Culture, Communications, Welsh Language, Sport, and International Relations Committee

Good morning. I'd like to welcome Members to this meeting of the Culture, Communications, Welsh Language, Sport, and International Relations Committee. In accordance with Standing Order 34.19, I have determined that the public are excluded from attending the committee's meeting in order to protect public health. This meeting is being broadcast live on Senedd.tv, with all participants joining via video-conference. If for any reason I drop out of the meeting, the committee has agreed that Heledd Fychan will temporarily chair. Are there any declarations of interest to make? I see that there are none. Okay.

We'll move on to item 2, which is the future of public service media—[Interruption.]

Sorry, Chair, I couldn't get your attention there. I just wanted to let you know, in terms of one of the witnesses coming before us today, I do know Rhuanedd Richards personally.

Thank you for putting that on the record. Sorry, Heledd, I didn't see you putting your hand up there. We'll move on to item 2, which is the future of public service media with Ofcom. Elinor, can I ask you to introduce yourself for the record?

Certainly. Good morning. I'm Elinor Williams, and I'm the head of regulatory affairs for Ofcom in Wales.

Great. Thank you very much for that. We have a number of things that we want to talk to you about this morning. We don't have a great deal of time, so if I can ask Members, and you too, Elinor, please, to be succinct in your responses and in your answers. So, just a quick question from me to start: there are a number of changes that have been recommended that are going to have a major impact on Wales; what changes, or what change, do you think will be most important or significant for Wales?

Well, first of all, may I say thank you to the committee for dealing with this issue so early on in your programme of work? It's something that Ofcom welcomes: that Members of the Senedd are taking such an interest in this topic.

There are three things that I would say that are the background to everything that I will say this morning. First of all, that we need to ensure that the broadcasting regime and public service broadcasting meets the needs of audiences, and continues to do so, and that those audiences get the best benefit from the public service broadcasting system. And that any changes that are introduced do help to bridge the gap between the traditional content and the digital world, and that any arrangements put in place, legislatively or in terms of regulation, are sustainable—that there's an element of flexibility that enables them to be adapted as the time goes by.

The document is a very comprehensive document; the entire content of it is appropriate for audiences in Wales. Of course, we've benefited from the wealth of high-quality content that has been available on television and online, and that is provided by public service broadcasters and commercial broadcasters, and I think that's very important to set out at the beginning.

If I were to have to choose three things I think I would pick out that are most important and relevant to audiences in Wales, they would be prominence and availability, namely ensuring the need to include public service media, that they're prominent, that they're widely available and easy to find. Secondly, I would set out the need to modernise the objectives of the current system, that we have a reformed set of objectives for public service media. And I think, then, I would turn to partnerships and the need to continue to collaborate, to see collaboration between the public service broadcasters amongst themselves, and for those broadcasters to set up strategic partnerships with others too. And I think that it is very important to say, at this point, that we had over 100 responses to the consultation, a vast number of them from stakeholders in Wales, so the voice of Wales has been very prominent, and I think that you can see that in the way that Ofcom has gone about the document.

Thank you for that, Elinor. Forgive me for cutting across—I'm aware of time. A number of the things that you've raised here will be issues that the Members will want to pursue, but thank you very much for that, that was very useful. We'll turn to Alun Davies, if that's okay.

Thank you very much, and welcome to the committee meeting, we've met before, of course. I hear what you say about prominence, and in the old days, it was simple enough, wasn't it? It was the electronic programme guide, and you could regulate who was prominent on that. Now, I use apps to access services by the public service broadcasters. So, how would you ensure that the app receives the prominence that you talk about?

Well, the recommendations that we propose for the Government are that we need to introduce legislation that updates the rules for prominence, and that would work—. Well, there are three elements to that, namely that public service providers have to provide those on-demand services to those popular television platforms, and those platforms need to provide appropriate prominence to the content of public service broadcasters and negotiate with providers of public services effectively. And then, the third thing that we're proposing is that there's a regulatory process, an effective process put in place akin to the system that exists in the world of telecomms—

Can I just stop you there? I have a mobile phone here, an Apple phone, so how would you ensure that public broadcasters have that kind of priority that they need in the Apple store or whichever other store it might be? How would that work? I see what you're saying, and I agree with you in terms of the objective, but I'm not entirely sure how you would go about doing that.

Well, it is going to be up to the providers to discuss and negotiate with the platforms, and I think it is a very important point for us to make that the recommendations that we are putting forward are not relevant to some of the apps that you're talking about in terms of the VSPs, namely the video-sharing platforms. I think that that is very important to note. I think that prominence is one of the things that are discussed at the same time as other conditions of carriage, and I think that we need to ensure that this is very high up on the agenda in terms of the availability of new on demand.

Time is passing, but I do think we do need to return to that, because I'm not sure you have answered the question, if I'm entirely honest.

I have read the Ofcom reports like this, and you have presented them for several years, and we've discussed reports of this kind in the past. And it isn't an overly happy story, is it? We've seen a decline in public service broadcasting in Wales and a decline in the kinds of services that people in Wales receive over the years. And we've discussed—everybody who has been part of this committee has discussed this in the past.

I want to ask you two questions on this. Does Ofcom have the desire to actually do something seriously to ensure that Wales receives the kind of PSBs that it deserves? We don't receive the service that we deserve. You'll remember that I worked for S4C years ago and, in the past few decades, we have seen PSBs saying that they're failing, for whatever reason, to provide the kind of public service that we want to see. We've seen real problems over the last two years with the news, for example, and I don't see that Ofcom has raised a finger on that, if I'm perfectly honest. And I was listening to Radio 4 this morning, for example, and I wasn't very comfortable with the way that they were discussing Wales as a nation as part of the United Kingdom. So, does Ofcom have the desire to actually do something seriously to ensure the future of PSBs in Wales? And the second question is: would the Department for Digital, Culture, Media and Sport actually deliver on that, in terms of legislation, because my experience of being a Minister, when I was responsible for broadcasting policy, was that DCMS saw us as a kind of problem to be solved, rather than a partner to work with?

I think obviously Ofcom can only take action according to the statutory powers that we have, and I think it's important to note that advice and clear guidance are the recommendations in the report to the United Kingdom Government. It's up to them how much attention they give to the recommendations and, to be fair, according to what we understand, the United Kingdom Government is very eager to introduce a media Bill very soon. And I think that that is a positive sign that they want to take forward some of the recommendations.

In terms of what we do in Wales, as I said at the beginning, I think that the way that we've gone about gathering information, sharing information and listening to the voice of stakeholders in Wales during the process of compiling this document demonstrates the way that Ofcom does work in Wales. And I'm not sure that I accept that we've seen a decline over the past few years. If anything, we've seen an increase in the use of public service content, particularly during the past year, where we've depended on news and current affairs that are provided in the medium of Welsh by the public service broadcasters in Wales, and we've turned increasingly to those broadcasters over the past period to help us, or to lead us through the pandemic. So, I think what we need now is to focus on seeing that change in the system, ensuring that the change delivers for audiences over the next decade to ensure that it is flexible and that we can put structures in place that help the PSBs to deal with the challenges that face them because of the appearance of some of these major corporations, such as Netflix and Disney+ and so on.

Alun, I know—

We could carry on all morning, but—.

I'm aware of time—

I would appreciate any information from Ofcom on the increase in provision from PSBs for Wales, because I haven't seen it, and I don't think that any PSBs have really argued that case in front of us. I'd also be very interested in any work that Ofcom has done. Because you say that you haven't got powers, Elinor, but you've got the power to write reports, and you do write quite a lot of reports. And you could write a report, following on from Anthony King's very good report, on news coverage in the United Kingdom—which I think would be very useful, were we to see that—over the last year, specifically about the pandemic. But I'll leave it there.

I want to come in quickly there in terms of the provision of news. We have been undertaking a piece of work that we have commissioned recently on the provision of news on the network and how that is reflected in the nations. We are currently looking at some of the findings. We'll be looking to publish some kind of report in the near future on that.

Okay. Well, we'll be very grateful to see a copy of that. Thank you for that. We'll move on to Heledd Fychan.

Thank you. Good morning, Elinor.

Good morning.

Just to pick up on points made by Alun in terms of prominence, you talked about it being up to the broadcasters to discuss that. Is there support that Ofcom intends to provide in that regard? We know that S4C has been trying to campaign for this for many years and hasn't had a great deal of success. It's one thing to have this as a recommendation, but will there be support given by Ofcom in this regard?

Certainly, and I think that it is very important—. In terms of the provision, I think it's important to look at what is being broadcast by the PSBs too—some of the content that you wouldn't see on Netflix and Disney+. That is, our broadcasters—the BBC, ITV, S4C and Channel 4, of course—broadcast a wide range across all kinds of genres on television; things such as news, current affairs programmes, content in Welsh that isn't going to be produced by Netflix and so on. I think that that is a very important point to make—that we do look to give prominence to that, and that it's widely available and easily accessible and easy for people to find on some of the new platforms that are available.

But don't you think that video services such as Disney+ and Netflix should be subject to the new prominence rules?

No, simply because the platform that they use doesn't lend itself to—. As you have that EPG, it doesn't lend itself to giving prominence. It's more like a kind of catalogue or library of content that you seek and search through. Having said that, on some of the platforms—on smart TV, for example—there is scope to give prominence to the PSBs, and that is something that Ofcom certainly wants to see happening. We will do all that we can to collaborate with the United Kingdom Government to ensure that that works in the best possible way.

Thank you. One of the things, from reading the reports, was that, clearly, you are focusing on television, or content for television in whichever way you access it. I see that the evidence given by the BBC mentions the need for radio to be much more prominent. Is there anything, in terms of the recommendations, that you've thought about in terms of the radio element, particularly in terms of the BBC—thinking about the fact that, in parts of Wales, it's very difficult to tune into the radio other than through the tv or digital devices? So, I just want to ask why radio isn't more prominent in these reports.

