Written evidence submitted by S4C
Response to DCMS Select Committee inquiry into ‘The future of public service broadcasting’.
About S4C
S4C is the independent Welsh language public service media provider (‘PSM’). Its content can be viewed on linear television as well as through its player S4C Clic, the BBC iPlayer and on social media across the UK.
S4C offers content across all genres including news, current affairs, drama, documentaries, music, entertainment, sport and children programmes. Independent production companies produce most of the programmes.
The BBC also produces a minimum of 520 hours a year for the channel. This is provided free of charge to S4C under a long-standing statutory provision and is funded from the licence fee.
Hansh, S4C’s online brand aimed at younger audiences receives an average of 700,000 viewing sessions a month across social media. S4C is one of the few PSMs not to be losing the 16-34s and its viewing in peak among this age bracket has doubled during the past four years.
S4C has played a vital role since it was first broadcast in 1982. It has had a significant and far-reaching cultural, linguistic, economic and social impact. It has been argued that without S4C, Wales wouldn’t have an independent production sector at all.
It’s important to highlight that S4C is by its very existence an intervention because of market failure. It exists to offer a valuable service to UK audiences – free-to-air Welsh language content – that would not otherwise be sated by the commercial market. S4C has been funded through various formulae since it first broadcast in 1982 including full funding through UK Government grand-in-aid and the current split between DCMS grant- in aid and the licence fee. Advertising income generates a very small proportion of S4C’s turnover. From 2022 onwards, all of S4C’s public funding will come from the licence fee.
It is because we serve in an area where there is market failure, it is difficult to see how S4C could ever become a commercial proposition. We do not believe that a subscription model would support Welsh language content in a way that would enable the landscape to continue to thrive nor would its future be secured. Nor would S4C be able to continue its mission to reach the widest audience possible across a range of contemporary platforms as highlighted by the Secretary of State for Wales during the March 2020 Budget announcement. S4C’s value, as the main commissioner and publisher of Welsh content is more than PSM and more than financial alone. There is Welsh-medium radio coverage, and S4C works closely with BBC Radio Cymru, but beyond this, there is little.
Looking ahead: what should a PSB look like in a digital age?
There is no doubt that public service broadcasting (PSB) and the wider media in the UK have changed significantly over the past five years - perhaps even faster than many forecasters had envisaged. The digital ecology has evolved, with audiences now familiar with a range of platforms and alternatively funded services, and a wider choice of content than ever before.
Whilst the term PSB may no longer be appropriate, and with many UK broadcasters including S4C already operating across platforms as public service media providers (PSM), the concept at the heart of PSM – universal, impartial, high-quality content - is more important than ever.
The value of PSM and the vital role it plays in society has been reinforced during the current COVID-19 lockdown. S4C as a PSM has a responsibility to serve its audiences with information and entertainment across a variety of platforms. S4C’s focus has been on reflecting the reality of people's lives during this challenging period and providing information, comfort and company to people in Wales and across the United Kingdom. This has resulted in S4C’s linear viewing figures increasing during the crisis, with audiences 50% higher than usual for our main news programme and up by 30% across news and current affairs, and with audiences for our daytime children’s programmes having trebled. We have also seen record numbers through our digital platforms. For example, Hansh achieved over 1.4million viewing sessions in March 2020. And as people and communities across Wales adapt to the changes to their lives brought about by COVID-19, S4C Clic has launched a new channel Yma i Chi (Here for You) which sits alongside the current S4C Clic channels such as Walter Presents, Cyw, Hansh and offers the latest news and stories from viewers. As well as new programmes, the channel also features some classic shows, as requested by S4C viewers.
Over the past decade, S4C has instigated several efficiency programmes to deal with the significant cuts to its funding. For example, S4C has taken extensive measures to reduce its overheads and has embarked on two major projects with the relocation of its headquarters from Cardiff to Carmarthen in West Wales, and the co-location of its broadcast and technical activities with BBC Wales in Cardiff.
At the same time, S4C has upgraded its online presence and player, including growing our short-form and medium-form digital content and platforms, hosting box-sets and improving functionality. In February 2020, S4C celebrated its on demand service S4C Clic reaching 100,000 subscribers in just over six months, enabling communication with viewers on a one to one basis and thus providing a more comprehensive service. This is fundamental to broadening S4C’s reach and appeal and in line with the recommendations in March 2018 from the independent review of S4C prepared for DCMS by Euryn Ogwen Williams. This has been achieved by reprioritising and diverting £1m per annum from the television content budget to bolster digital activities.
