Home > Media and Analysts > Speeches and Presentations > 2008 > March > RTS - PSB

11|03|08

The Future of Public Service Broadcasting

Introduction

Today, Public Service Broadcasting finds itself in the spotlight of parallel debates.

On one hand it is in the spotlight of the debate about which parts of our historic system of public service broadcasting we should carry forward or adapt from the old analogue era into the converged digital world and how we harness the opportunities that this new age offers.

This is the debate which concerns all of you here tonight most directly – it is a debate taking place within broadcasting and I hope at the very least the wider communications sector.

Public Service Broadcasting also plays a role in a much wider debate about what the cultural, creative and economic fabric of the UK should look like in the first part of the 21st century; and how society can promote standards of excellence across our creative industries to ensure that we stay at the forefront of innovation and of the creative economy.

And it plays an important role in a further debate; a debate about what we see as the components of a modern democracy, about how we see and manage the tension between diversity and cohesion, between individuality and community, and our differing senses of what and who we are as a country.

Public service broadcasting is not the answer to any of these questions, nor should it ever try to offer solutions, or even worse be enlisted in any particular view of what the right answer to these questions might be.

But it does have an important role to play in these debates.  And it is in this context that I want to talk this evening about Ofcom's second Statutory Review of Public Service Broadcasting.

My aim in highlighting this wider context is not to create idealistic or unrealisable lofty ambitions; it is in fact a much simpler goal. It is to try to start by being clear about what we are trying to do as we set about considering the future.

In our first review of Public Service Broadcasting we articulated a set of public purposes.  We did so to try and move beyond the sterile debates about what PSB was for that had bedevilled us in the past.

The four purposes aim to increase our understanding of the world, stimulate our knowledge and learning, reflect our UK cultural identity and to ensure diversity and alternative viewpoints are represented.

Let me say how important I believe this framework to be.

Without such purposes, the danger is that we have many different debates about means, but we do so with no idea about ends.

Without a framework of this kind, we have no compass with which to set a course, and crucially no way in which we can compare alternative ways in which to achieve these goals.

You can take from this starting point that Ofcom's outlook is to try and take the long view - tonight will not be an opportunity for promoting some sticking plaster solutions that seek to disguise the fundamental questions we face.

Now is the time for us to develop a long term view about how best to deliver PSB in the future, and then to ask what the right transition path is from where we are today to where we want to be in the future.

I want to marry this thought with a second, very simple idea.  Ofcom's perspective on these issues will be unashamedly focused on the citizen and the consumer, on the interests of audiences, of viewers, of listeners.  Of course we must understand the mechanics, the incentives and the motivations of producers and broadcasters, but our starting point is the interests of citizens and consumers and this will infuse our approach.

The context for our forthcoming review of PSB

Let me now take us forward to our point of departure.

Our task is to report on how the quality of public service broadcasting in the UK can be maintained and strengthened.  So, in terms of direction of travel the remit has been set for us.

PSB2 will set out analysis, evidence and some options for change in our public service broadcasting system and is intended to frame a debate which is based on the research and analysis that we have carried out over the last few months.

And later this year we will publish the second phase, which will set out our more substantive set of proposals for how the public service system might be maintained and strengthened.

As a starting point one might ask what is different to four years ago when we concluded our first PSB review?

The candid answer to this question is that we now face a far more immediate choice than we did four years ago, and a far more material set of challenges.

No-one should be in any doubt about the urgency of these challenges.

For the first time since their creation, the range of questions about ITV and Five will concern not only the nature of their PSB obligations, but also whether they can or indeed should play a central role in PSB in the future – a question inevitably for their shareholders as much as for policymakers.

And for the first time since its inception the balancing act at the heart of a publicly owned commercial PSB – Channel 4 - is in question in a fundamental way.

Again, this is unlikely to be a question of modest adjustment but one which lies at the heart of the channel, the Channel 4 Group, its mission and its ability to deliver that mission.

I very much welcome the work Channel 4's Board and management have been doing to clarify what they see as the organisation's purpose and strategy.  The time is ripe for this; Channel 4's challenge is to reinvent itself with the same ambition and panache with which it was launched 25 years ago.

