Select Committee on Welsh Affairs Second Report

5.  Memorandum submitted by Teledwyr Annibynnol Cymru (TAC)—Welsh Independent Producers


  1.1  TAC is the trade association for Welsh independent film and television producers. At the beginning of September 1998, 86 companies were affiliated to the Association, these being concentrated in the Caernarfon and Cardiff areas, with a small number in West Wales and the remainder scattered around Wales and in England. TAC has offices in Caernarfon and Cardiff.

  1.2  Member companies are primarily concerned with producing Welsh language output across a range of genres, consequently the main customer is S4C with commissions from the BBC and HTV accounting for some of the business. A number of companies are diversifying their portfolio by seeking commissions from other broadcasters or moving into additional activities including radio, corporate work, and new (or digital) media. The Association, in conjunction with partner organisations is actively involved in facilitating and supporting company development and diversification.

  1.3  Given the nature of the primary market, one of TAC's main tasks is to represent member companies in policy and contractual discussions with the broadcasters. In the case of output commissioned by S4C, TAC is responsible for negotiating, implementing, and advising upon, standard terms of trade. A similar role is adopted in relation to the trades unions representing various sectors of the workforce with the TAC-negotiated rates and commissions forming the basis of contractual agreements between individual companies and S4C.

  1.4  Almost two-thirds of the Top 30 Welsh language programmes and series broadcast by S4C between January and December 1997 were produced by companies which are currently members of TAC whilst exactly a third were produced by the BBC. (S4C Annual Report 1997)


  2.1  TAC understands that the broadcasters operating in Wales are in detailed discussion with the Welsh Office regarding the coverage of the Assembly and the elections to that body. TAC, as an organisation, is not party to these discussions. At present, news coverage for S4C is provided by the BBC whereas current affairs programming is provided by both the BBC and independent producers.

  2.2  The independent sector has an excellent track record in producing current affairs and documentary programmes and, given the likely level of interest in the deliberations of the Assembly and the evolution of a new political environment, TAC would expect its members to be actively involved in producing content focusing upon the Assembly elections, the workings of the Assembly and the multifarious activities, happenings and events which will emanate from its establishment.

  2.3  In order to achieve this, it is felt that, without delay, the independent sector as a whole needs to be involved with the broadcasters in any discussions regarding the broadcasting of the Assembly so that it understands the background to the workings of the Assembly, the aspirations for the representation of the Assembly on television (and associated visual media), and to ensure that it is not excluded in any way from opportunities to respond to the challenge.

  2.4  It must be expected that a proportion of the viewing public will have minimal interest in what goes on in the Assembly, even if the size of this proportion is difficult to predict. It is contended that, in this context, the function of producers, working with the Assembly and its officials, will be to seek to maximise interest by utilising innovative approaches to reporting and featuring the work of the new body and allowing interaction between the electorate and the elected. Technological advances accompanying digital broadcasting provides an excellent environment for such innovation.

  2.5  These advances will probably mean that the manner in which the Assembly will be "broadcast" will differ considerably from that to which we are used in terms of televising the UK Parliament. We would draw attention to two illustrative examples.

    (i)  As was stated in the European Commission's Green Paper on the convergence of the telecommunications, media and information technology sectors, and the implications for regulation COM(97)623 (Section 1.3) ". . . Broadcasters such as CNN and the BBC are starting to make parts of their broadcast content available on the Internet, extending their normal geographical reach, whilst a new breed of webcasters is emerging to broadcast particular live events, such as sports coverage, concerts, major events, etc Example: Coverage of the recent Irish elections was available to Irish citizens all over the world via a webcast site ( . . ."

    (ii)  The Fourth Report of the Select Committee on Culture, Media and Sport recognises the need to cater for new developments when it states ". . .

     The Government must seek to ensure development which maximises the social and geographical availability of broadband networks. This should be designed to ensure that the benefits of the Internet, of new interactive services and the capacity of the citizen to conduct business with Government electronically are available throughout the United Kingdom . . ." (Para 137). A number of policy recommendations follow, these being linked to the switch off of analogue services.

