Simultaneous Translation - Welsh Affairs Committee
Wednesday 9th September 2026
Skip to latest contribution
This debate has concluded
(began 2 weeks, 3 days ago)
Watch LiveSkip to latest contribution
This debate has concluded
14:42
Speaker 1
-
Speaker 1
I feel that we have had the opportunity to express our views and we feel that we've been listened to fairly. We have a close relationship with officials in the culture department, so those discussions are ongoing. We sent a paper in representing our standpoint very clearly , that there was a need for continuity of funding for broadcasting through the medium of Welsh. But since we put that paper in, there's been a lot of toing and froing, lots of additional questions.
They want clarification on certain things. So I do feel that we've had a fair opportunity to express our standpoint and argue our case, but these major decisions are remaining to be made, and they're going to be very important to us. And again, we're very grateful to you for inviting us here to give evidence today, because , as Padraic hasn't given specific parliamentary evidence on the charter review until this point, and as an organisation which is funded by this process, by the licence fee and our funding into the future is going to be decided.
On the basis of this process, we feel it's important for S4c's voice to be heard so that we can continue to serve our audiences with this big issue of sufficient funding for the future. Some of the things that we've asked for, I don't want to go into too much detail in terms of what I've already said, but we need more than we're currently receiving in order to be able to serve audiences effectively. If we believe in public service broadcasting, if we believe in the future of the Welsh language, if we want young people to enjoy content, then as Padraic has got to be able to serve them on the platforms that they view, and that requires considerably greater funding than linear television funding, as it's been in the past.
And the other point that I'd perhaps like to make in terms of the charter review, and one point that we've emphasized that's important to us is in addition to the licence fee, which funds us, which is about 100 million at the moment per year. We also have a supply of programmes from the BBC that correspond to a value of around 20 million a year. Well, one of the points that we've made quite clearly in the charter review process is that we are eager not only to ensure that there is an increase in our budget, but also that there's an inflationary increase protected for that supply of programmes as well, because without that, there's a danger that it could be open to be cut.
We are very aware of the challenges the BBC are currently facing, and the possibility that that could impact on the supply of programmes for. So what we're asking the Secretary of State in the charter review to do, therefore, is to safeguard that supply so that that value of 20 million can be protected and increased by inflation. Can I just follow on follow on with one thing on that. And I hope that it'll never come to this, to be honest, because as Padraic is very close to all of our hearts, I can assure you of that here.
But have you had to start thinking about what the outcome may be or where you might have to cut, or you know, as how the channel is going to look if the funding is not forthcoming to protect what we currently have. We have such varied audiences to serve, and already with the funding we have, which is increasing by inflation at the moment, there are difficult decisions to be made because if you do start a digital news service which wasn't available six years ago, then that money has got to come from somewhere.
Where does it come from? Well, it comes from the programme's budget. If you invest in content for YouTube and we have to do that because that's where young people get their content. Where does that funding come from? That comes from the programme budget, because without that somebody else might be screaming out for for this somewhere else. So at the same time, with the investment that we're making in content for TikTok and Instagram and dramas for these platforms, for the young people.
So already there is pressure. But what we're specifically concerned about with the supply of programmes for the BBC is that we are hearing so much about the pressures on BBC, and how they're expected to save 500 million, and we are concerned that that could impact on the supply of programmes for Padraic. I and Delyth have come today from a meeting with the new director general, Matt Britton, where we've been speaking about this exact subject and where we've made our point quite clearly, where we're concerned about any impact this might have on the services that we offer our audiences.
Those discussions are going to be ongoing. What we're saying is that there needs to be a new partnership agreement between BBC and US, and we need to look innovatively and pioneering at what the audiences are going to look like, moving onwards so that that programme can serve those audiences. Thank you.
They want clarification on certain things. So I do feel that we've had a fair opportunity to express our standpoint and argue our case, but these major decisions are remaining to be made, and they're going to be very important to us. And again, we're very grateful to you for inviting us here to give evidence today, because , as Padraic hasn't given specific parliamentary evidence on the charter review until this point, and as an organisation which is funded by this process, by the licence fee and our funding into the future is going to be decided.
On the basis of this process, we feel it's important for S4c's voice to be heard so that we can continue to serve our audiences with this big issue of sufficient funding for the future. Some of the things that we've asked for, I don't want to go into too much detail in terms of what I've already said, but we need more than we're currently receiving in order to be able to serve audiences effectively. If we believe in public service broadcasting, if we believe in the future of the Welsh language, if we want young people to enjoy content, then as Padraic has got to be able to serve them on the platforms that they view, and that requires considerably greater funding than linear television funding, as it's been in the past.
And the other point that I'd perhaps like to make in terms of the charter review, and one point that we've emphasized that's important to us is in addition to the licence fee, which funds us, which is about 100 million at the moment per year. We also have a supply of programmes from the BBC that correspond to a value of around 20 million a year. Well, one of the points that we've made quite clearly in the charter review process is that we are eager not only to ensure that there is an increase in our budget, but also that there's an inflationary increase protected for that supply of programmes as well, because without that, there's a danger that it could be open to be cut.
We are very aware of the challenges the BBC are currently facing, and the possibility that that could impact on the supply of programmes for. So what we're asking the Secretary of State in the charter review to do, therefore, is to safeguard that supply so that that value of 20 million can be protected and increased by inflation. Can I just follow on follow on with one thing on that. And I hope that it'll never come to this, to be honest, because as Padraic is very close to all of our hearts, I can assure you of that here.
But have you had to start thinking about what the outcome may be or where you might have to cut, or you know, as how the channel is going to look if the funding is not forthcoming to protect what we currently have. We have such varied audiences to serve, and already with the funding we have, which is increasing by inflation at the moment, there are difficult decisions to be made because if you do start a digital news service which wasn't available six years ago, then that money has got to come from somewhere.
Where does it come from? Well, it comes from the programme's budget. If you invest in content for YouTube and we have to do that because that's where young people get their content. Where does that funding come from? That comes from the programme budget, because without that somebody else might be screaming out for for this somewhere else. So at the same time, with the investment that we're making in content for TikTok and Instagram and dramas for these platforms, for the young people.
So already there is pressure. But what we're specifically concerned about with the supply of programmes for the BBC is that we are hearing so much about the pressures on BBC, and how they're expected to save 500 million, and we are concerned that that could impact on the supply of programmes for Padraic. I and Delyth have come today from a meeting with the new director general, Matt Britton, where we've been speaking about this exact subject and where we've made our point quite clearly, where we're concerned about any impact this might have on the services that we offer our audiences.
Those discussions are going to be ongoing. What we're saying is that there needs to be a new partnership agreement between BBC and US, and we need to look innovatively and pioneering at what the audiences are going to look like, moving onwards so that that programme can serve those audiences. Thank you.
14:46
14:46
Speaker 3
-
Speaker 3
Thank you, chair, and I'll return to English, if I may. Great to see you both again. Really good to see you. I think the following on from what you were just saying there in your response to the Government Green Paper, you referred to the unique partnership with the BBC, and I'd just like to be interested if you could just go a bit further in how that partnership has improved S4c's overall offer to viewers in Wales.
14:46
Speaker 4
-
Speaker 4
The partnership exists on several levels. In some ways. We've co-located to Central Square in Cardiff, transmission for BBC Wales and S Padraic comes from that building, so there are efficiencies there that have come about due to the co-location, the iPlayer relationship that we already mentioned. Giving us more prominence is certainly something that's been beneficial to us. We've seen a significant increase in the number of viewers that are seeing our content.
We've got more features to come online as a result of that. Now, with children's content within the children's sign on within BBC iPlayer being more prominent. That will come online, hopefully next month. So we're still seeing the benefits there of the digital relationships as well as the existing relationships. But I think the content relationship as well has always been good. BBC produces no other than our TV news programme for us, which gives us a fantastic service.
The standard of journalism on it is outstanding. It gives viewers in Wales a Welsh as well as internationally, who's told from their perspective and if you were to look back at the fires in France earlier this summer, there was a reported out there from from the BBC, from ending up on News at Ten because they hadn't sent anybody to cover the fires. But nevertheless, Padraic were there first, thanks to that relationship we've got with the BBC. So it does benefit us.
And also the soap. The long running soap opera is made by the BBC and that is still delivering audiences for us, not just linear TV audiences, but we're also seeing the consumption of soaps now on digital platforms like iPlayer and click. We're releasing that content now in the morning of transmission, and we're seeing that people are actually viewing it before it goes out on air. So there are lots of these benefits have come about as a result of the good relationship we've had with the BBC over a number of years.
We've got more features to come online as a result of that. Now, with children's content within the children's sign on within BBC iPlayer being more prominent. That will come online, hopefully next month. So we're still seeing the benefits there of the digital relationships as well as the existing relationships. But I think the content relationship as well has always been good. BBC produces no other than our TV news programme for us, which gives us a fantastic service.
