Public service broadcasting in the United Kingdom continues to deliver but needs to evolve as the trend towards online viewing grows. In its latest review the regulator Ofcom questions whether the benefits intended to support public service broadcasting will remain effective in the internet age. It notes the rapid changes over recent years may mark a fundamental shift in audience attitudes and consumption.

It is the third review that Ofcom has conducted of public service television broadcasting. The last was published in 2009 and was concerned with issues such as the transition from analogue to digital broadcasting. Since then there have been significant changes in the broadcasting landscape, not least with the emergence of new ways of watching television.

Sharon White, the chief executive of Ofcom, said: “More people are watching online or on demand, and this presents challenges as well as opportunities for public service broadcasters. They must continue to find new ways of connecting with audiences, and the PSB system needs to evolve to ensure it remains effective in the digital age.”

In 2014 public service broadcasters in the United Kingdom spent £2.5 billion on new original programming, with the BBC accounting for just over half of this, while ITV, Channel 4 and Channel 5 contributed the rest. However, this investment has fallen in £400 million in real terms since 2008.

Despite the continued growth in the number of channels available, over half of all television viewing in the country is still to the five main public service television channels, rising to 72% when other channels in their portfolio are included.

Eight out of ten viewers believe that public service broadcasting is delivering on its purposes, compared to seven out of ten in 2008.

Watching on line, on demand, and across a range of devices are increasingly important to viewers, especially to younger people. Only 50% of viewing by 16-24 year olds is to live television, compared to 69% across all adults.

Ofcom says that while consumption of TV remains high overall, despite a decline over the past two years, young people’s behaviour may be an early indication of a more substantial shift across age groups to on-demand and online viewing.

Public service broadcasters are well placed to engage with viewers in innovative ways, but they need to respond to changes in technology and viewer behaviour, the regulator observes.

Ofcom believes that broadcasters need to adapt their models to maximise commercial revenues and efficiencies, and the public service broadcasting system needs to evolve as the trend towards online viewing grows. Otherwise, broadcasters are likely to face difficult choices about which content and services they are able to fund.

Public service broadcasters receive certain benefits, such as access to spectrum, prominence in electronic programme guides and in the case of the BBC revenue from the television licence fee.

Ofcom says policy makers will need to consider whether the benefits designed to enable public service broadcasters will remain effective in the internet age.

As more people watch programmes online and on demand, the rules that provide prominent access to public service programming on television were designed for the analogue era and are likely to need changing.

Viewers are likely to want more than just traditional television programming from public service broadcasters, and short-form video or online-first content could potentially serve as an effective way of delivering their key public service purposes.

Some public service broadcasters want subscription services to pay to carry their channels. Ofcom says that these retransmission fees could bring in additional funding for broadcasters but resolving any possible disagreements would require complicated and lengthy regulatory intervention.

Ofcom calls out five key trends likely to shape the landscape around public service broadcasting over the next five to ten years.

Consolidation and globalisation — with mergers and acquisitions among independent producers and Channel 5 now owned by Viacom.

Changing technologies and models of distribution — hybrid platforms combining broadcast and broadband delivery are likely to become ubiquitous over the next decade.

Changing user interfaces driving new consumption habits — moving away from the channel-based grid guide to focus on particular programmes and recommendations.

New international players — no longer limited to traditional television platforms, competition is coming from online services like Netflix, with global scale to invest in innovation and programming.

New platforms — it may be difficult for public service broadcasters to maintain audiences to their own platforms in the fact of competition from global online platforms and aggregators.

The report considers three possible scenarios, ranging from substantial evolution, through radical change, to revolutionary change.

In the case of a rapid shift to video on demand and other online content, away from linear television, led by global companies, Ofcom suggests that public service broadcasting could be seen as increasingly irrelevant, requiring a wholesale re-evaluation of how to deliver public service outcomes.

Public Service Broadcasting in the Internet Age is available from the Ofcom web site.

www.ofcom.org.uk