  2.6  In such a rapidly changing environment it is TAC's view that innovation in the production and delivery of content is far from being the sole preserve of the broadcasters and that, in the independent sector, there is a store of creative and technical talent that can contribute significantly to the successful portrayal of the Assembly and establishing its importance with the population of Wales. TAC perceives a strategic role for itself in representing the independent sector and all it has to offer in what should be all-embracing discussions founded on the principle of inclusion.


  3.1  The briefing note/press release relating to this inquiry poses the question "Will all parts of Wales be able to receive television coverage of the Assembly?" The answer to this question obviously depends on a number of factors, particularly the mode of carriage (analogue or digital) and the proportion of Assembly related content to be allocated to each. The language used is also of major interest to TAC and whilst, in the past, this has had the effect of prescribing upon which channel a programme appears, this may not be the case in future bearing in mind the significantly increased capacity for the regions and nations to broadcast indigenous content, and the possibility that technology will facilitate the broadcast of a programme offering the choice of languages on a simultaneous basis.

  3.2  To illustrate this point one can refer to the evidence of S4C to the Select Committee on Culture, Media and Sport, summarised in paragraph 98 of the Fourth Report which states ". . . S4C considered that digital television offered a major opportunity. . . by enabling S4C to offer additional Welsh language services. It will launch a new Welsh language service this year (S4C1) and has longer term plans for S4C2, whose services might include. . . live coverage of the Welsh Assembly. . .".

  3.3  Thus, whereas, inevitably, there will be some analogue coverage of the Assembly, the limits upon transmission time (particularly as regards S4C), will probably dictate that much of the coverage will be limited to the digital services.

  3.4  Most of the population of Wales can receive the existing analogue output of S4C but the digital terrestrial coverage will be limited during the first years of transmission. The report prepared by NERA for the Radio Communications Agency and the Department of Culture, Music and Sport "A Study to estimate the Economic Impact of Government Policies towards Digital Television" (January 1988) states that, for the UK as a whole, ". . . the expected population coverage of DTT services three years after the start of transmissions varies from around 90 per cent for the largest multiplexes . . . down to around 70 per cent for the smallest commercial multiplex . . . it is also possible that there will be "black spots" of no DTT coverage within the projected coverage area." The situation within Wales is likely to be worse than this given that only the main transmitters and a handful of relays (out of over 180) will acquire digital capability during the first round of adaptation and it is for this reason that S4C is looking to use Digital Satellite Television (DST) coverage which we welcome.

  3.5  Dependence upon the digital service, when the transmission difficulties are coupled with the additional costs of equipment (a suitable set-top box) which might, initially, be a disincentive, would result in the exposure of the Welsh public to in-depth coverage of the Assembly during its formative years being patchy to say the least. Additionally, the favoured date for the analogue "switch-off" (2008-13) (Television: The Digital Future, Consultation Document, DCMS, 1998) does little to encourage the public to invest in digital sets.

  3.6  As is noted above, TAC is aware of the consultation on the future of the analogue service and notes the various options put forward in terms of encouraging the take-up of digital services by the consumer. It also notes the Government's observations on some of the options put forward by NERA, the general reluctance to distort the market by Government subsidy with the emphasis instead upon the requirements of the Broadcasting Act 1996 that licensees put in place incentives to encourage the take-up of receivers. Unfortunately, following the lack of agreement on common standards, and aggressive marketing, particularly by the main DST operator, there remains much uncertainty in the public's minds about what they will obtain for their money.

  3.7  It is TAC's contention that, in accordance with the recommendations of the Select Committee on Culture, Media and Sports Fourth Report, the Government should consider broadcasting not in isolation but as part of a wider communications sector affected by convergence; that the issue of analogue switch-off should be taken forward in the wider context of universal access; and that it should commit to measures to ensure the widest possible availability of the necessary receiving equipment with a view to achieving analogue switch-off by 2008. It also supports NERA's view that the supply of digital reception equipment in areas that may have not had the benefit of a number of years of analogue and digital simulcasting should be subsidised by the proceeds of an auction of "analogue" spectrum.


