National Assembly for Wales

Chair, thank you very much, and excuse me for speaking English, but—

We forgive you. [Laughter.] 

Thank you very much for having us here, and thank you for your contribution and, hopefully, continued contribution to the discussion about the future of public service broadcasting. Just to pick up on the point that Hywel just made, we do have a statutory responsibility as Ofcom to look at the state of public service broadcasting every five years. I think, in the past, we've done a long piece of work; it's been a few volumes that has tended to measure how PSBs are doing and what the audiences think of public service broadcasting. It tends to be quite a few volumes that generally sit on shelves gathering a bit of dust.

What we felt was that the challenge to public service broadcasting has become so acute and public service broadcasting is so important to the UK and the nations of the UK that we wanted to take a different approach this time. So, we will discharge our statutory responsibilities about the state of public service broadcasting, what it's spending, what genres it's producing, what the audience thinks of it, but at the same time, we thought it would be a good idea to actually have a wider look at the future of PSBs in the UK: what really matters to audiences, which is our primary focus, and what they deliver to audiences, but also what they uniquely deliver to the UK and to the nations as society. So, this is really about trying to look as far ahead as we can as to what matters about PSBs and PSB-type content, and to have a really wide-ranging, quite bold review of it—to look at how PSBs can survive in what has become a much more complicated and competitive environment.

I think, to some extent, the sheer budgetary power that the giants like Netflix and Amazon Prime have and the quality of the content that is being produced with these big platforms—many people say that we're now in a golden age of tv—whilst that can be seen as a threat, I think to some extent, it forces our core PSB broadcasters to also up their game. So, I think that's why we've seen the likes of BBC Wales, not just giving evidence to you, but increase its spend in certain core areas, and you can see the increase in quality of drama from some of our core PSBs as well.

Maybe to answer your first question about relative divergence in audience patterns across the UK, I think it's instructive to look at Ofcom's 'Media Nations 2019' report, which shows, for example, that broadcast viewing continues to be highest in the UK within Wales and Scotland equally. There was a 4.3 per cent decline in that last year, which was the smallest decline of the UK nations, relative to a 5.2 per cent decline overall. But the decline is stratified, if you like, so it's declining at different paces within different audience segments. Now, when you look at the 16 to 24s, within Wales, that has seen the largest decline within the last eight years—down 61 per cent since 2010 versus 49 per cent overall within the UK. That appears to be the most pronounced decline in broadcast viewership.

Okay, that's really interesting to hear that overview.

Shall I answer that one? This is not just a question for Wales—this is a UK-wide question. I think there's a range of impacts that it has on the BBC. I think, to start with, it's really worth just getting some context on—. Netflix's spend is very focused, as Hywel said, on key genres, so, high-end drama. Clearly, they put a lot of money into that. Although they spend a huge amount on content, it's a very global spend still, and their spend in the UK is still much smaller than the PSBs combined. So, they are an important player here in some genres, but they're by no means a dominant player here in some genres.

The impacts on the BBC—so, in specific areas, undoubtedly there is less studio space available for things like drama across the UK and in Wales, because, not just Netflix, but other big American companies like working in the UK. They've driven up costs in some genres. There's a shortage, particularly of skilled producers and writers and so on, who are very much in demand. So, in a way, it's a golden age for parts of the production industry—they've got a bigger market.

On the other side of the equation, not just Netflix, but other big multinational companies like HBO—American-based companies—are very much open to and are in fact enthusiastic at the moment about doing co-productions. So, many of the high-end programmes that we might see on the BBC, like His Dark Materials, which has been an amazing success story for Cardiff and for Wales and for the UK, is obviously co-funded by HBO as well as by the BBC. It probably would be impossible to make something of such high cost unless there was that joint-funding model available.

So, I think it's a mixed picture for the BBC. There are some costs that are rising; there are some opportunities there for co-production. Some colleagues and I were in the States—we go once a year to talk to the tech companies and to the big studios and so on—and I think it's fair to say there is an incredible enthusiasm amongst some of the really big companies like HBO and Warner Bros in general, Netflix and Amazon to produce in the UK, and there are some centres of excellence, and actually, Wales is clearly a centre of excellence for drama and high-end drama. So, there are some great opportunities there. And in fact, their ambition to work in the UK is often only limited by the amount of studio space available and talent available. So, they're constantly looking around to see if there are other places to work in the UK. So, there is a positive. There's definitely an enthusiasm to work here and money coming into the creative industries.

To go back to your question on the BBC, I think it's a mixed picture. So, clearly, there's competition, and it is driving the BBC to look at new innovative ways of reaching audiences. So, if young audiences are now increasingly consuming on-demand content via subscription video on demand or other players, clearly that’s what has driven the BBC and ITV to look at BritBox, that's what's driven the BBC to invest in iPlayer and in BBC Sounds, because for any organisation to survive, it needs to be smart and follow how the audiences are listening to and watching content.

Thank you.

Diolch. Is there anything you'd like to add to that?

I'd just like to add that, clearly, the BBC has an important role also in supporting the Welsh language, which is one of its responsibilities. You asked specifically about Wales—a lot of the BBC's responsibilities and public purposes clearly read across the UK.

Yes, of course.

And as Hywel says, the rolling news is probably unique here because of the relative lack of plurality of the Welsh news market, and they have the language responsibilities, clearly, as well. One of the really important things where we've said the BBC needs to do better is about representing and portraying the peoples of the United Kingdom, and also to the rest of the United Kingdom and to themselves. We know, from our research about audiences in Wales, that that's one area in particular that the audience in Wales thinks the BBC needs to do a bit better on.

Yes, and that's actually something that—. Well, looking, then, at the BBC, do you think that the current model of regulation for it is doing its job in terms of ensuring that there is enough Welsh content available for Welsh audiences?

I think it is at the moment. It might be tested if the BBC asks for some changes to its operating licence, which we'll look at in due course, if they do ask for those changes. It seems to me that the provision of Welsh language content, in terms of the overall commitments of the BBC—the audiences seem to think it's at a reasonable level at the moment, in the context of the fact that you also have the provision to S4C and programming to S4C as well. I'm pleased to hear, both from the BBC and S4C, that the relationship is pretty good between the two of them, so that's a really important part of their Welsh language provision.

I think one thing that's worth saying about the BBC in Wales is, clearly, when we drew up the operating licence, we put some conditions on the BBC for its network programming in Wales, which was not just percentage of spend but also percentage of hours. I think the early signs are that that is helping to drive an increased range of genres of types of programmes in Wales, as well as continued investment in high-end production, like drama, as well. So, we do have some tools to make a difference, but we would tend not to try and get involved in regulation where we don't see a problem, because the BBC is fairly, I would say—although, I'm sure they would say—pretty heavily regulated anyway.

Thank you. And finally from me, just looking at the licence fee model, do you think that that at the moment is fit for purpose? Do you think it's going to continue to be fit for purpose with the various ways in which things are changing? And if it should change, how do you think it should change, please?

So, I have to speak within the confines of purdah, because of the Westminster election going on, and also in the confines of what Ofcom's remit is. In the end, the licence fee is a matter for UK Government at the moment. Clearly, we've said we think there could be pressures on the future licence fee, if young audiences continue to move away from the BBC. And that is an issue for the BBC to address in terms of trying to find new ways to attract young audiences, or better ways to attract young audiences, which I know they are working quite hard on across a range of areas.

The thing I say about the licence fee is there is a licence fee settlement until 2027. So, hopefully, the question is not that imminent. But it will be something—. I do think, when you are reviewing public service broadcasting across the BBC and commercial broadcasters, you cannot shy away from funding, because you can have all the good will in the world and all the great ideas in the world, but if you can't pay for it, there's not much point in having that. So, whilst we have a narrower remit on funding, I think it's definitely worth surfacing those questions about future funding.

