Written evidence submitted by the Ofcom Advisory Committee for Wales (BIW 08)

Introduction

The Ofcom Advisory Committee for Wales welcomes the opportunity to respond to this Inquiry at what is a particularly critical period for the provision of media and broadcasting in Wales. Media provision in Wales has relied heavily, to a greater extent than in the other UK nations, on its public service broadcasters (PSBs), BBC Cymru Wales, ITV Cymru Wales and S4C. They have collectively served Wales well, yet over the last few years spending and output by the PSBs on programming specifically for Wales has decreased significantly in both Welsh and English.

Wales' dedicated press provision has always been weaker than in the other UK nations and it is now in rapid decline. The most recent circulation figures for the Western Mail, the country's only truly national paper, are down to about 18,000 and it has been variously estimated that the bulk of the press read in Wales (around 90%) is produced by London based newspapers which rarely, if ever, contain stories about Wales. 

Ofcom's recent Third Review of Public Service Broadcasting suggested that radical change had occurred since the previous Review was conducted in 2008. Broadband connectivity and access to the Internet[1] have driven this change and, in turn, created new challenges in securing prominence of content about Wales.

Ofcom's PSB Reviews have shown consistently that audiences in the Nations place a high value on news and plurality of news provision for their areas.[2]  Ofcom's Third PSB Review also noted the importance to audiences of portrayal of their nation on the UK's networks.[3]

As a nation, Wales now faces a curious paradox in which accelerating devolution, bringing further powers from Westminster to Cardiff Bay, is potentially matched by a significant reduction in the provision of Wales specific media content that serves to inform its citizens. There is, therefore, a risk of inadequate scrutiny of the future actions, decisions and policy making of government in Wales and of more limited public discussion of Welsh affairs generally. 

English Language Television for Wales

The reduction in non-network English language television spend by the BBC and ITV Wales between 2008 and 2013 was among the biggest percentage decline in spend of any of the UK's nations at 30%.  Although the BBC still provides the majority of non-network programming for Wales in the English language, it has nevertheless declined in that period by more than 100 hours, mostly in non-news programming. 

Following the cuts imposed on BBC Wales in 2010, its range of English language programmes for Wales narrowed significantly, as recognised by the BBC's Director General in a speech given last year in Cardiff[4]. Data provided by BBC Wales[5] shows that while total news and sport output for Wales has increased in the period from 2004/5 - 2014/15, drama, arts, comedy and music output has more or less halved across the same period. 

Following Ofcom's second PSB Review, there was a significant drop in ITV's output for Wales in 2009 because of the risk that ITV might choose to give up its PSB status and hand back its Channel 3 licences.  Following the award of a new Channel 3 licence specifically for Wales in 2014, ITV Plc, which owns ITV Cymru Wales, has agreed to maintain its provision of news, current affairs and other programming at existing levels until the licence expires in 2024[6]. However, it has made it clear that there will be no increase in provision in the coming years.  But the presence of ITV Wales remains vital in providing a plurality of voices in news and current affairs in competition with the BBC. It is worth noting that this plurality of supply is evident both in the English and Welsh languages, where both ITV Wales and BBC Wales provide current affairs programmes for S4C.

But plurality is not just about news provision.  It is also important to consider non-news genres, such as comedy, drama, factual programming and the arts, all of which are essential in reflecting a modern, vibrant and democratic society.  These programmes can provide insights that go beyond news coverage, promoting greater personal understanding and social cohesion.  We note that Wales' First Minister has called for an additional £30 million of funding to be provided to the BBC in Wales to bolster its non-news output. It is vital that audiences in Wales have access to the quality of national content they expect and deserve.