  4.1  When proposals for digital television were first mooted, and specifically when S4C announced that it was to provide digital services, TAC went on record with its support for such a move. Such support is qualified but it is the Association's contention that for S4C not have taken this decision would have been harmful to the future of broadcasting in Wales which would, in time, impact upon its members.

  4.2  In expressing its support for S4C's decision, and being aware of the fiscal background, TAC made known its concerns regarding the substantial increase in the number of hours to be broadcast by the Channel without anything like a commensurate increase in the resources available to finance content. The main concerns centred on the quality of what appeared on the screen and S4C's apparent desire to substantially reduce in size its supplier base. TAC does not accept that increased effectiveness is necessarily related to size of company and would certainly argue that a diverse supplier base has its attractions in maximising the exploitation of creative talent.

  4.3  Partly as a result of the proposed introduction of the digital service and the funding regime imposed upon it by the 1996 Broadcasting Act, S4C announced significant changes in its commissioning policy in 1996. As is referred to above, the Channel made it clear that it expected substantial efficiency savings to be reflected in production companies' budgets to the extent that it was expected that a number of companies, in order to survive, would need to merge and pool resources or otherwise cease trading. This occurred to some extent but perhaps not as widely as was predicted at the time. Indeed it would appear in hindsight that many more companies succeeded in obtaining commissions from S4C than was expected. Having said this, the nature of the industry in the United Kingdom exhibits a trend towards larger independent production units and, given the business maturity of most of the operational production companies, it comes as no surprise that the structure of the industry in Wales has exhibited significant change in recent months, driven not necessarily by diktat but by a desire to safeguard the existing workload and securing new business from a more diverse customer base.

  4.4  Although desirous of expanding their business base, many Welsh companies have found it difficult to break into new markets, particularly Channel 4. TAC concurs with the Government's view that ". . .Wales . . . has considerable strengths, including a strong independent television production sector which has developed following the establishment of S4C, and also a well respected animation industry. . . The cultural industries have a value that extends beyond the direct employment they offer. Their role in promoting a positive image of Wales has been recognised in commissioning a major study of the economic impact of the sector in Wales..." (A New Economic Agenda for Wales, 1998, paras 5.34/5.35) Theoretically digital broadcasting, with a vast increase in the spectrum available and the number of channels broadcast as a consequence, should offer new opportunities to Welsh companies to supply new markets. The extent to which this will be the case has yet to be demonstrated but a number of member companies are positioning themselves to take advantage of opportunities as and when they occur.

  4.5  In order to maximise the opportunity for Welsh companies to gain new business, TAC has been working with the Welsh Development Agency under the auspices of its Source Wales programme, seeking not only to develop the competence of companies to compete for business but also by commissioning research into commissioning opportunities outside Wales which is currently underway.

  4.6  It is extremely difficult to gauge the impact which the broadcasting industry has in terms of employment and its contribution to the economy both directly and indirectly in terms of the impact emanating from goods and services supplied by companies local to the producer. Academic research has sought to quantify the situation but, as yet, robust indicators which can be used in empirical analysis are unavailable. One can, however, discern general trends and comment in general on the current situation regarding the human resource which is of utmost importance to the industry.

  4.7  Wales has pioneered a number of training initiatives which represent best practice in the industry and is recognised as such by the National Training Organisation, Skillset. The decision to establish Cyfle, which, over the years, has provided the independent production and facilities sector with a supply of indigenous technical and support staff with its consequent beneficial effects. The recent establishment of Broadcast Training Wales seeks to build on this success by widening the coverage of training provision. The European Social Fund has been a major source of funding for this provision but, as is the case with other public institutions, the European Community has changing priorities which has resulted in the need to secure alternative and more diverse funding for this provision. At the same time digital broadcasting presents a challenge to the training regime and it is essential that, if the industry is to maintain the standing accorded to it in the New Economic Agenda, adequate resources are available to fund training provision.

  4.8  TAC supports the introduction of digital broadcasting and is confident that Welsh companies, with appropriate support, can meet the technical and commercial challenge which this presents. The broadcast industry in Wales has developed considerably over the last few years with substantial investment in the development of the indigenous workforce. This has been an effective use of both public and private resources which needs to be maintained if we are to meet the expectations of the New Economic Agenda, a point developed further below.


