UK: Ofcom Consults On The Way Forward For Public Service Broadcasting

Last Updated: 5 January 2015
Article by Paul Stone

Ofcom are required by the Communications Act 2003 to periodically review public service broadcasting (PSB) in the UK, with a view to establishing the extent to which the PSB television channels (BBC, ITV, STV, UTV, Channel 4, Five and S4C) have fulfilled the purposes of PSB and to make recommendations as to how PSB can be maintained and strengthened in the future.

The PSB purposes are:

  1. to inform and increase understanding of the world through news, information and analysis of current events and ideas.
  2. to stimulate interest in and acknowledgement of arts, science, history and other topics, through accessible content that can encourage informal learning.
  3. to reflect and strengthen cultural identity through original programming at UK, national and regional level; on occasion, bringing audiences together for shared experiences.
  4. to increase awareness of different cultures and alternative viewpoints, through programmes that reflect the lives of other people and other communities, both within the UK and elsewhere.

The current review covers the period 2008-2013 inclusive and is the third Ofcom PSB review. Previous reviews took place in February 2005 and January 2009.

THE REVIEW

Ofcom looked at PSB in light of major changes in the broadcasting industry since 2008 such as the digital switchover, the growth of broadband, mobile devices and DVRs and new services and platforms such as iPlayer and Netflix which give audiences a greater choice of how they consume content.

It also considered the impact of the decline in spend, output and viewing across the PSB channels, which it attributed in part to the growth of non PSB portfolio channels.

Ofcom found that despite the rapid change in the broadcasting industry the PSB system remains strong. PSB broadcasters are continuing to provide programming that is highly valued by audiences and are broadly delivering the purposes and objectives of PSB. At the same time however, audiences are not satisfied that current PSB output strengthens national/regional identity or reflects the different cultures in the UK and the provision of programming for children has continued to decline to the point that there is little UK non-animation output beyond the BBC.

THE RISKS TO PSB

Ofcom identified a number industry/social changes that may pose a risk to the future of the PSB system, such as:

  • A faster shift to on-demand viewing – this could be a problem for the effectiveness of the PSB system if PSB broadcasters lost share of viewing to other players or if on-demand viewing could not be monetised as effectively as linear viewing. Also there is the danger that distribution costs can only be met through reducing investment in content and/or the reach and impact of the PSB broadcaster.
  • New entrants to the UK market – "over-the-top", online only video and other such services may eat into audience share and revenues of PSB broadcasters and leave them lacking the scale required to compete.
  • Faster fragmentation of audiences – demographic changes and a failure to adequately reflect a more diverse society may result in falling viewer satisfaction.
  • Significant cost inflation – if the rising costs of production are not matched by an increase of funding this may lead to a reduction in volume of quality of PSB programming.
  • Threats to key sources of funding – such as the licence fee and advertising

THE KEY AREAS FOR CONSIDERATION

In light of its duties under the Communications Act, Ofcom believed it was important to consider what could be done in the event that any of the identified risks were to materialise. They identified four key areas for further consideration and to form the basis of the consultation:

  • Modernising availability and discoverability rules - to ensure that PSB content achieves universal reach and impact in the future, it may be necessary to reform the current regulations on prominence and carriage, and to define what is meant by universality in a more complicated connected environment. Part of such analysis will be to understand the effect on distribution costs and how that affects content investment.
  • Providing greater institutional flexibility – so that PSB broadcasters have greater flexibility in choosing how they deliver PSB content, including online, on demand and on mobile. Such an approach could be applied to all PSB institutions or just a subset, recognising the different roles that different PSBs play in the overall system.
  • Rebalancing the relationship between broadcasters and the production sector – changing regulation that influences the relations between the PSB broadcasters and the independent production sector. Such an approach would need to consider whether the changes would increase investment in UK content and improve the delivery of the purposes and characteristics without undermining the current success of the UK independent production sector.
  • Considering additional sources of funding - this could include retransmission fees, relaxing television advertising rules, new tax breaks to encourage investment, industry levies and copyright regimes or establishing new quotas to secure provision of any at risk genres.

CONSULTATION

Ofcom is inviting views and comments on these initial findings. The consultation will run until the 26 February 2015 and a final report will be published in the summer of 2015. A full copy of the report and details on how to respond to the consultation can be found here.

This article was written by Dionne Alveranga, a trainee solicitor. 

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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