Gaelic Digital Service: Public Value Test final conclusions
January 2008
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Contents
1. Introduction and key findings 4
2. Background – summary of the BBC Executive’s application 7
3. Summary of the Public Value Assessment 9
4. Summary of the Market Impact Assessment 12
5. Summary of the BBC Trust’s provisional conclusions 13
6. Summary of responses to the public consultation 15
7. Summary of the BBC Executive’s response 17
8. The Trust’s conclusions on the further evidence provided 24
9. The Trust’s final decision – Approval, subject to conditions 32
Annex 1: Background to the Public Value Test 36
Annex 2: Service Licence 37
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BBC Gaelic Digital Service: Public Value Test final conclusions
1. Introduction and key findings
1.1 This document sets out the BBC Trust’s decision to approve the launch by the BBC Executive in partnership with the Gaelic Media Service (GMS) of a Gaelic Digital Service (GDS) on satellite and cable in 2008. The GDS will be subject to a comprehensive review before digital switchover commences in central and northern Scotland in 2010. This approval is also subject to a number of other conditions, set out in this final decision document.
1.2 The Trust is drawing final conclusions in its Public Value Test (PVT) of the BBC Executive’s GDS proposal, having conducted a public consultation on its provisional conclusions. The provisional conclusions were published on 21 November 2007 and were followed by a four-week consultation. Further details on the PVT process are contained in Annex 1.
1.3 The public consultation on the Trust’s provisional conclusions closed on 19 December 2007. In response to the request for further evidence contained within the Trust’s provisional conclusions, we also received a response from the BBC Executive before that date. Its response has been considered in detail and we are publishing it as fully as possible, whilst preserving commercial confidentiality, alongside our final conclusions.
1.4 We received 282 submissions overall, overwhelmingly from members of the public. We are publishing a summary of the individual responses. We also received a number of submissions from industry stakeholders, such as Bòrd na Gàidhlig (the Gaelic language board), PACT and Voice of the Listener and Viewer (VLV), the BBC audience councils in Scotland and Northern Ireland, and the BBC Executive and the Gaelic Media Service (GMS). Except where the respondents requested confidentiality, we are publishing these responses in full.
1.5 In addition, we conducted a number of interviews with industry stakeholders. Given this broad range of evidence gathered, and our consideration of the BBC Executive’s response to our provisional conclusions, we consider that there has been a meaningful consultation on the GDS proposal.
1.6 In this document, we provide our view of the main issues arising from the public consultation and outline where we have consequently modified our provisional conclusions.
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1.7 The main points of our final conclusions are that:
• In relation to the educational strategy, the Trust is satisfied that the need for further evidence on education as set out in its provisional conclusions has been met sufficiently. Indeed, the further evidence received from both the BBC and GMS, and other organisations leads us to conclude that the educational benefits of the GDS would in fact be greater than we had originally anticipated in our provisional conclusions.
• Although the Trust remains doubtful about the service’s ability to achieve the level of reach proposed by the BBC Executive of 250,000 in the short term, we recognise that to a great extent the appeal of the channel will rest on the day-to- day operational actions of the GDS’s management. As set out in the Charter, this is clearly the responsibility of the BBC Executive. Indeed, the Trust believes that the GDS proposition represents an opportunity for the BBC to connect with viewers in Scotland in a new and innovative way. In the long term, therefore, the Executive’s ambitions for reach may be achievable.
• In balancing the needs of small audiences with those of the wider UK population, the Trust is open-minded as to whether linear channels are necessarily the most appropriate way of serving smaller audiences. In the case of the GDS, distribution on DTT is one of the main costs to licence fee payers. The cost per user of the full GDS proposal would be £191 per year, based on the current reach of Gaelic programming on TV and radio. When DTT is removed from the equation this falls to £139. Should the service achieve its target reach of 250,000 this falls further to £43, providing much greater value for money and broadly comparable to what is spent on other language services. While the Trust recognises that Freeview was the most popular choice of distribution mechanism in the public consultation, the balance of evidence presented so far does not yet justify the proposed spend on DTT.
• The Trust notes the concerns raised in the public consultation that requesting wider reach at the same time as requiring that carriage on DTT be subject to review before digital switchover commences in central and northern Scotland in 2010 appears somewhat contradictory. However, the proposed reach for the GDS put forward by the BBC Executive included DTT in the Borders region only, with other areas to follow as switchover occurs. While recognising this may impact slightly on the reach achieved, the Trust does not believe that DTT would have played a significant role in the underlying numbers.
• The Trust does, however, recognise the cultural significance attached to a linear channel, at least in the short term. Many respondents to the public consultation raised this point, with the view that the simple existence of a linear channel would bring wide-ranging benefits, regardless of the level of use. However, the Trust is of the view that for any proposition, including the GDS, to achieve
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significant impact it must reach its intended audience. Furthermore, GMS is relatively well-funded, principally by the Scottish Government and could provide a stand-alone service for the Gaelic-speaking community. One of the key benefits of the BBC’s involvement would be to bring the leverage offered by its portfolio of services to generate wider public value.
• In seeking to support the reach of the service in the short term, the Trust also considers that the Gaelic Zone should remain on BBC Two, at least in the short- to-medium term, pending further review before digital switchover commences in central and northern Scotland in 2010. While respondents to the consultation were evenly split on this issue, with some believing that better use could be made of the space for English language programming with wider appeal, and others expressing the concern that removing the zone could lead to the isolation of the language from mainstream culture, the Trust considers this an important element of the BBC’s Gaelic offering.
• On balance, at present, the Trust is not convinced that in this instance a linear channel is the most appropriate means of distribution. We also believe that the evidence of wider appeal beyond Gaelic speakers, based on latent interest, has not yet been translated into a wholly robust strategy for delivery. However, recognising that this latent interest exists, and the lower costs of distribution without DTT, we believe that it is appropriate for the Trust to approve launch of the GDS service in 2008 on cable and satellite. While provision on DTT is approved in principle, launch would only follow at a later date subject to further consideration by the Trust. Given remaining concerns, however, we would propose a detailed review before digital switchover commences in central and northern Scotland in 2010 to ensure that sufficient public value is being created in practice by the new service.
• The Trust will seek the advice of Audience Council Scotland and Ofcom where appropriate, and involve a range of stakeholders. The review will look in detail at to what extent the GDS is fulfilling its stated aims. If the BBC is to be a partner in the GDS it must add greater public value than could be achieved simply through offering enhanced provision to existing users of Gaelic content, which could be provided by a GMS-only venture. In particular, the Trust will look closely at the service's educational strategy to ensure that enough emphasis is being placed on attracting new speakers to the Gaelic language. We will also examine to what degree the service is appealing more widely to an audience beyond Gaelic speakers. The emphasis of the review will be on both the reach being achieved by the service and its broader impact throughout Scotland.
• We will also look at whether the management structure of the GDS is working effectively on a day-to-day basis. The proposed management arrangements still appear somewhat cumbersome and bureaucratic. We believe this potentially risks
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stifling the creativity and success of the service. However, the Trust also notes that the likely success of any new service is partly dependent on how the GDS operates in practice. Provided there are good working relations between the two parties this does not have to be an issue. We will therefore want the review to satisfy us that the partnership between the BBC and GMS is working properly to deliver a great service to audiences, and value for money.
• Should the Trust be satisfied that the service is delivering sufficient public value we will then consider how the BBC can best serve the GDS's target audiences from that point forward. In reaching a view we will consider whether the Gaelic Zone on BBC Two is still an appropriate location for Gaelic content. The review will also consider which methods of distribution, including DTT, are the most appropriate. The focus of this element of the review will be on to what extent any proposed changes would increase the public value delivered by the service.
• We believe a more comprehensive early review than previously proposed creates the right opportunity for the GDService to launch, whilst keeping it focused on the areas discussed above early in its existence.
• In addition to this review, a number of other conditions are attached to this approval, set out in section 9 below.
1.8 In sections 2, 3, 4 and 5 we present a summary of the process to date. Sections 6, 7 and 8 explain our consideration of the consultation responses and evidence and the detail of our final conclusions. Section 9 sets out our formal approval.
2. Background – summary of the BBC Executive’s application
2.1 Prior to the launch of the PVT process, the BBC Trust and Ofcom worked together to produce a service description based on the BBC Executive’s application, which was then published as part of the public consultation. This summary draws primarily from this description, as well as from the Public Value Assessment (PVA), and was then consulted on as part of the Trust’s provisional conclusions. This is not a description of the service as it will be launched, but a record of the basis on which the Trust consulted on its provisional conclusions. As the approval is subject to a number of conditions, changes to this service description as part of the final approval are discussed in sections 8 and 9 below.
2.2 The BBC Executive and the Gaelic Media Service (GMS) have concluded a collaboration agreement to provide the GDS – drawing on content from the BBC and a variety of other providers.