Great. Thank you very much. 

Diolch, Cadeirydd. Can I just look at ITV, then, which is, by a whole margin, the most vulnerable PSB, compared to the BBC and S4C, which have pretty entrenched mandates, it seems to me, and it's difficult to conceive of them not operating? But ITV now operates under a business model that was designed in the late 1950s and 1960s, and you have to be about my age—I'm in my late 50s—to remember the fierce competition for the licences that used to exist in that model, just because the advertising monopoly was so lucrative.

That was a very strong model, but that model just doesn't exist anymore. Of the 15 licences, I think 13 are with ITV—it's remarkable. Wales is the smallest licence, or one of them, and already we're obviously seeing their public broadcasting obligations being reduced, which is, obviously, a recognition of their weak business model at the moment. So, how viable is this type of approach in 2020, or as we approach 2020?

Thank you. Mr Bakhurst, do you think the model is still robust, even it's not as strong as perhaps it was previously?

Well, they're clearly under pressure in some areas, as you rightly allude to. The traditional small advertising market is changing rapidly. ITV are still a very profitable organisation at the moment and they're still producing amazing content. As Hywel says rightly, they're selling amazing content around the world through ITV Studios, so they have changed their business model.

I think they would be the first to say that, obviously, a huge percentage of advertising has moved online to Google, Facebook and so on. Combined with that and changing audience habits—recording programmes, spooling through ads and watching stuff on demand, which doesn't necessarily have ads always in it—undoubtedly, in the medium term, it's going to put pressure on their old model. But I think they have a really good leadership team—a very good chief executive, who's changing things quite rapidly. And BritBox is a good example of that. It's a challenging thing to get into, but they are trying out new technologies and new ways of catering to audiences.

But, at some point, don't they look—? Their business model operates pretty much like their digital competitors, so at that point why do they want to remain in the game of public service obligations? I suppose that's the nub of the question.

So, at the minute, there's no urgency to dramatically redesign the licences in this area, though you may think at some point, well, either continued adaptation or, at some point, even more drastic action may be required. But we're not there yet.

Well, I wouldn't describe it as a burning platform. I mean, I think we need to be—. Look, we need to be rapid as a regulator in responding to the really rapid changes in the market. We have constant conversations with ITV. You're quite right: the value of the PSB benefits they get in terms of spectrum or in terms of prominence on electronic programme guides is diminishing all the time as audiences change their habits, and we need—. When the licence does come up, of course we'll have to look at their licence obligations in the light of how valuable those PSB benefits are. And other things can happen. They're a commercial company. They may be attractive to other commercial companies at some stage. So, these are constantly things we need to consider and weigh up and I think this is going to be a part of our review of public service broadcasting, which is looking at—in the rapidly changing market with the competitive pressures, particularly on commercial PSBs; on Channel 4, as well, by the way—what is reasonable to expect them to do as part of that compact and what can they afford to do, and what makes it attractive for them still to be part of that system, if you like, or are there other ways of delivering that PSB content. 

And, on the other ways, presumably the current model in terms of being an alternative, or even a competitor in terms of news to the BBC, is very important in terms of the balance and challenge we get in news and documentaries, which is obviously, inevitably, a controversial area, potentially, if it's done properly, that that—. If it's attached to a commercial model, the alternative of the American system of actually funding a specific public sector digital service runs a great risk in not being watched very much, presumably, whereas the current model, at least, is a wide-ranging offer, covering entertainment, sport and all sorts of things. So, that type of model continues to be really quite important, doesn't it, in terms of, in any development, seeing that taken away. And that public service element given to a much narrower commercial operation is going to have difficulties. Am I right? 

Robert Andrews—[Inaudible.]

Yes. I think that whilst it would be tempting—. This may end up answering that question, but whilst it would be tempting to look at trends like the boom in SVOD services—subscription video on demand—and imagining that that will be the predominant mode of consumption, for example, it's important to look at consequences like—. Advertisers look on that trend with some degree of alarm, because, as more people rush to pay for content, they see a landscape in which the opportunity to reach potential customers through premium destinations is actually drying up. Now, whilst many advertisers love embracing digital precision targeted advertising opportunities, they're also looking at a different part of the marketing funnel, which is mass reach, and there are few places that you can reach as many people as Coronation Street on a Wednesday night that would reach a mass in the UK. And I think that means ITV continues to provide significant value to advertisers. 

I think, to come to your core point about the value of a popular alternative to the BBC, I think the UK market and the market in Wales is really well-served by having a really popular alternative to the BBC, and that's not just in news provision, it's in terms of other types of programme, whether it's soaps—which people still love, as alluded to—or whether it's Wales in the Rugby World Cup. To be able to bring these events to a big audience free at the point of viewing on air is a really important part of the PSB ecology. So, that's one thing, clearly—. We are—. As I said earlier on, we are approaching our PSB review very much from the point of, 'What is really valuable to audiences?', and, 'What is really valuable to society?' So, those are some of the essential things that we'll be looking at. And I think ITV—last night was quite a good example—does a great job of core PSB-type broadcasting. Whatever you may have thought of it, the prime ministerial debate—

We were watching the Wales game. Well, I was, anyway, sorry. [Laughter.]

Yes. You're not the first person to say that to me, funnily enough.

Can't speak for David. 

Yes, but followed by I'm a Celebrity—. They are hitting young audiences with I'm a Celebrity and they're hitting big audiences, but they're doing important programming to a UK-wide audience.

I would endorse that. I think ITV produce excellent news and political coverage, which is really important for us and for our democratic culture and health. It really is something that, if we lost, we'd realise how big a hole it left. 

You've touched slightly on the issue of prominence. Because of time, I'll try and incorporate into really just one question the areas I'm concerned with. The core importance of prominence, how—. If you could summarise what needs to be done in that area and how important it is, particularly with regard to internet access for public service broadcasters, but also, then, the specific aspect of prominence and its importance with regard to Welsh audiences—if you just put those together and just perhaps a summary around those.

Yes. So, obviously, this is something that Ofcom was asked recently to look at, and we published our report about prominence. So, just as a reminder, we looked at linear prominence on programme guides for linear channels, and that is an area where we already have a remit. So, if we come to take a decision, which we have taken, about that, which is that, in the Welsh context, S4C should remain on Channel 4 on electronic programme guides and that Channel 4 itself should be lifted up a bit on EPGs in Wales, we basically have reinforced the position of public service broadcasters on those linear programme guides.

I think possibly more complicated and as important to the public service broadcasters was looking at future prominence, which we were asked by the UK Government to look at and make recommendations. And we did make recommendations that there needs to be legislation to give Ofcom the powers to ensure that PSBs have appropriate prominence for on-demand services in particular. And, in conversations with any of the broadcasters, I think you'll find those two things are both important, but, in particular, future prominence is critically important to them, because, again, it comes back to the similar question about funding. If audiences can't find your content, there's no point making it. And, clearly, there are going to be huge commercial pressures on many user interfaces, or on many platforms, from big multinationals to buy prominent space, and it's really important for the future of public service broadcasters that they have the prominence they need to reach wider audiences. So, we've done that; we've made our recommendations. It's waiting now. We would need legislation to do it. We haven't done nothing since then; we've had many conversations with the manufacturers of smart tvs, with other platforms, with commercial broadcasters, and so on, about our prominence recommendations so that we are building on our technical knowledge of how to deliver that.

