Public Service Broadcasting: Annual Report 2009

Published 21|07|09

Introduction

Ofcom has a duty to assess the designated public service broadcasters, taken together, in terms of their delivery of the public service purposes set out in the 2003 Communications Act. We have used the methodology developed in our first PSB review.

This is the third in our series of Public Service Broadcasting Annual Reports, Ofcom’s statistical evidence base for assessing the delivery of public service broadcasting (PSB). The designated PSB broadcasters are the BBC, Channel 3/ITV1, GMTV, Channel 4, Five, S4C and Teletext ^(-1-). The report is intended to provide an up-to-date evidence base of the current delivery of public service content in the UK and gives a factual account of broadcast hours, viewing figures and audience opinions of the channels over the last five years. We have also included some spend figures for the first time, to show trends in investment in public service content.

The UK media landscape has undergone huge changes since the publication of the first PSB Annual Report, brought about by increasing audience fragmentation and the significant pressure on advertising revenue in broadcasting. As a result, we commissioned our second PSB review one year earlier than the statutory requirement, with the final statement, Putting Viewers First, published in January 2009.

In Putting Viewers First we made recommendations to government and parliament for maintaining the widespread availability of public service content across a range of digital media. These included a re-balancing of public service obligations across the sector; on one hand, securing the economic future of strong institutions which have public purposes at their heart (the BBC and Channel 4); on the other, freeing up commercial networks while retaining modest public service commitments consistent with the commercial value of the licences. We also highlighted particular challenges facing commercial provision of news programming in the nations and regions, programming for older children and non-news programming in the nations.

Since then, the government has published its Digital Britain report, setting out its response to our recommendations, including pilot proposals for local news consortia to provide news in the English regions and devolved nations, as an alternative source to the BBC. The report also set out a consultation on opening up a contained, contestable element of the television licence fee for funding local news and other potential uses.

In a challenging economic environment, the 2009 PSB Annual Report shows continued declines in investment in public service content on the five main PSB channels, with first-run originated output spend down by just under 15% since 2004 and viewing down by a similar amount. Yet the evidence also shows that people value PSB content more than ever, with increasing opportunities to consume content in ways which suit them, whether via digital video recorders, the BBC iPlayer or the increasing range of on-demand services available on both TV and the internet.

With rapid changes in the nature of the way PSB is delivered, the PSB Annual Report will need to adapt its measurement methodology in the future to reflect new forms of access and consumption.

Executive Summary

Spend, output and viewing

Spend on all network programming by the five main PSB channels has decreased over the last five years, by 10%, reducing from a total of £3,110 million in 2004 to £2,799m in 2008. Within this figure, while spend on repeats and acquired programmes has increased, the amount spent on first-run originations has fallen by £339m since 2004 to £2,314m in 2008, a real-terms fall of just under 15%^(-2-).

Since 2004, total expenditure on all programmes broadcast has declined on most of the five main PSB channels, with the exception of Five, where spend increased by just under 1%. Spend on BBC One and BBC Two combined decreased by 13%, whilst spend across the commercial channels (ITV1^(-3-), Channel 4 and Five) fell by 8%.

The volume of first-run originated programmes on the five main PSB channels in 2008 was 33,177 hours a year; a slight decrease on levels seen in 2004 (by 1099 hours or 3%).

Against this background of decreasing spend and first-run originated hours of programming, average hours of viewing on the five main PSB channels fell by 15% between 2004 and 2008, at 2.3 hours a day per person in 2008. Reductions were seen for all age groups and were greatest among children and people aged 44 and under.

The wider context is that there was no decrease in the average hours of viewing to all television channels, taken together, for the average viewer from 2004 to 2008. While from 2007 to 2008, viewing of any television channel increased for all age groups, except those aged 16 to 24.

The combined viewing share of the five main PSB channels declined from 75% in 2004 to 61% in 2008. In peak time it declined by 12 percentage points, from 80% in 2004 to 68% in 2008. ITV1 had the largest drop in peak-time share, from 29% to 23%, and BBC One also had a drop of 3% over this period. Historically, ITV1 has achieved a greater peak-time share of viewing than BBC One, but in 2008 BBC One’s peak-time share was 24% while ITV1’s was 23%.

