17 July, 2015
Public Service Broadcasting in the Internet Age - Ofcom's 3rd PSB Review
On 2 July 2015, British Regulator Ofcom published the conclusions of its third review of public service broadcasting. The review examines how the BBC - but also ITV, STV, UTV, Channel 4, Channel 5 and S4C - have fulfilled the aims and purposes of public service broadcasting as set out in legislation and identifies options for how the system could be maintained and strengthened.
While the first two Ofcom Reviews, published in 2005 and 2009, mostly looked at concerns arising from the transition to digital broadcasting, the current review focusses on the opportunities and threats arising from the growth of Internet use.
In terms of delivery, the review highlights a number of very positive developments but also some potentially worrying trends:
Positive messages: The report concludes that the PSB system to date has been broadly working, delivering the outcomes for which Parliament has legislated, whereby the BBC remains the cornerstone and the key driver of investment of the system. Audience satisfaction has increased between 2008 and 2014 and remained high over this period. News remains the most important PSB genre for audiences, with PSB still accounting for 95% of TV news viewing.
Issues for concern: Between 2008 and 2014 total levels of investment in new UK-originated content by the PSB channels fell by 15% in real terms. Additional issues of concern include in particular news consumption and the provision of news for young people, content tailored for the needs of UK nations and regions and children's programming (beyond the BBC). Concerns also remain about the portrayal of some audience groups, leaving especially black ethnic groups and disabled people feeling under-represented.
In terms of viewing habits and emerging trends, the review points out that:
Young people's behaviour may be an early indication for a more substantial shift across age groups to on-demand and online viewing. If the trends towards online and on-demand viewing accelerate, the current PSB system is likely to struggle to deliver its purpose. In that context, the current regulatory tools, i.e. access to spectrum and prominence on EPGs may cease to be effective. Public service broadcasters will need freedom to continue to innovate.
The review thus concludes that:
Increased connectivity offers exciting opportunities for the PSBs to improve delivery and engage with audiences in new and innovative ways; PSBs are well-placed to take advantage of such opportunities.
However, the current PSB system will need to adapt further to the changing environment. In addition, Funding challenges are likely to grow. Deciding the role of the BBC through the forthcoming Charter Review process will be critical.
In terms of regulation, the Statement suggests reforming the rules that guarantee appropriate prominence and access to public service content, to match changes in technology.
The Review has a cautious approach on a potential reform of the system of retransmission fees between platforms and broadcasters. While acknowledging that it could result in extra funding for PSBs, it considers that such a change would require complicated and lengthy regulatory interventions. Similarly, the Statement is cautious towards reforms of the independent production sector to change the programming quota for independent production (25%) or the definition of "qualifying independent producers".
Section 5 looks at the potential consequences of the changing landscape by considering three scenarios for change:
Scenario 1 "Substantial evolution": raises questions about the current funding models.
Scenario 2 "Radical change": would require amending the licence fee model to apply to non-linear consumption. The BBC's position may be preserved but commercial PSBs would encounter difficulties.
Scenario 3 "Revolutionary change": might imply a whole re-evaluation of how to deliver public service outcomes.
The Ofcom Statement is published alongside a separate statement which considers the performance of the PSB system in each of the UK’s Nations: England, Northern Ireland, Scotland and Wales and their regions. The two statements are to be read in conjunction with several interesting documents which provide supporting evidence, such as a data annex, consultancy (on PSB Distribution Costs and Trends in Content Investment) and audience research (on representation and portrayal of different groups of people on PSB TV) as well as a specific Review of Channel 4.
Source: Ofcom Website