And we also say it needs to be futureproofed, because the number one step is about the on-demand players, but we're very well aware there are things like voice search, search engines and other areas of prominence, and it would be a fool who'd try and guess what the next one is. But all we know is technology's moving quickly, and, as a regulator, we would need to be able to also move quickly to ensure prominence of public service broadcasting, and that includes, obviously, S4C in Wales.

Do you see any specific differences in terms of the importance of that with regard to Welsh audiences, or is it exactly the same across the board?

It's not exactly the same, because we have S4C. You have S4C here, so it is different. We took that into account and we will take it into account looking at future prominence as well. I was talking to Owen last night, actually, from S4C. This is one of the issues. I think S4C were very happy with our recommendations about linear prominence. I think that's really important for them and certainly there are other people who wanted changes there, but we decided that wasn't the right thing to do.

So, the key issue going forward, really, is the legislative framework.

I think, for it to be an effective system, that's our recommendation. It needs to have legislative support. You're dealing with big international companies here, so, to force them to do it, and there's a lot of money at stake, so that's the tool you need.

Okay.

The issue of securing PSB app placement within smart tv platforms will be a thorny one. As Kevin alluded to, it's going to require legislation, but it's also going to require the equipment manufacturers to comply with that. Securing placement for a PSB app on a home screen is one thing, but there's a regionality consideration thereafter. So, if iPlayer is secured on the front page of a Sony device, where is the Welsh content within that? Should that be surfaced on the tv device homepage? Should that be disregarded and should it be considered only within the iPlayer environment? So, regionality needs to be a consideration within this, because that would not be analogous to the old idea of a BBC One Wales electronic programme guide placement.

Do you have a view or recommendation on that?

We haven't worked through the detail of it yet, and I'm sure the advisory committee will have a view, or it does have a view. So, we have said, for example, if ITV Player is to get prominence under this new regime, there would be public service obligations alongside it. So, much as I love Love Island and I'm A Celebrity, it can't all be about that; it has to have public service content as well to earn its place. So, I daresay language services, S4C content and so on, on the BBC iPlayer, these will be part of the discussions. We haven't reached a view on it yet.

Diolch yn fawr, Cadeirydd. Yes, we've touched on many of the issues that I'd like to ask you about, really, in terms of the rapid change in digital technology and services. So, in terms of video content, what would you say has been the impact of change on content for Welsh audiences? And how could we, as we go forward, secure that content? Are there any obvious ways or important ways that that could be achieved?

Sorry. Just to clarify. Do you mean content for Welsh audiences generally in English and Welsh or for Welsh language?

Yes.

Generally—yes. Do you want to do that?

So, this is where I slightly disagree with the advisory committee. I do think there is a role for Ofcom in guaranteeing content for audiences in the nations and, actually, we have a range of tools that we use. A lot of it is—. So, clearly, as Hywel says, there needs to be creative discretion for the broadcaster, but we do have tools about the amount of content that is produced in the nations.

We do a lot of research about what audiences feel, how they feel they are being represented or whatever. One of the biggest interventions Ofcom made—and I can't take any credit for it, because it was before my time—but we've upped it, or certainly made it clearer, is the made-outside-London guidelines, which has had a significant impact on the type and range of content that's being provided for audiences around the UK, and particularly here in Wales. I think if you talk to some of the big, really successful independent production companies here, they will say that that is one of the things that has been a catalyst for driving the creative sector here, which drives content for audiences across the UK, but also, particularly for audiences in Wales. So, I do think we have a range of tools. I don't disagree that a lot of this should be down to the creative decisions of the broadcaster, but we have tools that can form the basis for those decisions, I would say.

Sorry. I should clarify. I was referring to non-broadcast content. I thought you were alluding to content on new platforms like YouTube and so on, rather than mainstream broadcasts.

It's video content, generally.

Yes. We have, obviously, regulatory powers in relation to broadcast content, but I was thinking more of the new areas that are outside our current remit.

Sure, okay.

Robert, did you have anything to add there? I saw you indicate. We'll finish on you then.

I think the lesson of the digital era, which is at least 20 years into that now, is just the sheer abundance and plurality of content choices that people have and the sheer number of draws on media time. So, Welsh content is just one part of it. But also, broadcaster tv is just one part of it. A significant proportion of people's media time is shifting to Tik Tok or Snapchat, or environments like this.

I think there's a fundamental question about whether broadcasters should reach people where they are in the platforms they are using, or only in broadcast-like environments, videos-on-demand players. And if they should reach people where they are, what does the regulatory environment look like for that? That's just a big question, I think.

Thank you very much.

I'm going to speak in English so that my fellow evidence-giver can understand where I'm going for a moment. So, I think, in general, the patterns are very similar. I don't think there are massive differences in the general big picture. However, when you start to look in more detail, the reality in a devolved context, I think, means that there are certain aspects that are more prominent and have greater significance in terms of those trends in Wales.

I think issues around availability of trustworthy news is something that clearly all of us should be deeply concerned about. I think that access to content that reflects the lives of people in Wales is something that is part of a bigger debate around Welsh civil society and the development and sustainment, as a public sphere, I suppose. And so those trends, I think, are important. And I think, also, the challenges in particular for S4C as a much smaller public service broadcaster that has a hugely important role in terms of maintaining the Welsh language but also the normalisation of the language within a digital context is something that obviously is really important and is not being challenged through the delivery of Netflix, for example. S4C is in a unique position in that way. So, it's very different from the situation in England or the English regions. So, in general, that would be, I suppose, some of the headlines.

I would agree completely with Ruth. I think the 'Media Nations 2019' report was a really interesting insight into some of the trends within Wales. Certainly, in terms of value, Welsh audiences still value PSB very much, and the audience share for PSB channels is still over half—53 per cent, I think. There are still high levels of consumption of linear tv, and I think often in the current context, we hear a lot of rhetoric around change and, actually, while there are significant changes, particularly in terms of who's consuming content and where they're moving and things like that, there are also really important moments of continuity. And I think, particularly around the value of PSB for Welsh audiences and around their linear viewing, and I think that, then, raises very specific issues for the providers within Wales around providing both linear content, but also then the view-on-demand content, and I think that there will be very specific capacity issues that that raises for public service broadcasters that we might want to talk about.

But I think one of the things that Ruth and I often talk about in our research is around the different myths around digital and this idea that everything is changing—the myth of digital but also the myth of choice. I think, particularly in Wales, I think there's an interesting dynamic around this idea of choice. Yes, we have lots and lots of tv drama. I could spend all day, every day watching new, high-quality tv drama, and I can watch it across a lot of different services, but, actually, if you look at other genres, for instance, one of the other things that I look at is arts content, there's less choice—less choice of UK, original content. So, there are areas of abundance and there are areas where I think that we're having restrictions, but often they get lost in the mix.

And the second thing I would say about choice is that to have this entirety—. For a Welsh audience to have the entirety of choices available, you have to have very deep pockets. You have to pay for lots and lots of different services, and I think, Bethan, talking to you, you were asking about how things have changed. I think that's been one of the things, the fragmentation of the services and the fact that we're having to pay across lots of different services.

Sorry. I'm just conscious. I wanted to make sure that we communicate well on this. I think there are lots of new entrants. That requires quite a lot of agility amongst consumers, because, actually, you're talking about a more and more rich and diverse, but also highly competitive, environment. That requires consumers then to have a great deal of their own consumer or media literacy to navigate some of that. I think that's something that we need to think about, not only in terms of the generation that we hear, time and again, being talked about, that's the 16 to 24-year-olds, but the entire rest of the population where we also know that some of the issues around media literacy pertain quite seriously to older consumers, who I think absolutely deserve their prominence and their service as well.