In this PSB review, there will also, for the first time ever, be a real debate about the role and distribution of the licence fee rather than just a discussion about the role and limits of the BBC itself – and indeed a debate about other potential sources of funding too, whether they be indirect or direct.

And for the first time since television emerged to complement radio – and public service broadcasting embraced both media – we have to respond fully to the opportunities created by new media as well as to the adaptation of what we now regard as old media.

A changing environment

There is a second reason why this PSB review is different to the first one - and that is because we have lived for four more years in the midst of the rapid change that now characterises our television and wider communications landscape.

Tonight is not the time for a review of the implications of this rapid change, only to briefly note that there are:

• More than 50% of homes with broadband with ever rising speeds;
• 100% of households will have digital multi-channel TV by 2012;
• Since 2003 there have been 800 million video streams or downloads in the UK;  
• And five years ago, when we began our last PSB review, Google's UK revenues were a mere 5% of combined Granada and Carlton advertising revenues- today they look set to overtake ITV's in the UK.

Let me offer a few general reactions:

• The future will never be about linear television alone, but a rich mix of linear TV and new and diverse forms of content and delivery;
• Content, but also technology and distribution have to be at the core of our challenge;
• Personal control, mobility and interaction will be central to audience demands; and
• Managing change, uncertainty and the ability to adapt will be crucial to success – not only for commercial companies but also to public service broadcasters and to our system of public service broadcasting.

What do audiences want?

We need to begin by understanding what people value. Much like companies, part of our job is to ask ourselves what it is that audiences want our broadcasting system to deliver?

We have conducted extensive research ahead of publication which has thrown up some interesting insights into a number of aspects of public service broadcasting - including what people see as most important, how they interpret the delivery of our existing PSBs and where audiences go for different aspects of their media experience.

Again, a few brief highlights:

First, that despite the shift away from viewing of PSB channels, the public's support for PSB and its desire to see the public purposes which underpin PSB delivered in an effective and accessible way remains very strong.

Second, that audiences continue to see high levels of UK content as central to delivering the PSB purposes and characteristics.

And third that plurality in the public's view is a central component at the heart of PSB.

These will all be central to our assessment.

Equally, our research and analysis has exposed some very real challenges.

Today we can see where, in addition to the underlying fragility of the funding and institutional model of PSB, other challenges are emerging as our media changes and audiences' behaviour adapts.

If I were to attempt a relatively crude shorthand for the detailed and reasoned analysis that will be set out in our first PSB review document next month, it would be around some simple themes.

Firstly, there is an ongoing challenge for PSB in terms of its reach and impact.

This is not to overstate the case. The enduring importance of television in peoples' lives remains clear, and in many ways the resilience of PSB in the digital world is a remarkable story.

The development of portfolio channels has certainly had a significant impact, although the amount of origination on commercial PSB digital channels has been limited to date.

But overall, the pressure of audience fragmentation, the pressure of alternative media, the pressure on advertising revenues is unlikely to decline.

Second, under a range of scenarios for the future economics of commercial television and UK origination in particular, UK children's programming and programming for the nations and regions present a significant cost to commercial broadcasters, and the decline in commercial public service broadcasting output in these areas looks set to continue or worsen.  Other areas such as current affairs and serious factual may well also face declines.

But the BBC's output in these areas has every reason to be maintained – which is good news; it is, as I have said on many occasions before, the cornerstone of our system.  But while the BBC is necessary, it is not sufficient.

So the third major risk to delivery of public service purposes in the future is the risk to plurality in the provision in key types of public service content, and indeed some associated decline in overall levels of investment in UK content.  I think this must be at the heart of our concerns.

But, finally, there is also an opportunity.

The challenge for reach and impact of PSB using linear TV alone is increasing, and among younger audiences it is a lot starker.

• On average people now spend over 12 hours a week online, three quarters of which is at home;
• The amount of time that 16-24s spend online at home has increased by over 50% in the last two years alone;
• And today, 20% of people identify the internet as the communications service they would find it most hard to live without.

This change creates the opportunity to meet public purposes not only with the declining if remarkably resilient power of linear TV, but also with the increasingly virile powers of new media.