Alongside the decreases in viewing of the five main PSB channels, there has been a steady increase in average weekly reach of all of the PSB portfolio channels combined (both PSB and commercial) since 2004; from 53% in 2004 to 69% in 2008.

Output and viewing of key genres

News and Current Affairs

Expenditure on network^(-4-) News and Current Affairs programmes by the five main PSB channels showed a fall of £39m or 14%, from £289m in 2004 to £250m in 2008.

The volume of UK/national network News across the whole day fell by 7% between 2005 ^(-5-) and 2008. Peak-time News output increased in 2008 to a level closer to that seen in 2005 (901 hours in 2008 compared to 928 hours in 2005) after two years of lower output. This was largely driven by ITV1’s increased peak-time News provision with the re-introduction of News at Ten.

Viewing of UK/national News on the main five PSB channels fell by 9% between 2004 and 2008. The largest decrease was for ITV1 (down by six hours or 21%).

Nations and regions News output and viewing varies by area:

• In England, while there was a steady growth in the volume of BBC nations/regions News and Current Affairs programming between 2004 and 2008, volume on ITV remained relatively stable over the period despite falls in 2006 and 2007.
• In Scotland, STV nations/regions News and Current Affairs fell by 22% between 2004 and 2008
• In Wales, the BBC reduced its nations/regions News output by 18% between 2004 and 2008, while ITV1 output remained broadly stable.
• In Northern Ireland, the BBC increased the amount of nations/regions News and Current Affairs broadcast by 20% between 2004 and 2008, while UTV decreased output by 14%.
• Network share of viewing for Channel 3 nations/regions News decreased from 22% in 2004 to 19% in 2008. BBC nations/regions News share was down slightly, from 30% in 2004 to 28% in 2008.

Factual programming

The expenditure on network programmes ^(-6-) by the five main PSB channels has fallen less steeply for Factual programmes than for most other genres; by 4% or £17m.

There was an increase in the volume of Factual output across the five main PSB channels, and BBC Three and Four, between 2004 and 2008 – and since 2007 in particular. Increases in the last three years were driven mainly by a large rise in the volume of Other Factual programming (an increase of 52% since 2006), although both Specialist Factual and Factual Entertainment increased (by 4% and 7% respectively over this period).

Five particularly increased its Specialist Factual output from 2006 to 2008 (by 84%). This consisted mainly of repeats of natural history and other documentaries. The BBC decreased its volume of Specialist Factual by 7% over the same period.

Viewing of Specialist Factual on the PSB channels decreased by 21% between 2004 and 2008. The most marked decrease in viewing hours of Specialist Factual was for BBC One (from eight to five hours a year).

Children’s programming

UK first-run originated hours of Children’s programmes broadcast on the five main PSB channels and on CBeebies/CBBC fell by 51% between 2004 and 2008. Investment in first-run originated children’s programming by these channels fell by just over a third between 2004 and 2008, with spend by the commercial PSBs down from £42m to £11m.

There was also a reduction in the proportion of viewing by children of the Children’s genre on the five main PSB channels (32% in 2004 to 12% in 2008). Despite increased viewing on the BBC digital children’s channels (from 15% in 2004 to 24% in 2008), there was an overall decrease in the proportion of viewing on the five main PSB channels and BBC digital channels combined (47% in 2004 to 36% in 2008).

Audience impact

Despite the decline in viewing of the five main PSB channels, the proportion of the PSB audience that rated the PSB channels together highly was larger in 2008 than in at least one of the previous two years, across almost all of the research statements that reflect the purposes and characteristics of PSB.

Regular viewers gave more positive opinions about individual channels for many of the research statements in 2008, compared to either 2007 or 2006. For example, there was an increase in the proportion of regular viewers who rated channels highly for three or more of the five main channels on 11 out of 17 statements in 2008, in comparison to either 2006 or 2007

However, not all statements showed such widespread positive shifts in opinion:

• Its nations/regions News provide a wide range of good quality news about my nation/region. No channel saw an increase in ratings among regular viewers over time in any nation.
• Aside from News, it provides a range of good quality programmes about my nation. No channel saw an increase in ratings among regular viewers over time in any nation
• I trust this channel. Only BBC Two saw increases in the proportion of regular viewers who rated the channel highly on this.
• Engaging – it shows programmes I want to watch. Only Five increased the proportion of its regular viewers who rated the channel highly on this, while BBC One saw a decrease in this measure.

