Further memorandum submitted by BSkyB
EC TELEVISION WITHOUT
FRONTIERS ("TWF") DIRECTIVE
The Television without Frontiers ("TWF")
requires Member States to ensure "where practicable"
that broadcasters reserve for European works "a majority
proportion of their transmission time, excluding the time appointed
to news, sports events, games, advertising, teletext services
and teleshopping" to be achieved progressively. Statistical
reports must be supplied to the European Commission by Member
States every two years on the proportions achieved and reasons
for any failure to reach the majority quotas.
The ITC acts as the collection agency for this
information for UK licensed cable and satellite channels and passes
the details to the Department for Culture, Media and Sport, which
is responsible for implementing the policy. The figures for the
most recent year reported by DCMS to the European Commission
for Sky channels are attached.
The great majority of Europe's public service
broadcasters and mainstream commercial channels that enjoy scarce,
universally available frequencies provide a majority of EU content.
governments make it a condition of receiving those funds and frequencies
that high domestic content levels are maintained. It would be
odd if BBC, ITV, Channel 4 and Channel 5 did not provide this
given the direct and indirect subsidies and other privileges they
have been granted in return for specific content requirements.
In contrast, entirely private sector commercial
channelsincluding the vast majority of services on the
digital satellite and cable platforms in the UKenjoy no
special privileges. They receive no guaranteed licence fee income,
subsidy or special protection, or automatic access to homes, and
exist purely on the basis of consumer demand. Their choice of
programme content is based on many factors including overall programming
budgets, audience size, potential revenue streams (from advertising,
sponsorship, subscription and carriage fees etc), availability
and cost of talent, availability and cost of acquired programming,
competitive conditions, and the nature of each service.
Over the years, Sky has invested hundreds of
millions of pounds in creating thousands of hours of original
UK content. However, most of this has not counted as "European"
content under the TWF Directive, given the exclusion of news and
sports events from the definition of EU content. So a low-budget
soap counts towards EU quotasbut coverage of the Kosovan
crisis (for which Sky won the RTS News Channel of the Year award),
or an EU summit, does not. Similarly, a cheap chat show counts
as European content under TWFbut Sky Sports' commitments
not just to high profile sporting events, but to coverage of grass
roots events and minority sports as well, do not.
Sky One's commitments to original content have
grown significantly over the years. In the most recent year reported
by DCMS to the European Commission, 34
per cent of Sky One's content comprised European works. This is
a positive achievement given the channel's audience share of less
than 2 per cent of UK television viewing (around one-fifth of
Channel 4's and one-fifteenth of ITV's audience share in the year).
As a proportion of Sky One's programming budget,
the cost of commissioned first run programming is even higher
than the EC quota figure. In 2000-01 approximately 50 per cent
of the channel's budget was spent on first run original UK commissioned
programming. The vast majority of the spend on commissioned first
run programming is also with EC producers independent of Sky (eg
the multi-award winning Dream Team, commissioned from Hewland
Sky One's initiatives underscore the fact that
new, private sector channels have added significantly to the overall
levels of investment in, and volume of, EU content available to
viewers in recent years.
With respect to Sky's film channels, pay TV
movie channels are principally an additional exhibition window
rather than a source of original production. As long as theatrical
exhibition largely features non-European product, a thematic film
channel is likely to reflect that in order to appeal to its viewers
and to gain a sufficient supply of films. However, Sky has invested
in movies directly
and indirectly, eg through output deals with distributors. Sky's
massive investments in digital satellite have also made it easier
for new services to launch: witness Channel Four's launch of its
own pay TV film channel, Film Four, on the platform, as an additional
outlet for European and non-European films.
2. PUBLIC SERVICE
Clauses 181 and 182 of the draft Communications
Bill describe general requirements for public service broadcasting
(PSB) in the UK and remits for the licensed public service channels.
Before the public service requirements are translated
into obligations for each licensed public service broadcaster,
OFCOM should consult not just with the relevant broadcaster but
more broadly about its proposals. Other broadcasters and consumer
groups should be included in this consultation process. The obligations
of the public service broadcasters should be balanced with the
privileges they receive (eg free or discounted spectrum).
The Bill also gives the Secretary of State power
to amend public service remits (clause 188) on the recommendation
of OFCOM. Before OFCOM makes such a recommendation and before
the Secretary of State makes an order, each should consult the
public service broadcasters affected. These consultations also
should not be confined to the public service broadcasters but
should take into account the views of the public and of other
In respect of the BBC, OFCOM should be given
responsibility for the approval of any proposed new BBC services
and for the ongoing scrutiny of the new BBC channels that have
already been approved. The BBC is a large player in the communications
sector whose unique privileges make it a strong and effective
competitor to commercial companies. Approvals and reviews should
be considered with a specific obligation to ensure that such services
do not duplicate or foreclose entry by similar commercial services.
In the interests of transparency and accountability,
the BBC should also be subject to audit by the National Audit
Office and scrutiny by the Public Accounts Committee.
European Quota Figures for Sky channels2000
|Sky Sports 1||91|
|Sky Sports 2||90|
|Sky Sports Extra||95|
|Sky Premier|| 9|
|Movie Max|| 4|
Directive 89/552/EEC adopted on 3 October 1989 by the Council
and amended on 30 June 1997 by the European Parliament and the
Council Directive 97/36/EC. Back
For the year ended 31 December 2000. Back
These channels also account for the majority of television viewing.
As Mrs Viviane Reding, European Commissioner for Education and
Culture noted in her speech to the European Voice Conference on
TWF (21 March 2002): "When 'Television without frontiers'
was first adopted in 1989, there were a mere 47 TV channels in
Europe. There are now more than 1,500. Yet three-quarters of the
audience remains dominated by about just 50 broadcasters." Back
Year ending 31 December 2000. Back
At Sky's oral evidence session, Tony Ball noted an agreement with
Pathe to finance up to four films each year. Back
Most recent annual figure reported by DCMS to the European Commission. Back
TV subsequently ceased transmission (analogue and digital) in
September 2001. Back