2.3 The proposal was to launch a dedicated digital TV channel in Gaelic – on-air for up to seven hours per day (concentrated in, but not confined to, late afternoons and
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evenings). This would comprise 1.5 hours per day of originated programming (including existing output from the BBC), narrative repeats and archive content. The service would also draw on BBC Radio nan Gàidheal as a sustaining service when the TV channel is off-air. There would also be significantly enhanced Gaelic content for users of bbc.co.uk.
2.4 The service would be mixed-genre – including the daily news and weather in Gaelic. 2.5 At least half of the programme fund contributed by GMS would be spent in the independent sector. The BBC Executive and GMS originally stated that, in due course, up to 50 per cent of non-news and current affairs programmes on the TV channel would come from independent producers, subject to a sufficiently developed independent Gaelic production base. They have subsequently clarified that this should in fact read “at least 50 per cent” rather than “up to”. The content supply strategy will be formulated after further negotiation with key stakeholders.
2.6 Subject to the completion of this PVT in early 2008, and BBC Trust approval, it was expected that the service would launch before the end of March 2008.
2.7 It would be available, in the first instance, on satellite and broadband1 and on digital cable later in 2008. Distribution on digital terrestrial television would be in Scotland only and would come with digital switchover.
2.8 Following completion of digital switchover, it was proposed that the existing regular Gaelic Zone on BBC Two would be withdrawn. Although a change to the BBC Two Scotland Service Licence, the Trust did not consider that removal of the Gaelic Zone on BBC Two Scotland would be a significant change to the UK Public Services since the Gaelic programming objective provided in the BBC Two Scotland Service Licence would be covered by the objective of the GDS proposal. There should be little or no impact caused by the removal of the Gaelic Zone on BBC Two Scotland as this provision would be replaced by Gaelic content being provided on the GDS. As such, and in the event that the Gaelic Zone is removed from BBC Two, the Trust does not consider that such a change would require a separate PVT.
2.9 The BBC and GMS would continue to provide programming to the Gaelic digital channel TeleG for the duration of TeleG’s licence (which currently runs until 2010).
2.10 The service would be licensed and regulated by the BBC Trust, and would be subject also to Ofcom regulation to the same extent as any other BBC service.
1 The channel would not be offered in whole via broadband. The broadband offer would initially be on-demand (via iPlayer) only on the BBC website as part of BBC Scotland’s 10 hours per week allocation, and possibly some complementary catch-up content on the GMS website, though this may increase over time as the iPlayer develops.
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2.11 The BBC Executive proposed to manage the service jointly with GMS, although ultimate responsibility for editorial standards would rest with the Director-General of the BBC who is accountable to the BBC Trust.
3. Summary of the Public Value Assessment2
3.1 The PVA, as an initial stage of analysis, considered whether the proposal fits with the BBC's public purposes. It is a prerequisite of any approval that a proposed service should further the public purposes in some way. The public purposes are:
• sustaining citizenship and civil society; • promoting education and learning; • stimulating creativity and cultural excellence; • reflecting the UK's nations, regions and communities; • bringing the UK to the world and the world to the UK; and • in promoting the above purposes, delivering to the public the benefit of emerging communications technologies and services (the digital purpose).
3.2 As well as considering how the proposal promotes the public purposes, the PVA assessed the proposal in relation to four key drivers of public value:
• Reach • Quality • Impact • Value for money
3.3 In reaching conclusions, the PVA started by looking at the strategic objectives the BBC is trying to achieve. The proposal is for a service intended to have an increased impact on existing Gaelic speakers, and a wider value to learners and the wider population of Scotland. Therefore, the PVA took impact as a key issue. The Trust has also taken a consistent view in the previous PVTs that it has carried out that public value will never be realised if a service does not reach its intended audience. Therefore, reach was also treated as a key issue. The other drivers were regarded as important, but this PVA treated them as secondary, although any new service approved must show value for money.
2 This section provides a summary of the PVA to aid the reader and is not a substitute for reference to the PVA report which deals with these matters in full. The Trust has considered the full PVA report and all its conclusions in reaching these final PVT conclusions.
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3.4 In assessing these aspects of public value the PVA, published in November 2007, found that there is evidence that suggests the GDS would be of good quality and provide an enhanced service to existing Gaelic speakers and, therefore, contribute to some degree to the BBC's public purposes. The PVA also found, however, that the evidence provided by the BBC Executive in support of the GDS proposal was not sufficient at that stage to support the conclusion that the proposal would reach the claimed audience of 5 to 10 per cent of the population in Scotland. In addition, the PVA found that, if the service is limited to just existing Gaelic speakers, the service would come at a considerable cost in terms of cost per user of the service.
3.5 The PVA therefore concluded, overall, that the service proposals could deliver public value; however, the evidence was not sufficient for the Trust to conclude that the level of likely public value would be sufficient to justify the level of investment proposed. The Trust considered it would need to see greater evidence that the proposed service would create public value by supporting the future of the Gaelic language and offering wider value to the audience in Scotland. In particular, the Trust would need to see more developed strategies for educational content, commissioning of programming, and the marketing of the service. This reshaping of the proposal would need to be inside the proposed budget for the GDS put forward in the BBC Executive's application.
3.6 The PVA considered that the key supporting documents that the BBC Executive should provide, as evidence, were:
• the commissioning strategy for the GDS; and
• the marketing strategy for the GDS.
In addition the PVA considered that the Trust should understand how the BBC Executive's arrangements with a range of partners for the delivery of educational material would work, and their state of development. The Trust also asked the Executive to consider how far the BBC could sensibly increase the GDS’s links with the BBC’s other public services to provide greater public value.
3.7 The PVA concluded that, if such evidence could be provided, this would demonstrate a level of likely public value that would justify the level of investment proposed. This would provide an overall assessment that the proposals provide sufficient public value for the Trust to consider approving the service.
3.8 On the basis that the Trust is provided with the evidence to reach this conclusion, the PVA recommended that the following requirements have to be met before any launch of the GDS in order to enhance and protect public value:
• The BBC Executive must provide fuller details of how the management structure, financial and accountability controls for the partnership will function. The Trust
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would like further explanation and BBC Internal Audit should confirm these matters have been considered and resolved.
• The BBC Executive's Controller of Fair Trading must confirm that the proposals for training of independent production companies satisfy the BBC’s fair trading guidelines.
• The Trust requires clear evidence of how the commissioning strategy will minimise the partnership risk created by the joint venture – for example, will the partners commission certain genres (other than news) rather than both commissioning all genres?
• The BBC and GMS must have agreed plans to ensure that the user experience when accessing online material held by GMS and the BBC will be a consistent, seamless and high-quality one.
• In light of recent speculation about availability of slots on the Sky Electronic Programme Guide (EPG), there must be confirmation that a Sky EPG listing can be obtained.
• The funding for the GDS must comply with any applicable requirements set out in clause 75 of the Framework Agreement.
3.9 In the event of the Trust approving the launch of the GDS, the PVA recommended the following service conditions:
• That launch on DTT should await a review by the Trust by 2010, given the absence of reliable evidence as to the case for a linear TV channel, and given that space on the DTT would not be immediately available anyway. This review will allow the Trust to take account of experience gained from the channel being available on satellite and cable alongside the existing opt-out on BBC Two and also to monitor what progress has been made with broadband penetration particularly in the Highlands area. Any such review would involve Ofcom and GMS.
• Were the Service Licence to be revoked or expire without renewal, and the BBC-GMS collaboration agreement therefore terminated, any renewal of the Service Licence should be subject to approval by the Trust and it will be at the discretion of the Trust to apply a further PVT if necessary.
• A condition for the Service Licence to remain valid should be that agreed funding is provided by GMS.
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4. Summary of the Market Impact Assessment3
4.1 Ofcom looked at five categories of products and services that could be affected by launch of the BBC GDS: independently produced Gaelic TV programmes; other Gaelic programming on TV and radio; Gaelic print and online material; Gaelic education services; TV platform and network services.
4.2 Ofcom, in the Market Impact Assessment (MIA), found that there are very significant positive market impacts of the GDS proposal, most notably in the net increase in scale it will bring to the Gaelic media sector, which should involve an increase in market opportunities for a number of players, as well as wider benefits. Ofcom also noted, however, that there were, in its view, significant concerns of potential suppliers to the GDS about the commissioning processes and protocols.
4.3 The MIA did not propose any modifications to the GDS proposal but made some recommendations to the Trust, should the proposal be approved, to ensure transparency in the commissioning processes of potential suppliers to the GDS and to encourage the GDS to play its part in further developing a diverse and creative production base for the Gaelic media sector. Specifically, the MIA makes the following recommendations:
• Steps should be considered to ensure transparency of governance for the GDS's commissioning practices.
• There should be clarity on how the GDS will ensure the complete independence of commissioning from in-house production.
• There should be a clear and transparent audit trail in the commissioning process and the GDS should make every effort to ensure that all potential producers have access to information on how funds will be applied, who makes the funding decisions, and the nature of the editorial strategy.
• That, in principle, the independent sector should have the opportunity to bid for all genres of GDS programming and there should be no ring-fencing, albeit that the MIA recognises a distinction between news and non-news programming.
