A cross-party House of Lords communications committee is holding an inquiry into the future of public service broadcasting in the age of video on demand. The committee will ask how serious the threat to public service broadcasting is, whether it is worth saving, and what form it could take in future. Among the questions that the committee will be considering are the requirements for prominence for public service broadcasters, whether there should be new regulation of on-demand services, and the relationship between public service broadcasters and on-demand platforms. Notably, the committee is asking about the implications of BritBox, the planned online video joint venture between the BBC and ITV.
The House of Lords Select Committee on Communications, chaired by Lord Gilbert of Panteg, is inviting responses to a public consultation.
“Public service broadcasters must fulfil a range of obligations, including on the volume and type of adverts they show, programming in specific genres, the way they commission content, the audiences they serve and the watershed,” he said.
“On-demand services do not have these obligations and it has been suggested that these big budget productions are pricing public service broadcasters out of the market by inflating production costs. The Committee will investigate if the concept of public service broadcasting retains some value, what form it should take in future and how it could be financially viable.”
The committee notes that public service broadcasters, such as the BBC, ITV and Channel 4, face mounting challenges. In 2018 conventional TV viewing fell by 5 per cent. Annual reductions in viewing by the 16– 24 and 24–35 year-old age groups were the steepest on record. Conventional TV viewing by under-25s has halved since 2010.
In recent years, video streaming services have emerged as powerful global distributors and producers, particularly subscription video on demand services. Between 2015 and 2018 the number of UK homes with access to a subscription video on demand service doubled. Over 10 million households now have access to Netflix, the most used service. These services have made available thousands of hours of content for subscriptions which start at £5.99 per month — less than half the cost of a television licence.
On-demand services are increasingly competing with public service broadcasters, especially in producing high-quality drama and factual content. Services such as Netflix and Amazon Prime can spend over £15 million per hour on original content. It has been suggested that these big budget productions are pricing public service broadcasters out of the market by inflating production costs and raising viewers’ expectations. There are also concerns that on-demand services have become less willing to co-produce programmes with public service broadcasters.
Although 80% of investment in United Kingdom production is from public service broadcasters, subscription video on demand services increasingly commission UK content, including high-profile programmes such as The Crown and The Grand Tour.
The popularity of on-demand services has implications for commercial public service broadcasters’ revenue. Further decline in viewing figures threatens television advertising, which has traditionally been attractive because of the scale of its reach.
Public service broadcasters are concerned about maintaining visibility in a fragmented market operating across different platforms. It is not always clear when content on video on demand services is produced by a public service broadcaster.
Public service broadcasters have a range of obligations, including on the volume and type of adverts they show, programming in specific genres, the commissioning of content, the audiences they serve, and the watershed. On-demand services do not have the same obligations.
Public service broadcasters have launched their own on-demand services, including the BBC iPlayer, ITV Hub and All 4. While these have focused on ‘catch-up’ services, in February 2019 the BBC and ITV announced Britbox, a new subscription service providing a range of archive and specially-commissioned content. A similar initiative, known as Project Kangaroo, was blocked in 2009 by the Competition Commission.
The call for evidence on public service broadcasting in the age of video on demand is open to written submissions until Friday 26 April 2019. Evidence will be heard from March to July and the committee intends to report in the Autumn.