PSB compliance reporting, 2010 Introduction (I)

• TV broadcasters must comply with a range of programme and output quotas that set minimum levels of types of programmes that they must show. These obligations originate in the Communications Act 2003 (‘The Act’) or in European legislation, and Ofcom has a duty under the Act to monitor and enforce compliance with these quotas.

• The level of regulatory intervention that Ofcom is required to apply depends on the category of broadcaster – public service broadcasters operate under much tighter regulations than multichannel operators – therefore some quotas apply across the board while others are specific to the PSBs.

• In terms of licensing and regulation, Ofcom has a direct relationship with ITV1, GMTV1, Channel 4 and Channel 5, whose licences carry specific quota compliance obligations, while the BBC is regulated jointly by the BBC Trust and Ofcom. The Trust sets the majority of the BBC’s targets and monitors compliance but must consult with Ofcom before changing specific quotas, and must obtain Ofcom’s agreement in setting quotas for original productions and out-of- London network productions.

• Ofcom has a duty under the Act to review and report on compliance with programme obligations and in previous years this analysis has been included in Ofcom’s annual Communications Market Review or in Ofcom’s Public Service Broadcasting Annual Report.

2 Introduction (II)

PSB quotas and the Communications Act 2003

• The Act sets out a range of obligations applying to public service channels, and Ofcom sets appropriate quotas to meet these obligations. When fixing the quotas, Ofcom takes into account the individual remit of each channel and other relevant criteria. These are reviewed as necessary, and the levels may be revised up or down to allow for changes in circumstances and the broadcasting environment.

• A summary of the quotas applying to PSB channels is given below. These are applicable to the BBC’s analogue and digital channels, ITV1, GMTV1, Channel 4, Channel 5 and S4C in Wales. They do not apply to the commercial broadcasters’ digital services (such as ITV2, CITV, E4, More 4, Five USA, Fiver) or to other multichannel operators. This pack reports of the first five of these quotas:

1. Original productions – programmes commissioned by broadcasters from in-house production resources or independent producers. 2. Out-of-London productions – network programmes made in the UK outside the M25. 3. Independent productions – programmes made by companies that are independent of broadcasters. 4. Networked national and international news. 5. Networked current affairs. 6. Nations and regions programmes on Channel 3 and the BBC – made and shown in the nations and English regions (data relating to these quotas will be reported separately).

3 Introduction (III)

European ‘AVMS’ quotas

• All television broadcasters licensed by Ofcom in the UK, including multichannel operators, are subject to the obligations of the Audiovisual Media Services (AVMS) Directive.

• The AVMS Directive replaced the Television Without Frontiers (TVWF) Directive on 10 December 2007 and was transposed into UK legislation in December 2009.

• This requires that on each channel, the majority of programmes must be European (including from the UK) and at least 10% must be made by independents.

• Of these, the majority must have been made within the past five years. The European Commission publishes a report on compliance by all EU Member States every two years and the latest report can be found at http://eur- lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:52009DC0309:EN:NOT

4 100% Note: BBC figures include programmes made or commissioned for other BBC channels. repeats. channels. Includes BBC other commissioned for or made include programmes figures BBC Note: Source: quotas, alltime Broadcasters’ production original against performance Hours 20% 40% 60% 80% 0% Quota % Ofcom/broadcasters 70% 85% BBC One 86% 88% 89% 70% 83%

BBC Two 82% Achieved 2007 82% 82% 80% 81% BBC Three 86% 85% 83% 70% 75% BBC Four 84% 80%

83% Achieved 2008 70% 75% CBBC 79% 84% 83% 80% 79% Cbeebies 81% 80% 81% 90%

97% Achieved 2009 BBC News 24 97% 97% 96% 90% 98% BBC Parliament 97% 98% 98% 65% 90% ITV1 87% 80% Achieved 2010 82% 56% 64% Channel 4 62% 61% 58% 50% 56% Channel 5 59% 56% 51% hours run from 19:00 to midnight. Includes repeats. Includes midnight. to 19:00 from hours run Note: BBC figures include programmes made or commissioned for other BBC channels. BBC Three and BBC Four peak Four BBC channels. BBCand Three BBC other commissioned for or made include programmes figures BBC Note: Source: quotas, peak- Broadcasters’ production original against performance 100% Hours % % Hours 20% 40% 60% 80% 0% Ofcom/broadcasters Quota

90% 99% BBC One 99% 99% 100% Achieved 2007

80% time 95% BBC Two 95% 95% 97%

70% 70%

BBC Three 78% Achieved 2008 75% 74%

50% 63% BBC Four 81% 80% 80% Achieved 2009 85% 95% ITV1 96% 95% 97%

70% 76% Channel4 76% Achieved 2010 79% 77%

40% 42% - time Channel 5 49% 44% 44% Source: Source: producers Qualifying hours commissioned from independent independent from commissioned Qualifying hours % Qualifying hours Qualifying % 100% 20% 40% 60% 80% 0% Ofcom/broadcasters