• The GDS should actively consider the use of personnel and facilities from the independent and freelance sector to contribute to its newsgathering operation for the channel.
3 This section provides a summary of the MIA to aid the reader and is not a substitute for reference to the MIA report which deals with these matters in full. The Trust has considered the full MIA report and all its conclusions in reaching these final PVT conclusions.
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• The GDS should clarify the reference in the service description that “in due course up to 50 per cent of non-news and current affairs programmes on the TV channel would come from independent producers”, and, as part of discussions on the content supply strategy, should set a more precise target or “floor” for independent production.
• There should be clarity in the area of online rights and the production of any content specifically for online outlets once terms of trade applied to both BBC- and GMS-funded output are agreed. Specifically, agreements should be flexible enough to adapt to any changes in the commercial online market and independent producers should be able to compete for commissions for any online-specific content.
• The scope for the online element of the GDS to develop the market by providing links and signposts to other Gaelic sites should happen in a fair and non- discriminatory fashion.
• The GDS should open up a dialogue with TeleG to ensure that there is a co- ordinated approach towards the scheduling of Gaelic programmes for the duration of the TeleG licence.
5. Summary of the BBC Trust’s provisional conclusions4
5.1 The Trust provisionally concluded that the proposal would create almost no adverse market impact; indeed the MIA suggests any impact would be positive. However, the Trust also concluded that on the evidence before us, applying the test in clause 26(6) of the Framework Agreement, we could not conclude that the proposal would create sufficient public value.
5.2 We consequently set out the additional evidence that we needed to see to conclude that the proposal would generate sufficient public value to justify the level of investment required.
5.3 The challenge from the Trust was summarised in two key points: • The Trust was not convinced that the proposal for the service placed enough emphasis on the role of the service in attracting new speakers to the Gaelic language. In particular, we had not seen sufficient evidence as to how the educational strategy would be delivered – which we regard as key to the public value of the service.
4 This section provides a summary of the Trust’s provisional conclusions to aid the reader and is not a substitute for reference to the full report which deals with these matters in full.
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• Although we could see that a few programmes could appeal more widely to an audience beyond Gaelic speakers, we had seen very little evidence of a convincing plan for appealing to a wider audience in Scotland – certainly not of the level that justified the projected reach of the service.
5.4 In addition, the Trust asked the Executive to consider how far the BBC could sensibly leverage from its other public services to the GDS. The Executive’s original application referred to educational material being delivered with a range of partners. The Trust wanted to understand how those arrangements would work and the state of their development. Finally, the Trust was also concerned as to whether the service would be distributed in the most effective and efficient way possible. The Trust considered that these challenges could be met by potential licence conditions, but also signalled that any further clarification by the Executive would be welcome.
5.5 The BBC Executive was asked to provide this additional evidence no later than the close of the public consultation period for the provisional conclusions on 19 December 2007. The Trust provisionally concluded that if the BBC Executive was able to provide the additional information required in these areas, applying the requirements of clause 26(6) of the Framework Agreement, we would conclude that the likely public value that would be created by the GDS would be sufficient to outweigh any adverse market impact. We noted that the MIA's conclusion was that there would be very significant positive market impacts of the proposal, notably in the net increase in scale it would bring to the Gaelic media sector, which should involve an increase in market opportunities for a number of players, as well as wider benefits. The Trust therefore concluded that it would be minded to approve the proposal subject to the specific requirements as set out in detail by the provisional conclusions.
5.6 The Trust accepted all of the recommendations contained in the MIA with the exception of one point discussed at 5.8 below. In general, the Trust was of the view that provided the GDS operates within the BBC’s editorial and fair trading guidelines, the points raised by Ofcom should be addressed. However, given the unique nature of the partnership with GMS and the role of both GMS and the BBC as commissioners, we asked that there be clear public statements and processes set out as to how the commissioning process would operate in a transparent manner. As a matter of common sense we would expect the GDS and TeleG to maintain a dialogue about the scheduling of Gaelic programmes.
5.7 The Trust also welcomed the clarification from GMS and the BBC that the aim of the GDS is to commission “at least” 50 per cent of content other than news from independent producers “in due course”. However, like Ofcom we considered this target to be rather vague. Therefore, whilst keeping the overall ambition in this area, but taking account of (a) the increase in the volume of production necessary for the new service, and (b) targets for independent production elsewhere, we suggested the following condition. For the second year of operation of the service (2009) onwards, a
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minimum of 25 per cent of commissions should be sourced from independent producers. The Trust will review progress towards the “at least 50 per cent of programmes” ambition in 2010. Given the monitoring of targets below network commission level is relatively unusual, we would propose that the Audience Council Scotland is best placed to monitor progress and advise the Trust annually in its Review.
5.8 Ofcom also suggested that, in principle, the independent sector should have the opportunity to bid for all genres of GDS programming and there should be no ring- fencing, albeit that the MIA recognised a distinction between news and non-news programming. It was also suggested that consideration be given to the GDS using personnel and facilities from the independent and freelance sector to contribute to its newsgathering operation for the channel. In general, the BBC has ring-fenced its news operations from all independent commissioning targets across the UK. Given that part of the public value of the GDS news service would be its contribution towards wider BBC operations across Scotland and the UK, the Trust believed it would be appropriate to maintain a ring-fence around news operations. This is not to say that the BBC should not look to use freelancers and other independent facilities in order to ensure good value for money in its delivery of news, and indeed does. We encouraged the Executive to look at such options to ensure value for money of the news operation.
5.9 The conditions in section 6 of the provisional conclusions included detail in relation to carriage on DTT subject to a review by the Trust by 2010. The Trust’s potential approval also included authorising the withdrawal of the Gaelic Zone from BBC Two Scotland as part of the full implementation of the distribution plans for the GDS. However, this withdrawal would not take place until completion of digital switchover in Scotland. The review would also allow us to take account of experience gained from the channel being available on satellite and cable alongside the existing opt-out on BBC Two and also to monitor what progress has been made with broadband penetration particularly in the Highlands area. The Trust’s aim will be to ensure the most efficient and effective means of distribution for the service.
5.10 This potential approval was subject to certain conditions to safeguard or enhance the public value and minimise any adverse market impact. They were explained in section 6 of the provisional conclusions.
5.11 The Trust consulted publicly on its provisional conclusions for 28 days, and also conducted a number of stakeholder interviews with industry organisations. Section 6 below sets out the Trust’s considerations arising from the public consultation.
6. Summary of responses to the public consultation
6.1 The Trust received 282 responses to its public consultation on its provisional conclusions, including 33 from organisations. The Trust also received a detailed
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response from the BBC Executive, produced in collaboration with GMS. This section summarises the key messages from the consultation.
Summary of public responses
6.2 While there was a wide range of public responses to the questions asked, and broad differences between those responding in Scotland and those in the rest of the UK, we can draw out certain key messages:
• The focus on education and wider appeal is viewed by many as appropriate, though a sizeable minority believe the focus was inappropriate.
• If the further evidence is sufficient then the Trust should approve the service, though a sizeable minority are concerned at what they perceive to be a waste of money.
• If the further evidence is not satisfactory the Trust should approve regardless, as many respondents believe that the public value evidenced is already sufficient.
• The service will appeal to speakers, learners and those with an interest in the culture and language.
• The incremental spend proposed is justified.
• Freeview is the most popular distribution method, closely followed by broadband. Cable and satellite are less popular.
• Opinion on the withdrawal of the Gaelic Zone on BBC Two is evenly split.
• The conditions proposed are appropriate.
Summary of organisation responses
6.3 Of the 282 responses received by the Trust, 33 were from organisations. On the whole these were more positive about the proposal than the general public’s responses. We also note that there was a co-ordinated response from industry, with many submissions carrying, word-for-word, the same messages. The key messages were:
• The GDS is critical to the development of the Gaelic language.
• While education and wider appeal should certainly be looked at, they should not be the primary focus of the channel.
• The proposed additional spend is justified.
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• Existing programming reach is sufficient evidence of wider appeal.
• Subtitles will further widen appeal.
• Normalisation of the language is important – a linear channel would give enhanced status, and should be carried on DTT, satellite and cable.
• The Gaelic Zone on BBC Two should remain indefinitely.
• The commissioning strategy and independent sector target were not clear or robust enough.
7. Summary of the BBC Executive’s response
7.1 The BBC Executive responded, in collaboration with GMS, to the issues raised in the Trust’s provisional conclusions. The main focus of their response was on education, wider appeal, commissioning, online, and partnership and Governance. Their response in these areas is summarised below.
Education
7.2 The BBC Executive and GMS have stated that:
• The GDS is committed to broadcast in the region of five hours of non-news original content per week to deliver to the wider audience, of which no less than two hours per week will support the learning strategy.
• Language learning materials will be scheduled prominently on television and will also have prominence online and on Radio nan Gàidheal.
• A varied range of language learning materials and resources will be available for pre-school and school age learners, and adult learners from beginners to the relatively fluent.