Is it—

'Cat-ri-na'.

Sorry. I know it's spelt that way, with 'Catriona' in Scotland, but I know one person who still pronounces it 'Cat-ri-ona'. So, sorry about that. It wasn't me being ignorant, I promise.

In terms of what do I see the impact of drama, BBC drama in Wales—

I suppose this plurality of choice, how do you see the effect of that specifically affecting the BBC in ways that it might not affect other broadcasters? So, in a previous evidence session—I don't want to guide your answer in any way—they had suggested, because of something that Ruth had been talking about earlier, the fact that there isn't as much—. The media landscape in Wales is different from the UK—

It has very specific dynamics, particularly around—I think the key thing for me, and this wouldn't be my area of expertise—but certainly around journalism. I think that there's a provision of journalism. I know the committee have spoken to this previously about some of the capacity issues within journalism. I think, for me, the role of the BBC and the role of the public broadcasters, ITV—. If you look at some of the statistics around where people get their news, particularly young people, ITV is still hugely prominent and hugely important. So, for me, the role of the BBC hasn't changed, per se, but is perhaps more pronounced in certain areas, and I think news is one.

And then, obviously, in terms of the provision of stories, and stories maybe in terms of factual stories, but also fictional stories for and about Wales. In preparation for today, I had a look online to see Netflix and see, if you search for Wales on Netflix, what comes up. The first thing to say is that, actually, if you look at the top-10 things on Netflix, you're only getting two that are UK based, so The Crown and Top Boy are there. When you search specifically for Wales, it keeps sending you to whales, as in the mammal, not the place. [Laughter.] Where the content is on there is Hinterland, which, obviously, is PSB, and then The Crown, which refers to the Prince of Wales, and then the other one is a documentary about castles in Wales, but, again, commissioned initially by the PSBs.

So, I think, for me, the role of the PSBs hasn't changed per se, but I think has become much more pronounced within this. I think that the delivery of a range of genres—drama, arts, current affairs, all those—and their ability to speak for and about Wales is becoming more and more important, and I think speaks to the value that PSB has in Wales.

I think I would also say that it presents new opportunities that the independent sector has managed to respond to. I think the example of Hinterland/Y Gwyll is a really good example of that. One of the things that Caitriona and I, when we've been talking about the myths, and I'm going to be shameless here, but seeing as we've written a book and it has some of this data in it, this is the book, about producing drama content. There's an awful lot of talk about the abundance of drama, and SVODs like Netflix gives that impression, and it is true, there is a huge amount, and that is a huge opportunity for those independent production companies that specialise in drama production, but the thing is, an awful lot of the indie sector in Wales does not specialise in drama; it specialises in factual. I think that we see this over a period of time.

In the 1990s as academics, constantly what we were talking about was factual, not drama. It was really not the genre. So genres have different moments, and they fit into different business models. I think it's worth remembering in the context of all of this that drama is the genre that has seen the greatest reduction in terms of first-run originations in terms of hours. So, yes, there's a world of abundance, but actually if you look at what's being made here in the UK, first-run originations in drama have seen a cut, and there's a range of reasons for that, not least of which is that drama is expensive and audience tastes have developed to have high-budget, high-end, costly drama, and Netflix has very, very deep global pockets. They are difficult expectations then. There are different ways of having to manage the creative task, I think, of producing high-quality drama when the scale is massively, massively different—what S4C's entire annual budget is compared to one series of high-end drama tv.

So I think it has a huge impact in terms of what audiences see. It has an impact as well—and I think this is something that's really important about the purpose of public service broadcasting—on the wider supply chain and the creative economy. But it also has an impact, for both of us as teachers, in terms of where our students go on to work, and the job opportunities in this sector. PSBs are still absolutely the cornerstone through their commissioning of what the workforce gets to work on.

And in terms of training and development, in terms of the nurturing of writers, as part of the bigger ecology, it's not simply the BBC or the public broadcasters; it's how they've partnered with other organisations and supported—. At the end of the day the PSBs are the biggest buyers of content in the UK, and I don't see that changing anytime soon.

Thank you. And in terms of—again, this is something that you've already touched on quite a bit—the role of the BBC as the PSB, what you were saying about the fact that Welsh content, the stories that people see and hear, not just factual, but also fictional, and the portrayal of those, it was interesting, Caitriona, that you're talking about the things searching for 'Wales' on Netflix—. Okay, this isn't true about Hinterland/Y Gwyll, but in terms of The Crown and castles, that's a very specific portrayal that's been put out to the world, then, on Netflix of Wales—very specific. In terms of the portrayal of Wales to people in Wales on the BBC, how do you see that that is important, and do you think that the way that the BBC is operating at the moment in terms of the way that it's regulated, do you think that that is—? Do you think that it's living up to the obvious challenges that it faces?

It's one of the biggest risks, I think, for public service broadcasters, because in a sense it's wider legitimacy. And I suppose this speaks to the core public service broadcasting purpose around accountability—and I mean accountability, not regulation—is that it needs to be serving the needs of people in Wales, and I think there are areas of real concern, but also areas of strength. So, some of the areas of strength I would see are the development of co-production and the relationship with S4C that has led to some of those dramas—Craith and so on. On the other hand, I think that some of the data that has come out both from Ofcom's review of BBC News and also the 'Media Nations 2019' report gives cause for concern in terms of what audiences seem to be thinking about regional news supply. So I think there are areas of strength and weakness there. I think the actual specific regulatory model is still in some ways quite new in terms of Ofcom, and I think the other thing is, whilst the BBC can announce £8.5 million coming through, television is a slow development chain, especially in certain genres, so it can take a long time from funding being released to actually what we start to see on screen. So, I don't think that there's anything in terms of the regulatory model that I would immediately stress, but I think we have to watch that, and I think for the broadcasters, that's one of their massive challenges. In the news review, I was really struck by the qualitative focus group research, where they were basically talking about, 'I don't hear voices like mine, I don't see people like me', and that's really dangerous for any organisation, I think, because public service broadcasting's legitimacy lies in serving the public.

And I think that will be served through three things. I think it will be served through, obviously, the funding and the spend. I think it'll be informed through the kind of decision making, and I think we're seeing improvements in terms of the commissioning, and I think that that as a relationship is more and more important, not just here on the BBC but also, for instance, with Channel 4 and their out-of-London commissioning. I think the relationship between the nations and the commissioners will become incredibly important. And then I think there's a cultural change about the responsibility of the BBC to the people of Wales. 

So, I think, for me, to address the issues that Ruth has raised, we need all three of those, and I think the dial is moving, and again her point about this isn't about necessarily regulation, but perhaps more accountability. I think that's the space that we need to think about.

Thank you. The final area that I had to ask you about was the licence fee model. Is there something that you would—? Do you think that the model that we have at the moment is fit for purpose? If you think it should change, how do you think it should change?

I don't think anyone would start—. If we were all starting from today, would a licence fee model be where we would begin? No. There are reasons why, faced with a range of different options, including a subscription model, I think the licence fee still has a purchase, and I think it goes to the absolute necessity of the BBC having independence. Because, in actual fact—and I think it's particularly the case with news, but not exclusively so—if public service broadcasters lose that, then they absolutely lose their legitimacy. I know that the House of Lords review recently proposed an independent model around a funding commission. It's a bit concerning that S4C's place is not mentioned in that, so I think that's something where representation—particularly if this does gain any traction in terms of policy making—really needs to be present, particularly because it's only a few years now before we're in a position where S4C is going to have to be entirely reliant on the licence fee. So, I think that needs to be very clear in terms of if that was a model, and if that was an organisation or a commission that was set up, that it would think very carefully about how it would agree the funding mechanism for S4C within that.

