significant impact on BBC iPlayer both in Wales and across the rest of the UK. Some of the recent, stand-out titles include: The Pact, Keeping Faith, Hidden, In My Skin and A Killing in Tiger Bay. In News, BBC Wales has adopted a ‘digital-first’ strategy and remodelled its news operations so that audiences receive a high-quality digital news service in English and Welsh. In radio, BBC Wales recently announced its intention to increase the number of broadcast hours of Radio Cymru 2, its digital Welsh-language entertainment service. On BBC Sounds, there has been investment in recent podcasts, such as those looking at the stories of Terrence Higgins and Emiliano Sala and, in Welsh, podcasts such as Siarad Secs looking at identity and relationships.
- BBC Cymru Wales’ shift to digital has also been aided by significant investment in new technology. The production facility in Central Square is one of the most modern in the BBC estate and provides transmission facilities for all BBC Cymru Wales and S4C content on television, radio and online. The BBC’s centre of excellence for Climate and Science journalism, including BBC News’ specialist Climate and Science team and BBC Radio’s Science production team, are also in the process of relocating to Cardiff. In addition, Cardiff is now a new Audio Hub for Wales and Bristol.
- This approach is not confined to the BBC’s own services in Wales. BBC Cymru Wales is also currently working with S4C as it modernises its remit and makes the transition from linear broadcastng to digital distribution. BBC iPlayer helps deliver c.75% of S4C’s VOD viewing and we are planning, subject to the Media Bill, to move away from an hours-based content delivery model to a more flexible partnership. This change would allow the BBC to provide S4C with digital content and services better suited to the channel’s needs.
- Notwithstanding what is in our gift to change, faced with structural changes in consumption and delivery, there will be continuing questions around the role of global digital gatekeepers. The discoverability of digital content, including content relating to Wales, is a major issue. These questions are urgent and being explored by the Government for inclusion in a media bill. They have also thrown into sharp relief the policy priorities for the UK media ecology, and Public Service Broadcasting, where the BBC is funded to put the public first, make everything accessible and not crowd out, or restrict competition.
- Audiences must come first in any debate around the future of PSB. Consumers have more choice than ever before which is a good thing, but audiences also want to have access to an offer which is unique to them. Ofcom’s recent Public Service Broadcasting review, Small Screen: Big Debate, found audience appetite for UK-originated content and services was high. The public still want UK on-demand players as part of their consumer mix. They valued trusted, impartial news but they also wanted to see authentic UK content and stories reflected to them.
- This is reflected in more recent research by Ofcom exploring the attributes of PSB in Wales. Its Media Nations [2022} report found that among Welsh respondents, ‘trusted and accurate UK news’ was seen as the most important element of PSB for society, mirroring the overall UK findings. This was followed by ‘a wide range of different types of programmes, such as drama, comedy, entertainment or sport’, and ‘programmes that help me understand what is going on in the world today’. ‘Regional’ or ‘national’ programming was also seen as more important in Wales than in the UK overall.
- Other considerations to future trends include the overall roll-out of high quality universal broadband and accessibility to digital services. There continues to be a significant group of audiences who rely on linear services. Enders Analysis found that around 8m adults only access free to air television. This is a significant proportion of the population who do not use pay or on-demand services. And they come from different types of households – 3m living alone, 4m from C2DE households, 1.8m disabled households and 6.7m outside London – watching on average 5 hours of TV a day. There is also still a strong desire from UK audiences to watch live TV together, in the millions. And there is a responsibility on policy makers and broadcasters to ensure we continue to serve those audiences.
- And it is important to note that for the BBC, we have always continued to innovate and distribute ourselves on a range of platforms. High quality, high speed, broadband is an important means by which audiences can enjoy new types of media provision. But neither coverage nor take up is universal. Nor will it be for the foreseeable future.
- Finally, we would note that while there are many questions which are specfic to the BBC’s role and mission in delivering the benefits of PSB, Wales has benefitted from a strong overall PSB compact across many decades. In this context, the role of S4C and ITV Wales, alongside BBC Cymru Wales, in delivering choice across a range of genres for audiences, as well as being foundational investors in Wales’ successful creative industries, has been instrumental for many decades. This success is no accident and is the direct result of statutory and regulatory underpinning, sufficient funding and co-ordinated working across PSBs, governments and the independent sector to deliver in the national interest of Wales as a whole.
- For 25 years the Listed Events regime has allowed audiences across the UK to come together for the biggest sporting moments, irrespective of their ability to pay. It has benefited sports participation and physical activity and helped build positive role models that continue to inspire the next generation of elite performers.
- The lists includes events which have a particular resonance in Wales, such as the European Football Championship Finals Tournament(s), the men’s 6 Nations’ Rugby Union Championship and the FIFA World Cup Finals Tournament(s).
- But the ways audiences access and consume content is changing fast and if the legislation stands still it will lose relevance.
- Firstly, the qualification criteria have become outdated and no longer reflect modern consumption habits. It is crucial the Media Bill reflects this change by specifying unambiguously that listed events are intended to be delivered to the public by the UK’s PSBs. This would future-proof and simplify the regulatory regime, an approach endorsed by Ofcom in its recent PSB review. A change in legislation is the only way to guarantee that the widest possible audience continues to engage with the highest profile sporting events.
- In addition, the current scope of the UK regime (in terms of the rights overseen) is ‘television broadcasting’ – in effect linear broadcasting. The regime was conceived in an analogue age when coverage was viewed through the narrow prisms of ‘live’ and scheduled ‘highlights’; it does not provide any protection for on-demand (digital) rights.
- The need for reform is clear. Across the 2021 sporting summer the BBC had over 400 million requests for digital, on-demand sports content – with the Olympics and Euros key drivers.
- This reflects a big shift in the last few years, where younger audiences in particular are navigating from linear TV to digital, on-demand services. Without additional protections a new digital divide will develop with younger audiences increasingly excluded from the big national sporting moments. We have managed to secure some on-demand rights for Listed Events but that situation cannot be expected to hold indefinitely.
- There are ever increasing risks that on-demand rights to Listed Events will be sold on an exclusive basis to the highest bidder, accessible only to those who can afford it, and inaccessible to the majority unless action is taken. If these on-demand rights end up exclusively behind a paywall – as we would expect without some protection – this will create a digital divide where significant parts of the UK public are excluded from these major national moments.
- The urgent need for action was acknowledged in the Government’s recent Media Bill White Paper which stated a commitment to review this matter.
- However, if the review does not happen soon there is a risk that the Media Bill will not include the necessary legislation. We would therefore urge the UK Government to begin their review as a matter of priority.
21 September 2022
 Ofcom Media Nations Report, Wales , p.5
 Ofcom Media Nations Report, Wales , p.17
 Ofcom Media Nations Report, Wales , p.13
 Ofcom Media Nations Report, Wales , p.14
 S4C Annual Report [2021}, p.65
 Small Screen: Big Debate – a five-year review of Public Service Broadcasting (2014-18), Ofcom 
 Ofcom Media Nations Report , p.27