Implications of a Reduction of English Language Programme Output

As a consequence of the new licence fee settlement announced over the summer, the BBC in effect faces a 20% cut to its funding.  In its own response to the current Charter Renewal process the BBC commits to 'protecting the funding for each nation' by 'ensuring they are cut less than other areas'. BBC Wales demonstrably needs increased funding, but in response the BBC in London claim that any increase would impact on the BBC’s network output. This is an inadequate argument given the difference in scale of spending and output between London and Cardiff. Data from BBC Wales' annual management reports shows that funding for its English language television output fell by £3.8 million between 2006/7 and 2014/15. It is therefore hard to see how restoring funding for BBC Wales to the level of 2006/7 would impact heavily on the BBC’s total network budget.  It is vital that the balance of funding between Wales and the network is looked at in the round.

Wales is a constantly evolving society, with a growing ethnic minority population and an ever more diverse demographic. It is important that broadcasters in Wales recognise this and reflect the diversity of the nation in their output. A central purpose of programme commissioning is to maintain or increase audience share and reach. There is simply not enough funding to reflect the diversity of contemporary Welsh society if the present budget cuts are not restored.

Welsh Language Television

The Welsh language is a unique cultural asset in the UK and one that needs particular support, in addition to the rest of broadcasting. S4C’s role in maintaining and strengthening the Welsh language has been widely recognised, through the success of its pre-school service Cyw and by the Welsh Government in the development of its Welsh language strategy[7].

Despite the cuts faced by the broadcaster in recent years, in which its programme spend   has reduced from £87 million in 2009 to £64 million in 2013, Ofcom data suggests that its range and diversity of service has been maintained, covering most genres with an increase in the volume of first run, original programming[8].  Ofcom's PSB Tracker research shows that the service is broadly appreciated by Welsh speakers and that it delivers on most of the purposes and characteristics of PSB defined by Ofcom[9].

Unlike the other broadcasters in Wales, S4C is free to schedule and broadcast its own programmes without reference to any other organisation or authority. The Operating Agreement between the S4C Authority and the BBC Trust enshrines the principle of S4C's editorial, operational and managerial independence and it is essential, for the benefit of viewers in Wales, that this principle is maintained in the forthcoming negotiations about the BBC's Charter renewal.

Future Funding of Welsh Language Broadcasting

At first, S4C was funded by a levy on all the ITV companies in the UK and it did not compete with BBC services for the bulk of its funding. This remained the case when S4C’s main funding was later switched to a direct government grant. But From 2013/14, as part of the Comprehensive Spending Review a new framework agreement, between the BBC and the UK Government, included an arrangement for S4C to be funded by the BBC licence fee together with S4C's commercial income and a greatly reduced grant from DCMS[10].  In October 2010, the DCMS Secretary of State confirmed a 24.4% cut to S4C’s funding over the 4 years of the review period (equivalent to 36% in real terms). However, the Public Bodies Act 2011, also placed a duty on the Secretary of State to secure 'sufficient funding' to enable the S4C Authority to fulfil its public service remit.

In October 2011, the BBC Trust and the S4C Authority agreed a new Operating Agreement[11] which provides funding up until the end of the current charter 2016/17, but no further grant support has so far been announced by the DCMS, beyond 2016[12]. 

S4C also benefits from at least 10 hours per week of content supplied by the BBC[13] and from October 2006 the supply has been provided under a Strategic Partnership between the two broadcasters, with the present agreement running until the end of the present BBC Charter in March 2017. But the value of the supply has fallen from £25 million in 2008/9 to £19.7 million in 2014/15.

With funding for both Welsh and English language television now sourced primarily from the licence fee, there is a risk that these new arrangements could be lumped together in a single pot of funding for Wales.  But, a 'race to the bottom', in which funding is equalised between the languages would be grossly unfair and should be avoided. S4C is the only Welsh language television channel available for viewers in Wales (and indeed the wider UK, where the content is available to the Welsh diaspora), while there are already hundreds of English language services with many more available online. S4C's funding deserves to be 'ring fenced' as suggested in the terms of reference for this Inquiry.  As noted earlier, the Secretary of State has a duty to ensure that there is sufficient funding available to deliver the S4C service[14].  He should consult and make public the range of criteria he intends to apply in exercising this duty.

