14.08 .2018 Margot James MP Minister for Digital and the Creative Industries DCMS 100 Parliament St Westminster London SW1A 2BQ Dear Margot We are pleased to enclose S4C’s implementation plan which responds to the recommendations made in the Revie w of S4C and also the Government’s response published earlier this year. We are confident that our plans for implementing the Review’s recommendations will mean that S4C will continue to have a central and unique role to play in securing prominence and su ccess for the Welsh language in the mass media of the future. We are pleased to note that we have already made significant progress in implementing many of the recommendations. In areas relating to the provision of our service, we have already put in pla ce a number of new strategies and initiatives to ensure that we are able to deliver the type of digital services envisaged by the review. In areas where S4C needs to cooperate with partners including DCMS and Ofcom, we have already held constructive discu ssions with a view to implementing a number of the recommendations. We look forward to working with you and your officials to discussing our implementation plan and to delivering the matters set out in our plan. Yours sincerely Huw Jones Owen Evans Chairman Chief Executive Enc ‘Building an S4C for the future’ - S4C’s response and implementation plan July 2018 Introduction S4C and the Review S4C began broadcasting at 18:00 on Monday 1 November 1982. Initially, 22 hours of Welsh - language programming were broadcast each week. Today, S4C broadcasts over 115 hours of programming each week, 1700 hours of new Welsh - language programming each year, with most of these available to view online for the following 30 days. S4C commissions content from 55 different independent comp anies and generates economic activity of £170m per year. It is the only Welsh - language television service available, whether free - to - air or commercially. The Review therefore is entirely correct in emphasising S4C’s central importance to Welsh life and th e Welsh language. Following a year in which the service achieved substantial growth in reach thanks primarily to high quality sport, drama and entertainment programmes, the publication of the independent Review is a timely signpost for fixing our sights c onfidently on the future. We are very grateful to Euryn Ogwen Williams for taking this work forward and we welcome the Government’s contemporaneous response. This makes the path ahead clearer and accelerates the process of change and moving forward. We a re determined to use this as a base to achieve even more for our viewers, especially digitally. In particular we welcome the strong commitment made by the UK Government to supporting and enshrining S4C’s status as an independent Broadcaster. Remit The di gital direction described in the review is not new to us. We have signalled the direction in which S4C needs to go, and have taken important steps along that road, introducing our Hansh (for young people) and Cyw Tiwb (for young children) online services. But it was very important to receive confirmation of support for the need for S4C to take on the role of a fully - fledged Welsh language public service media provider. The Review provides this as does the commitment from Government that our statutory rem it will be changed in due course. It is no small matter for any organisation to spend the public money it receives for purposes that are not clearly identified in the documents that establish its purpose. Simply from the point of view of regularity, the promise of a new remit – with an emphasis on digital development and a wide - ranging audience – is fundamental and very important. We do not intend to wait for legislation before taking decisive steps. The digital world is having a dramatic effect on the viewing habits of audiences, particularly the young. They can watch more of what they want, when they want, and receive personal viewing recommendations about subjects of particular interest to them. Welsh language content must find its way quickly on to the most commonly used digital devices. Increasingly, such content needs to be created specifically for digital consumption. 1 Digital strategy Technology encourages us as broadcasters to seek to communicate and interact with our audiences one - to - one rather than one - to - many. Developing the means which will allow us to personalise our services to this end is a key element of the digital strategy described in this implementation plan. We have announced our intention to spend £3 million over the next 3 y ears specifically on this new digital strategy – in addition to what is currently being spent, and in addition to the use of content that is appropriate for all platforms. A greater amount, as a percentage of our income, than that spent by Channel 4, for example. Personalisation will be one aspect of the challenge of ensuring viewers, in a fragmented media world, are aware of the Welsh - language content available to them. In this context, we were disappointed that the Review did not make stronger reference to the importance of securing prominence for public service media providers on digital platforms. We regard all Welsh - speakers, of whatever degree of fluency and familiarity with the language, as our potential viewers, and it is clear that the media choi ce of many is governed not by the linguistic medium but by awareness of attractive content. The prominence given to S4C on the programme guides and apps of the future is, if anything, even more critical for us than it is for English - language PSMPs and we would urge the Government to do all within its power to support the objective of continued prominence. In this respect S4C has already met with the Minister for Digital and Creative Industries, BBC, C4 and OFCOM to discuss the issue and S4C welcomes OFCOM ’s recent consultation on the subject. S4C will seek to maximise it s visibility in the future both through a greater involvement with the development of its iPlayer presence thanks to its partnership with the BBC but also through improved digital marketin g using data captured through its own Clic player. Governance There are many challenges involved in ensuring successful implementation of a new strategy, of course. Internally, new skills will be needed – a new mindset – driving new developments forward while maintaining the linear channel. We welcome the proposals made and agree that the new governance model which has been recommended is likely to provide greater clarity as to how and where future strategy is developed and approved, making it clear that S4C is a single body and that all key decisions are made by its Board, which will include the Chief Executive and other senior officers, as well as a majority of non - executive directors. It will need to be clear, however, that non - executive members of th e Board have specific duties in terms of scrutiny and monitoring of executive performance, including that of the services that S4C provides. This will be facilitated by retaining the principle that editorial responsibility and content commissioning decisi ons, within an approved overall strategic framework, rest with the Chief Executive and his team. 2 We believe that these and related issues can be successfully addressed by new Standing Orders and that these will enable current members of the Authority, tog ether with a specific number of independent directors and also executive directors who should be proposed by a nominations committee of the board, to act as a shadow unified Board while awaiting legislation in due course. We believe this can take place before the autumn, in line with the recommended timetable. New members of the Authority Board appointed recently have been told that they will automatically become members of the new unitary board. Funding The Review’s e mphasis on the importance of financial stability and transparency for S4C, together with the Government’s support for these comments, is one we warmly welcome. Though we had hoped that the Review would suggest principles by which the Secretary of State wou ld arrive at future decisions regarding sufficiency of funding for S4C, these comments do offer the hope that S4C funding now ceases to be a regular topic of debate. This will help ensure that the organisation’s focus is directed fully to delivering its c ore functions. It will of course be a challenge in the short term to ensure that the money available is sufficient to fund several platforms and types of services. The audience for Welsh language content is varied and our enthusiasm for digital must be ba lanced by our responsibility to continue to meet the needs of those for whom the TV screen, either live or as catch - up, is the preferred delivery mechanism for entertainment and information. This will require a careful balancing of priorities, with consta nt reference to audience preferences. The expectation of funding stability, however, will provide a good foundation for continuing to seek out the efficiencies that will be needed. The recommendation that S4C should in due course be fully funded by the te levision licence fee has attracted much attention. The obvious advantage of sourcing S4C funding in its entirety from the licence fee is that the commitment can be made for a five year period, in parallel with the licence fee settlement itself. This there fore is the mechanism by which funding stability is to be delivered from 202 2 /23 onwards. The Review is silent on the question of the quantum of such funding, and its relationship to the calculation of the licence fee settlement as a whole.