Ofcom review of public service television broadcasting: Phase Two - Meeting the digital challenge

  • Start: 30 September 2004
  • Status: Closed
  • End: 24 November 2004

Public service broadcasting in the UK has been sustained over many years by a mutually reinforcing mix of institutions, funding and regulation. This delicate balance will not survive the move to the digital age.

The historical compact in which PSB was provided by commercial broadcasters in return for access to the analogue spectrum will come under increasing pressure as the audience using analogue services declines and erodes the financial value of the licences to those who hold them. In this report, we conclude that a new model of provision will be needed in the digital age if PSB is to maintain its unique ability to reach millions of people with a plurality of suppliers providing distinctive content.

The digital model of PSB will be different from today’s analogue model: it will involve explicit and transparent public funding to replace the current opacity and implicit subsidies; it will involve a new mix of providers; it will involve a changing approach to regulation; and it will require the use of new distribution systems alongside conventional TV broadcasting.

Currently, ITV1, Channel 4 and Five receive approximately £400m a year in implicit subsidies for PSB. These subsidies result from their access to the analogue spectrum. By the time of digital switchover, the declining value of the analogue spectrum will have reduced these implicit subsidies close to zero.

We believe PSB in the digital age should not cost any more in real terms than the current £3bn public subsidy for the TV market. But there is a sound rationale, supported by the public, for replacing part of the current £400m implicit subsidy with explicit funding to maintain plurality and competition in PSB supply in the digital age.

The transition to the digital age will be challenging, but holds the exciting prospect of broadcast and other visual content with distinctive purposes available to all alongside a huge increase in consumer choice. This is our vision for maintaining and strengthening PSB

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Supporting documents