Radio Broadcasting in Wales

BBC Cymru Wales also operates Wales' two national radio networks, Radio Wales and Radio Cymru. Although originally an AM service, BBC Radio Wales now covers 81% of the population on FM, while Radio Cymru, originally launched as an FM network, reaches 95% of the population.  Both stations are also broadcast on Freeview across Wales, and across the UK on satellite as well as via Digital Audio Broadcasting (DAB).  But their coverage on DAB at 65% of the population has lagged behind the UK's BBC stations in Wales, at 85%, which has been a serious disadvantage.  For technical reasons, the BBC's UK multiplex does not carry Radio Wales and Radio Cymru, which are instead provided via local commercial DAB multiplexes in Wales. But due to the substantial investment required these have been slow to roll out and large parts of mid-Wales are currently only served by the BBC's UK Multiplex.

The commercial radio sector in Wales does currently offer some plurality of news and information other than that provided by the BBC, but due to the stations' music-led formats, they are more of a notice-board than a critical voice. Commercial radio listening and revenue levels in Wales are lower than elsewhere in the UK and some commercial radio groups have indicated their eagerness to shed their remaining localness commitments, particularly when services switchover to DAB.  Without a change of legislation, commercial stations would no longer be required to include any news, weather and traffic information for Wales. It is possible that community radio could emerge to fill this deficiency, but its reach is currently limited and despite some recent reforms, the long-term sustainability of these services, which are largely run by volunteers, remains problematic.

Economic Impact of the Broadcasters on the Creative Industries in Wales

The Hargreaves Report on Wales' Creative Industries[15] recognised the economic contribution made by Wales' broadcasters to the local economy and, in recent years, both the BBC[16] and S4C[17] have commissioned economic impact studies.  As a publisher broadcaster, S4C invests in programmes and content from independent producers, commissioning programmes from 65 companies during 2014/15 [18]. The BBC commissioned 90 Wales-based companies[19] for its output for Wales during 2014-15.

The development in recent years of the BBC's Drama Village in Roath Lock, Cardiff has provided a significant boost to broadcast industry freelance workers in south Wales.  But despite the high-quality programmes produced by BBC Wales as a centre of excellence for network drama, programmes reflecting life in Wales on the network have been in short supply in recent years.  It is now over seven years since Torchwood and Gavin and Stacey were first broadcast (and that series was in any case produced by a Manchester indie). 

Impact of New Technology on Viewer Behaviour

Across the UK, overall levels of television viewing have been falling but although in decline, viewing to the main PSB channels still accounts for 50% of all TV viewing.   According to Ofcom, people in Wales are avid TV watchers but demographic analysis of the viewing audience shows that while levels of TV viewing for the over 55s have remained fairly stable, viewing among under 35s, and especially children, have fallen significantly, although, the BBC argues that the top TV channels for 16–24s are still the PSB channels[20].

In Wales, there was a 9% increase in Smart TV take-up in 2015 compared to the previous year, which enables viewers to watch services delivered via broadband. All sets sold in the UK offer access to the BBC iPlayer, but for example, Sony smart TVs do not currently provide access to the ITV Player and All4, while Apple TV, does not include any UK PSB catch-up services, although Netflix is available as standard[21]. This access is managed by the manufacturers but their 'gate-keeper' role was not envisaged by the 2003 Communications Act and is effectively unregulated[22].

The key issue is the extent to which PSB programmes will remain universally available and discoverable in an age of rapidly changing technology. There is an urgent need for the UK Government and the devolved administrations, together with the European Commission, to instigate an urgent review of current regulations and legislation to ensure that international manufacturers can guarantee a level playing field for public service broadcasters across Europe, the UK and in Wales.  This is going to be a particular challenge for the public service broadcasters in Wales.

29 October 2015