Yes, I would agree. I think the House of Lords report has been a really interesting and important intervention in the legitimacy of the licence fee, and I think their support for the licence fee, although a change to the process on how it's negotiated, I think is warranted. Research that I've used or I've thought about is from the European Broadcasting Union, so they're the trade union or the association of publicly funded broadcasters across Europe. And they recently looked at licence fees, and more than half of EU nations still have a licence fee. There have been some interesting shifts away from the licence fee. So, for instance, in Finland and Sweden they've moved to income-based funding. In Denmark and Iceland, they've moved to public state funding. I don't think that either of those two models would necessarily transplant neatly into the UK situation, so I would be reluctant to advocate for that. 

I think the most interesting thing in the report is that the level of the licence fee directly correlated to the market share of the public broadcaster, that having a strong and stable licence fee meant a public broadcaster with a significant market share, and that was their conclusion—that licence fees, market share and stability all came together in that space. So, I think, for me, that internationally comparative research also speaks to the value of licence fees, and I think that there have been a number of different models suggested as an alternative. I'm not convinced, personally, and the research that I've seen doesn't convince me either.

Diolch yn fawr, Cadeirydd. Continuing that last point, really, the business model and funding model for ITV was developed in the late 1950s/1960s. There was intense competition—and anyone my age will remember this—for the licences in each round they came. And, certainly, by the 1970s and 1980s, the amount of advertising revenue that was generated was 'monopolyesque', wasn't it, in terms of its extent. Now, all of that doesn't pertain any more. Is the current model sustainable in the medium and long term, or is it going to have to be radically reviewed?

I would say we should begin the conversation about ITV with two points in mind. One, I think, is the fact that they still play a hugely important part in people's viewing in Wales, and in the rest of the UK. And, in Wales, going back to that point around plurality, particularly in news provision, they are hugely, hugely important. I think they are also quite interesting in some of the innovation that they're undertaking, particularly aimed at younger people and online content. So, that would be a first thing.

The second is to remember that, as a commercial organisation, it remains very profitable and it has responded to the realities and the shift that you were outlining in a range of ways, not least by thinking about its production arm through ITV Studios. So, I think, as a commercial organisation, it's very aware of that. I think it still has considerable purchase. There are trends here in terms of advertising, yes, but television advertising is still a big business, and is one of the most effective ways of reaching a mass audience.

So, I think there's a slight danger of sort of suggesting—almost as though media is a glass, and, eventually, if we carry on pouring the water in, we'll get to excess and it'll spill over. Actually, media is incredibly rich and we can consume a great deal of it. There's space for an awful lot of content in there, and an awful lot of different types of advertising. I think there might be a question in due course about the regulation of advertising and whether advertising on broadcast television and advertising online are facing similar regulatory regimes. But that's not something—obviously, I'm not an expert in advertising.

So, I think that it's fair to say that the value of the licence is not static and is changing, but I would say there's still value in that licence, and it's also very good to see ITV Wales continuing to operate with an ethos of public service broadcasting.

And would that include the Welsh licence, for instance, or is ITV hugely commercially viable because of other sectors, really, or because of the other 13 licences? And some of those are obviously in highly lucrative areas—south-east England, London, et cetera.

Yes, I suppose that—what I would say is that we shouldn't forget that ITV's presence is not just in terms of as a broadcaster here, but also through companies like Boom and the production arm that it has here in Wales. 

If these licences are still so valuable, why is there no competition for them anymore?

I think it would be very difficult to become a new entrant, at this point, into that market. So, if you're going to be a new entrant, you're looking to where the future new spaces are. It's much easier to enter into a space that is not already very well controlled. ITV has such an enormous history. The very fact that you refer back to your own memories, and I think many of us do—whether you grew up in a BBC or an ITV household, for example, still has purchase. It's still one of the things that came through in the review of BBC news. 'Why do you watch BBC?' 'Because we grew up in a BBC news household.' It doesn't sound very digital, does it? But it's still driving people's behaviours. So, there's a kind of brand recognition, there's an occupation of the space, that I think is really important. 

And if all new licences in England and Wales are held by one company—ITV—should we move away from the fiction of regional licences and just say they're a national provider and it would be better to see them as such and to regulate and impose public sector broadcasting obligations on them that way?

I wouldn't move in that direction. I think the very fact of the history of ITV as regional, as having a distinct connection to the regions in which it was operating, actually is part of where its value lies, and goes back to that question of legitimacy, actually, and where some of its best content, I think, can come from, and how it can serve the public, and why the public in Wales are watching particularly its news provision. So, I wouldn't say that, prima facie, there's a reason for doing that.

I also think, in the current digital landscape, scale is a really important feature, and I think breaking up the licences would work against that. So, I think that there is an economic rationale to keep that together. And I think if you're going to have broadcasters that compete with the likes of Netflix and Amazon—who, as we said earlier, have massively inflated budgets compared to what we have here in the UK, of any of the broadcasters—I think scale and brand recognition are still really important in this digital landscape. I think that ITV, while they might have been maybe slow around their digital provision—so, for instance, their ITV Hub and things like that—the direction of traffic, I think, is good, and I think, particularly given how they've diversified into production as well, that they are in a better place to respond to that.

I think, if we were looking anywhere as to where ITV Wales could have a stronger route, it would be, I think, in terms of thinking about how its content appears on ITV Hub. So, going back to the point that you made about when you're searching for Netflix—. This is a point about prominence. Actually, the ease of access and getting ITV Wales's content onto the Hub, I think, is quite an important issue, and it would be good to see movement on that, I think.

So, it seems to me that you think it's fairly robust at the moment, that there won't be factors pushing ITV away from remaining a linear broadcaster with public sector broadcasting responsibilities, instead of flipping over and becoming like their digital rivals and riding that market.

I don't know that they would become their digital rivals. I think that the possibility of their becoming a different kind of commercial entity and whether they can still see value in the longer term to the licence that matches the degree of ask in terms of what exactly they're being asked to produce in terms of news and current affairs, for example—. So, I think it's a question of degree, not an absolute.

So, the PSB bit is—at the minute, would you regard that as optimum, or—? If they're hugely commercially successful, are we not demanding enough? Should we be more demanding? Where is the optimum line there?

I think there's a real difficulty in terms of if we think that—not unproblematically, but one of the ways of defining and thinking about public service broadcasting is in terms of market failure. I think that the market for Welsh-only content is limited, and therefore the licence and that regulatory regime is really important in securing provision. I think that that is a different issue, then, if we think about how ITV has responded to the push to locate production across the UK, and I think, in comparison with the BBC, what you do see with ITV is it has very distinct centres of production, which are not here in Wales. So, because they're not operating under the same quota system, the sort of feed-through in terms of production is very, very different in terms of what we get on screen.

Would that be a way you'd perhaps see of altering the Welsh licence in the future, to have an element there that does pull in more production?

I don't know whether I'd say it with such certainty, but I think that thinking about how ITV might engage with the wider push towards regions and nations production would be useful. I think the success of those companies in Wales, in Boom, that do that already would be a good platform from which to begin that conversation.

Thank you.

Diolch, Cadeirydd. I just wanted to touch base on funding models if I could, particularly in terms of developing a sustainable funding model for S4C. Obviously, at one point, there was direct funding from UK Government. Now it's a mixture of mainly BBC Trust funding through the licence fee and then there's a small grant, isn't there, from DCMS.