The standard of journalism on it is outstanding. It gives viewers in Wales a Welsh as well as internationally, who's told from their perspective and if you were to look back at the fires in France earlier this summer, there was a reported out there from from the BBC, from ending up on News at Ten because they hadn't sent anybody to cover the fires. But nevertheless, Padraic were there first, thanks to that relationship we've got with the BBC. So it does benefit us.
And also the soap. The long running soap opera is made by the BBC and that is still delivering audiences for us, not just linear TV audiences, but we're also seeing the consumption of soaps now on digital platforms like iPlayer and click. We're releasing that content now in the morning of transmission, and we're seeing that people are actually viewing it before it goes out on air. So there are lots of these benefits have come about as a result of the good relationship we've had with the BBC over a number of years.
14:48
14:48
Speaker 4
-
Speaker 4
Well, the BBC does have its purposes as part of the charter that they need to achieve, and I think it helps them fulfill those public services that those public purposes in the content that they produce for us and that we transmit on on as part of that is, you know, we are providing news, public interest news from a reliable source, which I think is highly important in the present context now. And I think that relationship enables the BBC then to be able to fulfil in a TV context , their public purposes.
But also working in relationship with Derek means that the deficiencies of the BBC as well. So the newsroom is built on a model. You can ask the BBC themselves this because they would know more than me about it, but it's built on a model where you have TV and radio and online in Welsh and in English. So there are benefits to the BBC. Then from being a producer of content for Derek as well.
But also working in relationship with Derek means that the deficiencies of the BBC as well. So the newsroom is built on a model. You can ask the BBC themselves this because they would know more than me about it, but it's built on a model where you have TV and radio and online in Welsh and in English. So there are benefits to the BBC. Then from being a producer of content for Derek as well.
14:49
14:49
14:49
Speaker 1
-
Speaker 1
I'm going to be speaking in Welsh as well. Lots of the question I was going to ask has already been answered. But the prominence, you know, following the agreement around iPlayer and what this means for us for. See so the next question then is, do you think there's scope for this model between streamers and funders to collaborate and that this is a step forward as well and shows a good example. Do you think there are other opportunities available? Having prominence on the iPlayer platform is something which is a little bit easier to deliver because of the special relationship we have with the BBC? So those conversations were constructive and they could see the value in placing space for content on their space.
And of course, we have our own platform that we manage, which is where it becomes more difficult is when we're talking about prominence on connected TVs. So the Media Act put measures in place to ensure there was prominence for broadcasters like us on connected TV until the Ofcom Prominence code is published, and that's not likely till the end of next year. That means that at the moment we do have to go into direct negotiations with Sky, Virgin and Samsung and LG and all those in order to make sure that the S4c's app can be prominent on their platform and then into the new arena we're all talking about now.
That's YouTube, because there are so many people now who get their content and view their content regularly there. The Media Nations Ofcom report recently referred to the fact that 61% of the population of Wales watch YouTube every week. So it shows that there is a big appetite for that. Children spend a lot of their time on YouTube about an hour a day, it appears. So the need for us to be on that platform is vitally important.
What's difficult for us is to manage then what space we get on that platform. How people find our content is the algorithm pushing people towards content in the Welsh language. And we're concerned about this. And YouTube told us, you know, you're too small to have a business partner status with us. But thanks to roundtables with DCMs that were convened earlier this year, we now have come into a better relationship with YouTube. We are having conversations with them around prominence.
The current Green Paper on the future of broadcasting does address this. It calls upon us as broadcasters and YouTube to come to a voluntary relationship to give prominence to SBS. If that doesn't happen, then the government is entitled perhaps to enforce this. And I really very much hope that we can come to a voluntary relationship. But if that's not the case, then there may be a need for a little bit more power of their elbow to actually give prominence to us.
And we're this is also incredibly important is that the Welsh language will not be on YouTube unless S4c's is given prominence. They're creators of content are not going to create content for YouTube and make a livelihood out of it through the medium of Welsh. They can do that in English. It's only through S4c's being able to commission them that we are going to be able to develop a network of Welsh medium content creators that make the Welsh language a living language on an as important a platform as YouTube.
And of course, we have our own platform that we manage, which is where it becomes more difficult is when we're talking about prominence on connected TVs. So the Media Act put measures in place to ensure there was prominence for broadcasters like us on connected TV until the Ofcom Prominence code is published, and that's not likely till the end of next year. That means that at the moment we do have to go into direct negotiations with Sky, Virgin and Samsung and LG and all those in order to make sure that the S4c's app can be prominent on their platform and then into the new arena we're all talking about now.
That's YouTube, because there are so many people now who get their content and view their content regularly there. The Media Nations Ofcom report recently referred to the fact that 61% of the population of Wales watch YouTube every week. So it shows that there is a big appetite for that. Children spend a lot of their time on YouTube about an hour a day, it appears. So the need for us to be on that platform is vitally important.
What's difficult for us is to manage then what space we get on that platform. How people find our content is the algorithm pushing people towards content in the Welsh language. And we're concerned about this. And YouTube told us, you know, you're too small to have a business partner status with us. But thanks to roundtables with DCMs that were convened earlier this year, we now have come into a better relationship with YouTube. We are having conversations with them around prominence.
The current Green Paper on the future of broadcasting does address this. It calls upon us as broadcasters and YouTube to come to a voluntary relationship to give prominence to SBS. If that doesn't happen, then the government is entitled perhaps to enforce this. And I really very much hope that we can come to a voluntary relationship. But if that's not the case, then there may be a need for a little bit more power of their elbow to actually give prominence to us.
And we're this is also incredibly important is that the Welsh language will not be on YouTube unless S4c's is given prominence. They're creators of content are not going to create content for YouTube and make a livelihood out of it through the medium of Welsh. They can do that in English. It's only through S4c's being able to commission them that we are going to be able to develop a network of Welsh medium content creators that make the Welsh language a living language on an as important a platform as YouTube.
14:52
14:52
14:53
Speaker 6
-
Speaker 6
Well, we in part of our submission to the charter review process, we emphasised the importance of recognising the importance of minority language as part of the BBC's public purposes. We know how important it is in Wales, but there are other minority languages in Scotland and Ireland, of course, which would also need that kind of recognition, and we felt it was important that that was enshrined in the new charter, the sort of commitment to supporting languages across across the United Kingdom.
So that's a that's one of the things that we made very clear in our submission.
So that's a that's one of the things that we made very clear in our submission.
14:53
14:54
Speaker 6
-
Speaker 6
It very much complements our objectives? You know, we're both public service broadcasters, public service media organisations, and our role is to represent the communities across Wales and the BBC across the whole of the United Kingdom. You know, our our strapline is to show our world through the medium of Welsh and and that's about giving a voice to communities. And Ofcom has done quite a lot of interesting research on what people value in public service broadcasting in both the BBC and S4c's.
And it's about hearing their own lives and seeing their own experiences reflected back at them. And in a world that is so dominated by big, the big American streaming platforms having somewhere which is, you know, representing our communities and our cultures in Welsh and in English is absolutely critical for the, for the future of, of, of the way the UK operates, I think so that we're bringing people together. And that's part of the role of the BBC and part of the role of espionage.
And it's about hearing their own lives and seeing their own experiences reflected back at them. And in a world that is so dominated by big, the big American streaming platforms having somewhere which is, you know, representing our communities and our cultures in Welsh and in English is absolutely critical for the, for the future of, of, of the way the UK operates, I think so that we're bringing people together. And that's part of the role of the BBC and part of the role of espionage.
14:55
Speaker 4
-
Speaker 4
And there has been talk of growth becoming another public purpose for the BBC, so that the BBC can be a catalyst for economic growth. And. And we feel very much the same way. We in some ways adopt very much the public purposes that the BBC has. And what, as per directors and what you will see from the funding that paddock gets from the licence fee, is that the GVA that's delivered is around 1.70 for every pound that we receive from licence fee funding that we do support 2500 jobs around Wales, that we do support work and skills development in communities all over Wales.
Because of our spending, 57% of that is spent outside of Cardiff, which is very important to us because we want to support skills development and growth in the creative industries in North east Wales, North West Wales, West Wales as well as in Cardiff. So very much, you know, we adopt that public purpose if it was to become.
Because of our spending, 57% of that is spent outside of Cardiff, which is very important to us because we want to support skills development and growth in the creative industries in North east Wales, North West Wales, West Wales as well as in Cardiff. So very much, you know, we adopt that public purpose if it was to become.
14:55
14:55
Speaker 2
-
Speaker 2
Thank you very much. Now, before we finish this session, I just wonder, is there anything else that, you know, you came here with a burning desire to tell us about, which we haven't managed to bring out in the questioning yet, something that, you know, obviously we are going to be talking to the DCMs and making sure that we we state the case for Wales. But is there anything else that you need us to tell us now? Shall I start with Ellie?
