Media Bill

Damian Collins Excerpts

2nd reading
Tuesday 21st November 2023 Commons Chamber

[Damian Collins (Folkestone and Hythe) (Con)]

A number of hon. Members have mentioned how long it has been since the last major piece of media legislation, but it is worth reflecting on that period of change and what it means. When the Communications Act 2003 was passed more than 20 years ago, Amazon was a relatively small online retailer selling music, books and video games, Netflix delivered videos and DVDs by mail order for people to watch at home, and YouTube did not exist. If we had asked someone then what a smart device was, they would probably have guessed that it was a scientific calculator. There were no smart devices, and the iPhone was still some years away from existing.

The idea that every one of us would carry in our pockets a device allowing us to watch live television whenever we like would not have been envisaged, or people would have thought that to be far off. That is significant not just because technology changes the media landscape but because it has a massive impact on viewing habits. That in many ways is the real challenge faced by the public service broadcasters today. The Bill is a hugely welcome step towards addressing some of those needs, but there will continue to be an ongoing challenge.

All Ofcom data is clear that, with the exception of the pandemic period when everyone watched a lot more television, public service broadcasting is declining. The minutes people spend each day watching public service broadcasting are declining year on year. Broadcasters face ongoing pressure not just from that audience decline but from rising costs through inflation for television production, which are running much faster than the consumer prices index. That puts an inevitable squeeze on budgets.

Public broadcasters that have the luxury of making more of their own programmes while raising money through subscriptions and other things are better placed to deal with that audience change. Nevertheless, it is there. The biggest challenge that the BBC faces is not about it not making brilliant programmes, not having fantastic writers or not nurturing brilliant talent; it is that people are voluntarily declining to pay the licence fee simply because they feel their needs in gathering news or watching fantastic programming can be met elsewhere.

The challenge that Channel 4 has faced is that, without the ability to invest in programmes from which it can make money, it relies solely on advertiser revenue, and that revenue is under challenge all the time, so it is much harder for it to be sustainable and to plan for the future. I welcome the Government’s introduction of measures in the Bill to change Channel 4’s remit. I understand the concerns raised by companies in the independent production sector, but I think they would recognise that that sector is totally different from when Channel 4 launched. At that time, a lot more BBC and ITV production was done in-house and there were no other routes to television.

Channel 4 created an opportunity for independent production companies to launch businesses, make programmes and gain an audience that otherwise would not have existed. Now, there are huge opportunities for independent producers. While Channel 4 is an important part of that ecosystem, it is by no means the only one, so the best thing we can do for the independent sector is ensure that Channel 4 is in as robust health as possible so that it can commission more, because 65% or 70% of a bigger TV company is worth a lot more than 100% of a very small one, or one that is struggling to continue to exist.

Those are the ongoing challenges that the PSBs will face, and the fight for attention will only continue. People now are more distracted not only by video-on-demand services but by video gaming and other forms of audio-visual entertainment. That is the backdrop against which the Bill is being introduced.

The question of the degree of PSB prominence on connected devices—modern televisions that are internet-connected and totally integrated with people’s on-demand viewing habits—is incredibly important. Whether that level of prominence is “significant” or “appropriate” is an important debate. Is it enough simply to have the television schedule there on the device, with that schedule the live schedule ranked in order on the electronic programming guide as we are used to seeing it? How easy is that to find? Will people be constantly shifting through menus for on-demand services, be those Netflix, Amazon, Sky programming or whatever, before they find the television guide?

We see in Ofcom’s yearly audience analysis data from its media nations report that those under the age of 40 do not really regard television as a live product any more, unless they are watching the news or live sport; it is an on-demand product. If we asked student audiences what they thought of the TV schedule, they would find the idea of going home, turning on a television, pressing the No. 3 button and watching live what had been preselected for them, in a selected order, completely anathema. Younger audiences do not expect television to be a live product. They do not expect to go to the television guide to find what they want. In fact, audience analysis shows that, increasingly, when people turn the television on, the first thing they do is turn to an on-demand service like Netflix to browse what is there—that is their primary act, rather than going to a channel.

Whether it is easy to find the schedule and see what is being shown will be key to the debate on prominence. Otherwise, the PSBs will continue to find it hard to have a share of voice and be noticed in an environment where people are increasingly distracted by what they want to see. That experience itself is fractured, as a consequence of the way that on-demand services are designed. They are tailored to the user, so everyone will see a different screen when they turn them on. When everyone turns to Netflix, they see something different. They even see different tiles advertising the same programmes, tailored based on their past viewing habits. That is great for the consumer; it makes it much easier to navigate the services and find what they are looking for, but it makes it much harder for them to be challenged and surprised.