7.3 The BBC Executive and GMS have also stated that the GDS will have two distinct roles in relation to language learning. It will:
• be the destination for new learners, acting as a major partner in campaigns designed to increase the numbers learning Gaelic and;
• make learning resources available to all levels and ages – making the process of learning easier, more accessible and motivating, and improving opportunities to achieve fluency at every stage.
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7.4 In looking at the Trust’s request for information on how partnerships would function, the BBC Executive and GMS have stated that as a partner in campaigns to promote the language:
• the GDS will schedule learning materials to coincide with Bòrd na Gàidhlig campaigns, and work in close co-operation with them;
• BBC Scotland will point to the GDS as a varied source of language learning opportunities; and
• accessible Gaelic content of all kinds will be showcased on BBC Scotland after digital switchover and this content will be supported by messages and trails pointing to language learning via the GDS.
Wider Appeal
7.5 On the issue of wider appeal, the BBC Executive and GMS have said that the GDS will offer a better service to Gaelic audiences in a digital world and, by creating a unique content offering, attract new audiences and supporters both from the language community and the wider Scottish population.
7.6 They say that three elements, when taken together, will help the service move towards the proposed weekly target reach by attracting non-speakers, learners and people who currently do not consume any Gaelic content:
• The educational and learning strategy (outlined above)
• The appeal of the proposed service beyond speakers and learners
• Effective marketing
7.7 They also state that the potential audience for the GDS can be broken into two main groups:
• Bi-lingual (Gaelic/English) – this is a varied audience demographically.
• Predominantly English speaking – access via English language subtitles and the crossover appeal of some genres (music, sport, factual, news and weather for example) will offer regular opportunities for both speakers and non-speakers to use the Service.
7.8 Evidence cited by the BBC Executive and GMS, carried out in 2007 by research agency Progressive, found that while 3 per cent5 claimed fluency in Gaelic, 5 per cent had
5 1,001 interviews of the Scottish population carried out using the Scottish Opinion Omnibus in 2007
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conversational Gaelic, with a total of 12 per cent able to understand a few words. 19 per cent are interested in learning more about the language, with 27 per cent expressing an interest in the language – offering a basis for estimating informal learning or knowledge-building potential around Gaelic. The largest proportion – 46 per cent – are interested in specific aspects of Gaelic culture (such as music and history). The BBC and GMS say that this represents the basis for a crossover audience who could be drawn to sample and to consume the service occasionally.
7.9 They also point out that, at present, viewers in Scotland are offered services on BBC One and BBC Two where the vast majority of the TV hours are made outside Scotland. Virtually 100 per cent of TV hours on other BBC and commercial TV channels are made outside Scotland. For a section of the audience in Scotland, a channel dedicated to reflecting aspects of life in Scotland, available in the early and late shoulders of peak-time as well as in peak, will be an attractive alternative choice. The volume of hours – originated, narrative repeat and archive – reflecting Scotland, such as enhanced local news, weather and sports coverage alongside Scottish music programming, will increase substantially versus current levels (more than doubling the transmitted hours from the BBC in Scotland). The scheduling of repeated blocks of output will offer some of the most accessible programming both when audience levels are highest, and separately when the options on more mainstream channels are less compelling. In this way, they claim the service should build up a significant reach among non-speakers, for whom the GDS is an occasional choice and a valued addition to their choice of services in a multi-channel multi-media world.
7.10 The BBC Executive and GMS summarise by claiming that there are five reasons to support this proposition:
1. Programmes will be accessible to non-speakers through the use of English subtitles.
2. There is evidence of wider interest in Gaelic life, heritage and culture beyond its heartland of fluent speakers.
3. Programmes will reflect specific regions of Scotland.
4. Programmes will reflect particular interests, such as local leisure activities, culture and heritage, music, sport and regional events.
5. There is evidence of success from other minority language services.
7.11 They also state that the GDS may collaborate with other BBC services and language broadcasters as well as European public service broadcasters to deliver programmes which have cultural resonances and align with the editorial strategy of the service. The Gaelic programming Zone on BBC Two will also act as vital promotion for the GDS.
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Commissioning
7.12 With regard to commissioning, the BBC Executive and GMS have provided the following detail.
7.13 All media content will be commissioned from a wide range of suppliers. All suppliers will have equality of access and opportunity. Content will be commissioned in accordance with the BBC Executive’s Content Protocol which will be contained within the annual Project Plan as required by the Collaboration Agreement between GMS and the BBC. The Content Protocol will be reviewed annually and agreed with the BBC- GMS Joint Management Board.
7.14 Together, GMS-funded and BBC-funded content will deliver at least 50 per cent of the total newly commissioned (non-news) GDS TV hours from the independent sector from launch. GMS also has a commitment to spend 50 per cent of its content funding with the independent sector.
7.15 The Head of Service will be employed by the BBC, and will be responsible for the creative leadership and editorial management of GDS content across TV, online and radio.
7.16 The Head of Content will be employed and funded by GMS, and will be responsible for the delivery of GMS-funded content for the GDS and for the television commissioning and scheduling strategy. For all television-led commissioning, a single process will be followed regardless of who provides the funding, under the day-to-day direction of the Head of Content. The Head of Content will be authorised to commit GMS funding. Prior to sign-off on commissions of GMS-funded material, the Head of Service, employed by the BBC, will need to be satisfied that the proposed content allows for fulfilment of the annual Statement of Programme Policy and the terms of the GDS’s Service Licence.
7.17 The Head of Service will commit BBC funding for material once the Head of Content has agreed that the proposed content meets the editorial criteria required to fulfil audience and scheduling demands.
7.18 A management team supporting the Head of Service and the Head of Content will include the following roles drawn from appropriate staff from across the BBC and GMS:
• Executive production
• Business / Finance
• Planning, Scheduling & Compliance – cross-platform, radio, TV and online
• Marketing, Communications and Audiences – cross-platform
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• Training and Development
7.19 The BBC’s in-house Gaelic production will be separate from the BBC management of the GDS and will be led by an Executive Editor.
7.20 The GDS will adopt the best practice set out in the BBC’s commissioning website http://www.bbc.co.uk/commissioning/ including:
• An annual Project Plan and Statement of Programme Policy, setting out commissioning requirements and proposed funding
• GMS-funded content being subject to GMS terms of trade
• BBC-funded content being subject to the BBC’s terms of trade
Online
7.21 The BBC Executive and GMS have clarified the nature of the online offering of the GDS. The BBC will host the main GDS website, which will carry broadcast content on TV and radio as well as offering bespoke online resources. The GMS corporate site will link and offer appropriate support to the BBC-hosted GDS site. GMS will consider offering any content that it has rights to on the GMS site, outside the window offered by the BBC through the iPlayer.
7.22 Both sites will link to other partners and initiatives as presently demonstrated on both the GMS site and also the BBC Alba site. This will be enhanced to reflect live partnerships and collaborations as they occur.
7.23 GMS will maintain its own corporate site from a separate budget. This will link to the main GDS website.
Partnership and Governance
7.24 The BBC Executive and GMS believe that there are clear arrangements for the management and governance of the partnership and detailed arrangements have been put in place to ensure the appropriate financial controls.
7.25 The BBC Executive and GMS will provide the BBC-GMS Joint Management Board (JMB) with quarterly accounts showing the financial spend and results compared to budget together with a commentary and report provided by the Head of Service. This report will include a forecast for the full financial year together with any corrective actions.
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7.26 It is agreed between the parties that a system of separate book-keeping is the most efficient and effective manner of dealing with transactions, in order to fulfil the accountability and reporting requirements of both organisations.
7.27 Transactions between the two companies are expected to be limited to operating costs charged by the BBC Executive to GMS and office rental charged by GMS to the BBC Executive, subject to agreement on actual costs, and both parties have agreed to run an “open book” policy. This principle entitles each party to inspect the accounting records of the other party to verify expenditures.
7.28 The BBC Executive will recover its overhead through the overheads charged to programme offers and commissions. GMS has withheld a portion of its overall annual budget to cover salaries and administrative expenses.
7.29 An annual Project Plan will be submitted to the JMB. This will show the expected budgetary expenditure of each party. The JMB will be responsible for review of actual performance as compared to the forecast.
7.30 Where possible, expenditures will be controlled by means of dual authorisation (one authoriser from each of GMS and the BBC Executive) to be designed and controlled electronically via email.
7.31 Regular phased forecasting will highlight the potential for budget variances.
7.32 The Head of Service will oversee the delivery of the strategy and programme planning of the GDS, working closely with the Head of Content. Regular updates will enable the GDS’s senior management to be aware of commissioning against target genres and funding remaining.
Marketing
7.33 Marketing was also considered by the BBC Executive and GMS. They state that the GDS will be marketed in accordance with the Marketing and Communications Plan to be agreed by the BBC-GMS Joint Management Board.