Well, this report looks specifically at television and public service broadcasting. I'm sure you'll be aware that there is a review of radio that has been under way in parallel with this, if you will, and, as I understand it, DCMS is looking to publish that report in the near future.

Thank you.

Okay. We'll move on to Tom Giffard.

Diolch, Delyth. I just want to move the conversation on a bit to the proposed new rules on the production of public service media content. So, what is the problem that Ofcom's trying to fix with its suggestions there, and what are the proposed solutions to address them?

On production with the independent sector?

With the independent sector, is that it?

Yes. Yes.

Well, in terms of the problem that we're trying to solve, you'll be aware that there are quotas for the independent sector, and that they have been in place for several years. They've achieved what they were set up to achieve, and I think, according to what stakeholders have been telling us during the consultation, there has been a very positive response to them, and there has been a positive impact that they've had too. They have achieved a great deal in terms of ensuring that the public service broadcasters collaborate with the independent sector and ensure that the independent sector is a viable one and that the sector contributes a great deal to the creative economy in Wales and in the nations. Our intention is to ensure that the close collaboration continues, and we're very eager to see legislation being introduced in order to see that the system is reformed. We need to update the system and ensure that we transition between the provision that's done so much for the traditional linear system to ensure that it is then appropriate for the digital world. And if you're talking about what the problem we're trying to solve is, well, the problem is ensuring that all of it is appropriate for the digital world.

So, following on from that, just to hone in on that a little bit, going back to television and broadcasting, where we've got public service media content mandated through current rules, I don't necessarily think that always reaches a very diverse audience. It reaches a group of people that perhaps are interested in that sort of content and would probably seek out that content anyway. So, do you think the rules can be modernised to ensure that that content is directed at a wider and perhaps younger audience and other target demographics, or do you think that's a responsibility for the broadcaster themselves perhaps, not the rules, to do?

Well, in terms of—. Could you just repeat the question, please?

Yes, of course. So, in terms of broadening the audience that access that independent media, the public service content that is available, if we want to broaden that audience, if we want more younger people to watch, a different demographic of people to be viewing that, in your opinion, is that something where you'd step in and, through the application of your rules, tell the broadcasters to provide content in a different way so that it targets younger demographics, for example? Or do you think the rules are fine as they are, and it's an individual decision for the broadcasters to make?

In terms of that, there are quotas that have been in place that have ensured that the public service broadcasters have to broadcast so much specific content for some genres. So, it is very important to safeguard some of that provision, namely, news, current affairs, programmes broadcast through the medium of Welsh. But I think also I would be very eager—and I think the public service broadcasters themselves would say this too, that they want to ensure that they are targeting the younger generation far better. We see that Channel 4, for example, is very good at doing that. I think, coming back to the point on prominence, it's very important to ensure that these young people know what content is produced by what broadcaster and how they can then watch it. If you look at some of the things that are on Netflix, for example—if you take something like Friday Night Dinner, I have young children who are huge fans of that programme, and I'm sure that, in their view, it's produced by Netflix, because that's where it's available. But Channel 4 actually produces it. But I don't think young people know that, and I think that's one of the challenges—to ensure that the content that is produced by public service broadcasters is labelled correctly on some of the digital platforms, and that that prominence is given to them.

Okay, Thomas, are you happy? Or did you want to ask another quick question?

[Inaudible.]

Okay. Quickly, please.

Sorry, I'll be really quick. So, I had a meeting quite recently with the BBC, and I had a long discussion about local journalism, particularly in my area where I live, in Bridgend. I feel that the local stories and local aspects are not covered very well, are not very well served, by the BBC. They're very good at covering national Wales-wide media, but in terms of specific local content—. And I'm sure that might be something reflected in areas that other Members live in as well. They spoke quite a lot to me about the rules that Ofcom have regarding local journalism to help protect local newspapers. Now, in Bridgend specifically, there has kind of been a market failure, I would say, in terms of that provision of local newspapers and local stories, or indeed local radio. It just isn't the same as it was 10 or 15 years ago. So, is there any consideration from you in terms of modernising those rules to ensure that all areas can receive local news, and broadcasters like the BBC could step in, perhaps, where newspapers haven't been able to?

Well, just to be clear, Ofcom has no responsibility in terms of journalism, nor in terms of what is reported in print news. I think that what is important is to state that the print network in Wales is relatively weak, and that the emphasis therefore on the importance of what is provided by the public service broadcasters—they're even more important in that regard. The BBC is very good in terms of producing local news. They have their network of journalists, and, of course, ITV in Wales is very important in that regard in terms of providing news. And we've seen, during the pandemic, people turning to those two providers to receive dependable news and timely news. And I think that news and current affairs would be two of the main things that we will be looking at, in terms of ensuring that there is a significant and secure future for them in any system that we would be modernising.

I'm sorry, but we'll have to move on.

I just wanted to be really clear, just so I got my question across properly. I wasn't asking you about local newspapers and local journalism; it was the fact the BBC says they cannot intervene on local stories because they want to protect newspapers. But, obviously, where those newspapers don't exist or are really scaled back, perhaps those rules aren't working. That was the only thing I wanted to flag.

Thank you for explaining that. Thank you, Tom. We're into our last 10 minutes in this session, so if I could urge Members to be succinct please, that would be great. Can we move on to Hefin David? If Hefin could be unmuted. Great.

I was just waiting for it to unmute. With regard to the report, there's a series of recommendations that are quite broad and perhaps lack a little bit of specificity. And the landscape of media generally is fragmenting quickly. One of the things you say in the report is that you would like the UK Government to bring in primary legislation to deal with some of the recommendations you make. But isn't there a danger that by the time primary legislation is developed, the landscape has changed again and you're constantly playing catch-up, and that these recommendations are broad because you're playing this kind of catch-up?

I think I'll come back to what I said at the beginning, namely ensuring that Members understand that it's advice and guidance to the Government that is contained in the document, and the whole purpose of the work programme in terms of Small Screen: Big Debate was to ensure that we can deliver public service broadcasting so that we do ensure that audiences derive the maximum benefit from the system for the next decade. And in that regard, I think that ensuring that there is an element of flexibility is important. We've deliberately not been too descriptive or prescriptive in what we have suggested, because we want to ensure that the broadcasters—

Because of time, I'd just like to interrupt you there. You said you're not being too prescriptive, but the problem is legislation needs to be prescriptive. It needs to be very specific. It says clearly that

'The most important recommendations in this Statement are for Government to take forward through new primary legislation.'

It says that in the report. But when you go to the recommendation,

'Update the rules for PSM providers, so that their requirements ensure online and broadcast TV audiences benefit from PSM',

that's so broad. I know if I was a legislator in the UK Government, I'd struggle to turn that into something that means something.

Yes, but I think it's very important to set out that Ofcom doesn't create legislation at all; that's up to the UK Government in this case. But certainly, we will be collaborating and helping officials in DCMS to understand and to set out the best recommendations to ensure that the legislation works for audiences across the United Kingdom, including audiences in Wales, of course.

If we have a look at the other recommendation,

'Update the rules for PSM providers, so that requirements allow each PSM provider to adapt their services to meet changing audience needs',

and also 'audiences benefit', Tom Giffard has already touched on Wales, but what about things like production in Wales, portrayal of Wales, access to local news services? If the UK Government is legislating on that, then that's surely not going to be a big part of the benefit. And what worries me is the gap between the broad recommendations that you make and, actually, the consequences for people here in our country, here in Wales.

Of course, as I think I mentioned, the quota system—.

The quota system does exist, it is achieving its purpose, and I think that it is something that Ofcom acknowledges, and, indeed, officials in DCMS— that it is importtant to protect some elements of the public service media environment, and news and current affairs are very important elements of that environment. You're talking about representation and portrayal. That is one of the core purposes of public service broadcasting, of course, namely the ability for citizens to see themselves presented and their lives reflected on the screen, and I think that that is something that our public service broadcasters in Wales want to see. It's something, certainly, that the BBC—

Is that specifically, then—? What I've seen over time is the amount of quotas and amount of requirements have gradually reduced as the media landscape has fragmented. So, is it even possible in the future? Will it be possible to put this duty on broadcasters to do what you're suggesting they should do, or is the landscape just too fragmented to achieve that in a meaningful way?

No. We've seen the quota system providing for audiences during the past decade, and I think that what we need to ensure is that it works for the coming period. Netflix and Disney+ don't have any interest in producing content about Wales, nor certainly do they want to produce content in Welsh. I think very recently, there was a production being filmed in Cardiff; I think that that content has an impact on the creative economy of Wales, but it was a series based in New York. I think it's something where we need to look at what we're good at and ensure that we do more of that in the future.

Would it be—? Last question. Would it be likely or possibly the case that, BBC aside, the commercial public service broadcasters might say, 'Well, this isn't really a space we want to be in any more; the regulations are so constricting and the landscape provides so much opportunity that it might be better to move out of the public service broadcasting space, because the benefits we got in 1983 are not going to be the same as the benefits we get in 2023'?

We don't have reason to believe that the commercial public service broadcasters are of that opinion. The ITV licence in Wales—Ofcom will be publishing a report and presenting it to the Secretary of State in June of next year on the sustainability of that licence, but nobody has said to us that there is any cause to believe that ITV in Wales wouldn't have any interest in setting aside their responsibilities in terms of public service broadcasting.

We're into our last two minutes. Carolyn, did you have a brief question that you wanted to ask?

Am I unmuted? It was regarding the proposed new rules on complementary public service media provision. What problem is Ofcom trying to fix, and how will the proposed solutions address this? Thanks.

