Ofcom has today published a consultation on its third review of public service broadcasting.
Today's review examines how the BBC, ITV, STV, UTV, Channel 4, Channel 5 and S4C have fulfilled the purposes of public service broadcasting (PSB) since Ofcom's 2008 review.
Ofcom's initial view is that public service broadcasting is performing well despite falls in both programme spend and viewing.
In research published today, audiences told Ofcom that PSB is meeting their needs with 77% of viewers satisfied with the PSB channels, up from 69% in 2008.
Viewers value the PSB purposes highly and are increasingly taking advantage of high definition and on-demand programmes and watching TV across a range of devices.
Viewing to the main PSB channels accounted for over half (51.1%) of all TV viewing in the UK in 2013, although falling from 60.8% in 2008. If the PSB's '+1' channels are taken into account, the combined viewing share of the PSBs was 58.7% in 2013.
Overall investment in original, first-run programmes from the PSB channels fell by 17.3% between 2008 and 2013, to £2.41bn. However, the impact on range and quality of programmes is unclear as overall audience satisfaction remains high and the volume of new shows during peak time viewing increased by 1.1% over the five years.
The UK media and communications industry has undergone significant change since 2008, driven by the completion of digital switchover, the rise in online TV viewing and the rapid take-up of connected and mobile devices.
There has been increased programme spend from providers other than the PSB channels between 2008 and 2013, including both the PSB's commercial portfolio channels and multichannel broadcasters. Spend on original, non-sport programmes from non-PSB channels has increased by 43% to £345 million in 2013 and now accounts for 15% of investment in original, non-sport programmes.
If current trends continue, Ofcom's view is that the PSBs should be able to maintain current levels of delivery and output. But on-going changes in the sector could present both opportunities and challenges for PSB:
A faster shift from live TV to on-demand viewing could reduce the reach of the PSBs. Alternatively, it could help PSBs better meet audience needs through greater convenience and access to archive programmes.
New entrants, including 'over-the-top' online video services such as Netflix and Amazon, compete with traditional broadcasters. Increased competition could reduce audience share and revenues for the PSBs. It could also stimulate greater innovation and better quality programmes.
Demographic changes in the UK, particularly differences between younger and older audiences, are potentially challenging for the PSBs. While a failure to respond may result in falling viewing share, innovation and increasing use of on-demand may allow better targeting of distinct audience groups.
The BBC licence fee and TV advertising are key sources of funding for PSBs. A significant reduction in either would need to be offset by further efficiencies or by creating new sources of revenue.
A significant increase in TV production costs could lead to a reduction in the range, volume or quality of PSB programmes, if funding is not maintained.
Ofcom has also considered what could be done should challenges to the PSB system emerge. Today's consultation identifies four key areas for further consideration:
Ofcom, which has also published its public service broadcasting annual report 2014, is seeking views on its initial findings. A final statement on the PSB review will follow in summer 2015.
Ed Richards, Ofcom Chief Executive, said: "How people watch TV is changing but it is clear that viewers value programmes from the public service broadcasters.
"The entire TV industry must meet new challenges from an evolving media landscape, which brings risks and uncertainties. But our view is that the public service broadcasters are in a strong position to continue contributing to a successful and innovative sector."
Ofcom has today also published a review of Channel 4 Corporation's delivery of its media content duties across its full range of services between 2010 and 2013. These duties include making a broad range of relevant media content that appeals to a culturally diverse society, making content that appeals to older children and young adults, making high quality films and the broadcasting and distribution of such content and films.
Ofcom's review finds a limited provision of content made for older children from Channel 4 Corporation and a continued decline in reach and share for the main channel and Channel 4 News.
But, overall, Channel 4 Corporation has broadly performed well in delivering its duties over the four year review period. In particular, it made a broad range of high quality media content of wide appeal; produced high quality films for cinema release; and continued to supported creative talent.
1. Ofcom is required to report periodically on the delivery of public service content with a view to maintaining and strengthening the PSB system. In order to do so, we have examined changes in both the broadcasting and wider communications sector and their potential effect on the current PSB system. This document first sets out the wider context in which the PSB system operates. It then assesses the extent to which the system has delivered the purposes of PSB since 2008 and looks at the contribution of other media services such as non-PSB television, radio and online offers. It then examines potential future challenges to the system and explores how the system might be maintained and strengthened.
2. The PSB channels considered in this review are BBC One, BBC Two, BBC Three, BBC Four, BBC News, CBBC, CBeebies, BBC Parliament, BBC HD Services, ITV, STV and BBC Alba in Scotland, UTV in Northern Ireland, Channel 4, Channel 5 and S4C in Wales.
3. The Communications Act 2003 sets out the purposes and objectives of public service broadcasting. Based on these statutory purposes and objectives, Ofcom developed a set of PSB purposes and characteristics.