A number of hon. Members have mentioned how long it has been since the last major piece of media legislation, but it is worth reflecting on that period of change and what it means. When the Communications Act 2003 was passed more than 20 years ago, Amazon was a relatively small online retailer selling music, books and video games, Netflix delivered videos and DVDs by mail order for people to watch at home, and YouTube did not exist. If we had asked someone then what a smart device was, they would probably have guessed that it was a scientific calculator. There were no smart devices, and the iPhone was still some years away from existing.
The idea that every one of us would carry in our pockets a device allowing us to watch live television whenever we like would not have been envisaged, or people would have thought that to be far off. That is significant not just because technology changes the media landscape but because it has a massive impact on viewing habits. That in many ways is the real challenge faced by the public service broadcasters today. The Bill is a hugely welcome step towards addressing some of those needs, but there will continue to be an ongoing challenge.
All Ofcom data is clear that, with the exception of the pandemic period when everyone watched a lot more television, public service broadcasting is declining. The minutes people spend each day watching public service broadcasting are declining year on year. Broadcasters face ongoing pressure not just from that audience decline but from rising costs through inflation for television production, which are running much faster than the consumer prices index. That puts an inevitable squeeze on budgets.
Public broadcasters that have the luxury of making more of their own programmes while raising money through subscriptions and other things are better placed to deal with that audience change. Nevertheless, it is there. The biggest challenge that the BBC faces is not about it not making brilliant programmes, not having fantastic writers or not nurturing brilliant talent; it is that people are voluntarily declining to pay the licence fee simply because they feel their needs in gathering news or watching fantastic programming can be met elsewhere.
The challenge that Channel 4 has faced is that, without the ability to invest in programmes from which it can make money, it relies solely on advertiser revenue, and that revenue is under challenge all the time, so it is much harder for it to be sustainable and to plan for the future. I welcome the Government’s introduction of measures in the Bill to change Channel 4’s remit. I understand the concerns raised by companies in the independent production sector, but I think they would recognise that that sector is totally different from when Channel 4 launched. At that time, a lot more BBC and ITV production was done in-house and there were no other routes to television.
Channel 4 created an opportunity for independent production companies to launch businesses, make programmes and gain an audience that otherwise would not have existed. Now, there are huge opportunities for independent producers. While Channel 4 is an important part of that ecosystem, it is by no means the only one, so the best thing we can do for the independent sector is
ensure that Channel 4 is in as robust health as possible so that it can commission more, because 65% or 70% of a bigger TV company is worth a lot more than 100% of a very small one, or one that is struggling to continue to exist.
Those are the ongoing challenges that the PSBs will face, and the fight for attention will only continue. People now are more distracted not only by video-on-demand services but by video gaming and other forms of audio-visual entertainment. That is the backdrop against which the Bill is being introduced.
The question of the degree of PSB prominence on connected devices—modern televisions that are internet-connected and totally integrated with people’s on-demand viewing habits—is incredibly important. Whether that level of prominence is “significant” or “appropriate” is an important debate. Is it enough simply to have the television schedule there on the device, with that schedule the live schedule ranked in order on the electronic programming guide as we are used to seeing it? How easy is that to find? Will people be constantly shifting through menus for on-demand services, be those Netflix, Amazon, Sky programming or whatever, before they find the television guide?
We see in Ofcom’s yearly audience analysis data from its media nations report that those under the age of 40 do not really regard television as a live product any more, unless they are watching the news or live sport; it is an on-demand product. If we asked student audiences what they thought of the TV schedule, they would find the idea of going home, turning on a television, pressing the No. 3 button and watching live what had been preselected for them, in a selected order, completely anathema. Younger audiences do not expect television to be a live product. They do not expect to go to the television guide to find what they want. In fact, audience analysis shows that, increasingly, when people turn the television on, the first thing they do is turn to an on-demand service like Netflix to browse what is there—that is their primary act, rather than going to a channel.
Whether it is easy to find the schedule and see what is being shown will be key to the debate on prominence. Otherwise, the PSBs will continue to find it hard to have a share of voice and be noticed in an environment where people are increasingly distracted by what they want to see. That experience itself is fractured, as a consequence of the way that on-demand services are designed. They are tailored to the user, so everyone will see a different screen when they turn them on. When everyone turns to Netflix, they see something different. They even see different tiles advertising the same programmes, tailored based on their past viewing habits. That is great for the consumer; it makes it much easier to navigate the services and find what they are looking for, but it makes it much harder for them to be challenged and surprised.
What is the value and role of original British content, telling unique stories of people on these islands? How easy will that be to find if people do not know to look for it and have not viewed it before? Those are the sorts of questions that Ofcom will have to consider. The Bill gives Ofcom the power to issue guidance, but it is important that here in this House we are on top of what Ofcom analyses and recommends, and that we feel that whatever the final wording of the Bill, it ensures that PSBs get a fair share of voice.