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21|01|09

The commercial PSBs

There needs to be major changes to the current PSB system if it is to survive past the digital TV switchover in 2012.

In the future the rising cost of PSB programming will outweigh the benefits for commercial broadcasters like ITV.

Ofcom’s blueprint addresses profound structural changes in the commercial broadcasting sector, such as digital switchover and pressures on television advertising, which will create a shortfall of up to £235 million per year by 2012.

The recommendations take advantage of the opportunities created by the revolution in digital media, including the use of broadband and mobile networks to distribute content.

Future role for ITV plc and other Channel 3 licensees

Short term

Given these changes, Ofcom has today decided to adopt the measures proposed in its September 2008 consultation to allow a restructuring of ITV’s regional news in England and the Scottish Borders.

This will ensure that ITV prioritises programmes that audiences value the most, such as peak time regional news coverage and original UK content.

In response to the consultation we have modified our original proposals in relation to the quota for factual non-news programmes in Northern Ireland.

Longer term

Ofcom wants to support investment in the wide availability of high quality original programming and UK and international news.

Ofcom proposes to position Channel 3 services as commercial networks with a limited public service commitments. Modest licence benefits should be balanced by appropriate obligations on a sustainable basis.

Maintaining Five’s public service broadcasting commitment

Ofcom recommends that Five should continue to broadcast national and international news and original UK content.

In the longer term Five’s obligations would be much more consistent with the proposals for Channel 3.

A strong public service alternative to the BBC

A new organisation, with public purposes at its heart, should be established; Channel 4 is well-placed to be central to this.

It would have a new remit to deliver news, current affairs, programmes for older children, programmes made outside London and a full range of digital media content.

This could be created by forming partnerships, joint ventures or mergers between Channel 4 and other organisations. These could generate new value through cost savings, synergies and new opportunities for growth.

One option would be for Channel 4 to form a new relationship with BBC Worldwide, the BBC’s commercial arm. Another option could be for Channel 4 to merge with a commercial organisation, such as Five. Any partnership would need to maintain and strengthen delivery of the public purposes.

Partnerships should complement market provision and ensure economic sustainability, accountability, choice and competition. New governance and accountability arrangements would be essential.

Children’s programming

A second public service institution could play an important role in delivering content for older children.

However, that provision may not go far enough so competitive funding should be considered for children’s content made in the UK.

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