OFCOM Public Service Review 2; “Crisis? What Crisis?!”

April 18, 2008

Part one is here. A reminder; these are my personal views.

The second document I’ve read from OFCOM’s review of Public Service Broadcasting is Annex 7: ” A synopsis of Oliver & Ohlbaun’s economic modelling of future scenarios for public service content”.

Traditional broadcasters need to reinvent themselves in order to adapt to the new media world which is being shaken up primarily by the internet. This synopsis gives some useful projections of what might happen as they do.

It is as one of my colleagues would say “chewy” i.e. lots of acronyms, diagrams and jargon.

The synopsis suggests four different things that might happen to the traditional commercial public service television broadcasters, with the worst case scenario being that the changes in media put them out of business.

But there is some data which gives cause for hope.

Figure 9 (p.15) gives some numbers for how traditional television advertising revenues might decline by 2020.

The two most optimistic scenarios see it declining by 0.4 billion or 0.7 billion pounds

Figure 7 (p.14) gives numbers for how revenue for web and mobile content might increase over the same time.

In the best cases it increases by 0.6 billion and 0.5 billion pounds.

So there is a possibility that by moving into the web and mobile the commercial PSBs could recover the revenue they lose from conventional tv advertising and maintain roughly their current position, presumably without throwing off their PSB obligations (which the research doesn’t refer to).

Clearly in order to make this move the commercial PSBs will need help. What kind of help is the question.

I would challenge the assumption which underlines this work that less investment in TV programmes is automatically a bad thing. In order to make the move commercial PSBs need to invest in platforms and web content rather than more programmes.

If more content is user generated the answer may be not to increase investment in content overall but concentrate on fewer, better more high quality programmes which can be put on mobiles and the web as well as conventional TV.

There is something curious about the final section of the report: 7.1: “Commercial viability of programme genres”.

This has a table (Figure 12 on page 18) which asserts that certain genres of programme are not profitable for commercial public service broadcasters. But there are no numbers attached to support it.

Are UK Children’s programmes really “very unprofitable” now (the table is for 2007), if CITV made £4 million for ITV last year?


4 Responses to “OFCOM Public Service Review 2; “Crisis? What Crisis?!””

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  2. Mark Bunting Says:

    Nick – these are interesting posts, thank you. I am the project director for the PSB Review at Ofcom. Couple of points on the future scenarios work:
    – some of the tables are data-light because they’re commercially sensitive. Not really fair or appropriate for us to show how much ITV is making on UK soaps (or losing on children’s programmes)
    – the issue with the purely commercial PSBs is not whether or not they can sustain a profitable business. It’s what leverage we have over them to do what we might want. ITV plc might well be able to make a children’s service hold up by integrating TV, broadband, radio, wrestling magazines (to appeal to my step-son’s demographic) or whatever it likes. But what is its incentive to do so if it can make more money doing something else? And even if it did go down this route, how could we guarantee that it would provide high quality UK programmes for kids that served public purposes if there’s more money in US cartoons?

    In the old world we had leverage because being an analogue broadcaster was something within society’ dispensation and it was hugely valuable to the broadcasters. But now anybody can be a broadcaster on cable, satellite or DTT, if they can afford to buy the capacity. The privileges left open to us are much more limited.

  3. nickreynoldsatwork Says:

    Thanks Mark for responding. I appreciate the sensitivities.

    But you can forgive me for being a little cynical if the commercial broadcasters keep repeating the line that content for children is unprofitable, yet the small amount of public data I can find shows that for ITV at least CITV is a profitable service.

    The Ofcom review makes a good suggestion of tax breaks for making kid’s programmes. How about tax incentives for UK companies that broadcast or distribute that content?

    “Anybody can be a broadcaster” should be an opportunity, not a threat.

  4. […] a closed, defensive, backward looking set of options which seems to boil down to only one: “we can’t do much about ITV, so we must protect Channel 4 at all costs if necessary by damaging the BBC”. And despite […]

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