7.34 The BBC and GMS state that the service will be marketed using a mix of communication tools:
• Press and publicity generating extensive word-of-mouth
• Cross-promotion from BBC airwaves, including television, radio and online
• Promotion on STV (subject to the approval of the Secretary of State for Culture, Media and Sport)
• Advertising in Gaelic and English language media
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• Advertising and publicity for its distinctive content strategy featuring news, music, sport, the environment, history and children’s
• Online social networking sites
• Online advertising (e.g. banner advertising)
• Viral marketing
7.35 The GDS will liaise closely with other bodies working in this arena such as the national advertising campaign with Bòrd na Gàidhlig; Gaelic further education establishments, and other Gaelic and specialist organisations (for music, sport and leisure for example) across Scotland and further afield.
Distribution including Sky Electronic Programme Guide (EPG)
7.36 The BBC Executive believes that, to achieve the universality it seeks for all its services, the GDS should be available via digital satellite, digital cable, digital terrestrial television (DTT) and broadband.
7.37 The BBC Executive considers that the inclusion of DTT distribution for the GDS would enable the service to be viewed across the complete range of digital television platforms and was a major incentive for the Gaelic Media Service in joining with the BBC in the GDS.
7.38 However, the BBC Executive notes that the current Ofcom consultation on the reorganisation of the DTT platform presents a potential capacity challenge in relation to the carriage of the GDS on DTT. Ofcom’s proposal is to clear the BBC’s Multiplex B – on which the GDS service was to be made available – for HD television services. The BBC Executive believes that it should continue to seek capacity for the carriage of GDS programming on DTT in Scotland prior to switchover but, if capacity cannot be found before that time, the Executive agrees with the Trust’s provisional proposal that DTT carriage should be reviewed by the Trust by 2010. In reaching our final conclusions, we believe rather than specifying ‘by 2010’ we should make it clear the review will take place before digital switchover commences in central and northern Scotland in 2010.
7.39 Until DTT carriage can be found, the BBC Executive considers that the existing BBC Two opt-out slots should continue but that they would not be an adequate compensation for DTT viewers in the longer term as they only allow for very limited content per week.
7.40 The BBC Executive has secured a place on Sky’s EPG listing launch grid for the service. There is a 12-week notification period for the week-long technical launch window. The
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EPG slot must be taken up within this time and the service must comply with all the other contractual provisions in the EPG services agreement.
7.41 The BBC Executive envisages that a slot for the launch of GDS on the Sky platform will become available on or before August 2008, but this date is beyond the control of either the BBC or GMS.
7.42 Securing a place on Sky’s launch grid is not an absolute guarantee of an EPG slot for the GDS. Sky has informed all channel suppliers that memory capacity constraints on digital satellite set top boxes mean that Sky will not be able to launch new services if capacity is reached before a channel’s turn comes on the grid. This could potentially affect the GDS. The BBC Executive’s view is that there is no suggestion currently that this will happen.
7.43 The Freesat platform is currently scheduled to launch in spring 2008 and the BBC Executive does not currently anticipate any problems in securing a listing for the GDS within the Freesat EPG.
7.44 Negotiations are continuing for the carriage of the service on digital cable in the months following initial launch on digital satellite.
Alternative Finance
7.45 The proposal involves a BBC public service using funding other than the licence fee. As such, section 75 of the Framework Agreement must be complied with. The BBC and GMS are aware that the programme and marketing support being provided by the Scottish Media Group is subject to the approval of the Secretary of State for Culture, Media and Sport.
Training
7.46 The BBC and GMS, in their response, have clarified that it is proposed that GMS will fully fund the training budget and that the training will be wholly supplied by third party trainers.
7.47 The training fund within the GDS budget is provided for and controlled by GMS and fulfils its remit to train the Gaelic sector. The BBC will not be involved in funding or providing the training. The BBC’s Controller of Fair Trading has confirmed that these arrangements are satisfactory.
8. The Trust’s conclusions on the further evidence provided
8.1 This section details the Trust’s considerations of the further evidence it has received from the BBC Executive and GMS, as well as organisations and the general public, and
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its conclusions on those areas where further evidence was requested in the provisional conclusions.
Education
8.2 In relation to the educational strategy, the Trust is satisfied that the need for further evidence on education as set out in its provisional conclusions has been met sufficiently. Indeed, the further evidence received from both the BBC and GMS, and other organisations leads us to conclude that the educational benefits of the GDS would in fact be greater than we had originally anticipated in our provisional conclusions.
8.3 It is clear from the BBC-GMS response that education will play a prominent role in the GDS, both directly through specific learning content and indirectly through the use of English subtitling. The BBC Executive has agreed with the Trust that education is a key part of public value of the service, while GMS has said that it is content that emphasis is placed on the many educational aspects of the service. The Trust welcomes the commitment that no less than two of the five hours of original, non-news content per week will support the learning strategy.
8.4 The BBC and GMS have clearly set out how the service will target learners of all ages and abilities. They have also discussed how the service will link with partners in the education sector to deliver further public value through, for instance, promotional campaigns and links to the National Plan for Gaelic.
8.5 A number of organisations have indicated that they are keen to work in partnership with the GDS in delivering its educational aims. Bòrd na Gàidhlig has also endorsed the educational strategy and again indicated a desire to work in partnership with the new service.
8.6 Some respondents have questioned whether the focus on education is appropriate for the service. The Trust highlights that one of the core aims of public policy, again often cited in consultation responses, is to reverse the decline in the use of the Gaelic language. In taking account of the public policy context the Trust therefore believes that the BBC’s role should deliver wider public value than simply an enhanced offering to existing speakers and users of current Gaelic programming. We therefore remain of the view that education is a core driver of the public value created by the GDS.
8.7 In light of the further evidence received, the Trust is satisfied that it has seen sufficient evidence as to how the educational strategy of the GDS will be delivered and that the proposal for the GDS does place sufficient emphasis on the role of the service in attracting new speakers to the Gaelic language.
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Commissioning
8.8 The Trust welcomes the increased commitment, as proposed in the BBC Executive response to the consultation, to commission a greater level of content from the independent sector than proposed in the Trust’s provisional conclusions, and believes that this addresses the concerns over the level and clarity of the target raised in the public consultation.
8.9 The Trust also notes the progress made on ensuring that commissioning procedures and Terms of Trade are clearly and robustly documented, as set out in the report from BBC Internal Audit. We also note from the Internal Audit report that commissioning for radio and online will follow existing BBC practice in these areas. It is important that sufficient clarity is achieved, in particular for those independent production firms interested in supplying programmes for the GDS. For this reason, approval of the service will be subject to a condition that a further report from BBC Internal Audit provides us with sufficient assurance on the commissioning process before launch.
Online
8.10 The Trust welcomes the clarification from the BBC and GMS that there will be one main website for the GDS. The Trust is keen to stress the importance of a simple, co- ordinated user experience. Should this be achieved, the Trust believes that the online element of the GDS will be sufficiently integrated with the wider proposition. Any linking or sharing of BBC content with the GMS website, not within the scope of the BBC Trust-licensed GDS, must comply with all relevant BBC guidelines.
Sky EPG
8.11 The Trust notes the BBC’s current position with regards to achieving a listing on Sky’s EPG. We believe that the launch of the GDS should remain conditional on a listing being achieved. The Trust also notes that this issue has resulted in a likely delay to the launch of the GDS until summer 2008.
Alternative Finance
8.12 The Trust notes the current position with regards to the use of alternative means of finance in carrying out the BBC’s public services. In complying with clause 75 of the Framework Agreement, this approval is therefore subject to a condition that appropriate sign-off is received from the Secretary of State for Culture, Media and Sport.
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Training
8.13 The Trust notes the BBC-GMS response on this issue, and the fact that the BBC’s Controller of Fair Trading has confirmed that the arrangements for providing training to independent production companies are acceptable. This is the first public service delivered as a partnership. In its activities the BBC exercises caution about any reputational risk to the BBC. The Trust urges the GDS to be mindful of the BBC’s reputation when carrying out training or any other activities through partners, but is satisfied that appropriate arrangements have been put in place.
Partnership and Governance
8.14 The proposed management arrangements still appear somewhat cumbersome and bureaucratic. We believe this potentially risks stifling the creativity and success of the service. However, the Trust also notes that the likely success of any new service is partly dependent on how the GDS operates in practice. Provided there are good working relations between the two parties this does not have to be an issue. The Trust received a report from BBC Internal Audit looking at the partnership and governance arrangements for the GDS. There are still a number of issues outstanding identified by BBC Internal Audit where the Trust will require a further report from them prior to launch, to satisfy itself that the arrangements are sufficiently robust to ensure the public value of the GDS can be delivered.
Wider Appeal
8.15 The Trust also requested further evidence as to how the channel would achieve wider appeal, and so achieve the level of reach proposed by the BBC Executive of 250,000 people. Given the positive progress made in the areas discussed above, especially education, the Trust considers this the key area for judgment in reaching our final decision on whether or not to approve the BBC Executive’s application.