14:56
Speaker 6
-
Speaker 6
Only to emphasise the point which this Committee understands only too well, which is the vital importance of character, both to the future of the Welsh language and to the creative economy in Wales, and that that needs to be protected and it needs to be funded sufficiently for for all of the constituencies represented here. You know, we we feel that we're delivering for our audiences, but also delivering for the Welsh economy. And we want to see that continue into the future.
14:56
14:56
Speaker 4
-
Speaker 4
No one, I think we've just outlined the importance. And if this committee goes back and will report on on the need for sufficient funding and clarity of funding for multiple years, because without that clarity of funding, you can't plan, you can't it doesn't enable you to get sporting rights for big events. It doesn't enable you to to plan for commissioning dramas and films such as For Play Now, which has been such a standout success for this for us this summer.
All of those things that are notable become so much more difficult and it becomes more so much more inefficient for the businesses that serve us to operate without that clarity of funding. So the sufficiency of it and the clarity of it are really important for us in the future of the channel.
All of those things that are notable become so much more difficult and it becomes more so much more inefficient for the businesses that serve us to operate without that clarity of funding. So the sufficiency of it and the clarity of it are really important for us in the future of the channel.
14:57
Speaker 2
-
Speaker 2
Thank you very much. And on behalf of the committee, I want to thank you both for coming here today. You've made your case very clearly. So I'm now going to suspend the session for a couple of minutes while we switch witnesses. Order, order! Yes. Here we are. Brilliant. I. And welcome back to our second session of today's panel on Broadcasting in Wales. Can I ask our witnesses to introduce yourselves first? Shall I start off with Garmon, please?
14:58
14:58
14:59
14:59
14:59
Speaker 7
-
Speaker 7
Yeah, I think BBC Wales plays a unique role in Welsh national life. We reach 88% of the audience every week. We provide trusted news and information services. We reflect Wales to itself and to the rest of the UK. We support Welsh culture and help sustain democratic debate and understanding. But you know, the challenge we've got is that we need to change the way we serve audiences in both languages. Consumption habits are changing.
So we've been going through that process of changing the way we work and the way we deliver our services for many years, but that change is only accelerating. So we want to ensure that we remain the most trusted, the most valued and most relevant media organisation in Wales. So we do need to do more to continue to to grow our reach on our own digital platforms, but do more as well on third party platforms. But the challenge we have is that we we need to do that.
Whilst our funding is under significant pressure. The fundamental challenge we've got is that 94% of people in the UK consume the BBC every every month, but only 80% of households pay the licence fee. And my concern is that without reform of the licence fee, we will be facing a position of managed decline.
So we've been going through that process of changing the way we work and the way we deliver our services for many years, but that change is only accelerating. So we want to ensure that we remain the most trusted, the most valued and most relevant media organisation in Wales. So we do need to do more to continue to to grow our reach on our own digital platforms, but do more as well on third party platforms. But the challenge we have is that we we need to do that.
Whilst our funding is under significant pressure. The fundamental challenge we've got is that 94% of people in the UK consume the BBC every every month, but only 80% of households pay the licence fee. And my concern is that without reform of the licence fee, we will be facing a position of managed decline.
15:00
15:00
Speaker 8
-
Speaker 8
Yes. And I'd start off by saying how vital, how important it is that we are having this debate here today. This is a pivotal moment, not just for BBC Wales institutionally, but for Wales as a nation, because so much of Welsh culture, be that Anglophone culture in Wales or Welsh language culture in Wales, relies on what BBC Cymru Wales and also you've heard from them just now, does. We are in the charter review process and we are very much listening to.
Our audiences are saying we had a very big survey out last year, 38,000 respondents, and very briefly, they told us that 92% of Wales said it was very important that we, the BBC, continue to provide trusted information. 85% said that's important. Of. BBC provides the best home grown storytelling and 74% said that it's important that the BBC uniquely brings the nation together. Alongside that, there's a clear desire for the BBC to have greater independence for its independence from any government to be reinforced.
So alongside what government has just said, in terms of the financial pressures, those I think are the key things that we are looking at in terms of charter review and also having listened to our audiences.
Our audiences are saying we had a very big survey out last year, 38,000 respondents, and very briefly, they told us that 92% of Wales said it was very important that we, the BBC, continue to provide trusted information. 85% said that's important. Of. BBC provides the best home grown storytelling and 74% said that it's important that the BBC uniquely brings the nation together. Alongside that, there's a clear desire for the BBC to have greater independence for its independence from any government to be reinforced.
So alongside what government has just said, in terms of the financial pressures, those I think are the key things that we are looking at in terms of charter review and also having listened to our audiences.
15:02
15:02
15:02
Speaker 1
-
Speaker 1
So thanks for joining us today. Could you outline the reach of BBC Cymru Wales in terms of economic impact for Wales, and also the opportunity of creating and producing content in Wales? What's the reach? Well, the economic impact is very significant. We estimate that our impact on GVA in Wales last year was 330 million, and that we assisted in supporting around 4000 jobs. We commissioned content on video and sound from a wide range of companies in Wales, and we also work alongside them to develop ideas, new ideas and new content development.
So I think our impact is far reaching across Wales. And of course, we have a significant centre in Cardiff. We're also very proud of the role the BBC in Wales has created. Sorry, the role the BBC has created in Wales in growing the creative cluster around Cardiff, and clearly our staff work across the length and breadth of Wales and we also have a significant centre based in Bangor, which is a focal point for a number of radio broadcasters as well, and a small studio in Carmarthen, if I may add, that very important.
As someone who was born in Carmarthen, it's a very important studio there. Can I add to what Carmen said in terms of the value of the BBC, BBC Cymru and also the network in Wales? Between those two elements, we're talking about an expenditure of about £214 million. If you add that to what has Fauci gets through the licence fee last year is about 98 million. We're talking about expenditure between those two of around £312 million.
Last year, Welsh Government spent around 200 million on culture and sport. In other words, there's nothing that comes close to or can compare with the value of the licence fee and through that, the BBC and S. And that's why this moment is so crucial, not only for you, with all due respect as parliamentarians, but for the whole of society in Wales to understand the opportunity, but also what's hanging in the balance. Can I just expand a little bit on that in terms of the work, what times of work, what type of work are you doing in terms of analysing what your viewers want or your listeners? Of course, because Rajakumari, you know, I've got it on all the time in the car and I'm sure that's the case for a number of us.
So what kind of analysis do you do in terms of data and knowing what people want? That has changed fundamentally over both of our careers at the BBC. As we have done more and more on digital platforms, we now glean data minute by minute that shows exactly what audiences, what they're involved in, what they listened to, and what they don't. If you go into our newsrooms, for example, and they can review teams and our online teams in English, they follow that data very closely.
And sometimes, you know, you look at a story and think, you know, we're not reaching the audience with this. So what's wrong? And how can we attract that audience in? So we look very carefully, very, very carefully, and we listen to our audiences through that data. But of course, also we hold sessions with groups of our audiences. We listen to feedback that our audiences give. So that's a process.
It's a daily process in terms of the teams providing our content. But I think that it's fair to say that we listen to our audiences more than we ever have done. Thank you.
So I think our impact is far reaching across Wales. And of course, we have a significant centre in Cardiff. We're also very proud of the role the BBC in Wales has created. Sorry, the role the BBC has created in Wales in growing the creative cluster around Cardiff, and clearly our staff work across the length and breadth of Wales and we also have a significant centre based in Bangor, which is a focal point for a number of radio broadcasters as well, and a small studio in Carmarthen, if I may add, that very important.
As someone who was born in Carmarthen, it's a very important studio there. Can I add to what Carmen said in terms of the value of the BBC, BBC Cymru and also the network in Wales? Between those two elements, we're talking about an expenditure of about £214 million. If you add that to what has Fauci gets through the licence fee last year is about 98 million. We're talking about expenditure between those two of around £312 million.
Last year, Welsh Government spent around 200 million on culture and sport. In other words, there's nothing that comes close to or can compare with the value of the licence fee and through that, the BBC and S. And that's why this moment is so crucial, not only for you, with all due respect as parliamentarians, but for the whole of society in Wales to understand the opportunity, but also what's hanging in the balance. Can I just expand a little bit on that in terms of the work, what times of work, what type of work are you doing in terms of analysing what your viewers want or your listeners? Of course, because Rajakumari, you know, I've got it on all the time in the car and I'm sure that's the case for a number of us.
So what kind of analysis do you do in terms of data and knowing what people want? That has changed fundamentally over both of our careers at the BBC. As we have done more and more on digital platforms, we now glean data minute by minute that shows exactly what audiences, what they're involved in, what they listened to, and what they don't. If you go into our newsrooms, for example, and they can review teams and our online teams in English, they follow that data very closely.