It's about ensuring that new providers find a space in this environment of public service broadcasting and that the system continues to be transformed. We want to ensure that the system is sustainable, that it provides for audiences over the coming years, but I think that it is important to note that any new providers in this environment—that there is new funding that comes with those new providers, that we don't cut what is available to the current broadcasters in welcoming those new players into the environment. The issue is to ensure that there are more providers being able to provide some of the genres that aren't as prominent as that, perhaps, and that we then ensure that there is close collaboration between the broadcasters as well.

Thank you very much for that, Elinor. I'm sorry, but we've run out of time. We've heard a great deal of information. A draft of the transcript will be sent to you; if you could check that for accuracy. Perhaps there may be some things that we will want to catch up with you on via letter, but thank you very much for joining us today. I'm sure we'll be in touch very soon.

Members, we will take a short break now. Can I ask all of you to return by a quarter past, please? We will go into private during the break.

Welcome back to this session this morning. We're moving on to item 3, which is a session with the public service broadcasters in Wales. May I ask the witnesses to introduce themselves for the Record please? I'll go to Rhuanedd Richards first.

Good morning. I'm Rhuanedd Richards. I'm director of programmes and services for BBC Cymru Wales.

Thank you, Rhuanedd. Phil Henfrey.

Good morning. Thank you for the invitation to come here this morning.

I'm Phil Henfrey. I'm the head of news and programmes at ITV Cymru Wales.

Diolch yn fawr. Ac yn olaf, Owen Evans.

Hello. I'm Owen Evans. Thank you for the welcome. I'm the chief executive of S4C.

Great. Thank you very much for that. We have a whole host of issues that we want to discuss with you this morning. So, if I could ask for responses that are as succinct as possible please, and I'll ask a question to begin with. A number—[Interruption.]

If it's possible, when you want to speak, would you just raise your hand physically, please? You've now been muted. That's excellent. Thank you.

What changes in terms of what has been proposed recently by Ofcom will be most far-reaching, most significant for audiences in Wales? I'll go to Owen first of all. No, I see that Phil has put his hand up. Right, we'll go to Phil, then to Owen, and then to Rhuanedd.

I wasn't quite sure I put my hand up, but I'm quite happy to go first. Look, I think if we're to avoid a future where a search of content about Wales only delivers documentaries about marine mammals, then, in some ways, all of Ofcom's recommendations are important. For the reasons that this committee really understands, viewers in Wales are really heavily reliant on public service content to get information programming about the country they live in. And I think, in Ofcom's recommendations, whilst there are a lot of recommendations, one of the things that I was always particularly struck by is that, in today's digital age, public service content, like that created by ITV, is something that remains hugely important to viewers in Wales and, indeed, across the UK. Of course, the pandemic brought that into sharp relief. The fact is that we operate in a market that produces little or no content about Wales. So, ITV Cymru Wales's role in Welsh life is vital, in providing that plurarity to the BBC in news and current affairs, in both English and Welsh, and then bringing a mass audience to it. Our current mix of dramas, entertainment, sport, current affairs, news reaches 1.6 million people a week in Wales. That's a really big number in a country of three million people, and I think I'd probably also say that commercially funded public service broadcasting brings a different audience in Wales. ITV brings a different audience to public service content than, say, the BBC and S4C.

So, we're proud to be a PSB, and we want to continue to serve viewers in Wales, but we can't do it alone, and what Ofcom's report also highlighted is the rapid changes that are taking place in our sector. In the not too distant future, most content is going to be viewed online and on platforms that will be mostly controlled by a handful of local gatekeepers—gatekeepers that don't currently deliver content about Wales. So, in its recommendations, Ofcom, in my view, correctly concluded that the current outdated legislation covering public service broadcasting needs a radical update for this global online era. And so, in particular, I draw attention to the recommendations that will secure prominence, inclusion and fair value for public service content. And make no mistake, if commercially funded public service content is to continue to serve viewers in Wales to the extent it does now, then this intervention is needed.

Thank you, Phil. Owen.

Thank you very much. I would echo what Phil has said of course. But, looking forward, viewing patterns are changing. The way that older people still access broadcasting is quite traditional, but people my age and younger, and then very young people, are very diverse in their habits, and one of the things that's very difficult to think about for the future is how people are going to access Welsh content, particularly through the medium of Welsh in future.

Ofcom has done a good job I think in terms of linear and the electronic programme guide, where they've ensured that our brands as PSBs are visible. But, in future, if you imagine a world where brands or tiles or apps for S4C, ITV and BBC are just not available to people, and that the major players—from the United States usually, but we'll see what happens with China as well—mean there is no opportunity for people to find the content in the first instance. And the example that Phil mentioned of, 'Do a search for 'Wales' and find marine mammals', might well be possible in future. And what we're now seeing is that there are areas where these corporations could take over just snippets of what the PSBs are doing in Wales. And the important question for politicians is, are those little snippets enough for the audience? Because, as Phil said, all of us here today have very strong audiences in Wales today, but, step by step, these major players might divorce us from the audiences that we are trying to reach.

Thank you for that, Owen. Rhuanedd.

Well, there's a danger that we'll all be in agreement here. But there's a major number of these proposed changes that are important for the audiences in Wales, because they deal directly with the choices in terms of content in the services that are available for the people of Wales, and involved with how audiences in Wales, as Owen and Phil said, can access content that reflects their interests, their ways of living, and content that's relevant to their lives. And the context is important here: the success of PSBs on these isles is a cause of envy across the world. And I think the message here is that the current system of public bodies working side by side with commercial providers does work well for audiences, but we need a system that has been reformed for the market as it currently is. We've talked about the major structural change that we're seeing in the media world. We can talk about our own personal experiences in that regard—my children too; they only watch sport on linear television. The change is vast, and audiences in Wales are part of that revolution. And I think that, amongst this exciting development, we need to create a regulatory process that is appropriate and relevant, and that's what's important with all of this.

We'll move now to Alun Davies. He wants to come in on this, and so we'll move to his questions as well.

I just want to challenge you on that, Rhuanedd. You sound very comfortable in what you're saying, and I don't understand the reason for your comfort. We all have different identities. I speak English and I speak Welsh, and, in terms of my Welsh language identity, we have a range of programming available to us. I watch S4C and listen to news services in Welsh provided by the BBC, and some of the stuff that ITV has done in Welsh as well—especially in the past, frankly. But as an English-speaking Welshman, I don't get any of that, do I? I'm pretty poorly served as an English-speaking Welshman—my cultural identity is not served by either ITV or BBC. There's some good programming produced. I'm not knocking the programming; there's some good programming. I enjoyed the programme, Rhuanedd, last night on the depths of the Celtic sea—terrifying, and I thought it was just me that looked like that in the water. [Laughter.] But it's the exception not the rule. There's not very much genre and tv produced in Wales that is outside of sport and news and current affairs, and my guess is—I haven't got the numbers to hand—that it's reduced over the years. And I don't understand where your comfort here comes from, because, as somebody who wants to see an English-language identity reflected on the screens, I don't see it.

Do you know what, I'm with you all the way about the importance of that identity being reflected on the screens. I grew up—

I know you did—in the Cynon valley; I know that.

—listening to Wales Today and Radio Wales, in an English-speaking household, learnt Welsh later, and realised the importance of Radio Cymru, S4C, to my whole identity. But I would dispute that—the amount of content we're making for English-language audiences has in fact increased. We're getting 70 per cent of that content now actually to the network, and, in doing so, we're enjoying larger audiences to some of that content than ever before. This year alone, the requests to the iPlayer for our content has doubled compared to that of last year. Does that mean there isn't a challenge? It absolutely doesn't; there's a huge challenge. I completely accept that. It is probably the biggest audience challenge any of us has ever faced before as broadcasters. I think what I'm saying, though, is that these challenges are not insurmountable. I think it's absolutely—

Why don't you surmount them, then? I agree with you, Rhuanedd, in what you're saying. And, as I said, you and Phil produce excellent English-language programming and I've got no criticism to make of it. In fact, my criticism is that I want to see more of it. If I didn't like what you're producing, I'd say, 'Produce less of it'. I want to see more of it, a greater range, a broader range of genre available and, as was the programming last night in fact, at a reasonable time. We all know that a lot of good programming that is produced by both broadcasters is put up against Eastenders or Coronation Street, or whatever it happens to be, and it isn't the prime time. So, I think the challenge that I'm placing back to you—because I think we should have regulation, and I'm sure that some would say that any level of regulation will mean that we walk away from the EPG, and we've heard that before—is that we also need you to step up to the mark.

And my commitment to you is to fight for more programming and more content for our English-language audiences. I hope you'd expect that of me as director of content for BBC Wales. Listen, the discussions that I'm at at the moment within the BBC—. The BBC is shifting £700 million extra out of London for production between now and 2026. What that offers is a huge opportunity for me to work with the network to commission new drama, new comedy, new factual series, and we're in the process of doing that now. And hopefully, we'll have some exciting offers to announce in the near future.

But I can assure you that there is no complacency here. I want depth, I want breadth, but, in the middle of all of that, what I also need is prominence. I need prominence within BBC products for BBC Wales content, and there's obviously an ongoing discussion about how we tailor those products to ensure that they're more personalised and can respond to the needs of the nations. But in addition, we need a regulatory framework that allows prominence for our content on those big major platforms, which is what we're discussing today, and that can only be a good thing.

Phil wants to come in here.

I completely take the point that Alun is making, and I think the point that Alun is making is that we want to see more. It's not that Wales isn't well served by television channels, for example—there are literally hundreds of commercially available television channels in Wales that viewers can access. But there's only one ITV that's actually producing any content for Wales. And I think it demonstrates quite closely that the market is not going to, in a sense, answer the question. It is not going to be able to deliver. It doesn't deliver now for Wales. If you then look to a future where, increasingly the market is dominated by global players who are looking to do deals with global brands to monetise global audiences, the likelihood of that happening via the market is less likely. So, I think Ofcom is looking at this and is basically saying, 'Okay, so what needs to happen?' and it's come up with a series of recommendations. And, of course, prominence and inclusion are really important in that. As audiences move to these new platforms, it's really important that they're able to find content about Wales the country and not whales the marine mammal.