  5.1  TAC is aware of the discussion that is taking place regarding the funding of S4C and whether the responsibility for this should be transferred from the Department of Culture Media and Sport to the Assembly. It also understands that it is not the Government's intention to transfer this responsibility as things stand at present.

  5.3  Reference has already been made to the Broadcasting Act 1996 which, in conjunction with the Broadcasting Act 1990, contains a number of provisions relating both to S4C and the regulation of broadcasting in general. These pieces of primary legislation serve to provide a common basis for the operation and regulation of public broadcasting in the United Kingdom. If one accepts that such legislation, regulation, and associated guidance is required vis-a"-vis public broadcasting then, in the absence of legislative powers being available to, or devolved to, the Assembly, there is a sound case for retaining the status quo.

  5.4  Having said this it would be totally unrealistic to expect that the Assembly will not have an interest in broadcasting in Wales, indeed it would be our contention that it should take a healthy interest in broadcasting and its support infrastructure on as wide a canvas as possible.

  5.5  It is a matter of opinion as to the extent to which there should be political involvement in the day-to-day affairs of any public broadcaster. TAC would be opposed to any attempt to impose upon either of the public broadcasters a regime which, in any way compromised artistic and creative integrity. It feels that the present structure whereby, for example, in the case of the S4C Authority, responsibility for operational issues rests on the shoulders of those appointed to the post after public advertisement and scrutiny by the appropriate Government departments, provides an adequate arrangement for monitoring activities and securing probity in the use of public funds.

  5.6  Away from the actual operation of the broadcasters, there are issues relating to the provision of services and the economic aspects of broadcasting which it is felt, should be of direct concern to the Assembly.

  5.7  Reference has already been made to the issue of analogue switch-off. No doubt the Assembly would wish to be assured that the population of Wales does not suffer in any way from lack of investment in the infrastructure to provide the full range of broadcast and associated services as soon as possible. TAC wholeheartedly endorses the sentiments of the New Economic Agenda when it states "The development of electronic information and communication technologies can create jobs and wealth which could not have been envisaged even just a few years ago. This technology has the potential to make a major contribution to economic development in the rural as well as the urban parts of Wales. We see information and communication technologies as a key to our future competitiveness. Wales needs a modern telecommunications infrastructure to enable our full competitive potential to be realised . . ." (Para 5.61) and hopes that this approach will be adopted by the Assembly as a major thrust of policy.

  5.8  The role of the cultural industries as a source of worthwhile employment which can make a considerable contribution to the wealth of a community if not the country as a whole is recognised in the New Economic Agenda. Reference has been made to the partnership between TAC and the WDA regarding Source Wales, other business development projects such as the Gwynedd Multimedia Development Programme have been undertaken in conjunction with the Agency and the European Regional Development Fund. These are good examples of pump-priming by the public sector which levers in private sector investment and, equally important, is assisting Welsh companies in the broadcast production sector to diversify their market base. However worthwhile this activity, it has taken place on the basis of ad-hoc responses to private sector initiatives.

  5.9  The recent Film Policy Review, although supposedly applying to the whole of the United Kingdom was so biased towards the English situation and English institutions that Sgrin—the Media Agency for Wales—has brought together a group representing the whole range of interests involved with film and television production in Wales in order to produce a Welsh perspective. This initiative needs to be replicated in relation to the development of film and television production and broadcasting as an important and developing sector of the Welsh economy and it is hoped that the current research into the role of cultural industries will provide a basis upon which comprehensive policy initiatives which will complement (rather than merely support) the efforts of companies operating under this umbrella. Clearly, given the Assembly's economic development role, this is an area in which it has an important role to play.

  5.10  TAC is of the opinion that the current structure of Governmental responsibility vis-a"-vis the regulation and funding of public broadcasting should be retained but that the assembly has an important role in securing universal access to, and reception of, services. Recognising the important role of film and television production and other cultural industries, TAC believes that the Assembly should act upon the recommendations of the New Economic Agenda and the research into the role of cultural industries with a view to facilitating the continued development of the sector with particular reference to diversification and the development of new markets.

Dafydd Hughes

Chief Executive

September 1998

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