And sometimes, you know, you look at a story and think, you know, we're not reaching the audience with this. So what's wrong? And how can we attract that audience in? So we look very carefully, very, very carefully, and we listen to our audiences through that data. But of course, also we hold sessions with groups of our audiences. We listen to feedback that our audiences give. So that's a process.
It's a daily process in terms of the teams providing our content. But I think that it's fair to say that we listen to our audiences more than we ever have done. Thank you.
15:06
15:06
15:06
15:06
Speaker 8
-
Speaker 8
The first point we'd emphasise has been touched on is reform of the licence fee. This is urgent and I think there are. There's a choice here. We can either. And this is a whole society choice. Set the BBC on a continuing course of managed decline or. The other choice is recognition of the fact that there needs to be urgent reform of the licence fee.
The BBC is presently faced with about £500 million deficit, which to Wales translates to around £9 million in savings and the closure of at least 50 FTE roles in BBC Wales. But also additionally and as importantly, the reduction in the number of independent TV and radio and digital companies we commission from. So the reform of the licence fee isn't an esoteric question, isn't an abstract question. It's an absolutely urgent and vital question.
If we collectively want to not just hang on to what we've got, but also to grow the presence of BBC Wales as a trusted voice, with news, with high quality entertainment, drama, orchestra and so on in Wales. The second point I'd emphasize is independence again, independence from government. I think that is vitally important, that people have confidence and trust in the BBC. And then the final point is regulatory reform, so that the BBC can, in a very, very fast moving media landscape, it can adjust and it can, as we've just been discussing, in terms of understanding, audiences serve audiences appropriately across a range of platforms.
Great.
The BBC is presently faced with about £500 million deficit, which to Wales translates to around £9 million in savings and the closure of at least 50 FTE roles in BBC Wales. But also additionally and as importantly, the reduction in the number of independent TV and radio and digital companies we commission from. So the reform of the licence fee isn't an esoteric question, isn't an abstract question. It's an absolutely urgent and vital question.
If we collectively want to not just hang on to what we've got, but also to grow the presence of BBC Wales as a trusted voice, with news, with high quality entertainment, drama, orchestra and so on in Wales. The second point I'd emphasize is independence again, independence from government. I think that is vitally important, that people have confidence and trust in the BBC. And then the final point is regulatory reform, so that the BBC can, in a very, very fast moving media landscape, it can adjust and it can, as we've just been discussing, in terms of understanding, audiences serve audiences appropriately across a range of platforms.
Great.
15:08
15:08
Speaker 8
-
Speaker 8
It's been a very thorough process, both internally within the BBC and myself, have been engaged over many months in that charter review process. And, as you would expect, making the case, arguing for not just BBC Wales institutionally, but for what the BBC does in Wales , and then externally for us such as this, hugely important in making sure that collectively there's a recognition of the needs and the voice of Wales. And then finally, in terms of engagement with the DCMs, that is very good.
That is very strong. So, for example, tomorrow I've got a meeting with DC met where we will be specifically looking at the needs of Welsh language broadcasting alongside other minority language requirements on the BBC.
That is very strong. So, for example, tomorrow I've got a meeting with DC met where we will be specifically looking at the needs of Welsh language broadcasting alongside other minority language requirements on the BBC.
15:09
15:09
15:09
15:09
15:09
15:09
15:10
15:10
Speaker 8
-
Speaker 8
government are, as you would expect, ongoing. There's a process. BBC is very much in listening mode around what the best means of securing sufficient funding to deliver our universal requirements are. I think there are three key questions to your point. First of all, the means does the future licence fee or whatever you want to call it, does that allow the BBC to deliver its universal mission? Second, there's the mechanism. And then third, there's the question of the sum that would be required levied on individuals to pay for the future requirements of the BBC.
We are between. And this is why this meeting is so helpful and important. We're . Between the Green Paper and the more definitive, harder white Paper. So those conversations are ongoing. BBC is still listening. We have, as I'm sure you will have seen, ruled out two specific proposals for raising money for the BBC. The first one is subscription . That would fundamentally change alter the nature of the BBC.
Definitely BBC Cymru Wales . And the second potential solution is advertising. Again, that wouldn't be a helpful idea. As we've seen with the sad news from channel four just today, advertising revenue across the whole of the UK is under a huge amount of pressure, so for the BBC to be entering that market, that would destabilize the very, very precious PSB ecosystem that we've got even further.
We are between. And this is why this meeting is so helpful and important. We're . Between the Green Paper and the more definitive, harder white Paper. So those conversations are ongoing. BBC is still listening. We have, as I'm sure you will have seen, ruled out two specific proposals for raising money for the BBC. The first one is subscription . That would fundamentally change alter the nature of the BBC.
Definitely BBC Cymru Wales . And the second potential solution is advertising. Again, that wouldn't be a helpful idea. As we've seen with the sad news from channel four just today, advertising revenue across the whole of the UK is under a huge amount of pressure, so for the BBC to be entering that market, that would destabilize the very, very precious PSB ecosystem that we've got even further.
15:12
Speaker 7
-
Speaker 7
As part of that discussion. You know, there has been talk of a household levy as a potential option because that is a model that is in operation in some European countries. Again, it is for the government ultimately to decide. But modernizing the scope of the funding model could also be a realistic way.
15:12
15:12
15:12
Speaker 8
-
Speaker 8
Prospect of effective status quo is an option. I think we need reform and the numbers bear that out. If you look at the number of households that do not presently require a licence for no licence needed households, there are 3.7 million of those in the UK at the moment. Last year, 500 million fewer people paid the licence fee, so no, effective change isn't an option. However, we are, as you would expect in an ongoing process with DCMs, around what the best solution is for the BBC and also for broadcasting and wider sense.
So
So
15:13
Speaker 11
-
Speaker 11
just in the interest of time, you answered in response to Mr. Rangers earlier question that your proportion of savings of the 500 million would be 9 million. And I think you said an FTE headcount reduction of approximately 50, with, of course, a knock on effect to the supply chain in and around the creative industries as a percentage. What does that 9 million represent as far as BBC country's annual budget is?
15:13
15:13
15:13
15:13
15:14
15:14
15:14
15:14
15:14
Speaker 7
-
Speaker 7
I think I think it is challenging because if you look at what we provide in Wales, all our services are unique and wherever we step away from or do less of, there isn't another party that will step in and fill that gap. But you know, our concern is facing scenarios where we are appearing again, you know, in front of this committee annually to talk about further reductions and further reductions. And that is why funding is critical.
15:14
Speaker 8
-
Speaker 8
And to your liveability test or question, you need to bear in mind that across this charter licence fee period, we are down by around 30 million in the buying or spending power of BBC Wales has got. So that equates to around 25% of our budget. For the last 16 years there have been nine licence fee freezes, so the pressure incrementally on us has.
15:15
15:15
15:15
Speaker 11
-
Speaker 11
My, my my final question is the BBC director general. Slightly bizarrely, I suppose some might argue recently declined to guarantee the future of BBC Scotland. That's where the Scots to sort out. But should we also regard BBC Wales as potentially being at risk, or is the uniqueness of the language service that ring fence? Is it?
15:15
15:16
15:16
15:16
15:16
15:16
15:16
15:16
15:16
15:17
15:17
15:17
Speaker 11
-
Speaker 11
I made the point again. Your Scottish counterpart would like the answer exactly the same question in exactly the same way he would. He or she would see the Scottish brand of the BBC as being very important. You clearly do. We all do the BBC Wales, but in the light of that absence of guarantee, has it not crossed your mind? Just to check in with a short email to the Director general?
15:17
Speaker 8
-
Speaker 8
No, for a simple reason. There is no risk whatsoever to BBC Wales. I think a far bigger risk to BBC Wales is a process of continuous continuing cuts, such as the like we've seen since 2017. As I was saying earlier, we now need to to save £9 million. There will be, in all likelihood not just for BBC Wales but for the rest of the BBC. Additional savings through to 2829 and unless there is future licence fee reform, then we are set on that inevitable path of managed continuing decline.
So to answer your question very directly, BBC Wales is here to stay. But I'm not so confident about the type of content that we presently produce and distribute so effectively, because we just don't have the money for it.
So to answer your question very directly, BBC Wales is here to stay. But I'm not so confident about the type of content that we presently produce and distribute so effectively, because we just don't have the money for it.
15:18
15:18
Speaker 2
-
Speaker 2
Thank you, Simon, and I'm sure you've very clearly identified the, you know, the safety of BBC Cymru Wales. And obviously, as a committee, we would want to make sure that our Welsh language and our heritage and the culture involved in BBC, ITV and S is all protected and obviously we would stand behind you there. But in terms of you've you've talked about the managed decline and, you know, the 500 million cut is significant. And, you know, even even I've noticed in this place, you know, when I first started, when we were interviewed, we'd have cameraman, a lighting person, sorry, as well as the reporter journalist.