But one thing I would want to add in here as well—because there are a lot of recommendations being made by Ofcom—is that if you had to achieve one of these, then the ability to set fair terms and fair value is really, really important. The reality is that, as I say, these are global brands doing global business for global audiences. And in this context, the dispute resolution role proposed by Ofcom is very, very important. What Ofcom is saying in its detail is that, in designing the framework on settling any disputes, a key consideration should be that the terms offered by any platform are consistent with the sustainable delivery of PSB. Now, nobody's got a monopoly on creating PSB, but what that's basically saying is that Welsh viewers are heavily reliant on public service content. There are literally hundreds of television channels available to audiences in Wales now, but few, if any, carry any Welsh content. And so, from our perspective, you can't understate the importance of the dispute resolution mechanism, because it puts the sustainable delivery of PSB as the most important consideration in a new regime. That's really, really important as an underpinning for what you want to see, Alun, which is more content about Wales.

Owen wants to come in here as well.

A lot of this comes back to funding. We are in a situation of flux today, I think. As to what's happened with Ofcom, the bus has moved on, really. The discussions now are about how you enact this with DCMS, but the funding is still very important. We and the BBC are now debating the licence fee settlement. That takes us to 2027. Who knows what will be in place after that? Who knows what will happen with Channel 4, where there's discussion about privatisation? And also we have to remember ITV. If they don't receive the rights that they have as a PSB—the access and prominence, and so on—is ITV going to be spending money on content that is very relevant to Wales and not very relevant to ITV in London and places like that? Because one of the things that is true in Wales is that S4C is the only Welsh public broadcaster, and the others are British broadcasters that broadcast in Wales. So, there is an argument about the settlement companies receive in future and how the system works and supports the PSBs regarding what kind of content and broadcast environment, and transmission environment across the digital platforms, will exist in future.

Before we come back to Alun, Rhuanedd wanted to come in—but briefly, if possible.

Yes, very briefly. I agree in terms of the financial climate—it's vital and it's vital for us here in Wales. People think about the licence fee in a British context, but it's vital for the future of services through the medium of Welsh and English here in Wales too. And that's why I wanted to give a word of warning, perhaps, about the one of the recommendations, namely the idea of creating more providers in the sphere of PSBs and whether that would come from the licence fee. Ofcom itself acknowledges that, in order to compete with these major providers, we need organisations that are of a large scale and have weight behind them, so that they can compete effectively. So, I think we need to be careful lest we create many providers that can't compete with the other players in the market that are on that larger scale.

Yes, and I understand that message, Rhuanedd, about the licence fee. May I ask Mr Evans about the licence? You share your funding now with the BBC, through the licence fee. So, as a broadcaster, and as a chief executive—perhaps you have more freedom now that you have said that you are leaving the broadcaster—have you seen your independence become problematic in the way that you plan and make the editorial decisions that you do as a broadcaster because the funding comes through the licence fee rather than directly from DCMS?

'No' is the simple answer. But I think one of the most important things that we did in the beginning was when the Government in London decided that S4C was going to be funded entirely through the licence fee, we set out clear asks of the Government and its civil servants so that there would be a separate process for S4C to discuss funding in future. Because what S4C was concerned about was that we would be a kind of sub-item in the debates that the BBC would have. And, of course, the BBC and S4C are now competing for the same funding, and we have to admit that. Therefore, of course, the BBC ensures that their slice of the pie is bigger than ours. But it's important, and one of the things that I'm very pleased about is that Ministers in London did take that argument on board as regards having a separate discussion for S4C, and that's why S4C set out its own plan for the Government, and the BBC submitted its plan separately. So, when we get a statement, hopefully in the next month—

Sorry, I just wanted to come back to you, Rhuanedd, as we are short of time. I don't think it's a secret, but, when I worked for S4C, I was arguing for this set-up, because I thought it would provide greater assurance for S4C, so I was very pleased to hear your comments on that. But the three of you, when you responded to Delyth's previous question, mentioned due prominence and how that is changing. In the old days, of course, people were talking about the EPGs and what number each broadcaster had on the EPG. But, as I was saying to Ofcom before, I use my mobile phone and I use apps more often than I do the EPG. I agree with you, by the way, that the broadcasters need this, but how do you see that those broadcasters will have that prominence when these changes aren't about to happen but have already happened?

Can I ask for succinct answers, if possible, because we'll have to move on after this to another Member? But I know that this is a huge question. Who wants to go first? Owen.

I think it's vital. There is a degree of viewership over phones, but a great deal of viewership happens over on the main television screen—through apps, through Netflix, and so on. What we discovered, when we were lower down the EPG, was that going up 30 places on the EPG increased the number of people who watched your services, because you were visible. In the same way, when you pick up the remote control, Netflix and Amazon are there, but BBC, S4C and ITV aren't there. When you turn the smart tv on, there's a list of apps. Somebody picks where those apps go, and if S4C, ITV and BBC aren't on that list and aren't prominent on that list, then people will choose something else. So, it's vital that the PSBs have the right to have their apps on these devices, but with the same kind of prominence as is given in the EPG, or people are just going to walk on by.

And we have the problem, as S4C and with the Welsh language, where our funding is relatively small as compared to ITV and the BBC, and we can't afford today to place our app on all kinds of devices and all kinds of televisions. And what that means is that people have to go through web browsers, and that's a pain in the backside. So, just having that challenge as regards viewing our content means that people will go elsewhere. It's vital, therefore, that we have that prominence in future.

Phil.

I think it’s almost coming back to the point that I’ve already made—it's about thinking that, in a world where television is consumed over television channels via the aerial, a viewer could find the television channels and the PSBs were prominent within that environment. And really what Ofcom is basically saying is that in a world where it won’t just be via the television aerial or via the satellite, but also via online and via new, future ways of consuming television content, PSB content should be similarly prominent on those platforms. And that’s at the heart of Ofcom’s recommendations.

But I come back to the point, too, that inclusion and prominence of themselves are not enough. You also have to be able to negotiate fair terms, so that recommendation that Ofcom is making, that dispute resolution mechanism—. Because if you've got a dominant platform that says, 'Yes we'll make you prominent, yes we'll include you, but here are our terms', and the terms that they state mean that it would be very, very difficult for you to sustain, say, programming for Wales, what is the point of the prominence and the inclusion? So, it's really, really important in the Welsh context, because of the market forces that operate in Wales, that there is this dispute resolution. So, if there is a provider saying, 'We will commit, such as ITV currently does, to producing news for the next 10 years for audiences in Wales', that becomes a factor in any negotiation that a company like ITV might have with a global platform, in terms of the terms for the prominence and the inclusion. I can’t overstate it enough; it’s really important.

Thank you, Phil. Rhuanedd.

I promise to keep this short, because I don't want to repeat what's already been said, but the truth is that there are forecasts that the major technological companies that are already responsible for content will also generate television content over the coming years. They'll control and manage the content. So, do you think seriously think that they would consider the needs of the Welsh language in that, or the needs of public service broadcasting in Wales? No. And that's why we need this legislation. Now, we as the BBC aren't going to tell these companies how they should look, be that a tile or an app or whatever, but our aim is to ensure that it is visible and prominent, and that's why this is so important.

Okay. Unfortunately, we will have to move on or we won't have any time for the other topics that we want to discuss, but thank you for that. We'll move to Heledd Fychan.

Thank you. Certainly, I think that I would have be interested, in relation to the licence fee settlement, in having a full session with you on that in order to understand some of the challenges regarding funding. From what you've said, also as regards prominence, things such as the budgets available to you for advertising and having those services available—it's not just about where you are—are a major challenge in terms of people knowing what's available. So, the more clicks that people need to do to find content, we know that that creates problems.

I just wanted to ask you a little bit more about the prominence in that regard. In terms of the challenges, perhaps, that you've faced to date, from this report, do you see that anything that Ofcom is recommending here is going to improve the situation and support you with that prominence? Because the onus is still on you, isn't it, to try to secure that prominence, from what I read in the report. Do you consider that this is going to improve the situation, or would you like to see Ofcom going further to support you?

Who wants to start on that? Owen.

Thank you. This is advice. Ofcom has given DCMS the message relatively strongly that things need to be put in place to support the system as it is or as it will go. There's no doubt about that. The major issue—and this is the point I was making earlier—is that that bus has left. They've proposed this. What the debate is today, in offices in Whitehall, is how they're going to legislate next year to achieve what Ofcom has set out. I think I would flip the question. I think we all agree, across ITV, BBC, Channel 5, Channel 4—all of us are united in that we support what Ofcom is trying to do here. But the question is—. Legislating is difficult. Legislation is complex. So, the question will be how far DCMS goes to achieve what Ofcom has proposed. That's the question that I would be focusing on. The reason that Phil emphasised the importance of the dispute resolution mechanism is that if we don't get the legislation right, this could turn into a huge mess, and, of course, the people who tend to win in that resolution process are the major corporations. So, for me, I think what Ofcom is proposing is sufficient, but it really does depend on how DCMS implements what has been proposed.

Rhuanedd.

I would agree with that. It makes sense, doesn't it, that our content should have greater prominence and be more visible and easier to find.