8.16 The Trust considers that the further evidence provided, while an improvement, does not clearly demonstrate that the channel will be able to achieve the stated level of reach above. However, the Trust also recognises that to a great extent the appeal of the channel will rest on the day-to-day operational actions of the GDS’s management. As set out in the Charter, this is clearly the responsibility of the BBC Executive.
8.17 Current Gaelic programming on TV and radio reaches around 77,000 people each week. The BBC Executive’s proposed level of reach for the GDS is therefore over three times the current level. The Trust considers that this will not be met, at least in the short term.
8.18 The BBC Executive and GMS, along with many respondents to the consultation, cite the reach of existing programming, such as Eòrpa, as evidence that achieving wider
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appeal is possible. While the Trust recognises that some current Gaelic programming does appeal to audiences beyond Gaelic speakers, we are not convinced that moving this programming from BBC Two to the GDS will result in a significant increase in reach, certainly not to an extent that would justify the ambitions for reach proposed.
8.19 The fact that programming will be subtitled in English has also been presented as evidence as to how the channel will achieve wider reach among non-speakers. While this does indeed allow non-speakers to access programmes if they wish, we consider it is unlikely in itself to attract significant numbers of non-speakers to the channel. The Trust also notes that existing programming on BBC Two is subtitled and, while achieving some wider appeal beyond Gaelic speakers, does not approach the GDS ambitions for reach set out by the BBC Executive.
8.20 The issue of whether the Gaelic Zone should remain on BBC Two was also considered by the Trust. Respondents to the consultation were evenly split on this issue, with some believing that better use could be made of the space for English language programming with wider appeal, with others expressing the concern that removing the zone could lead to the isolation of the language from mainstream culture. The Trust considers that an important part of the way the BBC fulfils its Gaelic language obligations includes programming on terrestrial television, and as such the existing arrangements on BBC Two should remain.
8.21 The Trust believes that tapping into the latent appeal among non-speakers, as shown in research for both the BBC Executive and the BBC Trust, and thereby achieving the level of reach proposed by the BBC Executive is, in part, dependent on new programming. While we have seen some examples of the types of programming the GDS may carry, we have not seen the same level of evidence demonstrating how wider appeal will be achieved as we have for educational material. Although we recognise the potential for Scottish-specific programming to prove popular among the target audiences in Scotland, the balance of evidence presented is insufficient for us to conclude that there is a high enough degree of certainty the Executive will achieve the levels of reach in their application in the short term.
8.22 We do, however, recognise the potential for the GDS to attract a wide range of users over the longer term as it builds a user base. TG4 is the Gaelic language channel in Ireland. Although it has a different operating model to the proposed GDS, in that it carries advertising and schedules English language programming and American acquisitions, it offers an interesting basis for comparison. In 2006 TG4 achieved channel share of 3 per cent (compared to 2.2 per cent for Sky One and 1.3 per cent for E4) and weekly reach of 46.3 per cent6. While TG4 is an established channel, having been in operation for 11 years, these viewing figures nonetheless give encouragement
6 Weekly reach of 3+ consecutive minutes of 46.3%, equating to just under 1.8 million viewers
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that the GDS could achieve significant reach. The Trust notes, however, that English language programming and American acquisitions are likely to have played a role in achieving these numbers, and the GDS currently does not propose to follow this route.
8.23 A further element in achieving wider appeal is in the marketing of the GDS. While we welcome the further detail provided by the BBC and GMS we continue to have reservations about the complexity of the proposed strategy, particularly around the high number of different target groups with separate marketing plans. The Trust is also not persuaded that focusing marketing spend on existing users of Gaelic programming represents the best use of resources, as existing speakers are likely to use the new service regardless.
8.24 Many respondents to the public consultation expressed the view that the GDS should purely be a channel for speakers; a basic service that those who speak the language are entitled to. The BBC’s commitment to small audiences was also questioned. The Trust considers that providing Gaelic language output is an important part of the BBC’s role in fulfilling its public purposes. We welcome the positive view of existing provision stated by many respondents to the public consultation. We are also committed to serving a wide range of audiences. However, the Trust must also be mindful of the wider strategic context in which it operates. The Scottish Government already provides significant funding of over £11m per year to GMS. Indeed this amount has recently been increased by a further £0.5m per year. The BBC’s participation in any new service must therefore add greater value than simply the provision of a greater amount of Gaelic content to existing users.
8.25 Many respondents to the consultation expressed the view that value for money should not form part of the Trust’s considerations, arguing that it was not possible to place a value on the survival of a language. Other respondents expressed the view that any spend on the GDS was inappropriate, and that there were other areas of the BBC requiring attention first. The Trust believes that fulfilling its obligations regarding minority languages cannot be reduced to a simple numerical equation. However, as noted above, significant funding for Gaelic already exists and the Trust views value for money as an important consideration, alongside the others contained within these final conclusions.
8.26 In summary, the Trust does not consider that the appeal to non-Gaelic speakers of current programming on BBC Two constitutes sufficient evidence for the wider appeal of the new service. Regarding subtitling, we consider that, while this does indeed allow non-speakers to access programmes if they wish, it is unlikely in itself to attract significant numbers of non-speakers to the channel. While we welcome the further detail provided by the BBC and GMS on the marketing strategy, we continue to have reservations about its complexity. The further evidence provided, while an improvement, does not clearly demonstrate that the channel will be able to achieve the level of reach proposed by the BBC Executive.
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8.27 However, we do recognise the potential for the GDS to attract a wide range of users over the longer term as it builds a user base, as evidenced by the success of TG4. The Trust also recognises that to a great extent the appeal of the channel will rest on the day-to-day operational actions of the GDS’s management. As set out in the Charter7, this operational management is clearly the responsibility of the BBC Executive.
Overall conclusion
8.28 On the basis of the further information received from the BBC Executive and GMS, and through the public consultation from both individuals and organisations, the Trust is satisfied that the need for further evidence on education as set out in its provisional conclusions has been met sufficiently. Indeed, the further evidence received from both the BBC and GMS, and other organisations leads us to conclude that the educational benefits of the GDS would in fact be greater than we had originally anticipated in our provisional conclusions.
8.29 Although the Trust remains doubtful about the service’s ability to achieve the level of reach proposed by the BBC Executive of 250,000 in the short term, we recognise that to a great extent the appeal of the channel will rest on the day-to-day operational actions of the GDS’s management. As set out in the Charter, this is clearly the responsibility of the BBC Executive. Indeed, the Trust believes that the GDS proposition represents an opportunity for the BBC to connect with viewers in Scotland in a new and innovative way. In the long term, therefore, the Executive’s ambitions for reach may be achievable.
8.30 In balancing the needs of small audiences with those of the wider UK population, the Trust is open-minded as to whether linear channels are necessarily the most appropriate way of serving smaller audiences. In the case of the GDS, distribution on DTT is one of the main costs to licence fee payers. The cost per user of the full GDS proposal would be £191 per year, based on the current reach of Gaelic programming on TV and radio. When DTT is removed from the equation this falls to £139. Should the service achieve its target reach of 250,000 this falls further to £43, providing much greater value for money and broadly comparable to what is spent on other language services. While the Trust recognises that Freeview was the most popular choice of distribution mechanism in the public consultation, the balance of evidence presented so far does not yet justify the proposed spend on DTT.
8.31 The Trust notes the concerns raised in the public consultation that requesting wider reach at the same time as requiring that carriage on DTT be subject to review by 2010 appears somewhat contradictory. However, the proposed reach for the GDS put
7 Article 38 of the Charter provides that The Executive Board is the executive body of the BBC and is responsible for…(c) the operational management of the BBC (except the BBC Trust Unit).
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forward by the BBC Executive included DTT in the Borders region only, with other areas to follow as switchover occurs. While recognising this may impact slightly on the reach achieved, the Trust does not believe that DTT would have played a significant role in the underlying numbers.
8.32 The Trust does, however, recognise the cultural significance attached to a linear channel, at least in the short term. Many respondents to the public consultation raised this point, with the view that the simple existence of a linear channel would bring wide-ranging benefits, regardless of the level of use. However, the Trust is of the view that for any proposition, including the GDS, to achieve significant impact it must reach its intended audience. Furthermore, GMS is relatively well-funded, principally by the Scottish Government and could provide a stand-alone service for the Gaelic-speaking community. One of the key benefits of the BBC’s involvement would be to bring the leverage offered by its portfolio of services to generate wider public value.
8.33 In seeking to support the reach of the service in the short term, the Trust also considers that the Gaelic Zone should remain on BBC Two, at least in the short-to- medium term. As noted above, while respondents to the consultation were evenly split on this issue, with some believing that better use could be made of the space for English language programming with wider appeal, and others expressing the concern that removing the zone could lead to the isolation of the language from mainstream culture, the Trust considers this an important element of the BBC’s Gaelic offering.