Three countries that I'd like to just focus on, and I wonder if you've got any comment on them: the first one is the BBC Alba model in Scotland, how does that work as a BBC channel; secondly, the Teilifís na Gaeilge Ceathair, the TG4 broadcasting in Ireland, how that's working, and how that is funded and the model there. And, thirdly, you mentioned Iceland earlier on, a country with 330,000 Icelandic speakers, under huge pressure from English as well in the country—a number of channels are available, but you mentioned that they'd moved to a PBS model, effectively.

To state funding.

I beg your pardon—to state funding. But there are some subscription channels in Iceland and, clearly, there's state funding for what looked to me as if there are 12 channels in total on tv in Iceland. How does that model work? The reason I'm asking is: are there any lessons we could learn from those models as far as S4C is concerned? Can you give us some idea—briefly—how each model works?

I can speak to the TG4 model. As you can hear, I am a consumer of TG4. So, TG4, for those who don't know, is the Irish language broadcaster of Ireland. So, in Ireland, there are two public broadcasters—RTÉ and TG4—and TG4, it's about, I think, 20 years old now. It transmits in the Irish language, but also has some content in English or dubs as well and subtitles into Irish.

In terms of how it's funded, I believe it's part of—. There's advertising on it. So, it's a dual model of both the licence fee and advertising. I would say that it has had a rough couple of years, in terms of the advertising industry. Obviously, in Ireland, we've had a much deeper economic recession than you've had in the UK, so that has, obviously, had an impact on the levels of advertising. That's impacted both RTÉ and TG4, and there have been calls over the last couple of years for the levels of funding for both RTÉ and TG4 to be changed.

I think that one of the interesting developments with TG4, where, in particular, maybe the things that we can learn are that S4C—. And I know that both are in conversation with each other—Ruth and I were involved in a project in which S4C and TG4 were partners with us. They've done some interesting things around sport and picking up rights in some minority sports like, for instance, camogie, the Irish sport. They've also made a decision not to geoblock their content internationally, looking at the demand from people like me, who don't live in Ireland but who might want to get that content. There are limited secondary markets for Irish language content, and so they've decided not to geoblock their content, so most content—not all content—depending on the licence, is freely available.

So, I think that there are some interesting examples in Ireland, but I wouldn't say that TG4 is—. I think that it is very robust and I think it has been creatively very good, but I think that they would recognise that there are funding challenges there as well.

So, what I would add to that, I suppose, is a couple of things: it's (1) just to remember that the scale of S4C is still greater than many of the minority language broadcasters, if we're looking at the likes of TG4. One of the things, when we were putting some assessment together in terms of funding models when the S4C remit was up for renegotiation and being looked at, was just how diverse the different models are for smaller broadcasters, in particular what I would group together, although they are very different, as what you might think of as content funds, as opposed to the funding of a broadcaster that then commissions content.

That was one of the things that really, really struck us, which, therefore, means that you can often have some incredibly complex relationships between different organisations that are being given what we might think of as more like arts funding. To some extent, I think you can still see that with BBC Alba, for example, and you can certainly see that in some of the other minority language broadcasters in western Europe, where other forms of screen agencies or arts bodies or language boards are actually becoming a kind of joint funder of content. 

I think that that's more understandable in a context where we're talking about minority languages that are not as widely spoken as Welsh, where there isn't a broadcaster that has the history, the legacy and the developed supply chain that S4C does have here in Wales.

Could I—? Thanks. Go raibh maith agat—thanks for that. As far as Iceland is concerned, how does the model work there? Clearly, with such a small population, how do the economics work, with so many channels? What's the funding model they have there? They've been quite successful in terms of selling some of their programming abroad, but is it just straight state funding and is that true for all of the free-to-air channels, do you know?

I don't know if it's true for all free-to-air channels, but I think a lot of this comes down to—. We shouldn't forget that the political ethos that underpins state funding in many of the Nordic countries reflects the different political culture that they're operating in and the fact that the Nordic countries actually have a very long-established model of co-production that is far in excess of anything that we see here in the UK. And it's at a very early co-development, for example. So, when we see Icelandic content, there is often a legacy relationship with the Danish, the Norwegian and the Swedish public service broadcasters as well.

And that being accepted, it can be very Icelandic content but might have co-funding from the Danes and things like that. So, I think, that is, in terms of the kind of content they have and the success of the content, I think those historic co-production agreements, I think, have been really, really successful. 

And the funding model—. Is it simply a funding model or—? As far as state funding is concerned, it's a straight funding model from taxation, is it?

I believe so.

I believe so. I'm happy to share the report from the—

Yes, it would be interesting, just to give us an idea. I mean, BBC Alba, I think, is just a straightforward BBC channel. 

Yes.

Okay. It would be quite interesting for me just to see the comparison.

Yes, we can share that.

I would say that in relation both to Denmark and Iceland that moved to state funding, there were criticisms. It wasn't something that was accepted wholly. There was a lot of concern within the sector about impartiality and about sustainability and things like that. So, even though we often look to the Nordic countries as, kind of, a model for best practice in relation to content, for instance, around the success of Nordic Noir, they, too, have their own concerns and their own concerns around sustainability in particular.

I see one channel's owned by the Government of Iceland, but that's Alþingi, which means it's the parliamentary channel. So, I doubt very much whether it attracts a huge amount of viewers, but there we are. Diolch, Gadeirydd. Thank you.

That's not good. That's not a model—

They've based some of the dramas on that, but I'm not sure—. [Laughter.] Mick Antoniw.

I'll just put together a few points with regard to the issue of prominence that we've been discussing and, really, what your take is on the challenges. Ofcom earlier, of course, were talking about the need for new legislation in this particular area, particularly with regard to internet accessibility and so on in terms of that, and, again, a particular aspect being the, I suppose, particular circumstances with regard to Wales. So, really, just what your views are on that, its importance, any views you have as to what could and should be done, your views on regulation, and any particular expertise you have on this issue.

I think prominence is absolutely going to become more of an issue, not less. In this era of digital abundance, actually, the ability to find content that speaks to both the actual equipment, devices, so we're talking about manufacturers here—it's talking about the capacity of consumers or viewers to have the wider literacy to be able to navigate that, and how that may or may not be made as easy as possible for them, as well as the place of regulators in all of this.

I think the consumer and the media literacy view is the one that is most often dropped off in this debate, but, again, the opportunities that digital affords also demands more from people who are not necessarily well served and being supported in being able to navigate that landscape. I think that we're in a point now where we can still see that linear television is still hugely popular. We mustn't lose sight of that. And so, things like the EPG do continue to have significance and prominence there matters. And I'm particularly conscious for S4C that that is particularly important.

At the same time, we have to be thinking about how content in catch-up services is made prominent, for example. So, in terms of how hard it is sometimes to actually find content and how much you have to navigate, we shouldn't forget that the landing page of the iPlayer is as significant a guide to where people will go as when you put your EPG up. So, thinking about the architecture of landing pages and what's put on there, and the extent to which moves towards personalisation of content can help with that, potentially, but also the technical ability and the research and development behind that, especially for smaller broadcasters like S4C, is quite a big challenge, and, in turn, where their data analytics come from in terms of being able to think what should be pushed towards viewers, particularly those—I'm really conscious of S4C—outside of Wales—. So, I think that there needs to be a recognition that prominence is going to mean different things and it will require different levers from the regulator, but prominence as a value is absolutely key for PSB content.

And I think, within the PSB spaces, if you think about what happens when you go on your homepage of iPlayer, the programmes that come up are either new or they're popular. So, how do we create prominence within public service content, so certain content around—I think we talked about it earlier—Welsh castles or whatever can find its way on? I think that we'll be looking more towards the prominence of PSB content, and I think that there's a role for the PSBs to think about the public service algorithm. How do we offer a distinct form of algorithm that as well as offering the new and the popular, also offers that wide range and brings some of the principles of public service broadcasting into that new interface?