To pick up on a question that you asked Ofcom in the previous session, one area that was deficient in the report—and Ofcom has acknowledged this entirely, to be fair, and there's another review of it—is radio, and prominence in terms of radio and audio services, which are also important to audiences in Wales. And I think it's right for you and us to raise this as part of this inquiry, because there are the same challenges and same issues arising as are faced by the television industry, and with my background in Radio Cymru, I'm very aware of those issues. It's vitally important that our radio services are visible on this same technology and are prominent for the audience. And when you consider some of the developments in terms of car radio and listening in the car, and of devices such as smart devices, smart speakers and so on, it's important that we don't forget the importance of radio in this debate.

Phil, was there anything you wanted to add?

I think I've used, in previous hearings, the sort of tsunami metaphor, and I think there's a real temptation in these debates that we can focus on very small detail. All detail is important, of course it is, but the way it's been characterised is that sometimes in this debate we are the equivalent of picking up litter off the beach, and really what we need to be doing is looking up and seeing the tsunami coming towards us that is about to wipe away the beach. And in answer to the question, 'Will Ofcom's recommendations protect public service broadcasting from this tsunami?', ultimately, it remains to be seen. But you could answer it the other way around and say, 'Well, if nothing is done, I think you can safely say that the global giants will be just fine.' Will that serve viewers in Wales? Yes, it will, of course. These global giants will be available to viewers in Wales. They will produce content that will be consumed by people in Wales, but will that be content that reflects the lives of people in Wales? Will that be information that is relevant to them in a Welsh context? I think that is less likely.

And so, Ofcom's recommendations are—. At the heart of this is that what public service broadcasting does right now really matters to people in Wales, and Ofcom has come up with a new proposal for a new regulatory framework, which should enable viewers in Wales to continue to get content about Wales that matters in their lives. Is it enough? In some ways, time will tell, but if none of this happens, or if we don't do enough or if we don't pass enough of the recommendations, as Owen is saying, then there's real jeopardy in the future, and you can't overstate that enough. It's not very often I think that all of the PSBs, whether commercially funded, licence-fee funded, whether they create content for viewers in Wales or not, are really united around the jeopardy that's in front of us, and that something needs to be done. Ofcom has come up with this report and, as Owen is saying, it is now for the UK Government to enact legislation. There can be a gap between what Ofcom has recommended and what actually happens in legislation. As a committee, you're a voice for Wales in this, and it's really, really important that Wales's voice is heard within this, because we are constantly talking about global audiences and the globalisation of television, and there's a real danger that Wales's voice gets lost in this.

And to a certain—and I will come back to Heledd, and I know that Rhuanedd wants to add something too, but lots of what—. These discussions could be happening, and there's a danger that the kinds of questions that could be asked could be asked anywhere in the world, but what you've just been saying, Phil, is going to be so centrally important in terms of how it affects Wales and Welsh audiences, and the idiosyncratic ways in which those dynamics play out. So, this is certainly something that we're going to be keeping a really close eye on.

Rhuanedd, I know that you wanted to come in, but, Heledd—. We're over halfway into our session now. Heledd, can I come back to you and then, Rhuanedd, perhaps you could pick up both points, if that's okay? Heledd.

Thank you very much. And I agree 100 per cent, Rhuanedd, in terms of radio too; I think we need to look at broadcasting in its entirety. As Owen is here and just talked about the challenges that are most pressing, I just wanted to take this opportunity, in terms of the announcement yesterday by Amazon on the red button, in terms of providing commentary through the medium of Welsh, I just wanted to ask for S4C's response on that. Is it a concern that it sets a precedent for other broadcasters? Does it endanger the future of S4C at all? I have seen a very mixed response on the internet and I've seen S4C welcoming this. I would like to hear your response, because we're talking about one of these major platforms, aren't we?

Okay, thank you. Well, first of all, does S4C welcome this? No, we bloody don't, to be honest. Certainly, we don't, and for several reasons, really. The first is—. And that's why things are so complex. It's a very good example in a microcosm of what's happening out there. Sport is important for S4C because sport brings a great crowd to the channel—we get a lot of viewers—and it's an opportunity for us to cross-advertise the content of S4C to an audience that doesn't often come into contact with the Welsh language. So, we do plug children's programmes and programmes for learners to those people who come to the channel through sport. So, sport and having the rights that have traditionally come to us through companies such as Sky and so on have been very valuable. But it shows the success of the Welsh language at times because a lot of people watch them.

And what Amazon's done here—and who blames them as a private company—is that we've had good audiences in this regard and they don't want to share them, so they've decided that they are going to take this behind a paywall. So, I think it's a retrograde step for us to think that—. We in Wales could argue that this is one of the crown jewels, but now people will have to pay to watch Wales playing international games over the autumn.

Now, in future, Amazon might decide, 'Well, we're going to provide a programme in Welsh.' What they're trying to do is to freeze us out of the traditional system that we have, and that's just a small example of what is likely to happen in coming years. Where S4C might decide, 'Well, we'll have the rugby programme, but we'll have programmes around that and draw the audience in,' I don't know whether Amazon's going to do that same thing. So, what I'm concerned about is that the Welsh offer, even though it'll be a high-quality offer for the programme itself, will just sit there and it will ensure that they don't share the audience, because that's what Amazon is really good at doing.

So, in future, I think there is a risk to the language and a risk to channels such as S4C, but also increasingly for the BBC and ITV, which are competing for these rights, that these people are encroaching where the PSBs traditionally are very strong and will just freeze us out of that space. So, certainly, S4C isn't welcoming what is happening. We've welcomed the fact that we will have the highlights of the programmes an hour afterwards, but certainly we would much prefer to have that live broadcast.

I'll come to Phil in a moment. Can I ask the witnesses: would you be available for an additional five minutes until 25 past? Great. If I can still urge you to give succinct answers, please. Phil.

Just picking up on that point about cherry-picking, I think the tradition of public service broadcasting has been to cover a broad range of content. So, you could say, 'Look, there are two really important national events coming up in Wales in the next three or four weeks.' One of them is Wales playing against New Zealand, and you can see why a global brand might see a global brand such as the All Blacks, et cetera, et cetera, and you can see why they might be interested in those rights. But tomorrow is the opening of the sixth Senedd, that's also an important national event. I don't see any global streamer competing for the rights for that, but all three of us as public service broadcasters will be giving that really close attention tomorrow and will be making it available to audiences in Wales for free and universally. And that's what's at the heart of public service broadcasting. That's what currently exists, and what you're seeing in the deal around the rugby is what could happen without legislation, without regulation, without proper thought about how you protect what you value.

Rhanedd, if you could be very brief, please.

I promise, yes. Just to emphasise how important rugby is and having that free-to-air rugby for people in Wales. In terms of the six nations, of the people watching television on that day, three quarters of them in Wales are watching rugby games. That's why it's important. It's important to our audiences, and I understand Owen's frustrations. We, of course, have had to focus on the six nations games, and it looks promising, and I'm very pleased to ensure that that continues to be available for free on BBC and S4C in the future, but we can't emphasise enough how important this is for young audiences in Wales as well. Sports do create that wide-ranging demographic and it's still an important offer for linear television, and hopefully it will be for several years to come.

Thank you for that. I'm sorry, we'll have to move on, and we'll go to Tom Giffard next.

Thanks, Chair. One of the joys of going in the second half of this thing is all your questions have been answered already, so everything I had prepared has been answered. So, I'll ask one question to the three of you, and hopefully that will help you with your timings as well, Delyth. So, my basic question. I think the general discussion we've had so far is, I think, that we all agree that the rules here need modernising. A lot of the discussion we've had has been about the licence fee, which might be based on numbers of set-top boxes or channel licences, and to some that sort of discussion might be quite old hat, considering how the landscape is changing. So, do you think the proposals by Ofcom go far enough in that regard? And if they don't, what are the answers here?

Rhuanedd first.

Yes, we are happy with these recommendations, particularly on prominence and availability. We think they're proportionate. But, let's not underestimate the audience challenge here. There are issues that we as broadcasters as well have to address in order to ensure the prominence of Welsh content on our screens. But, I think, in the general scheme of things, as Owen said earlier, the key thing now is, having talked about this for a very long time, that legislation takes place, that these are enacted and put in place, because time is of the essence. We've got to move as fast as our audiences are moving around this content in order to compete, and that's what we need to see applied to this. And this is where I think members of this committee can help accelerate action in these areas.

Owen and then Phil.

Thank you. It's an interesting question in terms of the licence fee. Tom, you were asking to an extent about the future licence fee regime. S4C is quite unique because we've been funded from a direct grant, from the Home Office I think it was at the time; we've had some funding from DCMS; we've had cash through the licence fee, and now we're going to move to the licence fee entirely. Now, the discussion is going on and on and on and on, and there's no perfect answer, but the question is, if the Government wants PSBs then they need to be funded in some way. And I have looked at several models, and it's probably the least bad model. There are questions then about the fact that it's regressive rather than progressive, but that's a debate for another day. But, for me, that's something that we do need to discuss in future; the important thing now is just to enact this stuff, go through it, and have the legislation in place.

Phil. Sorry, you weren't quite unmuted. You're unmuted now.

Sorry. I think one of the key differences between us and the BBC and S4C is obviously that we have to, in a sense, earn it before we can spend it. And one of the recommendations that Ofcom has put forward is around fiscal incentives, and Rhuanedd has already mentioned the opposition, quite rightly, against the top-slicing of the licence fee for that. But, I do think that the debate—. If we want more, and it comes back to what Alun was saying at the beginning about how is Wales served currently, and there's a debate around that, so if we want more in the future, then I think there's got to be a really open and honest conversation about how that is paid for.

We've seen in the production sector, for example, the way that tax credits and so on and so forth can really boost production. So, from our perspective, could something like a green production tax credit, which incentivises UK content producers to continue to innovate and maintain the UK's position in film and television—you know, how might we sort of do that? We're all moving towards becoming Albert accredited and creating sustainable programming. Should there be some sort of tax break for doing that? In our particular case, our programming is funded by advertising minutes. Are there incentives that Ofcom as the regulator could provide to enable us to do more? This is a heavily regulated environment. So, it can't all be about the licence fee; it also has to be about the tax system and other fiscal incentives that could be provided to sustain the public service content that we all want to see.

