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Written evidence submitted by Clwstwr



Submission by Professor Justin Lewis, Director of Clwstwr, a £10 million Research, Development and Innovation Programme, which has curated and funded 120 innovation projects with media industry partners over the last 3 years, and conducted research on the size, shape and innovation potential of the media sector in Wales. Professor Lewis is also incoming Director of Media Cymru, a £50 million, UKRI funded 23 partner consortium designed to boost innovation and growth in the Welsh media sector. He Chaired the Media and Communications Panel in the recent UK Research Excellence Framework (REF 2021), and is former Head of the Cardiff University School of Journalism, Media and Culture.


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 film and TV sector has, in recent years, enjoyed conspicuous success. More than 15% of businesses in Cardiff are now in the creative industries, and South Wales has more TV and film studio spaces than anywhere in the UK outside London. In recent years the Cardiff Capital Region has grown to become the UK’s 3rd largest film and TV industry employer (after London and Manchester), with the highest increases in sectoral productivity in the UK and with a growing reputation for producing high-end TV, producing titles like Dr Who, Sherlock, His Dark Material, Sex Education, Hinterland, Hidden, as well as a range of TV staples from Casualty to Only Connect and Songs of Praise.  The recent (2022) UKRI funding of Media Cymru is the largest UK R&D funding award to be made to a creative industry led consortium in the UK.


This success is based on an ecosystem made up primarily of small and innovative independent companies and freelancers (96% of creative industry businesses in Wales are small companies, and the sector depends upon a significant and sizeable freelance workforce). These work alongside some key anchor PSBs: BBC Wales and S4C create a steady stream of commissions, enabling the Welsh sector to develop the skills, supply chains and capacity for growth. So, for example, Severn Screen developed their craft with commissions from S4C and BBC Wales, and have gone on to win commissions from ITV (Pembrokeshire Murders) and Netflix (Havoc). The ability to produce high quality content for Welsh or UK audiences thereby provides a platform to develop TV content for global markets.


This ecosystem will be threatened if funding for PSBs is reduced , both within Wales and the UK. This same is true across Europe, where the most successful media industries in global markets are underpinned by strong PSBs. Current models of funding, such as the licence fee (on which both the BBC and S4C are now dependent), are not the only models available for public funding of PSBs: a number of other models across Europe merit scrutiny. What matters is less the method of funding than its stability, particularly given the importance of both the BBC and S4C to audiences across Wales.


The current model clearly has many strengths, producing a range of popular, high quality programming available to all at relatively low cost, and allowing a Welsh ecosystem of independent production companies to thrive, based on an appropriate and ring-fenced revenue stream. It also has weaknesses, notably:


Given the importance of PSBs to the Welsh culture and creative economy, any move away from the licence fee carries significant risk, and would need to ensure that the BBC and S4C are able to (at least) sustain current levels of funding, have medium to long term stability and guarantee independence from government.


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


As indicated by the overwhelming majority of submissions to the recent Channel 4 consultation, privatising Channel 4 is likely to have a negative impact on British broadcasting as a whole. In brief, Channel 4’s current structure costs the taxpayer nothing while enabling a steady stream of commissions (enhanced by recent decisions to devolve Ch 4) from Welsh independents (as it does from other UK nations and regions). It is an ingenious model with a range of positive economic and cultural impacts. A privatised Ch 4 is likely to lessen or remove its commitment to the UK nations and regions (and, indeed, to UK TV production in general) with no clear benefits to the UK film and TV sector.


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?


A key challenge facing the Welsh (and indeed the UK) TV sector is the shift towards (mostly US based) streaming platforms. The strength of PSBs in Wales has created a pipeline of entrepreneurial independents who have successfully won commissions (from companies like Netflix). But the future strength and sustainability of the Welsh film and TV sector will depend on its ability to develop and retain Intellectual Property (IP), rather than becoming simply a ‘show and go’ backdrop for TV production.


Global media companies enjoy a number of completive advantages, including the capacity to invest in research, development and innovation (R,D&I), and to spread IP across converged media. Public service broadcasting in Wales needs to have the resources to develop their own IP, as well to support investment in R,D&I to enable Welsh independents to create – and own - new formats and other forms of IP. UK and Welsh Government funded programmes like Clwstwr and Media Cymru, and the funding of Screen Agencies like Ffilm Cymru, also provide vital support for R,D&I.

Wales also has the potential to exploit its position – through the BBC and S4C – as the UK’s leading centre of bilingual production, with a range of skills (such as back to back production) enabling it to reach global markets. 


In the longer term, the strength of PSBs in Wales will depend on the ability of UK PSBs to collaborate on a UK-wide or European scale. Britbox is a step in this direction, but further collaboration will be needed to build platforms with the resources and reach to compete with US-based platforms or conglomerates. US companies enjoy an in-built advantage because of the size of their domestic market. This makes Pan-European collaboration an attractive option, allowing access to large markets with, potentially, better terms of trade for UK and other European PSBs.


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 sport is a valuable commodity in broadcasting. Large commercial suppliers therefore compete to win exclusive access to live sporting events. This has created a contradictory set of conditions, where sporting bodies have a financial incentive to limit the size of their potential audience. So while sports enjoy far larger audiences on free-to-air channels, these channels have insufficient resources to compete with large commercial broadcasters (notably Sky). The current market in live sports broadcasting therefore works against inclusivity and access.


This puts sports organisations in a difficult position: do they increase access to or interest in their sport by going free-to-air, or increase their revenue by signing exclusive deals with subscription services?


Free-to-air broadcasters and sport organisations are fairly powerless to square this circle, but there are two ways for government to intervene:

In this context, government needs to decide whether it sees sport as having particular cultural or public health value, or simply as a form of content. There is also a role for devolved government here, to keep sporting events of significant cultural value in Wales – such as the Six Nations – free-to-air.


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


The huge growth in interest in Women’s Football in Wales has been accelerated not just by the success of the England team, but by its conspicuous presence on free-to-air BBC platforms, dramatically increasing participation, interest and attendance at live games. This is in marked contrast to sports, like cricket, whose shift to subscription channels in recent years has created a problem in generating broader interest or engagement in the sport.

Moving away from free-to-air only has short-term benefits for those sports with enough market value to command significant revenue from commercial subscription services, and enough popularity to sustain interest despite smaller TV audiences. Even then, there is no guarantee that revenue is used to support grassroots participation. In the medium to longer term, signing exclusive deals with subscription broadcasters will reduce access, interest and participation levels in Welsh sport.



10 October 2022