The other thing I would just add in terms of prominence is linear tv is incredibly important and the remote control as a device is incredibly important. I have a tv that's got a Netflix button on it, and that bypasses a lot of the traditional way in which people get to content. But what about when the remote control is no longer the main device that you use to get to content? So, what about when you talk to Alexa or Siri and ask them to put on iPlayer or put on Doctor Who or whatever content it is? I think within that space—this is very much an English language space, to be perfectly honest. And so, in a voice-search environment, where does the Welsh language—? What are some of the opportunities for the Welsh language and what are some of the technical and cultural challenges for the Welsh language in operating within that? And I think that's where interventions will be really important, which will be partly driven by the public service broadcasters, but also by policy makers like yourselves as well.

So, legislation, essentially.

I think so.

Yes, and legislation with the recognition that this will change and evolve very rapidly. So, this isn't something to do as a one-off, this will be something that will constantly need to be thought about. Particularly because what we're dealing with here are global players in terms of manufacturers and service providers.

And thinking about that now, if we put in place the infrastructure to allow that—. If you think about how your sat nav pronounces Welsh names—things like that. How are you going to find that content in Welsh language? So, it's beginning to think about that now. Obviously, the prominence debate at the moment is very much around the EPG, and I think that's incredibly important for sustainability now, but it's also futureproofing some of the discussions around prominence.

My Alexa has specific difficulty with Tonyrefail, I can tell you. [Laughter.]

Sorry, we don't have much time left. John Griffiths—just to end. 

Diolch yn fawr, Cadeirydd. In terms of video content, obviously we've seen quite some growth—there's a lot of choice now for people. What has been the impact of that in terms of specific content for Welsh audiences? How might we secure that content as we move forward?

I think that one of the things that we need to think about there is in terms of the opportunities that might exist for independent production companies to be involved in delivering content for the likes of Netflix, but also to think about where other opportunities are afforded. So, I know that the House of Lords report, for example, pointed to Sex Education as an example, but that's an interesting example because it doesn't reflect Wales. There is no clear cultural representational value to that programme. However, it did give us an opportunity for some of the young people, who mostly come from the south Wales Valleys, to us as an institution—to give them the opportunity, before they'd even graduated, to work on a Netflix production, which in terms of their CVs is really important.

So, I would say that there are opportunities that the SVODs afford, not only cultural but economic in terms of the Welsh workforce. And so there are reasons why we want to engage positively there. But I would also say that there's a longer term problem because of the business model that Netflix has. And in terms of long-term revenue streams of independent production companies, there's a real problem.

Following on from Ruth's point, I think there are amazing opportunities to work with the SVODs, with the likes of Netflix, and obviously Sex Education has been an interesting example off that. But there are risks, I think, for production companies. Much of the content from Netflix is very big budget, and so most independent production companies in Wales probably wouldn't be operating on that scale. If you do operate on that scale, for me, I suppose there are three different kind of risks associated with working with the SVODs.

The first one is the rights, about how they buy the rights and how they buy the rights internationally. So, if you do find yourself having a success, you're not able to leverage that value across multiple markets. The second one is, from what I know, and maybe the committee might ask some of our colleagues later on from the independent sector—but from my knowledge, the independent sector rarely gets any information about how content has performed. And that's a really important resource in terms of being able to determine market value. If you don't know how well your content did or what the audience was for it, or anything like that, how do you grow, how do you learn?

And then the second one, or the third one, then, what the Lords started pointing to is an overheating—that there's an inflation of the costs and demands on talent. The thing about that third one, though, is we can do something about that in terms of training and development, as we've said. So, I think there are risks with independent production companies working with the SVODs and I think that there are certain ways that we can mitigate some of those risks, but a lot of them are just because they aren't accountable in the way that public service broadcasters are, and we talked about that at the beginning.

Okay. Diolch yn fawr.

A tiny question, just on the content thing: is that because they would know about the content if they were recommissioned—that would be a simple way of saying, 'You've been successful'? But when they haven't—they're not told in terms of viewing figures, or how do they not know about the content, sorry, because I just was a bit confused by that?

They're rarely told about how it's performed in terms of the viewing—. Netflix doesn't make—[Inaudible.]—Netflix, as far as I know. So, for terrestrial broadcasters, you obviously have the Broadcasters' Audience Research Board, and BARB is an incredible resource in terms of giving the market value of your content. 'You did really well, you were top-rated in the UK.' But for the SVODs, there is no obligation on them to share that. They may share that in the kind of, 'We want more of this, because this was well—.' But it isn't part of the landscape of that, so it's difficult in terms of how a production company—. Maybe this is a question for—I know there are some independent production companies coming in, and my understanding is that that feedback loop doesn't happen with the SVODs in the way that it does with the PSBs—

And that doesn't help them when they want to look at new ideas and new commissions, because if they're not told how well that did, they might say, 'Well, we'll do something similar', but that wasn't actually what might be useful for them to do.

I think the issue here is there's an awful lot, when it comes to Netflix, that we don't know, because they're not required to tell as, and that's the bigger regulatory challenge and that's a challenge for the companies who work with them, but it's a challenge for any of us as analysts who want to actually know what is happening.

For instance, we don't know how often people are accessing Hinterland or any of that kind of content, so we don't know how popular it is and, therefore, how widely the Welsh content is being seen.

Okay, that's really interesting. We'll have to probe further into that.

One particular area that I've been involved with for many years is the scrutiny of you guys, political journalism—well, I call it 'democratic deficit'. And I think Wales is not unique—pretty unique—in the UK, for the change in the digital consumption and the way that people engage with politics. I think Wales has got a market failure in its journalism, and I've noticed it over 35 years. I've been doing this for a long time and have seen massive changes in the coverage of politics in Wales and journalism, and there's that correlation between the increase in powers and the decrease in scrutiny.

I did a survey for the Wales Report about five years ago, it was just an ad hoc survey, so I wouldn't put too much to it, but we checked how many professional journalists that were working compared to paid PR consultants. And in the public sector it was 4:1, four on the side of the paid PR and a quarter of journalists scrutinising. I think, seeing the Brexit that I was involved with, it was one of the most disturbing campaigns I've been involved with in terms of information and the way that the digital media now—. Last night, the Conservatives doing the fact checker thing, for which they've been rapped on the knuckles, during the debate. Who are the trusted suppliers outside the public service broadcasters? For me, I was at the BBC for many years, so I defend the BBC and S4C. But, what will the market do in Wales when we have a pretty weak journalistic sector, I have to say?

When I started in journalism in Wales 35 years ago, you went to a press conference with you guys and there would be 20 journalists, national newspaper correspondents. Now, you know better than me, you're lucky to get a handful of journalists. So, how, in this mad world of content, digital content, fragmented media, information—? I think we can have information overload and understanding underload. We get a lot of information, it's coming at us from all directions. Who are the mediators in Wales? Who are the scrutinisers? Who's making sense of it? 

I think Brexit—. This election, I think, is fascinating. I won't go on and on. But, you look at the big debate about the NHS, how many of our electorate understand it's not the responsibility of Westminster? In the most recent poll I saw, just under 50 per cent of people knew the NHS was run by the Senedd. So, it's a massive battle. It's a complicated devolution settlement, and to bring the digital in, we've got this mass information, a lot of it I wouldn't trust, but how do we trust it? And that's where, for me, it's public service broadcasters in that sphere of democracy, and not just news provision. I've always worked in current affairs and I think there is a difference between giving people information and interpreting, scrutinising, examining that information in an unbiased, in the broadest sense, way. And I think that's the real challenge for the consumption of media in that sphere for me, and something that does worry me a lot having been involved with it for a number of years.