Thanks for that. I think Rhuanedd wanted to come back in.

Yes, very briefly. I just want to illustrate this quickly in terms of the audience benefits and the economic benefits. In terms of the audience benefits, let's just take the last 18 months and the pandemic. Over those 18 months, audiences to our news programme, Wales Today, have increased by 171,000 people. We've seen the number of people watching the briefings of the First Minister accelerate hugely during the year—people understanding the divergence of decision making between Cardiff and London, between Westminster and the Welsh Government. And that has been critical for people to make decisions and choices. Now, imagine if that information wasn't easily discoverable or available; it could have been catastrophic.

But, equally, in terms of the impact on the creative sector and why this is so important to them, our creative sector in Wales is growing quicker than in pretty much any other part of the UK. Over the last 10 years, where the creative sector has grown in the UK by around 31 per cent, in Cardiff and the surrounding regions, the growth has been 54 per cent. We need to keep investing in the sector, we need to keep building the content that Alun spoke about right at the beginning of this session—for Wales, by Wales, made in Wales. And in order to do that, you have to have a financial settlement that works, you have to be competitive with the big players, and you have to have prominence on your platforms. So, I guess that tries to illustrate why it's important, why it's important to Wales, and why we need to see things moving much more quickly.

I think Phil wanted to—.

I'll come to Phil and then Owen. If you could be brief, please.

Just very, very quickly, again, one of Ofcom's recommendations is around—. The current environment is mostly all about television, and, really, when you're commissioning content now, you're not just thinking purely about television, you're thinking about online and so on and so forth. So, there's got to be a new framework that enables the producers—. They may be no longer commissioned to make it for television, they might be commissioned to make it online. So, there's got to be a new framework, it's got to be updated for the modern world so that our production community can benefit from the opportunities that exist from this online world, rather than, in a sense, being hamstrung by being commissioned to make television and then secondary rights in terms of catch-up and so on and so forth. The reality is that broadcasters such as ourselves are going to start commissioning for online audiences only, and we need a new framework in which to do that.

Thank you. And Owen, finally.

This is a bargain. This is something that you give to us—PSB prominence and so on—and then we need to give something back. So, on the economic debate, one of the things that I would argue for is that if the settlement were to happen and if they were to legislate, what's the payback? What do you get out of us? So, the economic point is really important. With S4C, we have Rondo, we have Cwmni Da, we have Darlun in the north, we have Telesgop, Tinopolis in the west, we have a whole host of companies such as Avanti and Boom. There are around 50 companies around Wales. On a daily basis, we are the ones who are keeping that sector going, and that's one place where the economy of Wales has succeeded—broadcasting and creating that kind of content. And now these companies have moved around the world to work. So, as part of the bargain that needs to be struck, I would encourage you to support us to push for this legislation, but then the discussion turns to what you get back from that.

Thank you, Owen. We'll move to Hefin David.

Can I ask if any of the panel have looked at international examples of how these things, these challenges, have been addressed?

Owen is nodding his head.

The most obvious one is—. I'm not an expert, but I have looked at models worldwide. It depends how ambitious the Government wants to be, really. If you look at what has been happening in Germany and France around preventing the growth of corporations such as Google, Facebook and so on, then it's interesting to see how they've changed their rules to ensure more of a level playing field for local companies. I don't include people such as China and so on, because they're not democratic. But in terms of the European nations that are, it's worth having a look at what's happening in Germany, and to an extent in France—but perhaps Germany most of all. And the discussions are starting in Scandinavia too. The European Broadcasting Union, which is the umbrella organisation for broadcasting across Europe—that isn't part of the EU itself and is a separate body—has done a great deal of work on how the public service broadcasters should safeguard and protect the importance of their work with governance structures in future.

Phil.

I think the only point I would make there, Hefin, is that I think sometimes there can be a view that it's the internet and you can't regulate the internet, and these are global companies and nothing can be done. And I think that there are increasingly examples around the world—I'd point towards Australia—where, when national Governments say, 'No, the content produced by national providers for our audiences is important to us and we want to level the playing field with you', then actually that can make a difference. And, again, Ofcom's recommendations give a framework for the UK Government to be able to make that stand for public service content in Wales—public service content for the UK, of course, of which Wales is a part. So, my overall stance would be if you get the framework right you can make a stand against some of the—. It is not inevitable that the fragmentation of the audience and the destruction of public service broadcasting will happen, but it is going to take political will to stand up to this.

I must admit, having only been in post a few months, I haven't had a chance to examine the international systems closely, but it's something I am very interested in, and I know colleagues in the BBC have certainly taken a look at this. What we've got to remember, though, is that the truth is that everybody's looking at us as well and looking at the unique public service broadcasting system we've got here and its contribution to society and broader economic value and social value. And I think what can't be lost here is that value and the fact that we have got something really quite precious that we need to protect.

The Ofcom report specifically references Iceland, Canada and Switzerland, and it's quite interesting that nobody on the panel actually talked about those countries but instead talked about Germany, Australia and I suppose a little bit about Scandinavia, the Scandinavian countries. I don't know why the examples are just posted in the report, because I can't see how they link to the rest of the report. Is there value in looking at other countries, or are we sui generis here and the only solution is going to be at home?

I think Owen had his hand up.

I think the answer is Phil's point, actually, that what the international examples give you—. Every model is different and every model will work differently in every different country, but it's to have the ambition to try. And I think you can curtail the activities of these behemoths, but you need to have the political will to do so.

Okay. Just from my perspective, from some of the things that have been said, Owen, it seems that S4C is in a position where things are happening to it, like the Amazon example. I'm really frustrated; I like to watch the rugby in Gilfach workies, but I don't know how we're going to manage it, because they don't have Amazon. Normally we'd have it on S4C in Welsh and enjoy that. So, S4C has things happening to it. ITV, perhaps, has a few more choices with regard to the future. If the regulatory landscape is going to be so difficult to contain and contestably fragmented as Phil suggests, is the channel 3 franchise even going to be worth it in a few years' time, Phil?

I think, again, I come back to my overall point: if we do nothing, the global giants will be fine and the economics of the licence will just get more and more challenging. But, we're starting from the position that we recognise the value that the licence creates for viewers. We want to continue to do it, but we can't do it at any price. And it is going to need these changes in order to give a fair chance that the licence can deliver into the future.

In my mind, there are three important elements. I've been doing this for a long time; I've been working in Welsh journalism for 30 years and creating content for 30 years for Welsh audiences, and three things need to happen, in my view, to get to a place where public service content, commercially funded, is created. The first question to ask is: does ITV itself as an organisation want to do it? And I think we can unequivocally say, 'Yes, absolutely'. The second question is: what does the regulator think? The regulator has now come up with its report and said, 'Look, this is what we think needs to happen in order for that content, which is so valued by audiences in Wales and right across the UK, to continue in this new globalised world'. The third question then is that the UK Government needs to enact it. And that's the bit now—that's where this committee and your scrutiny and your questioning can be really helpful now in this debate, really being that voice for Wales.

As a Welsh audience, we rely really heavily on the content produced by the PSBs. I want to see that continue. I don't want to see a Wales where the BBC is the dominant factor. I love the BBC dearly, but I don't want to see them dominate. Because of the content we create for an ITV audience, we have the critical mass and the expertise, the know-how, to create the same sort of news and current affairs content in the Welsh language for S4C; I want to see programmes such as Y Byd ar Bedwar and Y Byd yn ei Le continue. So, yes, I think we should have hope, but there are a lot of things that are going to need to happen in the next 12 to 18 months for that to happen. By no means is any of this certain, and your voice within this debate is really, really important.

Hefin, just before you come back in, just to let everyone know, we're into our last five minutes of the allocated time; witnesses have very kindly agreed to be with us until 25 past, but we absolutely do need to end at 25 past, please. Okay, Hefin.

Just to say to Phil: it appears, then, that Ofcom are moving in a direction that you would find satisfactory, but there's a big gap between the breadth of what they're suggesting and the detail of legislation. Could it be there that the problem's occurring? As the landscape becomes fragmented, as you suggested, it may end up being not worth the battle in the future.

I think one of the things I've certainly discovered, and I think this committee's probably coming to terms with as well, is the speed of change. When you moved from four channels to 100 channels, that probably took nearly 10 years to happen. What we're talking about now—the things that are going to happen in terms of the globalisation of the marketplace, the globalisation of viewing—is going to happen very, very quickly, and so legislation actually does need to happen very, very quickly. But Ofcom's report is very detailed, it's very thorough, and it's a great basis for that legislation. And what we really do need to see happening, make no mistake—to come back to that sort of tsunami example, there's a first-order thing to do here: you have to create a new framework for all the PSBs, and particularly the commercial PSBs, and then you can get into the detail of what that commercial PSB can deliver into the future. But the framework is the most important thing; without that framework, it's really hard to see how we would ever get to the point of talking about the detail in a future licence.

Okay. And what about—I'll try and leave out the BBC and come to S4C—a voice for S4C? What do we do to give S4C that voice in that future landscape and future legislation?

The biggest one is parity. The debate between us and the Government in London—BBC, ITV, Channel 4 and Channel 5 have come together to argue on our behalf. The Welsh language is important. Even though we're small, we're very important to the system in Wales. You said earlier on that things are done to us; well, our ambition is far greater than having things being done to us. So, we are in London, we are working with larger partners now to ensure that the voice of S4C does cut through. The most important thing is that the politicians can see that the Welsh language is important, that it's worth supporting, that it's worth dealing with within this new regime.

