Culture, Media and Sport CommitteeWritten evidence submitted by International Broadcasting Trust

Summary

This submission is made on behalf of The International Broadcasting Trust (IBT). IBT welcomes the Committee’s inquiry into support for the creative economy and the opportunity to submit written evidence.

IBT is an educational and media charity which works to promote high quality broadcast and online content for a British audience about the world outside the UK, especially the developing world. Our expertise lies in such content and therefore we will limit our response to this inquiry to the TV sector, although issues we raise may be relevant to other sectors of the creative industry.

IBT welcomes this inquiry because it is IBT’s view that the broadcasting, television and radio production sectors need support to ensure the production of public service content where there is market failure. We view market failure as a situation in which there is a lack of supply of a genre or type of programming or there is a lack of plurality of supply of a genre on free to air platforms. This most often occurs when the BBC is the only provider of a certain genre or type of programming.

IBT is keen to stress that the value of the broadcasting and production sectors lies not just in the economic contribution they make to the UK but also in the contribution they make to British life, education, society and culture through public service broadcasting.

Television viewing is increasing and is one of the UK’s most popular leisure past-times. There is an opportunity for television to continue to provide informative, entertaining and educative content but without policy which supports high quality public service broadcasting, it is likely that quality, diversity and range of content will diminish and certain genres of programming will disappear from our screens because they are considered less commercially viable.

IBT believes that the upcoming Communications Act is an opportunity for the Government to ensure support for UK originated public service content rather than simply UK-originated content which appears to be the focus of this inquiry and the Government’s Communications Review. If content supported by policy is public service content this change will bring a greater benefit to the public. It will be a missed opportunity if the government legislates for this to be simply UK-originated content rather than UK-originated public service content.

IBT is most concerned about the drop of content on television which tells us about the world outside the UK. There has been a 41% decline in the amount of non-news international programming since 2005 on the PSB terrestrial channels. This decline is worrying when set against the increased impacts of globalisation on our lives and economy. IBT would like to see policy which supports the provision of international programming on mainstream channels to ensure that the UK public has access to engaging content about what is going on in the wider world.

There has been a drop of 20% in investment of UK originated public service programming on the BBC, ITV, Channel 4 and Channel 5 in the past 5 years. IBT believes the Government should implement policy which incentivises investment in such public service content on the mainstream channels.

There are other income sources which the Government should consider including levies, the abolition of retransmission fees and further tax breaks. This funding could be put into programme making and help the broadcast industries flourish.

Evidence

1. Success of the Broadcasting sector: Despite the fact that the UK broadcasting and production sectors generate billions every year and employ thousands of people, IBT is concerned to stress that the success of Britain’s cultural sector cannot be judged simply in economic terms.

2. Social and Cultural Benefits of Broadcasting: A diverse and thriving UK content production industry is profoundly important because it makes a contribution to Britain’s sense of identity, to British citizens’ knowledge and information about the world around them, and to the richness of British cultural life. It is IBT’s view that the social, cultural and educational benefits of UK-produced public service content (PSC) need to be considered equally as important as the economic benefits of such content when the Government is considering regulation and legislation.

3. Investment in PSC: Investment in UK-originated public service content has declined by 20% in the past five years and IBT believes that the Government needs to incentivise investment in public service content across all platforms especially in genres in which there is market failure. We have made suggestions of how to source funding for public service content and incentivise production later in this document.

4. Genres of programming which are specialist, such as international content or children’s programming, need support because the market for them is limited and they are often less commercially viable internationally because they may be produced from a specifically UK perspective. These programmes are essential because they inform us from a uniquely UK perspective what is going on around us in the world. This means that such programming is specifically relevant to us and therefore it may sell less well internationally.

5. Because of the economic and social benefits derived from public service broadcasting it is IBT’s view that investment in UK-originated public service content should be supported through legislation.

6. Commercial PSB’s: It is IBT’s view that it should remain a requirement of the commercial Public Service Broadcasters (ITV, Channel 4 and Channel 5) to fund guaranteed levels of original UK content in return for privileged positioning on the EPG and any other incentives the Government can devise to ensure their contribution continues. This contribution should include high quality programming and a diversity of suppliers to provide different approaches and perspectives. It is clear the public wants a plurality of suppliers of public service content.1

7. An element of this provision should be programming which informs us about the world around us. The single most important Purpose in the 2012 Ofcom PSB Annual Report was Informing our understanding of the world, with all three statements scoring higher than those for any other Purpose.2

8. IBT believes that the Government should ensure through policy that it is a commitment of any public service broadcaster to provide content which enables audiences to understand the wider world and engage with it.

9. It is clear from evidence3 that content which tells us about the wider world can lead to greater economic and social success. Such content provides citizens with the skills and knowledge they need to prosper and compete in a globalised society. The media and television, in particular, have a crucial contribution to make in engaging us with accessible content which tells us about other cultures and places so we can build a well-informed society, with the skills and knowledge to do business effectively with other countries, with a population which is able and willing to travel widely and appreciate other cultures.