And now we're down to two, if you're lucky. The camera. Yeah. Oh, yeah. And now it's most definitely sometimes just one person, as you, as Simon says with the phone. So I'm just anxious because obviously these are people's jobs and once they're gone, we don't get them back. So how are you managing this? Because obviously any cut is dangerous. How are you actually managing and working with it? Shall I ask really?
And now we're down to two, if you're lucky. The camera. Yeah. Oh, yeah. And now it's most definitely sometimes just one person, as you, as Simon says with the phone. So I'm just anxious because obviously these are people's jobs and once they're gone, we don't get them back. So how are you managing this? Because obviously any cut is dangerous. How are you actually managing and working with it? Shall I ask really?
15:19
Speaker 7
-
Speaker 7
Or I'm happy to. So yeah. And you as members will have seen how we'll have driven efficiencies as you as as you've described, and we need to continue to look for efficiencies. I mean, you continue to challenge ourselves in terms of how we operating as effectively and cleanly as possible. And we, you know, particularly as technology continues to evolve, that is going to be a continuing area of scrutiny. But in in terms of looking at how we approach the challenge of reducing our spend by 9 million in the first instance, I think we have got two principles.
We are aiming to sustain output with the highest audience value and impact, but also aiming to meet audiences where they are so that we don't do anything that prevents future routes to growth or impact activities in areas where we're already facing challenges, such as reaching younger audiences. But, you know, we are looking at, you know, the potential of more than 50 FTE post closures. We have been engaging in the voluntary redundancy expression of interest process with staff across the summer.
We are working through our savings plan in parallel with currently concluding that process, and we will be talking to staff and the sector about our plans relatively soon.
We are aiming to sustain output with the highest audience value and impact, but also aiming to meet audiences where they are so that we don't do anything that prevents future routes to growth or impact activities in areas where we're already facing challenges, such as reaching younger audiences. But, you know, we are looking at, you know, the potential of more than 50 FTE post closures. We have been engaging in the voluntary redundancy expression of interest process with staff across the summer.
We are working through our savings plan in parallel with currently concluding that process, and we will be talking to staff and the sector about our plans relatively soon.
15:21
15:21
Speaker 1
-
Speaker 1
Thank you. The BBC's response to the Government's Green Paper talked about opening up platforms to other content platforms and providers across the UK, and also looking into new strategic partnerships. So in your view, how would BBC Cymru Wales be able to benefit from that? Well, we have experience of bringing another partner in, namely S and iPlayer. I think that's a fantastic story as to how partners and public service broadcasters can work together for the benefit of the public.
The As chief executive Gareth Evans, talked about the significant growth that's been seen there in terms of content of S on iPlayer during the course of the past few months. In terms of opening up other platforms for the purposes of the BBC. Well, we have published a partnership with YouTube. In January of this year, and that work is a specific focus of very much a specific focus for BBC Cymru. Because of the success of audiences.
I'm sure all of you watch them on your In Your Households, you'll see the significant success of YouTube. In terms of those viewing. We've had thousands viewing in Wales and beyond. So that question of how. We use our third party platform, YouTube. And we have a lot of content that's already tailored for YouTube. And we are also involved with other platforms in addition to providing content. The second element of that alongside that, of course, is how accessible and visible our content is, because there's no point producing any content unless people can actually find it.
So those negotiations and discussions in the context of the Green Paper on the media Green Paper are now ongoing. And those discussions are key not only for the United Kingdom in its entirety, but I would also suggest that there are Welsh benefits to it as well. Thank you.
The As chief executive Gareth Evans, talked about the significant growth that's been seen there in terms of content of S on iPlayer during the course of the past few months. In terms of opening up other platforms for the purposes of the BBC. Well, we have published a partnership with YouTube. In January of this year, and that work is a specific focus of very much a specific focus for BBC Cymru. Because of the success of audiences.
I'm sure all of you watch them on your In Your Households, you'll see the significant success of YouTube. In terms of those viewing. We've had thousands viewing in Wales and beyond. So that question of how. We use our third party platform, YouTube. And we have a lot of content that's already tailored for YouTube. And we are also involved with other platforms in addition to providing content. The second element of that alongside that, of course, is how accessible and visible our content is, because there's no point producing any content unless people can actually find it.
So those negotiations and discussions in the context of the Green Paper on the media Green Paper are now ongoing. And those discussions are key not only for the United Kingdom in its entirety, but I would also suggest that there are Welsh benefits to it as well. Thank you.
15:23
15:23
Speaker 8
-
Speaker 8
I'd say thanks, first of all for having this conversation. It has been so valuable and helpful. But my main thing, my main parting shot politely message to you would be to move at pace to recognise the scale of audience change funding pressures on PSB overall, particularly from a self-interested perspective. The BBC and when it comes to engaging with the rest of the charter process, with the white paper, to be bold and to make the case, as I'm sure you will, for Wales.
15:24
15:24
Speaker 7
-
Speaker 7
Yeah, just to pick up on what we said, just one thing. I mean, we have talked about the funding mechanism we've touched on right at the beginning. But, you know, for us continuing to evolve our services in in response to far reaching and accelerating changes in the way that audiences are consuming content is absolutely critical. And for us, we are facing that challenge of trying to navigate an uncertain future in terms of our income, whilst also transforming the way we deliver our services.
15:24
Speaker 2
-
Speaker 2
Thank you very much, both of you. And I'm now going to suspend the session while we switch witnesses. Order, order! Thank you very much. Much appreciated. Oh, yeah. Okay. Five minutes. Okay. I know, I know. The panel today. It's good to see you both before us. Can I ask you to introduce yourselves and briefly say what? You know where you are.
So, shall I start with you? Yeah. Thank
So, shall I start with you? Yeah. Thank
15:26
15:26
15:26
15:26
Speaker 2
-
Speaker 2
Thank you very much. So obviously we've heard from Warwick and BBC Cymru Wales. So where does ITV Cymru Wales sit within the the Welsh broadcasting landscape, because obviously you're competing with with both of those. And they've got very distinct remits and purposes. So how do you actually fit in that. I
15:26
15:26
Speaker 13
-
Speaker 13
to that, the ITV Wales bit and then the wider ITV land as well. I mean, I think for ITV Cymru Wales specifically, we're the only commercial PSB in Wales. We are only the only other provider of national and regional news, in contrast to the BBC, who obviously provide it for both BBC and S4c's. On a practical level, we employ 100 staff, as well as the 300 that are employed by ITV Studios in boom, and I think we provide that plurality, a different voice and a vital sort of difference to to our other PSB partners.
And I think what is quite often maybe forgotten, because we are the smaller partner in the PSB Stakes in Wales, is that, you know, as well as the four hours of news every week. We also provide 78 hours of English language programming every week. We're a national broadcaster in that sense, but we're also a provider of content to the other broadcasters, whether that be through the long standing arrangements we have with S or C to make programmes like Be Done and a bit of Bedwyr, or whether it's the network unit who increasingly, increasingly make content for both the BBC and Wales and ITV.
So I think, you know, in Wales specifically , we've got a two part role and we're a smaller partner perhaps, but we're a really fundamental part of that cornerstone of the creative economy, I think. And then obviously ITV has a wider role as well.
And I think what is quite often maybe forgotten, because we are the smaller partner in the PSB Stakes in Wales, is that, you know, as well as the four hours of news every week. We also provide 78 hours of English language programming every week. We're a national broadcaster in that sense, but we're also a provider of content to the other broadcasters, whether that be through the long standing arrangements we have with S or C to make programmes like Be Done and a bit of Bedwyr, or whether it's the network unit who increasingly, increasingly make content for both the BBC and Wales and ITV.
So I think, you know, in Wales specifically , we've got a two part role and we're a smaller partner perhaps, but we're a really fundamental part of that cornerstone of the creative economy, I think. And then obviously ITV has a wider role as well.
15:28
Speaker 14
-
Speaker 14
And obviously at a network level at ITV, what we're trying to do as a public service broadcaster is reflect the whole of the UK to itself. So we see ourselves with the biggest commercial public service broadcaster, and we have a nationwide role in reflecting the UK . And of course part of the UK is Wales. And so a really important thing for us is to make sure that we're sharing Wales to the whole UK and we're showing the UK the rest of the UK to Wales, and that's our role, I think, as a very distinctive UK player.
And one of the things that we make, we've made a very active effort on over the last 3 or 4 years is is building more network production coming out of Wales in particular. And so we've got a very good relationship with Creative Wales that we've fostered over the last 2 or 3 years. And particularly we've taken a lot of commissioners actually down to Wales a couple of years ago, and open ourselves up to all of the production community in Wales and to foster those connections rather than expecting people to come to London.
And we're going to repeat that again in January of next year, because it was very successful and we now have a really good relationship with Creative Wales. And I'm pleased to say we're actually filming a couple of network dramas in Wales as we speak, in particular, something called Code Zero, which is the thriller which will be on next year. But but an even bigger thing for us, which is something called Majesty, which is really big period drama about Elizabeth Young Elizabeth, the first in the court of Henry the Eighth.