May I summarise, perhaps, because you didn't ask a question to me directly, by just saying that it's important for the BBC as well? It's important that S4C and ITV are strong; it's important that S4C continues to have its commissioning independence as it has, and that power to drive the sector forward. We at the BBC benefit from that as well, as well as from the investment made by ITV, and that plurality in Wales is very important, I think, to our audiences too.

Okay. Hefin, are you content with that?

Sorry, Rhuanedd, it was time I was worried about there.

I didn't take it personally, don't worry.

Thank you for that. We have six minutes left. We'll move finally to Carolyn Thomas.

Diolch. I think the questions I was going to ask have been answered already. I'm finding this really informative, so I'm making a lot of notes. I'd just like to say thank you for filming I'm a Celebrity in north Wales, in Abergele. I went there this summer and having that international status has made such a difference. There used to be hundreds of visitors; now there are thousands. The grounds and the gardens are beautiful and it's just given recognition to that area. The same with Wrexham football club, as well—it's amazing that, now they've got international celebrity status, they had 9,000 supporters there at a match, which is unbelievable. So, what's being done to promote the area? It just goes to show, doesn't it, the difference that that makes. But I think the questions I was going to ask have already been answered, so thank you.

Thank you. Does anybody else have a very short question that they wanted to ask? Alun looks as if he wants to ask something.

What happens next, then? The three of you have been very clear in the things that are important for yourselves in different ways, and, in many ways, from our perspective, it's a lot cleaner, if you like, with S4C, because we've got a chief executive in front of us rather than a head of content and the rest of it, with all due respect. So, we're able to look at S4C with more clarity, and my concern is how we ensure that we have both of the broadcasters that deliver for us—and I see Channel 4 as under significant threat at the moment from the Department of Culture, Media and Sport, I'll make that clear to you—and I see yourselves looking for particular regulatory tools to be in place to help support your own position. So, what is the single thing, from your perspective, that would help achieve an objective that I would set you—and I'm talking more in the English language than the Welsh language now, quite honestly—of more production, more portrayal and more content produced in Wales for UK audiences, but also in Wales or elsewhere for Welsh audiences. What is the shopping list, if you like?

Okay, we've got three minutes left. Could you—

One minute each—there we go.

A couple of sentences if possible, please, because we really have to finish at 11:25, I'm afraid.

Well, I'm happy to jump in and say, look, in terms of what Ofcom's proposing, that would mean a continuation of what ITV does in Wales, potentially, and that's really, really important. And then I totally understand the point that you want more, and it comes back to what I was saying earlier—well, then there has to be an honest and open conversation about how that would be funded. And there are—. Within Ofcom's report, there are ideas for new fiscal incentives, and I think that that's—

Can I interrupt you quickly and break Rhuanedd's heart? Would you accept cash from a licence fee in the future, just in hypothetical terms?

I tend not to talk about hypotheticals. At the end of the day, what we're talking about here—we need to sort out the framework first before you can get into the detail. I can't stress that enough, because we won't be talking about the detail without the framework.

Okay.

Okay. Very, very briefly, Rhuanedd and then Owen. Very briefly, please.

Okay. For me, content development goes hand in hand with product development and prominence. We can't separate these three issues. I am in constant discussions with Tim Davie, with the executive committee of the BBC, about how we're going to move more production to Wales, how we're going to ensure that Wales has a stronger presence across our networks, and do you know what? I've never seen such a level of commitment to make that happen, because I think there's that realisation that it's what makes the BBC different to our global competitors, our proximity to our audiences. But we've got to get our content right, we've got to get our platforms right, and then we've got to have the prominence. So, it's ensuring that we get movement on that third aspect.

Thank you. And finally, Owen. You haven't been unmuted.

Hang on—can we unmute Owen, please? Thank you.

Thank you. A selfish point, but, to Alun's point, the Government in London talks a lot about levelling up. What that means in Wales and for the Welsh language is that we must ensure we don't level down, so the settlement is important there.

That was very succinct. Thank you very much, Owen. Thank you to all witnesses. A draft transcript will be sent to you to check for accuracy. I'm sure that we'll be in touch with you very soon on a number of the topics that we've raised. Thank you very much to all of you for waiting and staying with us for an additional five minutes. Thank you for being here today. Thank you.

For Members, we'll take a shorter break than was scheduled on our agenda—for five minutes. If Members could be back by 11:28, please. Thank you.

Good morning. Welcome back. We move straight on to item 4, which is our session with academics, a word that I can never say in Welsh. May I ask the panelists to introduce themselves for the Record? I'll go to Ruth first of all.

Good morning, everyone. I'm a professor in the creative industries at the University of South Wales. Thank you very much for the welcome.

Thank you, Ruth. And I should have checked this in the break: is it Cait-rina or Caitri-o-na? I've—

It's Cait-rina.

Oh, it is Cait-rina. I have met some—

Yes. Thanks, Delyth. My name is Caitriona Noonan. I'm a senior lecturer at Cardiff University in the school of journalism, media and cultural studies.

Thanks you so much, Caitriona. Hywel.

Good morning. Yes, I'm here as chair of the Ofcom advisory committee for Wales. As it happens, I do lecture sometimes on some aspects of media law, but I'm here as chair of the advisory committee. I'd like to make the point that the committee is an arm's length committee to Ofcom. We provide advice to Ofcom with regard to Wales and citizens in Wales, but we don't represent the opinion of Ofcom and Ofcom doesn't have to take on board what we recommend either. They are supposed to consult us, but they don't have to take on board our recommendations.

Thank you very much for explaining that to us. And finally, Gareth.

Hello. I'm not here in any academic capacity at all, but I'm here as the chair of TAC and I'm also chief executive of the Rondo Media company. It's great to see you all. Thank you very much for the invitation.

It's great to see all of you too. As I said in the break, we do want to cover a great deal of issues and topics this morning, so I'll be asking for succinct responses, if possible. And just to start, I'll ask you—. We have been discussing the recommendations made by Ofcom mainly this morning. In terms of what has been recommended, if you could think about the recommendation that is most significant for audiences in Wales, what would that recommendation be? Who wants to to go first? Ruth.

I'll start. I think that the most fundamental thing is the need to modernise the regulatory framework. That is vitally important for everyone in the United Kingdom, I would say, but certainly for us in Wales. And aligned with that is the question of the prominence of public service broadcasters, including S4C, of course, in terms of that Welsh-medium prominence.

Thank you very much for that. Hywel.

Can I endorse what Ruth said, especially with regard to prominence? For example, the way that people use media has changed so fundamentally, we need to review how the media are regulated. For example, if you think about the EPGs, for example, which are meant to give that prominence to the PSBs, then, practically speaking, people will go straight to the app that they choose on their screen, and straight from there perhaps to an on-demand service. So, the process of ensuring that prominence that's noted in legislation is slightly old-fashioned now, and we need to look at how prominence is given to those PSBs.

Thank you, Hywel. Caitriona.

Yes, I endorse what both say, and I think the shift in the narrative of the Ofcom report, from thinking about broadcast simply to thinking about broadcast plus online, is really important, and, as both said, the kind of market structures that go around that. I was also struck by the request to formalise the contribution of public service broadcasters to the creative economy more generally, and I really welcome that. They've been doing that for a very long time, and I think having that within the legislative framework is really important, particularly here in Wales, and particularly to small and medium-sized production companies in Wales.

Thank you, Caitriona. Gareth.

Just to add, obviously, there have been discussions about prominence in the past. On this question of prominence, I don't know how easy it is going to be for the broadcasters and the device manufacturers and those involved with those agreements to decide how prominence works in practice. I think that's going to be a challenge, but that prominence is vitally important. The pandemic demonstrates how important that prominence is; you've seen Netflix increasing its audience by 38 per cent. Netflix have managed to control their processes for paying their debts over that time. They've also increased their prices over the past period. So, I think that the growth that there has been in S4C Clic, in iPlayer, ITV Hub and All4 is vital to their success so that audiences don't lose out. And they will lose out if they lose the opportunity to watch content and there's less content available to them.

Thank you very much for that. Oh, Hywel wants to come back in. You haven't been unmuted. Can we unmute Hywel, please?

Just a quick point to endorse that. Mentioning Netflix, almost 60 per cent of homes in Wales subscribe to Netflix services, and over half of television sets in Wales are connected to the internet, so the question of watching content over the internet, on your main set for example, or over other devices, is a very live one, particularly with regard to bodies like Netflix.

Thank you for that. Ruth, did you put your hand up as well? No.

I was imagining it.

I'm sorry. Okay, we'll move on to Alun Davies.

So, how do we do it, then? You've all spoken about due prominence, and it used to be a fairly simple thing, wasn't it? You could regulate who got what number on the EPG and it was very straightforward. ITV would tell you, 'It's not worth as much as you think, you know,' and then Ofcom would back down and say, 'Okay, fine, you can get away with this, this or that.' Nowadays, I access my tv using my app. So, I'm interested to know, and you've all got extraordinary, wide experience of this world, how do you ensure due prominence in a world where the EPG is potentially a secondary means of accessing services? You don't all need to rush, but—. [Laughter.]

Who wants to go first? Hywel.

One aspect of this as well is the way that the content is funded. In our evidence to the committee we talked, for example, about an example in Australia, where News Corporation, one of the major broadcasters in Australia, has come to an agreement with Facebook that will ensure that there are payments made if they carry stories that emanate from News Corporation. Companies such as Facebook and Google carry a great deal of content from other producers, including public service broadcasters, and at the moment they just get it for free. And I think—. We said in our paper that perhaps there is a space to think about a levy that they would have to pay, in order to use that funding to generate a fund that could be used to provide content.

Can I just come back to you on that, Hywel? I don't know whether that answers the question about how prominent these apps are, because I accept the point about the content—that is fair enough—but I don't think it answers the question that you've set yourself.