8.34 On balance, at present, the Trust is not convinced that in this instance a linear channel is the most appropriate means of distribution. We also believe that the evidence of wider appeal beyond Gaelic speakers, based on latent interest, has not yet been translated into a wholly robust strategy for delivery. However, recognising that this latent interest exists, and the lower costs of distribution without DTT, we believe that it is appropriate for the Trust to approve launch of the GDS service in 2008 on cable and satellite. While provision on DTT is approved in principle, launch would only follow at a later date subject to further consideration by the Trust. Given remaining concerns, however, we would propose a detailed performance review by 2010 to ensure that sufficient public value is being created in practice by the new service.
8.35 The Trust will seek the advice of Audience Council Scotland and Ofcom where appropriate, and involve a range of stakeholders. The review will look in detail at to what extent the GDS is fulfilling its stated aims. If the BBC is to be a partner in the GDS it must add greater public value than could be achieved simply through offering enhanced provision to existing users of Gaelic content, which could be provided by a GMS-only venture. In particular, the Trust will look closely at the service's educational strategy to ensure that enough emphasis is being placed on attracting new speakers to the Gaelic language. We will also examine to what degree the service is appealing more widely to an audience beyond Gaelic speakers. The emphasis of the review will be on both the reach being achieved by the service and its broader impact throughout Scotland.
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8.36 We will also look at whether the management structure of the GDS is working effectively on a day-to-day basis. The proposed management arrangements still appear somewhat cumbersome and bureaucratic. We believe this potentially risks stifling the creativity and success of the service. However, the Trust also notes that the likely success of any new service is partly dependent on how the GDS operates in practice. Provided there are good working relations between the two parties this does not have to be an issue. We will therefore want the review to satisfy us that the partnership between the BBC and GMS is working properly to deliver a great service to audiences, and value for money.
8.37 Should the Trust be satisfied that the service is delivering sufficient public value we will then consider how the BBC can best serve the GDS's target audiences from that point forward. In reaching a view we will consider whether the Gaelic Zone on BBC Two is still an appropriate location for Gaelic content. The review will also consider which methods of distribution, including DTT, are the most appropriate. The focus of this element of the review will be on to what extent any proposed changes would increase the public value delivered by the service.
8.38 We believe a more comprehensive early review than previously proposed creates the right opportunity for the GDS to launch, whilst keeping it focused on the areas discussed above early in its existence.
9. The Trust’s final decision – Approval, subject to conditions
9.1 To summarise our decision, we have considered the PVA, the MIA, the BBC Executive’s responses to our provisional conclusions, and responses to our public consultation. We are now approving the BBC Executive’s application to launch a GDS in partnership with GMS, subject to the service conditions set out below. We consider that any likely adverse market impacts would be justified by the likely public value of the GDS.
9.2 In reaching this decision we have addressed those factors the Trust believes are important when considering what constitutes an appropriate level of provision of minority languages, namely:
• The demand for services in minority languages from speakers, learners and those with an interest in the languages and culture (including non-speakers)
• The level of minority language content provided by the BBC and the market as a whole, and when compared to other minority languages
• The legal and public policy context
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• The overall funding context, including funding allocated to other minority languages, and value for money
• The needs of those with knowledge or interest of a minority language balanced against the needs of licence fee payers generally
9.3 We have considered our requirements under clause 26(6) of the Framework Agreement, our general duties under Article 23 of the Charter and our other legal duties. In our view, approval of the service is consistent with these duties. Particularly, but without limitation, we note that we have:
• represented the interests of licence fee payers in considering the value that would accrue to them (and any that might be forgone) from the proposals;
• secured the independence of the BBC through the proper application of the PVT process;
• assessed carefully and appropriately the views of licence fee payers;
• exercised rigorous stewardship of public money through the value for money analysis we conducted in the PVA;
• had regard to the competitive impact of the BBC's activities on the wider market through our consideration of Ofcom's MIA; and
• ensured that the BBC observes high standards of openness and transparency through the publication of these final conclusions and other documents arising from the PVT process.
9.4 We have also received and considered privileged legal advice on the proposal’s compliance with competition law (including state aid law). We conclude on the basis of this advice that the proposal is compliant.
9.5 Acting in the public interest, considering these and all other relevant matters, we conclude that the proposed service should be approved as it was set out in the BBC Executive’s application and subsequent response to the public consultation, subject to the following conditions:
Conditions to be satisfied before launch of the GDS
• Sign-off from the Secretary of State for Culture, Media and Sport on Alternative Finance must be received. • A Sky EPG listing must be achieved. • BBC Internal Audit must provide the Trust with assurance that the partnership
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and governance arrangements are sufficiently robust in a follow-up to their first report.
Post-launch • The service’s progress towards its aims, particularly around education and achieving wider appeal beyond existing speakers, should be evaluated in a review by the Trust, alongside consideration of the most appropriate methods of distribution (including DTT), before digital switchover commences in central and northern Scotland in 2010. The continuation of the Service Licence will be subject to the review providing the Trust with sufficient evidence of the service’s performance. • The future removal of the opt-out from BBC Two should also be subject to the review before digital switchover commences in central and northern Scotland in 2010. • The Service Licence would only be valid whilst agreed funding is provided by GMS. • GMS-funded and BBC-funded content should deliver at least 50 per cent of the total newly commissioned (non-news) GDS TV hours from the independent sector from launch. • The BBC Executive should also ensure that appropriate links and signposts to other Gaelic sites are made in a fair and non-discriminatory fashion.
9.6 We are also providing the BBC Executive with guidance, short of service conditions, on other matters relevant to our service approval:
• We would suggest that marketing be focused on the hard-to-reach groups on whom the higher levels of reach depend, such as non-speakers and those who do not currently consume any Gaelic content, rather than existing users of current services, who are likely to move to the new service without significant marketing.
• Although we believe the proposal to deliver some training to independent producers complies with state aid law, and the training itself will be delivered by GMS, the BBC Executive should ensure that the BBC’s reputation is protected when any training is delivered to third parties through the GDS brand.
• The GDS’s online offer should be focused on providing an integrated, seamless and high-quality user experience. Given the strong support in the public consultation for access via broadband, the GDS should consider increasing its focus on delivering content online.
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9.7 Since the GDS will be a new service, it requires a Service Licence. We have provided this in Annex 2. It reflects the specifications outlined in the service description issued at the start of this PVT, together with the conditions outlined above.
9.8 Our approach to review of performance is addressed in the Service Licence.
9.9 Our decision will be implemented once the Secretary of State confirms that the procedural veto allowed by the Framework Agreement will not be exercised, and the other pre-launch conditions are met. The Service Licence will be effective immediately thereafter, clearing the way for the launch of the channel on cable and satellite.
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Annex 1: Background to the Public Value Test
The BBC’s new Royal Charter and Agreement came into effect on 1 January 2007. The Charter makes clear that the BBC should be able to alter its UK public services – for example, to respond to changes in technology, culture, market conditions and public expectations. However, any significant service-related proposals for change from the BBC Executive, including proposed new services, must be subject to full and proper scrutiny. The means by which this scrutiny takes place prior to approval is the Public Value Test (PVT).
If the BBC Executive proposes to launch a new UK public service or make significant changes to an existing UK public service, the BBC Trust will consider the proposal and decide whether to launch a PVT. The BBC’s UK public services include all the BBC television and radio channels broadcast in the UK and the BBC’s online services. They do not include the BBC’s overseas services or its commercial services, such as the publication of magazines or sale of videos by the BBC subsidiary BBC Worldwide.
Where a PVT is undertaken the new service or change must not happen until that process is complete. The PVT has several elements. A Public Value Assessment (PVA) is prepared by the BBC Trust to ascertain the likely public value of the proposed change. In making this assessment, the BBC Trust acts in accordance with the requirements of a Framework Agreement concluded between the BBC and the Secretary of State for Culture, Media and Sport (Framework Agreement). It also must comply with all its other legal duties including the general duties in Article 23 of the Charter.
At the same time, the communications regulator Ofcom prepares a Market Impact Assessment (MIA) examining the extent of any likely adverse impact on markets relevant to the proposed change.
The BBC Trust then considers these two assessments and reaches provisional conclusions on the proposed change. In order to conclude that the proposed change should be made, granting approval either with or without conditions, the BBC Trust must be satisfied that any likely adverse impact on the market is justified by the likely public value of the proposed change. It also must be satisfied that approval would be consistent with the BBC Trust’s duties under Article 23 of the Charter and its other legal duties. The BBC Trust’s provisional conclusions are the subject of public consultation.
The BBC Trust will review and take account of, as appropriate, all representations received before making its final decision on whether or not to approve the proposed change. This document represents the Trust’s final decision.
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Annex 2: Service Licence The Gaelic Digital Service
Part I: Key characteristics of the service
1. Remit The remit of the Gaelic Digital Service (GDS) is to offer a television, radio and online service with content in the Gaelic language. The service should include a mix of genres, including television news and weather. The service should aim to serve Gaelic speakers, those learning the language, those that might wish to learn, and those interested in the language and culture. It should aim to reflect and support Gaelic culture, identity and heritage.
2. Scope of this Licence This Service Licence covers only the television output of the GDS. Its radio component is covered by the Radio nan Gàidheal Service Licence, and bbc.co.uk/alba is covered by the bbc.co.uk Service Licence.