It's got some big name Welsh talent in the lead on it, which we haven't announced yet, but it's being filmed in Wales, and both of those are done in partnership with Creative Wales. So that's how we sort of see. And we are, you know, after the BBC, one of the biggest, if not the biggest commercial investor, probably are the biggest commercial investor in in production across the UK, both in relation to all of the various genres of programming, but obviously network news.
So national international news, which clearly is, is a UK wide dimension. And so we have an ITN correspondent in Wales who reports on Wales for the network news and so on.
And one of the things that we make, we've made a very active effort on over the last 3 or 4 years is is building more network production coming out of Wales in particular. And so we've got a very good relationship with Creative Wales that we've fostered over the last 2 or 3 years. And particularly we've taken a lot of commissioners actually down to Wales a couple of years ago, and open ourselves up to all of the production community in Wales and to foster those connections rather than expecting people to come to London.
And we're going to repeat that again in January of next year, because it was very successful and we now have a really good relationship with Creative Wales. And I'm pleased to say we're actually filming a couple of network dramas in Wales as we speak, in particular, something called Code Zero, which is the thriller which will be on next year. But but an even bigger thing for us, which is something called Majesty, which is really big period drama about Elizabeth Young Elizabeth, the first in the court of Henry the Eighth.
It's got some big name Welsh talent in the lead on it, which we haven't announced yet, but it's being filmed in Wales, and both of those are done in partnership with Creative Wales. So that's how we sort of see. And we are, you know, after the BBC, one of the biggest, if not the biggest commercial investor, probably are the biggest commercial investor in in production across the UK, both in relation to all of the various genres of programming, but obviously network news.
So national international news, which clearly is, is a UK wide dimension. And so we have an ITN correspondent in Wales who reports on Wales for the network news and so on.
15:29
15:30
Speaker 9
-
Speaker 9
That's very interesting, considering the Tudors and the link between the Tudors and and Wales. So that's yes. That's a that's a a little link in there. So we'll see how that develops then. Isn't it really lovely. But going back to business, obviously the the licence for I, I Elizabeth the first wrong colour hair but never mind. The licence fee obviously does doesn't affect you. But how how will the settlement will the settlement actually have any effect on on the work that you do or how much money you've got or how ITV company sits in within the PSB in Wales? Does the charter review affect you in that way at all?
15:30
Speaker 14
-
Speaker 14
Yes it does. I mean, perhaps you deal with the specific bits in Wales, but but I think it really does affect us. And I think the point is it's an ecology. So there are three sources of funding for the UK broadcasting ecology. There's the licence fee, there's advertising and the subscription. And it does matter to us. Actually the BBC is substantially and proportionately funded from public resources. And so it would make a big difference to us, for example, if the BBC was funded through subscription or even advertising, that would have a serious impact on the commercial broadcasting sector and would take money out of the overall ecology.
And so we're an ITV is both a PSB through our channels business and ITV, but we're also programme maker, so we make a lot of programmes for the BBC. Across the UK. We make some of their some of their biggest titles through ITV Studios and through various labels in ITV studios. So it matters to us as a creative business that the BBC is well funded, that it has sufficient resources, of course, that it's efficient as well.
And that's also important. And one of the pressures we feel is the extraordinary competition that we face from the S forms, from YouTube, as well as the traditional, more traditional competitors. And we've had to get incredibly efficient, make make enormous efficiency cuts to maximise the amount of value we put on screen. But we, we recognise the the pressure that the BBC has been under from the declining licence fee. And we do want a sustainable and proportionately funded BBC from public resources.
And so we're an ITV is both a PSB through our channels business and ITV, but we're also programme maker, so we make a lot of programmes for the BBC. Across the UK. We make some of their some of their biggest titles through ITV Studios and through various labels in ITV studios. So it matters to us as a creative business that the BBC is well funded, that it has sufficient resources, of course, that it's efficient as well.
And that's also important. And one of the pressures we feel is the extraordinary competition that we face from the S forms, from YouTube, as well as the traditional, more traditional competitors. And we've had to get incredibly efficient, make make enormous efficiency cuts to maximise the amount of value we put on screen. But we, we recognise the the pressure that the BBC has been under from the declining licence fee. And we do want a sustainable and proportionately funded BBC from public resources.
15:32
Speaker 13
-
Speaker 13
And just from a Welsh point of view, I mean, all of that. But I think obviously just on on a very sort of national level in terms of Wales, that competition is a good thing. Having having a strong, healthy competition drives up standards for us both. It means that there is opportunities, you know, for for the people working in Wales to move between 2 or 3 really strong broadcasters. It also means on a on a basic level, I already mentioned the programmes that BBC Wales are commissioning from us now.
Obviously a weakened BBC mean that that form of of income stream disappears for us. So yeah, absolutely. It's incredibly important that the BBC has a strong and sustainable economic future.
Obviously a weakened BBC mean that that form of of income stream disappears for us. So yeah, absolutely. It's incredibly important that the BBC has a strong and sustainable economic future.
15:32
Speaker 9
-
Speaker 9
We have a huge creative industry in Wales. It's just so, so important. So what is for you? What does the charter renewal need to do to achieve the maximum growth or the maximum output, or the way that we can safeguard the culture and the language within Wales? What what does the charter review need to do?
15:33
Speaker 14
-
Speaker 14
I think the most important thing it needs to do is establish a more sustainable funding model for the BBC from from public resources, because, as you've heard, everybody's consumed well, most people in Britain are consuming the BBC, but but an increasing number are not paying for the BBC for a variety of reasons. Some of that's evasion, some of that's legitimately. They're not using the BBC services, and I think it benefits the UK to have a universally available and universally funded BBC.
And then, I mean, that's our perspective as ITV. What we don't have so much of a perspective on is exactly what the mechanics should be. And I think that's a political question ultimately about how do you want the BBC to be fun? What's the mechanic? Do you extend the obligation to pay the licence fee, for example, to people who are consuming other sorts of services? That's one option. I think it seems to be one of the leading options, one of the few options left on
And then, I mean, that's our perspective as ITV. What we don't have so much of a perspective on is exactly what the mechanics should be. And I think that's a political question ultimately about how do you want the BBC to be fun? What's the mechanic? Do you extend the obligation to pay the licence fee, for example, to people who are consuming other sorts of services? That's one option. I think it seems to be one of the leading options, one of the few options left on
15:34
Speaker 6
-
Speaker 6
Eating options. One of the few options left on the table, I think. And we do. We don't have a particular view about that. What we do have a view about is that there should be fair competition, and therefore, actually we would be very concerned if you had an extended mechanic that didn't cover all the relevant competitors. So you'd want to make sure that if you were going to put an obligation on people to pay the licence fee because they use ITV or they use more for that, it also needs to cover Netflix and Amazon and actually particularly YouTube.
I mean, the growth of YouTube has been extraordinary, both in terms of viewing and in advertising. And the last two, 2 or 3 years they've they've pretty much doubled their consumption in the UK and across all demographics, not just young people. And it's long form content. It's high quality, high produced content, more than half. And there's some extraordinary stats, I think is that more than half of YouTube consumption in the UK now is on the big television set, which is such a rapid change from a world where people were looking at cats on skateboards, on their phone.
That is not a YouTube anymore. I mean, they they say themselves, they are television and grandiose statement, but they're on the way to being that if they're not there already. And so we would be concerned if to make sure there was a level playing field for everybody else, that you didn't exclude certain people. If you were going to say that you have to pay the licence fee if you're consuming one service or another. So that would be our our main observation, I think, about potential potential mechanics.
Okay.
I mean, the growth of YouTube has been extraordinary, both in terms of viewing and in advertising. And the last two, 2 or 3 years they've they've pretty much doubled their consumption in the UK and across all demographics, not just young people. And it's long form content. It's high quality, high produced content, more than half. And there's some extraordinary stats, I think is that more than half of YouTube consumption in the UK now is on the big television set, which is such a rapid change from a world where people were looking at cats on skateboards, on their phone.
That is not a YouTube anymore. I mean, they they say themselves, they are television and grandiose statement, but they're on the way to being that if they're not there already. And so we would be concerned if to make sure there was a level playing field for everybody else, that you didn't exclude certain people. If you were going to say that you have to pay the licence fee if you're consuming one service or another. So that would be our our main observation, I think, about potential potential mechanics.
Okay.
15:35
Speaker 14
-
Speaker 14
Can I just finish? Sorry. I'll stop then. I promise, you know, we know advertising would have a huge effect on you on on on on ITV then and, and on channel four actually. So what's your perspective of the possibility of the BBC opening up the platforms and sort of starting to engage more fully? I know they've dipped into YouTube. They're dipping into into the BBC, I player system, but to develop other systems or other partnerships, really that would give them a platform, you know, for their programmes on other platforms like Prime or Amazon or something.
