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Written evidence submitted by Channel 4 Response to the Digital, Culture, Media and Sport Select Committee Inquiry into Public Service Broadcasting June 2020 Channel 4 was created to be a radical, innovative force in UK broadcasting. Our mandate then was to be bold, radical and to take creative risks. While we are changing in many ways to adapt to the changing times, we have remained true to that founding mission. In this changed world, we are continually challenging ourselves on how we can maximise our positive impact. Our intentionally marginal model – unlike other publicly owned broadcasters we are entirely commercially funded, contribute all our funds back in to the creative sector and do not seek a profit – means that we deliver public service content audiences across the UK and fuel the economy, all at no cost to the taxpayer and with only one shareholder to satisfy – the British public. At this time of unique national need, we are playing a vital role as the UK recovers from the global pandemic by bringing audiences together and stimulating growth and jobs across the UK’s creative industries. As we look beyond the crisis to the next ten years, the role of PSB in reinforcing social cohesion and a shared national identity, while driving the success of the UK’s creative industries, will only become more important. Executive Summary Public Service Broadcasting (PSB) continues to offer significant public benefit by supporting UK society and democracy and acting as a catalyst for the UK’s globally successful creative industries. The current COVID-19 crisis has demonstrated the particular importance of PSBs as being greater than ever. Channel 4 has played an active role in supporting the country through this time, through life affirming, entertaining British content that has contributed to a sense of shared UK experience in this unique national moment. Beyond the crisis, there will continue to be a fundamental role for Channel 4 and other public service broadcasters (PSBs) in our society. At a time of globalisation, fragmented public discourse and the proliferation of fake news, it will be more important than ever to have a PSB ecosystem that provides information the public can trust and that gives a whole- of-UK perspective on the issues that matter to people in this country. To erode that ecosystem now would create profound risks for social cohesion and public trust in institutions. Rapid changes in the media landscape present significant challenges for public service broadcasters (PSBs). PSBs must therefore innovate and think radically, to ensure they can continue to compete, remain relevant and reach audiences with public service content. Policy makers also have a vital role to play in nurturing the PSB ecosystem. The regime underpinning public service broadcasting needs to be modernised urgently, with changes to the regulatory regime to respond to shifts in the media landscape. This should include updating outdated ‘legacy’ regulation to better reflect the transition from linear to digital and to ensure we can operate on a level playing field with our competitors. Updating and reforming the PSB prominence regime to ensure that PSB content remains easily discoverable should remain an urgent priority. Action also needs to be taken to redress the balance of power between PSBs (and other content providers) and global technology companies, which has been further exacerbated by the COVID-19 crisis. Action is needed to address, firstly, the disparity of regulation between broadcasters and online platforms on content and advertising, and secondly, the unbalanced bargaining relationship between online platforms and content producers, and the risk this creates for the sustainability of public value content. Without intervention, the distinctiveness of Britain’s cultural output and the strength of the production sector will be eroded as more power is accumulated by the increasingly dominant global tech giants. Channel 4 has a history of innovation and we intend to innovate and adapt to the current circumstances. We and the other PSBs are ready to work with policy-makers and together have a radical impact in shaping a positive future of public service media provision. Introduction The UK’s public service broadcasting ecology is world-renowned and plays a vital role in British public life, supporting UK democracy and society. British TV programmes and companies also have an important role to play in showcasing the UK to the wider world, projecting British ideas, culture and talent on a global stage. Meanwhile, at important national moments and crises, such as the current COVID-19 pandemic, PSBs bring the nation together, acting as a valuable source of trusted information and content that speaks to the big issues of the day. Given widespread changes in the broadcasting landscape, PSBs are working actively to re-invent themselves for the digital age. But policy makers will also have a vital role to support this too. Channel 4’s unique role and evolving business Channel 4 was created to be a disruptive, innovative force in UK broadcasting. We have a vital social role to challenge conventional narratives and give voices to under-represented groups. We also play a hugely important economic role in the success of the UK’s creative industries, acting as a world- leading accelerator, investing in and stimulating the production sector and pioneering innovation in digital. Economically, Channel 4 has invested over £12bn in the creative sector, contributing £1.1bn to UK GDP, supporting 19,000 jobs and hundreds of independent production companies across the UK. That investment has put TV in the UK at the forefront of soft power, exporting ideas and talent worldwide whilst stimulating investment and growth outside London. As a publicly owned but commercially funded broadcaster, Channel 4 is run as an intentionally marginal business and deliberately lean company with no profit margins, and therefore pays no shareholders or dividends. As the media landscape has changed beyond recognition over recent years, we have acted quickly to transform Channel 4. We are now a digital-first business, with a strong presence across the Nations and Regions of the UK and have supercharged our offer to young people by making sure we speak to them about the issues they care about in formats they will access. The evidence shows in black-and-white that young people are engaging with our offer. Despite increased competition from SVoDs, All 4 has continued to grow, with record digital revenues and double-digit growth in 2019, whilst nearly 80% of 16-34s are now registered on All 4 (which has the youngest profile of all the PSB streaming services). We are the youngest-skewing PSB in the UK, reaching more 16-34 year olds across TV and streaming than any other commercial broadcaster, and are the only commercial PSB to grow share among this age group in 2020. With the habits of younger viewers changing, we are also finding new ways to reach them through online platforms. Channel 4 already has the largest reach of any of the UK broadcasters across Facebook and YouTube. Building on this success, we are investing in innovation in this area, by establishing a new department 4Studio which, from our National HQ in Leeds, will create, commission and distribute digital and social media content. We recently announced a new partnership with Snap which will see upwards of 300 short form edits of Channel 4 content air on Snapchat’s Discover platform over the next year. We have also in the last year completely transformed Channel 4 as an organisation, opening new offices in Leeds, Bristol and Glasgow with 200 staff already in place. The dividends of that approach are beginning to come through, with new Nations and Regions commissions by creative-decision makers dispersed across the UK. Examples include Derry Girls, The Circle, Ackley Bridge, The Accident and Boys. Section 1: PSB Impact and Representation PSB’s Societal and cultural role PSBs continue to play a hugely influential role in UK society. As a democratic culture, universal, accessible and accountable television is a fundamental part of bringing different communities in the UK into focus and at the same time, building an image abroad of what we offer to the world. PSBs continue to reach significantly more people in an average month than services such as YouTube, Netflix and Amazon Prime. 90% of UK 16-34s are reached by the PSBs. Meanwhile, PSBs maintain huge reach on television, with the five main PSB channels accounting for more than half (52%) of all broadcast viewing in 2018, rising to 71% of all TV viewing when their wider TV portfolios are also taken into account1. The universal reach of PSB, combined with its mission to provide public value across the full range of genres, is vital. Through Channel 4 News for example, Channel 4 dedicates an hour each night in peak time, to in-depth, impartial, trusted news and current affairs. Channel 4 News has a particularly strong appeal to young audiences – with the young accounting for 12% of viewing to the programme last year – well above the average 8% profile of viewing to national news programmes on other PSB channels. Through its ground-breaking digital strategy, Channel 4 News also has huge reach on social platforms, with 1.4 billion minutes of its videos watched across all social platforms in 2019, including an increase in YouTube video views of +65% (+72% increase amongst 16-34s) and +65% on Twitter in 2019. News and current affairs are of course vital, but just one part of the overall PSB mix. In other genres, the PSBs have historically shone a light on important social issues facing Britain and provided cultural landmarks. Channel 4 has always sought to do this in a distinctive and accessible way – for example Hollyoaks has recently tackled issues ranging from mental health to the far right.