31% All BBC 35% 2005 39% 38% 40% 36%

28% BBC One

30% 2006 33% 31% 34% 33%

39% BBC Two 40% 42% 2007 45% 49% 41%

33% 43% ITV1

35% 2008 40% 45% 39%

Channel 4 87% 84% 87% 2009 87% 84% 86%

Channel 5 88% 94% 96%

97% 2010 95% 81% = 25% = Quota Qualifying independent commissions, by genre

Ent Comedy Drama Sport C.Affairs Factual Factual Ent Hob/Leisure Arts Music Religion Childrens

% Qualifying hours 100%

80%

60% 99% 99% 99% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 97% 92% 89% 40% 86% 82% 80% 75% 72% 69% 66% 66% 58% 50% 47% 47%

20% 44% 41% 39% 38% 37% 33% 30% 29% 29% 28% 28% 27% 18% 16% 0% 0% 0% 2% 3% 0% 0% All BBC ITV1 Channel 4 Channel 5

Source: Ofcom/broadcasters Performance against the out-of-London production quotas

Quota Achieved 2006 Achieved 2007 Achieved 2008 Achieved 2009 Achieved 2010

Percentage of network production produced outside London, by value and by volume (%) 60%

50%

40%

30% 53% 52% 50% 50% 50% 46% 45% 45% 45% 44% 44%

20% 43% 41% 40% 39% 39% 39% 38% 38% 37% 37% 35% 35% 35% 35% 35% 35% 34% 33% 33% 32% 32% 32% 30% 30% 30% 30% 29% 26% 25%

10% 22% 21% 17% 15% 15% 12% 10% 10% 0% All BBC ITV1 Channel 4 Channel 5 All BBC ITV1 Channel 4 Channel 5 Value Volume

Source: Ofcom/broadcasters

9 Expenditure on out-of-London production

Percentage of production by value (%)

London Midlands & East Northern England Southern England Scotland Wales Northern Ireland

2006 63.3% 5.9% 17.6% 8.9% 1.5% 2.6% 0.2%

2007 63.3% 5.7% 17.3% 9.6% 1.3% 2.6% 0.3%

2008 61.1% 6.7% 17.4% 10.2% 0.3% 1.7% 2.5%

2009 60.5% 7.3% 15.3% 10.5% 0.6% 2.2% 3.6%

2010 61.8% 2.8% 15.1% 12.6% 2.6% 4.6% 0.4%

0% 20% 40% 60% 80% 100%

Source: Broadcaster returns

10 Volume of out-of-London production

Percentage of production by volume (%)

London Midlands & East Northern England Southern England Scotland Wales Northern Ireland

2006 66.0% 4.8% 14.5% 12.0% 1.6% 0.9% 0.2%

2007 64.3% 4.4% 17.9% 10.8% 1.7% 0.7% 0.2%

2008 64.6% 8.9% 12.7% 11.0% 1.8% 0.9% 0.1%

2009 62.7% 9.5% 11.3% 11.4% 3.3% 1.7% 0.2%

2010 60.8% 8.3% 11.6% 12.9% 4.6% 1.4% 0.5%

0% 20% 40% 60% 80% 100%

Source: Broadcaster returns

11 Out-of-London productions by channel/macro-region: value

Distribution of spend on qualifying productions by macro region and channel (%)

BBC ITV1 Channel 4 Channel 5 2007 2008 2009 2010 2007 2008 2009 2010 2007 2008 2009 2010 2007 2008 2009 2010 London 67.4% 65.1% 62.3% 62.2% 55.7% 50.1% 55.3% 61.2% 64.7% 68.3% 63.1% 60.6% 66.9% 65.5% 71.2% 73.6% Midlands & East 4.1% 3.8% 3.8% 3.9% 9.2% 13.4% 14.4% 1.4% 2.1% 1.0% 2.3% 1.7% 15.4% 17.4% 16.0% 7.2% Northern England 10.2% 8.9% 8.2% 7.7% 29.4% 31.0% 25.5% 25.4% 18.5% 18.4% 19.4% 19.7% 3.0% 5.1% 1.8% 0.1% Southern England 12.0% 14.2% 14.0% 13.0% 3.7% 4.0% 4.1% 11.4% 12.8% 10.8% 12.4% 13.5% 12.1% 8.7% 9.0% 12.1% Scotland 3.3% 3.7% 6.1% 7.4% 1.9% 1.4% 0.6% 0.4% 1.7% 1.4% 2.5% 4.1% 2.3% 2.9% 1.9% 6.2% Wales 2.6% 3.5% 4.4% 5.0% 0.0% 0.1% 0.1% 0.1% 0.2% 0.0% 0.2% 0.2% 0.5% 0.5% 0.1% 0.8% Northern Ireland 0.4% 0.6% 1.2% 0.8% 0.1% 0.0% 0.0% 0.0% 0.1% 0.0% 0.0% 0.2% 0.0% 0.0% 0.0% 0.0% Total Regional 32.6% 34.9% 37.7% 37.8% 44.3% 49.9% 44.7% 38.8% 35.3% 31.7% 36.9% 39.4% 33.1% 34.5% 28.8% 26.4%

