previous ministers

tessa jowell

Tessa Jowell's speech to the Royal Television Society

Speech by Tessa Jowell to the Royal Television Society, 20 June 2007

Thank you Steve, and to Simon and the RTS for providing this opportunity to speak on the challenges and opportunities these digital times present.

I am going to focus on television and, particularly, on the role of Public Service Broadcasting in the new, more fragmented but also transformed digital market place.

And addressing specifically three questions:

How are changes in technology affecting the consumption and delivery of PSB?
What does this mean for the institutions and the funding mechanisms that might be needed in the future?
And why do I believe the public will still demand PSB in a world of almost limitless choice?

Writing in 1998, media specialist, Professor Michael Tracey wrote:

“The public broadcasting community consists in effect of optimistic humanists who believe that a broadcasting service can and must be sustained whatever the historical conditions.”

I agree.

top

PSB HAS DEFINED UK BROADCASTING

Public Service Broadcasting has defined broadcasting in the UK throughout its history.

A 50 year model of competition between public and commercial PSBs has served people in this country and the media industry well:

Generating some of the most dazzling, entertaining, challenging and informative programming
Creating many thousands of jobs in an industry that captures much of this country’s creative talent and imagination
And providing a unique focal point for the moments in our history which we all share and which bring us together as a nation.

The question now - on the threshold of Digital Switchover beginning later this year; against a background of multi-channel, watch-anything-you-want television– is, can Public Service Broadcasting survive, and indeed thrive, in the digital age?

Television is a world of permanent evolution - driven both by consumer demand and creative innovation.

It is also one in which occasional revolutions take place.

The advent of commercial broadcasting
Colour television
Cable and Satellite
DTT and broadband

top

THE PACE OF CHANGE IS ACCELERATING

Recent times have seen a remarkable acceleration in the pace of change - in technology, audience behaviour and revenue patterns.

Digital TV take-up in the UK is now over 80% - with Freeview bringing subscription-free digital TV to 8 million homes – critical to making switchover possible.
Over half of UK adults now have broadband at home – a seven fold increase in just four years – with headline connection speeds doubling between 2005 and 2006.

On-demand and simulcast online services are being developed, such as the BBC iPlayer and similar services from ITV and C4 and Five.

And there is increasing convergence between the established industry and new media – through developments such as BT Vision, YouTube’s deals with NBC; and the presence of BBC and Sky News in Second Life’s virtual world.

Viewing habits are changing.

In multi-channel homes, the share of viewing of terrestrial channels fell by 12% in just 4 years before 2005.
Younger viewers are watching less public service broadcasting – indeed less television generally - than before.
Developments such as PVRs - the number of Sky+ boxes grew by more than 50% last year – have introduced sophisticated time-shifting and personal scheduling.
2006 saw a step-change in the popularity in video downloading through services such as YouTube – with whom the BBC now has a deal to showcase its products.

top

CHALLENGES AND OPPORTUNITIES FOR PSBS

All of these changes - and particularly the declining audiences for the main channels - is creating significant pressures on the existing commercial PSB models.

There are, of course, opportunities too – we are seeing the PSBs move online with new on-demand offerings.

And the commercial PSBs have developed some of the most popular digital channels.

Their portfolios help to compensate for a reduced audience share on the parent channels, although Ad revenues are not necessarily compensated to the same degree.

And of course the huge growth in online advertising – last year reaching £2 billion; more than 10% of total UK adspend - has been drawing an increasing volume of spend away from more traditional media.

But just because technology and consumption patterns are changing doesn’t mean PSB no longer has a place.

On the contrary, in a world of vastly expanded consumer choice, having clear and trusted points of reference will be all the more critical.

There remains overwhelming evidence that the public continues to enjoy high quality, mixed genre PSB output.

top

THE UNIQUE PLACE OF THE BBC

And there is no doubt that the BBC has a critical role in satisfying that demand.

It is a cliché - but true – that the BBC has a unique place in British broadcasting - because of its history and its constitution, because of its funding and because of the audience support it has always enjoyed.

Whether it is through its core channels, new digital channels or online services.

The next six years of the licence fee settlement period present the BBC with an opportunity – unmatched by that available to any other UK broadcaster - to continue to prove itself to be,

a force for creative excellence
a driver of change
an innovative operator
and a trusted guide for licence fee payers across the new and – still for many - unfamiliar landscape that digital represents.

While the UK media world continues to evolve in exciting new ways, bringing more choice and control for viewers, I do not believe these changes undermine or even fundamentally alter the PSB argument.