Do you have do you what do you think about that really?
Do you have do you what do you think about that really?
15:36
Speaker 6
-
Speaker 6
If the question is about whether the BBC ought to go to where audiences are in terms of how audiences choose to consume content, absolutely they should. And I think takes you back to the conversation we were just having about the universal availability and funding of the BBC. Clearly, if you go back to YouTube, if more than half of YouTube consumption is on the television, the BBC needs to be there. And indeed the BBC recognises that now, I think I mean, I think 4 or 5 years ago they had a sort of fortress, a fortress iPlayer strategy.
And I think the way the market's moved, I think they've recognised that's not enough because not everybody isn't going to necessarily come to you. You're going to need to go to where they want to be as well. And the BBC recognise that and started particularly embracing YouTube, but I suspect there are other platforms too, that they're going to need to embrace as well. And the great advantage they have, which is much more difficult for us, is that they don't need to be paid to do that.
They don't need to make advertising revenue. They don't have a problem of the amount of money they have to give away to YouTube, which is a major, major problem for us because they're not a commercial player. They can put their content wherever the audience is and not have to worry about, are we going to get paid for it? In fact, the opposite, the more they spread their content around, the more likely it is that people are going to accept that the licence fee is providing something for them, because the BBC is providing that content wherever they want to consume it.
And I think the way the market's moved, I think they've recognised that's not enough because not everybody isn't going to necessarily come to you. You're going to need to go to where they want to be as well. And the BBC recognise that and started particularly embracing YouTube, but I suspect there are other platforms too, that they're going to need to embrace as well. And the great advantage they have, which is much more difficult for us, is that they don't need to be paid to do that.
They don't need to make advertising revenue. They don't have a problem of the amount of money they have to give away to YouTube, which is a major, major problem for us because they're not a commercial player. They can put their content wherever the audience is and not have to worry about, are we going to get paid for it? In fact, the opposite, the more they spread their content around, the more likely it is that people are going to accept that the licence fee is providing something for them, because the BBC is providing that content wherever they want to consume it.
15:37
15:37
Speaker 6
-
Speaker 6
Well, so I don't think the BBC have to pay YouTube. So so I think it's an open platform. I mean, I mean, I can go and load a video up on YouTube and it won't cost me anything. And the BBC, as far as I know, you'd need to ask the BBC, but I don't think the BBC is paying YouTube. The BBC isn't being isn't getting any advertising revenue from YouTube and shouldn't be taking any advertising, by the way.
I mean, there shouldn't be adverts on BBC content on YouTube because because it's being paid for by the licence fee. And that's that's really important because that's about licence fee payers seeing that they can get BBC content for free without having to watch watch adverts.
I mean, there shouldn't be adverts on BBC content on YouTube because because it's being paid for by the licence fee. And that's that's really important because that's about licence fee payers seeing that they can get BBC content for free without having to watch watch adverts.
15:38
15:38
15:38
Speaker 8
-
Speaker 8
very much. Yeah. Nice to see you again. Really developing that line of discussion we were just having there. How those changing audience habits, the streaming platforms, you know obviously affected you as a broadcaster that relies on advertising or is funded through advertising. You know, can you sort of describe to me how that what that effect has been?
15:39
Speaker 6
-
Speaker 6
Yeah. Look, the effect has been profound. I mean, if you look at our the competition for viewing and the competition for advertising, we face a competitor set now, which is unrecognisable from ten years ago. So our biggest competitors now of course still channel four and Sky and so on. But but above all now the Ashfords say, who would have thought even five years ago that some of our biggest competitors would be subscription VOD services like Netflix and Disney and HBO, all of whom are now hybrid pay and free advertising finance businesses.
So suddenly you've got a whole new competitor set with a mass audience competing both for viewing, but also for advertising. And again, back to back to YouTube. I mean, again, a formidable competitor which is integrated into the whole Google ecosystem. So their data is astonishing because they have anybody who uses data, any Google product is effectively feeding the machine. And that includes YouTube. So they are a formidable advertising competitor and their reach is now greater than ITV.
It's greater on some measures than the BBC and it's growing very fast. So this is a mass reach platform with an incredibly data rich advertising offer, which is which is amortizing its cost across the whole world. We are investing in advertising, technology and ITV for one market, for one UK country, which is a medium sized country. They are all of our competitors now are amortizing their costs more or less across the whole world. That's a really, really tough place to be.
And if you look at our revenues, we've lost about, in real terms, about £500 million of total advertising revenue since 2021, our margins halved. We've had to invest a huge amount in ITV in advertising technology. It's really tough and to be honest, it's one of the reasons why. I mean, as strategy director, one of the things we did 2 or 3 years ago was say, well, if we take a five or more year view, where are we going to be and where do we need to be? And the conclusion of that was, we have to have a partner in this market, which is one of the reasons why the main reason why we approached Comcast and proposed that we did a deal with Sky to combine our broadcasting and streaming businesses to try and create an entity with sufficient scale and heft in the UK that was capable of sustaining our PSB obligations with a really strong economic base in order to do that, which is why we've done that deal.
So suddenly you've got a whole new competitor set with a mass audience competing both for viewing, but also for advertising. And again, back to back to YouTube. I mean, again, a formidable competitor which is integrated into the whole Google ecosystem. So their data is astonishing because they have anybody who uses data, any Google product is effectively feeding the machine. And that includes YouTube. So they are a formidable advertising competitor and their reach is now greater than ITV.
It's greater on some measures than the BBC and it's growing very fast. So this is a mass reach platform with an incredibly data rich advertising offer, which is which is amortizing its cost across the whole world. We are investing in advertising, technology and ITV for one market, for one UK country, which is a medium sized country. They are all of our competitors now are amortizing their costs more or less across the whole world. That's a really, really tough place to be.
And if you look at our revenues, we've lost about, in real terms, about £500 million of total advertising revenue since 2021, our margins halved. We've had to invest a huge amount in ITV in advertising technology. It's really tough and to be honest, it's one of the reasons why. I mean, as strategy director, one of the things we did 2 or 3 years ago was say, well, if we take a five or more year view, where are we going to be and where do we need to be? And the conclusion of that was, we have to have a partner in this market, which is one of the reasons why the main reason why we approached Comcast and proposed that we did a deal with Sky to combine our broadcasting and streaming businesses to try and create an entity with sufficient scale and heft in the UK that was capable of sustaining our PSB obligations with a really strong economic base in order to do that, which is why we've done that deal.
15:41
Speaker 5
-
Speaker 5
And if I can just add that on on a practical delivery level, you know, as as people on the ground trying to deliver content, the best content that we can all of the time, then that, that perpetual squeeze, I suppose, means that, you know, it becomes harder to do that. And what's happened simultaneously to that and because of that is that there's more platforms to do that on. So, you know, you, you're trying to tell stories in different ways on different platforms, and those platforms just increase and you'll need to be on those different platforms is, you know, doesn't decree one, one doesn't go away just because another one starts.
So you've got to perpetually growing an arena of, of, of places. You need to put your content and you need to position that content slightly differently, but with the same resource. And so on a practical level, that's, that's the effect, I suppose, of all of that.
So you've got to perpetually growing an arena of, of, of places. You need to put your content and you need to position that content slightly differently, but with the same resource. And so on a practical level, that's, that's the effect, I suppose, of all of that.
15:42
Speaker 8
-
Speaker 8
And is the change in advertising, is it? Well, you can tell me, is it the volume that's, you know, you're losing the volume of advertising that's coming to you because there's so much other choice that the people who want to advertise and go to. Or is it, you know, the price that that the value that advertisers feel, you know, they want to pay less to advertise on your channels because, because they've got other places to go to as well.
Or is it a mixture of both?
Or is it a mixture of both?
15:42
Speaker 6
-
Speaker 6
It's largely choice. I mean, there's just so many other places they can go. And and those are those are there, you know, they're very attractive mass reach. I mean, the, you know, the USP of TV used to be mass reach and there was nowhere else to go. The truth is you can get mass reach from a number of other players now. And there are lots of other places to go. And even even more than that, they will give you an even more even, even richer data offer than we can necessarily give you , given the limited amounts of data.
We have some data, but we don't have vast amounts. In fact, a lot of the data we have to buy in, whereas they have it innately within their ecosystem, as it were. So it's quite a it's quite a battle. One thing I would say, and look, I mean, I mean, this is the only glass half full point I think I'd make on this is it does force you to be more efficient. So we are very efficient.
Now. We have taken a lot of cost out. And to the conversation we had earlier about three people going to an interview. We do have one person going to an interview now, and we have made the budgets for things like Zoe knows better than anyone. The budgets for things like regional news go further, because the truth is we're providing a digital news service now alongside all of the linear broadcast TV that we traditionally did.
And if we were still sending three people to each story, we would not be doing that.
