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11|09|07

Ofcom begins public service television broadcasting review

Ofcom today published the terms of reference for its second review of public service television broadcasting (PSB). The review will examine the extent to which the public purposes of PSB are being met and assess options for maintaining and strengthening the quality of PSB in future. It is expected to conclude in early 2009.

Ofcom’s first PSB Review concluded that there was continued demand for PSB but that the existing model of ensuring it is provided by commercially funded channels would not survive the transition to a wholly multichannel world unchanged.

It stated that, as the value of analogue broadcasting licences declines, so the regulator’s capacity to require commercial public service broadcasters to deliver certain types or quantities of programmes diminishes.

Since the first PSB Review concluded in early 2005, the media landscape has evolved rapidly:

• Viewer adoption of digital technology has grown significantly. Eight in ten of us now have multichannel televisions at home – an increase of 17 percentage points in the last two years.
• Multichannel television means smaller audiences for all. The combined share of the five terrestrial public service channels (BBC1, BBC 2, ITV1, Channel 4 and Five) - which fell 10 percentage points between 2001 and 2005 – shrunk a further 3.6 percentage points in 2006 alone. In children’s programmes, the trend is even more stark: the public service broadcasters’ share for 4-15 year olds has fallen from 64.5% in 2002 to 45.8% in 2006.
• Meanwhile, 16-24 year olds watch less terrestrial television than ever before (down from 74.3% of their viewing in 2001 to 55% in 2006). They are increasingly turning to other platforms such as the internet.
• There has been a corresponding fall in television advertising expenditure as advertisers look elsewhere to make an impact with their target consumers. The commercial analogue channels have seen net advertising revenue fall from £2,559 million in 2002 to £2,427 million in 2006.

Ofcom announced in May that it would be bringing forward its second PSB Review based on this and other evidence including:

• Ofcom’s Financial Review of Channel 4, which highlighted the considerable uncertainties for that channel and indeed for commercial public service broadcasters more generally. This could limit their ability to meet PSB goals over the next few years. Any significant change to the structure or financing of commercial PSB is likely to require new legislation. The Government has already announced its wish to bring its own planned review of PSB funding forward informed by the analysis and conclusions of Ofcom’s statutory review.
• Ofcom’s initial work on other PSB issues. These include the future of news, on which it published a report in July 2007, and children’s television, where a report is due in October. It is important that policy proposals that might arise as a result of this work are considered in the context of a wider strategy for public service broadcasting as a whole.

Scope of the review

The second PSB review will consider the period through digital switchover and immediately afterwards and focus on traditional public service television services provided by the BBC, ITV, Channel 4 and Five, S4C and Teletext.

However, audio-visual services delivered over the internet and mobile networks are increasingly sophisticated and widespread, offering high-quality content delivered to consumers on their own terms.

The distinctions between content broadcast on traditional television and those delivered on new platforms are increasingly blurred. So there is potential for these new services to offer public service content.

The scope of Ofcom’s review will therefore include non-traditional audio-visual services offered by the existing public service broadcasters on other platforms. It will also examine the prospects for other broadcasters and online producers to deliver content that meets public purposes.

The review will also assess what intervention, if any, will be necessary in future to maintain and strengthen the quality of public service content on whatever electronic communications platform it is delivered.

Timetable

The Review will have three stages:

• Phase 1 will examine the extent to which the public service broadcasters are currently meeting public services purposes, the issues facing them in future and will assess their likely ability to meet existing requirements. Ofcom intends to consult on its analysis in Spring 2008.
• Phase 2, due for publication in Autumn 2008, will outline various policy options and recommendations and invite responses.
• Finally, Ofcom will publish a final statement in early 2009 which will include a summary of consultation responses and report any new findings.

Ed Richards, Chief Executive of Ofcom, said “Public Service Broadcasting still has an important role to play and the review will help maintain and strengthen its quality in the new market conditions”.

“However, the way PSB is delivered and consumed is changing radically. The potential for new services to deliver public service content beyond traditional television is already here, and should be exploited.”

Invitation to contribute to the Review

Ofcom is keen that the PSB review draws upon views from all interested parties. To that end, Ofcom welcomes comments on the terms of reference and scope of the Review. It is published today at www.ofcom.org.uk and the deadline for responses is 30 September 2007.

Ofcom also intends to hold seminars during the first phase of the review to gather further views from stakeholders.

Ends.

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