But we cannot and will not rest on our laurels. Looking ahead, it is clear that the PSB system as a whole must reach audiences wherever they now are and provide for viewers of all ages if it is to remain relevant. This will require commercial and technological innovation from PSBs. S4C believes that its business model must continue to adapt and evolve over the coming years to fit the needs of the consumer rather than expect the consumer to adapt to meet the needs of S4C. Maintaining the status quo is not an option.
From 2022, S4C’s public funding will be provided entirely through the licence fee. In the lead up to that milestone, S4C has begun the process of considering its purpose as a PSM, and asking the questions as to what services should it deliver in future, to whom and how. The starting point is to consider what would S4C look like if it were being set up from scratch today, and to redesign and reimagine a service fit for the future. This is increasingly important at a time when resources are stretched. We must continue to target our resources in the most effective way in order to provide compelling content to our audience. A key part of this work is to better understand the needs of our audience and to become a more customer centric organisation. There needs to be a better match between what we provide as a PSM and what the audience want. To achieve this, we will need to reach out and actively consult and listen to people over the coming months and years. This will require different forms of engagement so that we not only reach our current audience, but also those who don’t use our services. For example, securing over 100,000 registrations so far to S4C Clic is one way of enabling us to better understand our audience and seek views on the future direction of our services. As well as the audience, we will need to engage and work closely with key partners and the sector across Wales.
This is a very exciting time therefore for S4C and an opportunity to continue the transition from the linear PSB created nearly 40 years ago to a PSM which commissions and distributes compelling content on a wide variety of platforms. S4C as one of the smallest PSBs has the agility to continue to adapt over the coming years. Our importance as Wales’ only national indigenous public sector broadcaster is widely recognised, including by the UK Government. As the Chancellor said in March 2020 “S4C has become an integral part of the fabric of Welsh culture.” Without S4C and the wider ecology it supports day in, day out, the portrayal and representation of Wales on screens across the UK would be vastly different.
Regulation
S4C is accountable to DCMS and gives evidence to committees of both houses in Westminster. S4C also works with the Welsh Government, particularly so since the 2018 independent review for DCMS recommended partnership working to support the target of a million Welsh speakers by 2050.
S4C is part of the PSB eco-system in the UK and we believe the PSBs have an important role to play despite the increasing competition from SVODs and digital services. We believe the ‘PSB compact’ (EPG prominence and spectrum in return for PSB obligations) has worked well in a linear world and that an equivalent model should be devised for a multi-platform environment in order to continue to provide the benefits of PSB content to audiences. In particular, the need for impartial high-quality news and current affairs, original UK children’s content, nations and regions content and minority language services is as great as ever and should be replicated on non-linear platforms otherwise the benefits and impact of PSM will be lost in the digital world.
In order to make PSM easily discoverable and accessible in the digital world, it is imperative that legislation is passed as soon as possible to ensure prominence and inclusion for PSB content on user interfaces on all major platforms, devices and services in the UK used to consume TV or TV-like content. This is particularly important for Welsh language content, to ensure that Welsh language content is easy to find on platforms dominated by English language content. For minority language broadcasters such as S4C, regional prominence on digital platforms is also important and we believe this should become increasingly possible with developments in functionality to identify users’ location.
Representation
The principle of representation, as underpinned by the nations and regions quota, has been an important part of the PSB offering and these principles continue to be as important as ever in a multi-platform age. The benefits include portraying the diversity of cultures across the UK and ensuring that PSB commissioning spend is spread across the UK, ensuring a vibrant production sector in the nations and regions. The quota has also encouraged other PSBs to partner with S4C on co-producing or co-financing content from Wales, which attracts spend into Wales and the sharing of resources to serve both Welsh and UK audiences.
The growth of the production sector in the nations and regions on the back of the quota system has enabled many companies to seek commissions from non-PSBs and SVODs, but we do not believe that market forces alone can necessarily guarantee a sufficient supply of commissions to producers in the nations and regions, as global players may not have the same interest in reflecting the various cultures of the UK. We believe therefore that it is essential to maintain the principles of the quota system in a revised PSB model for a multi-platform age.