What is the value and role of original British content, telling unique stories of people on these islands? How easy will that be to find if people do not know to look for it and have not viewed it before? Those are the sorts of questions that Ofcom will have to consider. The Bill gives Ofcom the power to issue guidance, but it is important that here in this House we are on top of what Ofcom analyses and recommends, and that we feel that whatever the final wording of the Bill, it ensures that PSBs get a fair share of voice.

[Kirsty Blackman]

I did not even think about the TV schedule as something that people look at. I never look at a TV schedule. I do not know if my Fire Stick or my PlayStation has a TV schedule. On significant prominence, I was picturing the BBC iPlayer app being at the top of the apps list. Does the hon. Gentleman agree that Ofcom should look at both those things: how it appears on the screen and where the public service broadcasters are in any live schedule?

[Damian Collins]

The hon. Lady makes an important point. It should be easier to find through app stores. Although they are not directly in scope of the legislation because they are not broadcast formats in their own right, that question should be asked—is it easy to find? It should be easy to find on a connected device when it is turned on, and it should be easy to locate the apps.

Ofcom also has to consider whether the business model that underpins connected devices is fair to public service broadcasters. There is no doubt that the business model for Amazon and Google is to try to create a connected device space where all the entertainment exists and is tailored to each person. They also want to build the ad tech into that, so that they are the principal beneficiaries of the ad revenue, by monetising the placement of that content as well and diverting it away from broadcasters who have traditionally sold audiences to make money. That is the underlying problem that public service broadcasting faces today. The sale of audiences to generate advertising revenue to invest in programmes—the model that has fuelled independent public broadcasting for 50 years—is not broken, but it does not work in the way it used to; it is much more diffuse.

The revenue challenges that come from that are extremely real. That is why, on Channel 4, although I am pleased to see the Government’s changes to the remit, we need to keep a watching brief to see whether they go far enough. We have not gone as far as Channel 4 asked to go in its counter-offer to privatisation, which was the ability to go to the markets to raise money from private investors to create a programming fund that would invest £1 billion over two years in new programming. If we simply allow Channel 4 to acquire a stake in the making of programmes that it will broadcast, which will make revenue in the future, will that be enough now to meet the challenges that it will face? Given the ongoing pressures this year on declining ad revenue for TV broadcasting, we need to make sure that that will be enough. We should not assume that the measures in the Bill, which are welcome, will be the last word on that. There may be more challenges to come.

I would like to add two further points. It is right that we try to create more parity between the regulation of on-demand online services and broadcast television. If a viewer turns on their connected TV device, as far as they are concerned Netflix is as much television as the BBC, and there should be some parity in the way the platforms are regulated, the obligations they have to their users and the notifications they give about the suitability of the content. That should apply to advertising too. Often the debate we have is around advertising that targets children, but children are not watching live television; they are watching it on demand. The danger at the moment is that we have a highly regulated live broadcast television environment, but an almost completely unregulated online one. We should be far more worried about the ad rules that apply on YouTube than those on ITV, because that is where the children are. It is vital that the work on the Government’s online advertising review is completed at pace. The project has been worked on for a number of years. There needs to be proper enforceability of the advertising codes that have stood us in good stead in the broadcast world, but do not yet work in the same way online.

Finally, on media ownership and media freedom, which the Secretary of State mentioned in her opening remarks, we should give some consideration—maybe the Bill is not the right place—to the ownership of UK news companies and news assets, particularly if they are acquired by organisations based in jurisdictions overseas where maybe the regard for press freedom is not the same as it is in the UK. The Bill does not address that concern. If we have an ongoing concern about a vibrant news media landscape, there should be some concern about the companies that own media organisations—where they are based, what their interests are and what interest they have in the way the news is reported here. We do not want to see the press regulated in any way—we want to avoid that and in many ways the measures in the Bill are a nod to that as well—but we want certainty about safeguarding media freedom in the future.

[Andy Carter]

My hon. Friend makes a very interesting point about news media. What does he think about the ownership of public service broadcasters? Should there be legislation in place to consider who is allowed to own a public service broadcaster? For example, ITV could be bought and sold tomorrow on the stock exchange to somebody in a different country who has very different values and views on what content might be put out on ITV. Should that be in scope as well?

[Damian Collins]

My hon. Friend makes a very interesting point. Whether it be ITV or a newspaper such as The Daily Telegraph, which is currently up for sale, what is the motivation of someone acquiring them? We might assume they would not seek to censor what was going on, but would they have a different view on creative content, news, the stories they want to tell and what obligations exist for them? That is not something we have had to consider before, but in a market where such media assets are attractive to global investors, we should not be unconcerned about the motivations of investors who might buy those companies.