10. There is specific evidence that awareness of the wider world leads to greater social cohesion,4 greater employability,5 and that the public have an appetite for such information.6

11. Despite the rapid pace of globalisation which has impacted on all our lives, IBT’s most recent quantitative research (Outside the Box, 2011)7 shows a huge decline in the amount of programming about the wider world on UK television in recent years.

12. There has been a 50% decline in the amount of non-news programming about the developing world on the public service broadcasters’ terrestrial channels since 1989 and a 41% decline in international programming on the same channels since 2005.8

13. This decline in international content which is free to access and designed for mass audiences is deeply worrying when set against the increased impacts of globalisation on our lives and economy. Increased international travel, migration, the development of the internet and other global interconnections have increased our interdependency on the wider world, yet we have less content on television which can provide us with a context for news information.

14. News bulletins generally present events in the wider world only when they are newsworthy and this often means that they are negative. This perpetuates images of disasters abroad and provides little context for events. It is not possible to provide more than the basic, headline facts in a news story and this means we have little understanding of the deeper issues involved in events in other countries. It is IBT’s view that broadcasters should have a commitment to provide this contextual information in other programming on their mainstream channels.

15. IBT’s Outside the Box report warns that if current trends continue on mainstream television, instead of broadening understanding, television is likely to limit people’s horizons. It is doing this by moving programmes about international affairs onto niche channels which attract far fewer viewers and smaller budgets. The number of countries covered over the past five years by the public service broadcasters has remained static as has the choice of countries covered (52% of countries were not the main subject of any programme in 20109). We see the same countries on our screens year in and year out without change. This is a trend which concerns IBT because it is potentially leading to a narrowing of our horizons and a limited understanding of the world around us.

16. It is IBT’s view that these trends in international content provision will lead to increased insularity and isolationism in the UK at a time when, as global citizens, we need to engage with the rest of the world. This potential for the UK public to become more insular could be guarded against if the public service broadcasters were required by law to broadcast programming about the wider world as one of their commitments, as the BBC is required to do through its global purpose to Bring the UK to the world and the world to the UK. We have urged the Government to consider this option to strengthen the provision of UK produced content which will add to the Nation’s understanding of the wider world.

Sources of Income for PSC and Incentives for Investment

17. Retransmission Fees: IBT urges the Government to use the upcoming Communications Act as an opportunity to ensure that carriage fees for the Public Service Broadcasters on cable and satellite platforms are abolished in return for guaranteed investment in UK originated public service content (as opposed to simply UK-originated content). If the content supported is public service content, rather than simply UK-originated content, this change will bring a benefit to the public. It will be a missed opportunity if the government legislates for this to be simply UK-originated content rather than UK-originated public service content.

18. In order to ensure that such legislation results in an overall increase in investment in UK content, the amount of financial benefit to each broadcaster will need to be assessed, transparency will be required by the broadcasters and Ofcom will need to be given additional powers to ensure that this extra funding is used to produce public service content.

19. We base our argument for abolishing carriage fees for public service broadcasters on the clear evidence of the benefits to cable and satellite operators of transmitting the five PSB channels. Viewing to these channels in cab-sat homes comprises 2/3 of all viewing if you include the PSB portfolio channels and makes them more attractive to consumers.

20. Additionally, other countries have acknowledged the importance of retransmission fees as a means of returning value to those channels which have invested in original local content, and the UK should follow suit.

21. On principle, IBT opposes any funding generated by the licence fee being paid to a private company for retransmission purposes.

22. EPG Positioning: There is clear evidence that the public expects to have easy access to the five public service broadcasters and IBT strongly opposes any move which would reduce their prominence on the EPG.

23. Additionally, IBT welcomes the suggestion that EPG positioning could be used as a lever to encourage greater investment in UK-originated content but we urge that this policy should be used to encourage not just UK-originated content but UK-originated public service content otherwise there is little quantifiable benefit for the public.

24. IBT acknowledges that any legislation which implements changes to the rules for the EPG need to ensure certainty for broadcasters without which they will not be able to operate effectively.

25. Tax Breaks: IBT welcomes the proposal for tax breaks for drama and high-end TV production and animation. We believe there are other genres which the Government should consider applicable for tax breaks. These are the areas where there is market failure such as children’s and factual programming which according to Ofcom are the genres most at risk. If tax breaks were available for such programming it would provide greater incentive for investment in these areas.

26. Levies: A number of levy options have been suggested in the past, which follow the example of virtually every other European country and are based on the logical principle that those enterprises which exploit value from UK content creation should make some return to the creative pot. These include reuse fees, fees levied on ISP’s and mobile phone operators, and search engine fees.

27. The revenue thus created would help to reduce the funding deficit for public service content and could be used to provide free-to-air high quality competition to the BBC. Unlike pay-TV, this content would be free at the point of consumption, a fundamental public service principle of UK broadcasting. All new levies will have benefits and disadvantages, but none have been the subject of systematic, independent investigation. Ofcom should be asked to make such an assessment as part of the new Communications Act process.

28. Sale of Spectrum: From 2014, it is proposed that broadcasters will be charged for their use of spectrum through a new system of administered incentive pricing (AIP). This funding will go to the Treasury and will represent a further reduction in revenue available for reinvestment in original content. This funding could be diverted into public service broadcasting content and we propose that the Government should investigate this option.

November 2012