Accessibility
Despite platform advances and changes in the way our audiences watch S4C’s content, viewing to linear TV still dominates, as it does for all channels. Any proposal for an internet-based PSB delivery would be particularly challenging for S4C in particular due the lack of universal broadband coverage in Wales. A consistent message from viewers in rural areas across Wales is that they are unable to currently access S4C’s services via S4C Clic or the iPlayer due to either non-existent or inferior broadband coverage. We do not therefore believe that it’s remotely feasible to move to a wholly internet-based service and such a move would be highly detrimental to our viewers as things stand. Wales’ audiences must not be left behind in their ability to enjoy content. At the same time, this represents a challenge for S4C in that it must continue to serve different audiences with very different access needs and viewing habits.
Impact
Public service broadcasting plays a key role in sustaining and defining a country’s culture. The smaller the country, the greater the danger that the media available to the public are dominated by content created and paid for elsewhere. The cost of creating content is such that it is almost never in the interest of commercial producers and broadcasters to make programmes in lesser-spoken languages, such as Welsh. A good deal of high-quality English-language production, reflective of a broad British culture, can continue to be generated even without the application of public funding. The communities who speak minority languages such as Welsh, however, are entirely dependent on public service broadcasting for the provision of broadcast content in their own language.
The Welsh language is part of the cultural heritage of the UK, but also a living language spoken as the language of choice by hundreds of thousands of people. Part of S4C’s mission is to pass on the language to future generations and to help meet the target set by the Welsh Government of achieving 1 million Welsh speakers by 2050. Our Welsh language initiative this year launched on 19 April with Iaith ar Daith (Whistlestop Welsh). This is a brand new series which sees five celebrities, five mentors and five very different reasons for learning Welsh as they travel to different parts of Wales, and further demonstrates our commitment to making the language more accessible and ensuring learners programmes are part of the mainstream. But it’s important to note that S4C’s appeal extends beyond Wales and is enjoyed across the UK. We have seen significant growth yet again outside of Wales in the last financial year with the audience watching drama, sport, nostalgia programmes, but also vitally, our children’s content. S4C is enabling families to keep in touch with their roots wherever they might live and work within the rest of the UK.
S4C continues to work closely with partners across the UK and beyond and fully supported the establishment of the Young Audience Content Fund. S4C was one of the first broadcasters to have received sponsorship from the Young Audiences Content Fund with more than £500,000 to develop content for children and young people, and is also part of a project with BBC Alba and TG4 which will be produced in three languages - Welsh, Gaelic and Scottish Gaelic.
Alongside S4C’s cultural impact, S4C has a significant economic impact on the Welsh economy. S4C invests and commissions most of its cross-platform content from production companies across Wales, including Caernarfon, Llanelli, Swansea and Cardiff. As a result, S4C’s economic impact is spread in communities in North, West and South East Wales. Every £1 that S4C spends with independent production companies and other suppliers in turn more that doubles to create an impact of £2.09 within the wider economy. Production companies have a significant impact on their local economies and beyond their catchment area as productions travel the country to film content that reflects Wales. The contribution of the production companies also contributes to a highly skilled workforce that underpins a world class production sector in Wales that attracts television, film and digital content from countries around the world.
S4C is a cornerstone of the creative industries in Wales that has enabled the growth of Welsh-made TV drama in recent years. This is an example where S4C is significantly punching above its weight. S4C typically spends £200k - £300k per hour compared to Ofcom’s 5-year PSB Review published in February 2020 which reported that drama spend has increased to £1.7m and £1.9m per hour for PSBs and multichannel providers respectively. S4C Originals like y Gwyll (Hinterland), Un Bore Mercher (Keeping Faith), Craith (Hidden) and Bang have ensured that Wales in portrayed on screen and enjoyed across the UK and beyond in both Welsh and English. Home-grown studios like BadWolf are building on the strong skills base that S4C generated-content has built in Wales. As Professor Ian Hargreaves’ once commented in reviewing the sector in Wales:
“Without S4C, Wales may well not have any independent television production companies at all. Almost all the Welsh indies have their roots in making programmes for S4C and they are spread acrossWales in a way that has helped to broaden the geographic base of the Welsh creative industries sector”.