Source: Broadcaster returns

12 Out-of-London productions by channel/macro-region: volume

Distribution of hours of qualifying productions by macro region and channel (%)

BBC ITV Channel 4 Channel 5 2007 2008 2009 2010 2007 2008 2009 2010 2007 2008 2009 2010 2007 2008 2009 2010 London 68.1% 66.5% 64.7% 61.4% 46.9% 49.7% 48.0% 55.6% 57.3% 59.3% 55.3% 54.7% 84.6% 82.6% 85.5% 88.2% Midlands & East 5.8% 5.6% 5.5% 5.7% 2.9% 21.0% 25.5% 19.8% 0.5% 1.2% 1.9% 2.3% 7.1% 8.7% 6.5% 5.1% Northern England 6.6% 5.7% 5.1% 5.0% 43.7% 24.3% 20.5% 19.3% 23.5% 22.2% 23.7% 23.3% 3.3% 4.9% 1.5% 0.1% Southern England 14.6% 17.0% 15.7% 17.6% 6.0% 4.3% 5.7% 5.0% 16.3% 14.6% 15.3% 14.0% 4.6% 3.1% 3.3% 4.4% Scotland 3.2% 3.4% 6.5% 7.5% 0.4% 0.3% 0.2% 0.2% 1.5% 1.4% 2.0% 3.7% 0.2% 0.6% 0.4% 1.8% Wales 1.5% 1.5% 2.2% 2.0% 0.0% 0.2% 0.2% 0.1% 0.8% 1.3% 1.6% 1.6% 0.2% 0.2% 2.8% 0.5% Northern Ireland 0.3% 0.3% 0.4% 0.8% 0.1% 0.0% 0.0% 0.0% 0.1% 0.0% 0.0% 0.4% 0.0% 0.0% 0.0% 0.0% Total Regional 31.9% 33.5% 35.3% 38.6% 53.1% 50.3% 52.0% 44.4% 42.7% 40.7% 44.7% 45.3% 15.4% 17.4% 14.5% 11.8%

Source: Broadcaster returns

13 Source: Source: Hours per year per Hours quotas, allday against national Performance and international news 1000 1500 2000 500 Ofcom/broadcasters 0 Quota 1,380 1,467 BBC One 1,572 1,620 1,560 2005 1,602 1,617

365

465 2006

ITV1 444 388 374 384

394 2007

208 319 Channel 4

315 2008 312 313 318 237 2009

260 478 Channel 5 459 451 2010 417 411 331 Source: Source: quotas, peak- against national Performance and international news Hours per year per Hours 100 200 300 Ofcom/broadcasters 0 Quota 275 293 BBC One 280 278 276 2005 277 time 278

125

135 2006

ITV1 128 129 208 238

247 2007

208 217 Channel 4

210 2008 209 210 214 216 2009

100 119 Channel 5 115 126 2010 141 140 113 Source: Source: Performance against current all against affairs, current Performance day Hours per year per Hours 100 200 300 400 500 600 Ofcom/broadcasters Quota 0

365 Achieved 2005 BBC One & BBC One Two 433 456 463 528 493

557 Achieved 2006

43 93

ITV1 87

83 Achieved 2007 80 86 66

208 Achieved 2008 245 Channel 4 219 240 214 209 Achieved 2009 214

130 248 Channel 5 336 Achieved 2010 335 396 341 374 Source: Source: Performance against current affairs quotas, against affairs current peak- Performance Hours per year per Hours 100 150 50 Ofcom/broadcasters Quota 0

105 Achieved 2005 BBC One & BBC One Two 110 113 112 113 114

124 Achieved 2006

35 45

ITV1 59

55 Achieved 2007 64 58 37

80 Achieved 2008 126 Channel 4 119 122 117 118 Achieved 2009 140

10 14 Channel 5 15 Achieved 2010 10 time 21 10 21 Source: Source: Hours % % Hours requirements, 2010 requirements, against European programming Performance 100 20 40 60 80 0 Ofcom/broadcasters

50% Target 10% 50%

88% BBC One 37% 99% European programmes European

83% BBC Two 31% 95%

83% BBC Three 51% 100%

92% BBC Four 31% 94%

87%

CBBC 33% independents European 94%

95% Cbeebies 48% 76%

100% BBC News 7% 24 100%

83% ITV1 (excl. works Recent 26% GMTV1) 41%

66% Channel 4 49% 92%

54% Channel 5 40% 53%