The GDS should be available for up to seven hours each day. It should be transmitted free to air for general reception in the UK as a live broadcast on digital television platforms8 and it may be simulcast on fixed and mobile internet protocol networks.
It may also offer its broadcast content on fixed and mobile internet protocol networks or via other platforms9 for seven days after it has been broadcast. On the same platforms, it may allow users retrospectively to download multiple episodes of first-run series (known as “series stacking”)10 until a date no later than seven days after the last episode in the relevant series. The aggregate volume of such “series stacked” content must represent no more than
8 The service is likely to only be available on digital terrestrial TV when digital switchover occurs in Scotland, and is subject to a further review by the BBC Trust prior to the launch of any such service.
9 Provision by particular providers over certain platforms has been specifically approved by the Trust in its Public Value Test final conclusions of April 2007. Content may also in future be syndicated to other providers and platforms, in accordance with the Trust’s Syndication Policy for BBC on-demand content.
10 The Trust’s guidelines for which programmes may be included in series stacking are those where the series has a distinct run, with a beginning and an end and a clear “narrative arc” or those with exceptionally high impact. These should cover a broad range of programmes, in terms of genre and appeal.
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15 per cent of all television content offered on-demand. On the internet, it may give users 30 days after downloading the content to access it for the first time and may allow users to repeatedly consume downloaded content for up to seven days after first access.
The GDS should offer programme-related content on bbc.co.uk.11 Should at any time the Gaelic Media Service (GMS) withdraw from its partnership with the BBC or fail to provide agreed funding for the service, then approval for the service will be withdrawn and this licence will be revoked.
3. Service budget The GDS television service (as covered by this Service Licence) is funded jointly by the BBC and by GMS. The total budget for the Gaelic television service is £13.68m in 2008/09. The BBC’s contribution to this budget, as covered by this Service Licence, is £4.03m. This budget does not include the cost of distribution.
The BBC’s contribution to this budget may be adjusted annually for Retail Price Inflation. Any planned or actual change in the BBC’s annual expenditure on the service of more than 10 per cent in real value requires approval from the BBC Trust and may entail variation of this Service Licence. The Trust’s approval will also be required if total funding of the Gaelic Digital Service changes by more than 10 per cent in real value.
4. Overview of aims and objectives Programmes on the GDS should exhibit some or all of the following characteristics: high quality, original, challenging, innovative and engaging, and it should nurture UK talent.
The service should deliver its remit through high-quality programmes with wide appeal across a range of genres. It should show some originated television programming, including output first shown on other BBC services. The GDS should commission original programming across a range of genres, including news, weather, sports, live events, children’s, music and entertainment, factual programming, educational output and some comedy and drama. Its news and current affairs output should be accurate, impartial and independent. The GDS should support Scottish and Gaelic music and arts, and should represent the BBC’s main outlet for events of particular significance to Gaelic speakers. It should commission work from new and established talent.
11 This includes the offer of some news and current affairs output on-demand for an unlimited time period after initial broadcast. Any expansion of this offering will require the approval of the BBC Trust.
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When the television service is not being transmitted, the GDS may simulcast BBC Radio nan Gàidheal. The GDS is committed to commissioning output from independent suppliers, in accordance with the BBC’s statutory commitments.
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Part II: Contribution to public value
5. Contribution to the promotion of the BBC’s public purposes
5.1 Reflecting the UK’s nations, regions and communities The GDS should make a very important contribution to this purpose amongst its audience by reflecting and strengthening Gaelic cultural heritage and promoting awareness of it across the UK. It should do so by its provision of output in the Gaelic language for those who speak the language, and by its role in encouraging and enabling others to learn Gaelic. The GDS is aimed primarily at Gaelic speakers within Scotland, although it should also be available on some platforms to those outside Scotland. It should achieve these aims across all types of programming. In particular, its factual output should reflect topics of interest and relevance to the Gaelic community. In addition, religious and sports programming should represent the diversity of interests within the Gaelic community. It should aim to draw the Gaelic community together to share sporting, cultural and musical occasions.
5.2 Promoting education and learning
The GDS should make an important contribution to this purpose by offering regular support to those learning the Gaelic language with its programming, and by offering learning resources alongside its programming, including subtitles and additional online content. It should work with external partners in the Gaelic education sector to promote learning of the Gaelic language. The GDS should offer programming for both pre-school and older children in regular slots each week. The GDS should provide opportunities for informal learning across a wide range of subjects in its factual output. It may take part in pan-BBC learning campaigns, adapting them where necessary to enhance their appeal to Gaelic-speaking audiences.
Conditions The GDS should: • Broadcast around 5 hours of originated programming (excluding news) each week, including programming first shown on other BBC services. At least 2 hours per week of all originated programming should be aimed at those learning the Gaelic language.
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5.3 Sustaining citizenship and civil society
The GDS should contribute to this purpose amongst its audience through its provision of accurate, impartial and independent news and current affairs shown in peak viewing times. It should broadcast live news programmes each weekday evening, including at peaktime, and a longer news review at weekends. It should aim to originate some news material itself, as well as providing re-versioned news content gathered by the BBC elsewhere. Its journalism should focus on issues of relevance to the Gaelic speaking target audience. Political coverage, including coverage of elections, should focus on Scottish affairs, but also cover the Westminster and European parliaments, as appropriate. The service should enable audiences and experts to explore a broad range of subjects and to engage and interact on these issues. Some content should be made available for on-demand viewing online after broadcast.
Conditions The GDS should: • Broadcast live news programmes each weekday evening, including at peak time, and a longer news review at weekends.
5.4 Stimulating creativity and cultural excellence
The GDS should contribute to this purpose amongst its audience, both by supporting established talent and by developing new talent. It should contribute to the creative economy in Scotland by commissioning programming from independent suppliers. The service should support Scottish music and arts by broadcasting a range of styles of music-making and other performance, including traditional and contemporary music. The GDS should commission some original comedy and drama each year.
Conditions The GDS should: • Commission at least 50 per cent by volume of its original programming (excluding news) from independent producers.
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5.5 Bringing the UK to the world and the world to the UK
The GDS should play its part in this purpose, primarily by bringing the world to the UK, by regularly covering international events and issues in Gaelic, and through its news output. It should bring the Scottish Gaelic community to the world by making Gaelic language content available on bbc.co.uk.
5.6 Emerging communications
The BBC’s sixth public purpose is defined in the Charter as "in promoting its other purposes, helping to deliver to the public the benefit of emerging communications technologies and services and, in addition, taking a leading role in the switchover to digital television".
The GDS should contribute to the promotion of this purpose in a variety of ways which are described in this Service Licence.
6. Annexes to this Licence
6.1 Service Licence Annex I – Performance assessment
The performance of the GDS will be assessed by the BBC Trust using the framework described in Service Licence Annex I. The GDS’s compliance with any Conditions, as described in section 5, will also be measured on an annual basis and reported in the Annual Report and Accounts.
The BBC Trust will expect the GDS to comply with the commitments described in sections 4 and 5 of the Service Licence. The BBC Trust will monitor compliance with these commitments retrospectively as part of its periodic service reviews and/or on an exceptional basis if there is evidence or allegation of non-compliance.
6.2 Service Licence Annex II – Statutory commitments
Details of statutory quotas and other obligations to be fulfilled by the GDS, in conjunction with other BBC services, are set out in Service Licence Annex II.
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7. Operation of this Service Licence by the BBC Trust
For details of how the BBC Trust operates this Service Licence, please see the Service Licence Operating Framework. This is available from www.bbc.co.uk/bbctrust or upon request from the BBC Trust Unit.
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Service Licence Annex I: Performance measurement framework
Introduction
The BBC Trust has the function of assessing the performance of the Executive Board in delivering the BBC’s services and activities and holding the Executive Board to account for its performance.12 It will use the framework described below as the basis for its assessment of the GDS.
The framework is based around the four drivers of public value: Reach, Quality, Impact and Value for money and it includes measurement of the five content characteristics, as described in the BBC Agreement13: high quality, challenging, original, innovative and engaging.
The Trust can amend this framework without this constituting formal variation to this Service Licence.
Performance measurement framework
Reach: The GDS should contribute towards the maintenance of combined BBC weekly reach14 at over 90 per cent by aiming to increase its own weekly reach to around 250,000 people each week.
Quality: Audience approval of the GDS and perceptions of it as high quality and innovative. Also, the proportion of originated programmes across all hours15.
Impact: Audience perceptions of the GDS as engaging and challenging.
Value for money: The GDS’s cost per viewer hour.
12 Charter, article 24 (c)
13 Agreement, clause 14
14 For all BBC services
15 Including repeats
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Service Licence Annex II: Statutory commitments
In addition to the conditions and commitments described in this Service Licence, the GDS contributes to the fulfilment of a statutory commitment each calendar year.
• A minimum percentage of qualifying hours to be provided by independent producers
The exact level of this annual commitment is published by the BBC in its Statement of Programme Policy each year.
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