We have some data, but we don't have vast amounts. In fact, a lot of the data we have to buy in, whereas they have it innately within their ecosystem, as it were. So it's quite a it's quite a battle. One thing I would say, and look, I mean, I mean, this is the only glass half full point I think I'd make on this is it does force you to be more efficient. So we are very efficient.
Now. We have taken a lot of cost out. And to the conversation we had earlier about three people going to an interview. We do have one person going to an interview now, and we have made the budgets for things like Zoe knows better than anyone. The budgets for things like regional news go further, because the truth is we're providing a digital news service now alongside all of the linear broadcast TV that we traditionally did.
And if we were still sending three people to each story, we would not be doing that.
15:44
Speaker 8
-
Speaker 8
Yeah, yeah, that is quite interesting because I've just noticed more on I'm thinking of, I think it's Sky now TV and channel four actually more, more than I to be specifically that you're watching a film film. I'm guessing it's to do with the scheduling, but you actually get quite a long gap now where it says the programme will now continue, will continue shortly, which used to be filled with adverts. So and so. I suppose my question is really is, is are there not enough people wanting to advertise because you can't fill those gaps? Or is that just.
No,
No,
15:45
Speaker 6
-
Speaker 6
it's a good point because because if you think about the amount, the number of hours of television now, I mean, pretty much you could probably watch every single drama ever released somewhere on television in Britain now, and probably every single film, more or less. That's extraordinary. And, you know, no human being is going to be able to. I mean, if you if you set off to say, I'm going to watch every single piece of content currently available on a video service in the UK, you'd probably be you would be dead, I think, before you finish the particular thing.
So so yes, there's a huge amount more supply. And yes, advertising has increased. I mean, it's expanded. The markets increased. TV share of that, by the way, has not increased. It's gone down. So yes, there's been there's more demand. There's more advertising around now. But the supply of, of, of opportunities to advertise is also massively increased.
So so yes, there's a huge amount more supply. And yes, advertising has increased. I mean, it's expanded. The markets increased. TV share of that, by the way, has not increased. It's gone down. So yes, there's been there's more demand. There's more advertising around now. But the supply of, of, of opportunities to advertise is also massively increased.
15:46
15:46
Speaker 7
-
Speaker 7
Just as an older person who likes to go back to Morse and Lewis and all of those sorts of things, you know, obviously not Welsh, but I'm sure they would be if they could it looking at the the sort of the data side of things, can you just expand for, for a non-techie person, what do you mean by data and how you're harvesting and all that sort of thing?
15:47
Speaker 6
-
Speaker 6
I mean, the truth is we don't harvest all that much data from ITV. So on ITV , we want the sign up process to be as smooth as possible. So I think we get your email address, your name and probably your address. But in order to enable us to supply the right regional news and so on, so we don't we're not collecting huge amounts of first party data. We do. We do then for advertising purposes, we sometimes match data that we buy in from an Experian or whatever to try and match those, those data sources up.
But the truth is, if you're YouTube, then you're in the whole ecosystem of Google. So they know your entire search history. They know, you know, Google map history. I mean, there is just the amount of data that they know about you. They know when you were interested in, you know, am I thinking of buying a new car or is there a life event coming up or whatever it is? And they, they can use that data on YouTube to target their advertising.
So that's formidable competition if you're ITV, because we don't harvest that sort of level of data. And one of the reasons why the sky transaction is important is that in the US, Comcast does have some quite sophisticated advertising technology. We're having to invest in that technology ourselves. In the UK, for one country, what we really need is some more sophisticated advertising technology that the cost of which is amortized across a number of markets, particularly the US, because it's the biggest market.
And so one of the attractions of this, from our point of view, is that that technology can be deployed in the UK, which which saves us, saves us money, bluntly. I mean, we've got a product called planet V, which we've invested tens of millions of pounds on, which is an automated programmatic advertising platform. So agencies can buy directly from us without necessarily even having to go through the sales team. But to do that in one country, that that was a massive undertaking with buying the intellectual property, the know how and all the rest of it.
And our competitors are all amortizing, spending billions, by the way. We're not spending billions on that at all. But then amortizing that cost across the whole world. So that was just a microcosmic example of why something like Sky makes a difference. But but also content because Sky has a lot of content and they've got a lot of sport, they've got a lot of other UK content. And there's more that can be done in terms of enhancing our channel, I think, and you need to speak to them about their specific plans.
But but it helps ultimately helps Wales. I mean, there is there is an ecosystem on ITV where you increase the number of people who watch the channel, and that will increase the number of people who then engage with what Zoe and the team are doing in in Wales.
But the truth is, if you're YouTube, then you're in the whole ecosystem of Google. So they know your entire search history. They know, you know, Google map history. I mean, there is just the amount of data that they know about you. They know when you were interested in, you know, am I thinking of buying a new car or is there a life event coming up or whatever it is? And they, they can use that data on YouTube to target their advertising.
So that's formidable competition if you're ITV, because we don't harvest that sort of level of data. And one of the reasons why the sky transaction is important is that in the US, Comcast does have some quite sophisticated advertising technology. We're having to invest in that technology ourselves. In the UK, for one country, what we really need is some more sophisticated advertising technology that the cost of which is amortized across a number of markets, particularly the US, because it's the biggest market.
And so one of the attractions of this, from our point of view, is that that technology can be deployed in the UK, which which saves us, saves us money, bluntly. I mean, we've got a product called planet V, which we've invested tens of millions of pounds on, which is an automated programmatic advertising platform. So agencies can buy directly from us without necessarily even having to go through the sales team. But to do that in one country, that that was a massive undertaking with buying the intellectual property, the know how and all the rest of it.
And our competitors are all amortizing, spending billions, by the way. We're not spending billions on that at all. But then amortizing that cost across the whole world. So that was just a microcosmic example of why something like Sky makes a difference. But but also content because Sky has a lot of content and they've got a lot of sport, they've got a lot of other UK content. And there's more that can be done in terms of enhancing our channel, I think, and you need to speak to them about their specific plans.
But but it helps ultimately helps Wales. I mean, there is there is an ecosystem on ITV where you increase the number of people who watch the channel, and that will increase the number of people who then engage with what Zoe and the team are doing in in Wales.
15:51
15:52
Speaker 5
-
Speaker 5
Well, I think it goes back to a little bit of what I said earlier in being the only commercial broadcaster. We are that alternative voice. We do reach different audiences. You know, traditionally we reach slightly socioeconomically lower audiences. We provide that different voice to people in the election. I think you could see that, you know, the BBC we're seeing us were doing very similar things, but we were doing it in different ways to different audiences.
And I think, you know, that that the importance of that plurality and the importance of those voices continuing and us being able to do that and being a significant player in that market can't be undervalued, really. We do different things. You know, the purpose of the BBC is to do those those real things that perhaps commercial broadcasters can't afford to do. But I think we provide a really important alternative voice both in Wales and across the rest of the UK.
And I think, you know, that that the importance of that plurality and the importance of those voices continuing and us being able to do that and being a significant player in that market can't be undervalued, really. We do different things. You know, the purpose of the BBC is to do those those real things that perhaps commercial broadcasters can't afford to do. But I think we provide a really important alternative voice both in Wales and across the rest of the UK.
15:54
15:54
Speaker 6
-
Speaker 6
The only thing I would say, and just to reiterate, really what I've said already, which is that the health of commercial PSB across the UK has a direct impact on what we can do in Wales. Wales is part of that overall ecology. And there's a cross-subsidy bluntly, between the money we can make as a network service and the amount of money that we can put into Wales, and I think the single most important thing for us is getting the sky deal away.
And Sky have committed to delivering all of our PSB obligations for the entire length of the current licence. I do think it's really important. I think if you look at what's happened with STV, for example, in Scotland, I think we're really clear. We we wouldn't want to go there, but it is an example of how you have to have a sustainable economic model in order to deliver a national service of scale in Wales or Scotland.
And Sky have committed to delivering all of our PSB obligations for the entire length of the current licence. I do think it's really important. I think if you look at what's happened with STV, for example, in Scotland, I think we're really clear. We we wouldn't want to go there, but it is an example of how you have to have a sustainable economic model in order to deliver a national service of scale in Wales or Scotland.
15:56
Speaker 5
-
Speaker 5
Obviously, as Magnus said, we're part of that ecosystem. So all of that is is crucial for us. But on a more national sort of local level, then I think it's just doing what you already do, which I know is sort of amplifying our content and, you know, celebrating it to, to both your constituents and to other parliamentarians and to, to make sure people realise the value of, of what ITV Wales and the other SBS bring to bring to cultural life in Wales and the creative economy in Wales as well.
15:56
Speaker 7
-
Speaker 7
Thank you very much. And this brings this session to a close. And I want to thank both of you for attending today, Zoe Thomas and Magnus Brooke and I pay special thanks to our interpreter nurse who is in the box over there. Very patient, but thank you very much to all. I'll now bring the session to a close. Order, order!
15:57
15:57