I would say that you have fewer, bigger things, and in this completely noisy, fragmented marketplace, which is changing so much and people watch so many different things—those big moments, those expensive moments, the Netflix, the BBC, His Dark Materials, et cetera, that you look at—you have to have something big to shout through. And I think that it is difficult for companies to grow in Wales, because, if you're investing that amount of money, you usually go to your known suppliers, because, as a broadcaster—£20 million, £30 million, you've got to trust the talent, et cetera. So, it's interesting to see Bad Wolf, and that's trusted talent that built that company—Jane Tranter, et cetera—and they went with the talent that was known. So, I think it is difficult for companies, because the middle ground is not a nice place to be. You've got the end—. And I was going to add, about the way you're getting business from Netflix—very hard. They have known suppliers and are discovering big people, but it is a more anarchic place, these days—we've been in discussion with Facebook—because the gatekeepers between content and consumer are much weaker, because anyone can publish on a YouTube channel, et cetera, and you can build up a business by going straight to market with your material now on that end of it. But the bigger things—hugely expensive dramas—are the things that people are invested in, so you get fewer bigger things, which are harder to compete with, because there are fewer bigger companies. These are international, multinational, global companies—I used to work for one—so you are competing in that environment, which is hard.

I'd only just like to add the immense power and responsibility there is on the BBC in Wales, perhaps more than in any other place in the UK, because of the market structure in Wales. You look at radio too—there isn't a commercial speech radio in Wales; they've removed their news bulletins on a number of the channels. So, you look at the BBC, and with great power comes great responsibility. And, I agree, we are also after plurality. But I think it's such a challenge when BBC Wales—I spent many years arguing for more money when I was there, and some did come, but BBC Wales, I think—. It's different even than in Scotland—we've got two languages and a different media ecology in Wales to Scotland. Therefore, the responsibility on the public service broadcasters, particularly the BBC—and ITV, but particularly the BBC—is great, and I think it is almost too much for them. There's a battle against this avalanche of information that comes through the digital platforms now. You kind of feel like the BBC and public service broadcasters in Wales are standing there with fingers in proverbial dykes, sometimes, just trying to hold back and be that mediating voice, which I think is really important.

I think the journalist's role is as a mediator of information, something that I grew up in—and I think we're perhaps losing that a bit—and going direct to the electorate with information, which all of you do as well. But the trusted voice—the BBC still has that, and S4C. It has still got that, and that brand is incredibly important in Wales, and the trust.

Diolch yn fawr, Cadeirydd. If I can just look at ITV and ask how confident you are that this business model and the way we regulate commercial television is sustainable. All 13 licences in England and Wales are held by ITV—there's no competition for the licences—and there are issues, I suppose, about where they're going in terms of advertising revenue and the danger that they end up looking more and more like their digital competitors, and we don't see much value, then, in the public service broadcasting element of their work. So, where do you think the ITV model is at the moment?

I just think it's important that they remain a public service broadcaster in Wales and are regulated to supply the hours they are at the moment, and not more, because commercially, I know they have concerns about that. And I think they are such an important part of the ecology of broadcasting in Wales that they have to remain a public service broadcaster with regulatory requirements for particular hours, because if you allow that to go into the commercial marketplace, where do we end then? You're taking someone else out of a very limited ecology of broadcasters and media, certainly at the moment. So, I think that that regulation of ITV is really important. I'd like them to do more. To be honest, I really would like the clients to be bigger, but I understand the commercial realities of it. But it's where—we are in a very commercial media world. How much you can control that—. We're in a global media commercial world, and you can't and wouldn't want to control it too much, but in Wales, I think the public service broadcasters, across a range of output, are so important to us that I think ITV has to remain part of that and be regulated to produce material along those lines.

I'm told there's no prospect of competition for the licences in the foreseeable future, so we have 13 controlled by ITV and the two in Scotland are different. Should we really treat that much more as an England and Wales licence that should have obligations about production—for instance, quite firmly saying a certain amount of dispersal, and therefore a certain amount of activity should be undertaken in Wales? We take that approach with the BBC, why don't we take it with ITV?

I would love to see that. Because ITV Studios are like a massive independent company, and BBC Studios now—. The BBC and ITV are commissioning houses, fundamentally, apart from news and current affairs. But you've got these two broadcasters that are now global independent companies, not as big as—there are much bigger players in the marketplace, but ITV don't have the requirements and I think it's been a real positive for the sector.

I was at the BBC 15 years ago when we fought and fought to start to get a—[Inaudible.]—policy. It must be 15 years ago. And that's been a slow change and it's been incredibly beneficial. And then Channel 4 and it's relocation. ITV are not obliged, though they do say they're interested in stuff outside of London. I think Channel 5 are more easy to—who aren't a public service broadcaster, in that sense—but Channel 5 actually engage more with us in terms of commissioning and will commission more out of London than ITV do at the moment.

Okay. On the issue David raised of the England and Wales licence, my understanding is that, in fact, the only company that isn't part of ITV is STV. UTV is ITV, Border Television, which covers southern Scotland, is also ITV. So, you haven't just got an England and Wales licence, you've got part of Scotland and you've also got Northern Ireland, so it's a bit more complicated that it first appears.

I think S4C do an incredible job with the money they've got, but their targets have come down. I think 20 years ago we were in a linear world, and there was a loyalty to S4C—'We fought for this channel, we're going to watch these programmes.' And I think people consume media in a completely different way now, and content is everything. People will go to the content they want—Welsh, English, from Wales, whatever. The marketplace is far more competitive, and it's really not a particularly level playing field, I think, for S4C to compete on when their budgets are so much lower.

The companies do an amazing job with imaginative ways of using it, but you're still putting your content out there, not in the old-fashioned three-channel way, but into this hubbub, this babble of voices throwing stuff at you, which is, most of it, better funded et cetera. So, I think it's a real challenge for S4C and the companies making, because the targets have gone down in a marketplace that has become anarchic, almost, in terms of content, brands and the competition for people's views, habits et cetera. So, it is a really challenging time for S4C and the companies making for them.

Certainly, in terms of consumer choice and video content, we've seen a burgeoning of the new technologies and the choice that's available, but we're concerned in terms of specific Welsh content around that, as we are about specific Welsh content in general. So, what would you say has been the impact of that growth in video and people receiving services through that, on specific Welsh content, and is there any way that we can help secure that specific Welsh content for the future, in terms of video?

All I'd say is that 'Welsh content' is almost like an oxymoron, because it is such a global market now, and things that you make specifically for Wales—we've had examples of it; we did something called Young, Welsh and Pretty Skint and Young, Welsh and Pretty Minted, we made it for BBC Wales. It went massive on iPlayer, YouTube, and was watched in so many different places. So, in a sense, there is a Welsh market that now people can watch things anywhere. If you get content that cuts through—and for some reason, this did—suddenly, it spreads all over the place very quickly. There's a kind of viral marketing now if you get the right programme in the right place.

So, you need to make it in the first place, and that's where the public service broadcast comes in, but I think the opportunities beyond that in the marketplace, if you know how to do it—and our programmes are sold in many countries as well; taking Wales to the world as well—there are massive opportunities. The flip side of that is that there are so many people in the marketplace now; there are so many other people shouting and demanding attention out there. So, it's making sure you make the content in the first place. You can make it for Wales, but what a fantastic global reach you can get from the most unexpected things. So, it's a much more ambitious, challenging and exciting marketplace, but the challenge is the thing—to get people to watch your things, and that is so competitive now.