Television is of particular social & cultural importance and it seems unlikely that the market alone can ever fulfil completely the expectations that society has of it.

I am not saying here that public service broadcasting should merely be a response to a narrow economic definition of market failure.

With expanding choice and lower barriers to entry, the market may increasingly deliver some of the content which has traditionally been secured through public intervention.

But, even where markets work well and are thriving they may still fall short of delivering the range of benefits that a medium as powerful as television has the potential to deliver

Public intervention can drive up the quality – as well as the range – of what’s on offer.

top

THE CASE FOR PSB WILL ENDURE

So, despite the profound changes ahead for the television sector in the coming years, I remain convinced that the case for public service broadcasting will endure.

And that Government should be an advocate for PSB, but also a servant of the public in supporting what is clearly their preference.

We should aspire to be as proud of our public broadcasting future in the UK as we rightly are of our internationally recognised tradition in PSB.

It is a tradition that thrives upon quality driven by competition and plurality.

But are the funding pressures on non-licence fee supported services such as Channel 4 a threat to that future plurality?

As Ofcom identified last week, Channel 4’s ability to deliver public service broadcasting in the future is likely to come under sustained pressure in just a few years.

Recent programming controversies have brought other challenges too. Mistakes have been made - but also lessons learned – and Channel 4 must understand that its performance will continue to be very closely scrutinised.

Channel 4 has always been at its strongest when it has closely adhered to its public purpose: innovative, educational, distinctive and appealing to diverse audiences.

These are the reasons it was created in the first place - and I am pleased to hear the Board reaffirm its commitment to that this week.

Channel 4 has had an important role as a key source of public service competition, as well as a catalyst for the development of a world beating independent sector and an important contributor to the wider creative economy.

The Government wants to see that continue.

But it is clear that any meaningful consideration of the Channel’s longer term future can take place only in the context of a wider review of Public Service Broadcasting.

top

THE GOVERNMENT’S PSB REVIEW

We welcome the announcement by Ofcom that they are bringing forward their PSB review to begin later this year.

And I can announce today that the Government will be bringing its own Review of the funding regime for PSB forward accordingly, to commence as soon as Ofcom’s conclusions are known.

These two reviews will provide the right context for considering the medium-to- long-term solutions for Channel 4.

top

THE FUTURE OF CHANNEL 4

However, in the meantime, we need to understand more clearly how C4 delivers, and is accountable for, its statutory remit.

I strongly welcome the commitment by the C4 Board to put in place a new framework for measuring, and publicly accounting for, the Channel’s PSB performance.

This is in line with Ofcom’s recommendations and will provide a welcome step change in the Corporation’s transparency and accountability as it deals with the changing landscape.

We look forward to its implementation.

I also welcome the commitment to talk to all its stakeholders, and expect those stakeholders specifically to include the minority audiences the Channel has always prided itself on delivering for.

In the 2005 White Paper, and in announcing the BBC’s licence fee settlement earlier this year, I said that I was keeping open the possibility of requiring the BBC to contribute towards Channel 4’s switchover costs; the total sum involved being no more than £14 million.

This is partly in recognition of the fact that the financial models of the other main Public Service Broadcasters take account in some way of the costs of switchover. Channel 4’s does not.

I said that I would decide whether and how to implement this requirement in the light of Ofcom’s review.

Ofcom concluded last week that given the uncertainties over Channel 4’s financial prospects as DSO progresses, “it may be appropriate for Government to consider Channel 4’s request for short-term support during this period”.

I agree and have decided, as an interim measure, to activate the help for Channel 4’s capital costs and in doing so support PSB delivery for the public during switchover.

The assistance will of course require State aid approval from the European Commission and the Government is urgently setting in hand the process required to seek it.

I should be clear that this is completely without prejudice to any later decision about the longer term future of Channel 4, which can be properly assessed only in the context of the PSB reviews that Ofcom and DCMS will be undertaking.

I have decided that it would be premature at this stage to take the further step of allocating additional spectrum to Channel 4, not least because such spectrum may not be available until 2012.

Questions about Channel 4 are just some of those the reviews from Ofcom and the Government will need to address.

top

THE NEXT STAGE: QUESTIONS ON THE WIDER PSB SYSTEM

The BBC’s mission has been set for the next 10 years.

It will be funded by the licence fee to deliver that mission, and its funding settlement extends to 2013.

Clearly our PSB funding review will not seek to unpick what has been agreed with the BBC about the licence fee.

But, given the pace of change that we are now witnessing, it is important to prepare for the next stage.