And in a sense, this has validated our original ‘PSP argument'.  Does anyone seriously now doubt the proposition that PSB needs to embrace new media content and distribution as well as linear TV?  I think we can safely declare that question resolved.  The PSP as a concept has served its purpose and we can move on to the relevant questions for today:

• How the value of existing broadcast PSB output can be enhanced by making current and archive content available on demand and in different forms through a variety of media.
• What new forms of public service content are now possible – forms which take full advantage of interactive media's participatory and collaborative potential.
• How do we capitalise on the wide range of providers – private, public, third sector and individuals - who are already producing an unheralded diversity of interactive media which in many respects meet public purposes and characteristics already?

What lies ahead

So what does all this mean for our system of public service broadcasting?

Our current system is, of course, a bit of a historical mish-mash of funding models and regulatory interventions developed over 50 years of an evolving analogue broadcasting model. It is a model characterised by complex structures of regulation and accountability.

But the old model will face major constraints in adapting to the significant changes in market conditions and audience behaviour that lie ahead.

For the world that we see around us today, the old model has some real weaknesses:

• It is relatively inflexible and already visibly struggling to adapt quickly and effectively;
• It is too focused on a limited set of services primarily delivered over one specific platform;
• Elements depend on unsustainable commercial funding models;
• And it is becoming increasingly over-reliant on one institution, the BBC.

We need to disentangle that model now to begin creating a new system capable of delivering the public purposes in a digital age.

And at the same time we must give clear messages to different organisations – such as Channel 4, ITV and Five – about what we see as their roles in the future PSB system. Only then will these organisations emerge from what increasingly feels something like planning blight and be able to move confidently into the future.

In the face of new challenges from a changing media environment and from the steady erosion of the analogue model, we need to redesign our system.

Any approach needs to show it can be effective, against some key tests. 

• It must be flexible enough to be able to respond to uncertain audience and market developments.
• It must complement market provision and embrace a range of platforms and content forms, given changing audience behaviour and the possibility of new ways of delivering public purposes.
• It must provide sustainable funding models as the value of spectrum subsidies continue to decline.

It must also:

• Allow competition between a wide range of providers to deliver the benefits of plurality.
• Incentivise high levels of reach and impact in delivering the public service purposes.
• Ensure the future provision of a high level of UK content through which the public purposes are in great part delivered.
• And provide transparent, efficient and effective governance arrangements and methods of allocating resources.

I cannot today set out a detailed blueprint for change.  At this stage, our job is to describe where we are today, set out what audiences tell us they want, to map out the choices and options and to establish the tests which a reformed system will need to meet if it is to be effective.

We believe that public support for public service broadcasting and the PSB purposes remains strong and that our focus must be on meeting these for as many as possible of the UK's citizens.

We go into the review with a genuinely open mind, but:

• With an instinct towards continued intervention to maintain high levels of original production, which differentiates our public service broadcasting and is vital to meeting our public purposes;
• With an instinct to maintain plurality at the heart of the system alongside an appropriately financed, independent BBC as the cornerstone;
• And with an instinct that there is a real opportunity for meeting purposes through new media as well as traditional – whether that be by building on the new media development of existing broadcasters or considering something which draws itself on the new world.

At the time of our last PSB Review, the recommendations we made were aimed at sustaining the existing PSB model into a more challenging period as the pressures in delivering the public purposes became greater. Today, the spectrum of options that are open to us in re-casting PSB are much wider.

At one end of that spectrum we have to ask ourselves whether we would be happy to have the BBC as the sole intervention in the market. At the other end of the spectrum is a very open system of PSB, potentially with a number of delivery mechanisms for public service content, with stable but transferable funding at its heart.

Of course between these two ends of the spectrum are a great number of combinations, each of which have different mixes of funding and governance and different risks and opportunities.   All of these should be fully and thoroughly explored.

Yes, there may be a need for a significant change to the role of different organisations.

Yes, there may be a need for different remits and different approaches to accountability.

And yes, there may be a need for a new approach to funding and to the distribution of funding.

At this stage we should keep all these options on the table.

Next month, we will bring forward our thinking on alternative models and use them to help determine whether we need a new system that is a modest evolution of what we have, or whether the time is ripe for more radical redesign.

Thank you very much.

Back to top