PSB Channel performance

BBC One retains its core strengths relating to purpose 1 and its ability to help viewers understand what’s going on in the world today and having trustworthy news programmes.

BBC Two continued to be rated highly by its regular viewers on many of the characteristics and elements of purpose 2 – stimulating knowledge and learning.

ITV1 did not show the same degree of improvement as other channels on purposes and characteristics statements between 2007 and 2008, increasing its rating only on the characteristic of quality.

Channel 4 strengthened its ratings among regular viewers on some of its key measures, including programmes with new ideas and different approaches and challenging – shows programmes that make me stop and think, and increasing viewers’ interest in particular subjects. These positive shifts brought Channel 4 up to or higher than, the other channels with strengths in these areas.

Five did not strengthen its ratings on any of the purposes and characteristics among its regular viewers between 2007 and 2008, although did experience more positive ratings on the majority of characteristics from 2006.

As BBC Three and BBC Four have become more established, regular viewers’ opinions of these channels have strengthened across almost all aspects of the PSB purposes and characteristics. On many measures in 2008, ratings of these channels among their regular viewers are at the same level, or are stronger than, ratings achieved by the five main PSB channels.

The dedicated Children’s channels, CBBC and CBeebies, received high ratings on offering a wide range of high-quality and UK-made programmes for children from the parents of children regularly watching them; 71% rated CBBC highly and 82% rated CBeebies highly on this measure in 2008.

UK television market developments

The UK television market is changing rapidly, with continuing take-up of digital television, the take-up and use of DVRs, use of video-on-demand (VoD), online availability of content and HD availability and use.

There are indications that the growth of digital TV and non-linear viewing are enhancing the viewing experience for some people. For example:

• Recent consumer research^(-7-) has examined the viewer perspective of on-demand services in their broadest sense (DVRs, iPlayer and VoD) and found that most participants expect to watch ‘better’ TV rather than more TV as on-demand services evolve.
• Ofcom commissioned research in March 2009 into non-linear TV viewing and viewing experiences^(-8-). We found that viewers of on-demand services claim that it enhances their viewing experience; 78% of users of TV on-demand services agreed that they ‘watch more programmes that I enjoy because of on-demand services through the TV’, 80% of DVR users said they ‘watch more programmes that I enjoy because of my DVR’ , and 65% of online TV content users said they ‘watch more programmes that I enjoy because of having access to TV content online’.
• BBC Pulse^(-9-) data shows that 44% of responses to programmes in 2005 were ‘a special effort to view’ but this increased to 49% in 2008.
• Ofcom research in March 2009 also found that among those with access to digital channels, two-thirds (68%) said that they ‘watch more programmes that I enjoy because of having digital channels’, and among all adults two-fifths (44%) agreed that ‘the quality of programmes on the BBC channels, ITV1, Channel 4 and Five has generally increased in the past year’.
• When people were asked to what extent they agreed or disagreed that they, ‘appreciate [the main PSB] channels and their programmes more than I did in the past’, 25% of adults agreed. Those with multichannel TV were more likely to agree with this statement than those with analogue-only television.

Footnotes:

  1.- On July 16 2009, the Daily Mail & General Trust plc announced that it plans to end the transmission of the analogue Teletext services and a number of its digital television services in January 2010.

  2.- Figures exclude nations/regions programming.

  3.-Throughout this document we refer to the Channel 3 regional licensees by the most commonly-used collective terms: ITV1, or simply ITV. However, these terns are not used within the devolved nations. Channel 3 is referred to as STV in northern and central Scotland, UTV in Northern Ireland and ITV1 Wales in Wales. Where appropriate, therefore, we refer to STV, UTV and ITV1 Wales separately.

  4.-This excludes nations/regions programming.

  5.-The data series excludes 2004 as the figures were not comparable due to changes in the allocation of programmes to the News and Current Affairs genres.

  6.-This excludes nations/regions programming.

  7.-Research carried out by Essential Research http://www.essentialresearch.co.uk/

  8.-See section 3 for more detail. Telephone omnibus carried out by GfK NOP in March 2009.

  9.-The Pulse survey is a BBC-GfK online, nationally-representative panel of over 19,000 viewers that collects responses on programmes that were viewed on the previous day.