There is no doubt that we need to look again at the fundamentals of the wider PSB system.

As others have observed before me, we may find ourselves in five years’ time talking about PSC - public service content - rather than PSB.

We need to think about what forms that content might take as different patterns of distribution and consumption develop.

In a market of expanding opportunities and choice, what level of public intervention is required, beyond the BBC, to ensure that that content comes from a plurality of sources?

And what forms should any intervention take, and where should it be directed?

In the 5-channel PSB world, funding has of course historically been targeted at institutions which distribute content as well as commissioning and producing it – the broadcasters.

But we need to ask ourselves whether there is a case for new frameworks and new types of institutions in the digital world.

For example, might there be a role for funding, at source, the content makers themselves in all the rich diversity that we now enjoy in the UK?

These are central issues: developing the right answers, and putting any new measures in place, will take time.

So we need to get on with thinking about them.

And challenge some of our previous assumptions.

top

SPECTRUM SCARCITY REMAINS

The conventional wisdom at the beginning of the decade was that digital TV would bring an end to spectrum scarcity.

In reality things have turned out somewhat differently - in fact, spectrum scarcity is back with a vengeance

Of course this is a mixed blessing and brings with it a number of new challenges such as the current intense debate within the industry about the best use of the digital dividend.

But I take some satisfaction from this debate as final proof that we were right to embark on the digital switchover programme, without which of course there wouldn't be any digital dividend to fight over.

Alongside ensuring the universal availability of digital television, the Government is undertaking digital switchover in order to ensure optimal use of spectrum.
Ofcom has been consulting on a proposal that the spectrum released by switchover should be auctioned on an open basis during 2008-09. The Government supports this proposal.

Our policy since the Cave Report has been to favour technology-neutral auctions when considering mechanisms for assigning spectrum.
This gives as much flexibility as possible to the market to decide on services, technologies and providers.

Of course, in approaching and designing any spectrum auction, Ofcom will need to consider all the issues, including: the optimal use of the spectrum; the likely effect on competition; and the particular needs of all potential users of the spectrum - including, of course, broadcasters.

top

THE IMPACT OF CHANGE ON CONTENT REGULATION

The pace of change is also raising wider questions about the future of broadcasting regulation beyond PSB.

In this Country, we have a high degree of regulation for TV and radio, while internet content is virtually unregulated.

But convergence raises questions about how far this distinction is sustainable in the long term.

We have already seen this debate about the scope of regulation in the context of the AVMS directive.

We are in no doubt that the original proposal would have been very damaging and managed to demonstrate this to other Member States.

The recent agreement is much more sensible, with a limited extension to Video on Demand, but keeping other “non-linear” content out of scope.

Our thoughts now are turning to implementation – likely to be required by 2009 – and we will want to implement the on-demand elements via co-regulation as far as possible, in close consultation with industry.

But, beyond this, we need to consider how we want content regulation to evolve in the longer term.

In the wider online world, centrally enforced systems are not practical.

Technology shifts tools and responsibilities into the hands of consumers - where it belongs.

And with that access to technology must come understanding. I have been focused on media literacy for some years now.

I insisted Ofcom were given it as a specific role.

Because it is as valuable a tool for citizens and consumers as numeracy and literacy.

Because we live in a world where almost all we experience that is not completely personal is filterered through media of all forms

Surely it is only right that people should have the chance to understand better how this mediated communication works and how they can navigate their way through it.

And we need to explore new mechanisms, such as “opt-in” systems – and we welcome Ofcom’s current work on labelling.

So it seems likely that, around the time we are reaching conclusions about the future of PSB, we may also need to be forming views on the wider regulatory regime post-switchover.

top

CONCLUSION

The Communications Act 2003 was intended to last for 10 years and provided significant flexibility to respond to change. The Government is not about to announce the next one.

But - as we knew would happen – the frame of reference within which the Act operates is changing fast – and the pace of change is increasing.

Look, for example, at the proposals in Ofcom’s recent Radio Review and the changes it suggests may be needed to sustain a healthy commercial sector.

Even if the Act does last until 2013 – and we may need to make changes earlier than that – we need to start thinking now about how to deal with the challenges and opportunities beginning to unfold.

The Act was based on 3 key principles:

Dynamic, competitive markets
Universal, diverse, quality content
And protecting the interests of citizens and consumers

All still hold good.

But, as I have set out today, we now need to assess, over the next few years, what are the best mechanisms for securing these principles for the long term.

Through the latest and perhaps most profound revolution broadcasting has yet undergone.

ENDS

Back to main