That's a fair point, I think. The thing is that we have to ensure that, for example, on-demand services by broadcasters or content providers are available on all of the platforms, and that's going to be a huge challenge. There are examples given in Ofcom reports, for example, about how difficult it is to ensure that we have services—. Take, for example, Clic, the S4C on-demand service. You would want that to be available on every platform. Now, in terms of BT television, Clic is available as an app, as well as the other players, so in that case the prominence is there, and what's excellent is that, when you go to the homepage, you see a picture of all of the broadcasters and what they're showing at that time, including S4C. So, that's an example of good practice, perhaps. But, when you go to platforms provided by other providers, the prominence isn't there. So, I would strengthen what Ofcom is asking for, which is more powers to ensure that you can get that prominence. But it's an international question. It's not something that's just relevant to the UK or Wales. We have to think in European terms, and perhaps in global terms, because these bodies are global bodies, Google and Amazon and so on, and we need to be able to collaborate with nations worldwide to ensure the kind of prominence that I think you're talking about.

Caitriona wants to come in, I think. Can we unmute Caitriona? Great.

Yes, thank you. I think, Alun, you absolutely point out that we're talking about bringing in new stakeholders into this conversation, because we're bringing in the device manufacturers, and their territories, their markets don't map neatly onto national borders and onto regulations. So, I'm not sure that the answer to this will come from individual nations. But looking across at what other countries have been doing, there is no prominent way in which they're dealing with prominence as an issue; every country is taking very different approaches to this. Prominence isn't part of the EU's audiovisual media services directive, so each country, then, is asked to do their own kind of work on it.

Generally, I think countries are looking at two questions in relation to this. First of all, the criteria about what content is made prominent, and so, for some, it's obvious in terms of its public service broadcasting, but in countries like Germany, for instance, they've also made the decision to make some of their newspaper and journalistic content prominent and to have it under that framework. And then the second question that all countries are asking is, 'Well, what devices? Are we talking about tvs or are we extending it to devices like mobile phones, or are we talking about the internet more generally?' So, at the moment, there is no obvious answer emerging, and I think every country is having a lot of the same conversations that we're having, but thinking about those two questions about what do we want to be prominent and where do we want to make it. So, I don't have an easy answer, but I would just say that we're asking a lot of the same questions that other places are asking.

That's reassuring, at least.

It's not a nice, neat answer, I'm afraid.

Gareth.

I think it's becoming increasingly important, Alun. You're waving the phone, I have a remote control here and, of course, there are specific buttons for Amazon Prime and Netflix on remote controls as well. Once you're in those services, they won't let you go to the point that they ask, 'Are you sure you want to leave? Are you sure you want to exit that programme?' and you could get another episode of Squid Game in and have an hour's less sleep. They work in completely different ways, but they also work in a way that they collaborate, to some extent, and they co-fund major projects with PSBs. It's a Sin is an example of that, which was co-funded by Channel 4. But they're also going more and more into new and different territories, saying that they can produce content that isn't dissimilar to the content provided by PSBs. May I read something out to you here? This is a shopping list, if you will:

'We're looking for stories that could be in the sporting, music or entertainment world; more human stories, unscripted thrillers that could be in the world of business, crime, medical, and big-issue programmes that connect with personal experiences, subjects such as body image or societal or political issues'.

Now, that's a shopping list. You hear it and you think, 'Well, that sounds like Channel 4, that sounds like ITV, that sounds like the BBC'. That's a shopping list by one of the major commissioners of Disney. Now, Disney+ hasn't been around for much longer than two years; it was launched in November 2019, I think. That's a specific attempt to be spending more on content that is very similar in tone. I heard Elinor at the beginning of the session talking about the PSBs providing the kind of content that these other broadcasters don't. Well, those boundaries are starting to be eradicated and overcome, and the example we heard yesterday about international rugby is a further example of that. As part of the deal, shouldn't it be that the SVODs provide some of that prominence to the PSBs, especially if they co-produce and co-fund, and that they benefit? You'll see Channel 4 saying, 'Well, the SVODs are coming to the table and they expect all of the rights to be given to them forever and for the content to be available in their libraries and on their platforms.' Those same rights, then, can't co-exist with PSBs. One way that ITV goes about this in trying to square the circle is that they hold on to the rights to produce those versions. So, I think, in seeing the major development with the SVODs, there has to be some kind of advantage for public service broadcasters as a result of that, otherwise, I fear that, even though these recommendations are great, there will be some sort of decline management in the longer term as far as public service broadcasting is concerned.

Okay. Thank you for that. I want to focus in on the English language, if we could for a moment, because most of us who are bilingual have two cultural expressions, don't we? We have cultural expression in the Welsh language and in the English language. And I watch S4C and news services in the medium of Welsh, and they're there. There's room if you'd always want more and the rest of it; I get all of that, but they're there. But they don't exist in the English language. And, largely, if you look at the cultural expression in say Scotland, with BBC Scotland, it's a very rich offer—and I accept it doesn't get the audience numbers it gets—and you look at other countries very similar to Wales, you've got a rich offering in national languages. We don't have that in the English language.

And, to some extent, I'd like to push Hywel and Ruth on this about Ofcom, because Ofcom has essentially failed me as an English-speaking Welshman over the last two decades. It's failed to protect my cultural expression, my cultural inheritance. It's failed to deliver the sort of the breadth of genre and experience of me, and I don't see myself and my family, and my places and my country reflected on British tv, which is outside of tv which is made for Wales.

So, the regulation of public service broadcasters has probably done more for shareholders than for citizens.

Ruth, can we go to you first please on this?

There's a lot there, Alun, so let me start and I'll let Hywel come in. I think we have to take absolutely seriously the fact that many different audiences feel that they are not adequately represented by public service broadcasters. That might include the English-speaking population of Wales in terms of our cultural identity. I think it is at least as true as well when we're looking at British minority ethnic, Asian, black British audiences. And I think it is absolutely vital that if public service broadcasters are going to be able to continue to attract audiences, and perhaps more broadly, have legitimacy, a legitimacy that is tied to the licence fee in the case of the BBC, for example, then they have to be making progress that is quite discernible to the average viewer in better representing those audiences that feel that they are excluded.

I think we can see how there are some moves to do that. I think Channel 4, for example, has been really interesting in terms of how it has tried to push in terms of some of the British and minority ethnic Asian communities represented on screen. I think it has excelled in thinking about how it has innovated in a digital space to attract younger audiences, and I'm conscious that there are some significant investment plans from the BBC to try and increase the amount of English-language content from Wales that now appears on network.

But I absolutely take the point, Alun, that that's not the same, or isn't necessarily the same, as how a community is portrayed to itself in ways that are credible and recognisable to us, that I have that moment of recognition that many of us who are able to watch Welsh-language content are absolutely able to enjoy. So, I think there's a huge challenge there for the public service broadcasters to up their game, to maintain their legitimacy, and to really address the criticisms.

Can I come in there? The defence that the regulators failed others, as well as you, isn't a very strong defence of the regulator, and I don't think it is simply a matter for PSBs, although, clearly, it is. It's also a matter for Ofcom, and it's Ofcom that has failed here. It's failed to regulate effectively to deliver—. Your suggestion is that it's failed a lot more people than I have suggested. That's probably true; I'm not in a position to make that judgment. But it's a failure of the statutory underpinning of regulation, and a failure of the regulator to deliver this, surely.

Hywel probably wants to come in, so I'm going to let him do that, sorry.

Yes, I can see Hywel's indicated there.

The first point that's important to make clearly is that we as a committee don't represent the opinion of Ofcom—

I agree—I know that.

And we don't have a role to defend Ofcom either. But if you take as an example the provision that is on ITV Cymru Wales—Phil was here with you in the previous session and was talking about their contribution—ITV still provides four hours a week of news for viewers in Wales, which is vital to ensure plurality, in terms of what the BBC is providing. And I would say that that provision is an example of the regulatory success, historically, because that provision has been maintained for over 15 years. Through several reviews of public service broadcasting, the regulator has succeeded in ensuring that ITV continues to provide that service. If the regulator were to set out the requirements at a higher level on broadcasters, then the broadcasters would have walked away, and said, 'Well, there's no advantage for us being a PSB any more; there's no point in us providing this content, so we're not going to do it.' But by setting the level at one that makes sense in terms of what was possible to provide, the regulator succeeded in maintaining that ITV service. And it's vital now; we can see in terms of the use of news and current affairs, the majority of people receive their news about Wales through the television. So, what BBC and ITV do together in Wales is very important—for example, in terms of giving due attention to the work done by the Senedd and the Welsh Government. And we've seen that—

But you can't say—. Hywel, you can't capitulate every time a broadcaster tells you you're going too far in terms of regulation. And I think that's really the history of Ofcom, isn't it?

No, that's not the point I was trying to make. The point I was trying to make is that it is possible, through sensible regulation, to ensure that that content and provision has been maintained. If you'd gone for some more extreme regulation that would have set more onerous requirements on the commercial broadcasters, they just would have walked away, because the advantages wouldn't be there to be a PSB. That's what is difficult about the situation—the advantages that can be offered in the system are relatively weak. So, it was very important to ensure that that level was kept at the right level.

I hear what you're saying, Hywel—and we've known each other for some years, and we've had this discussion several times as well.

Caitriona, can I ask you, am I alone in the world in feeling like this? I know you studied in different parts of small-nation broadcasting. Are there other models of regulation in places that are more similar to Wales? We heard in the last session about Germany, and we've heard examples in Scandinavia, but I'm not convinced the German example is particularly useful for Wales, although it might be useful in a British context, about a federal environment. Are there examples elsewhere, where you've got a small nation, where regulation has successfully delivered a much richer cultural expression in terms of public service broadcasting?

If we can unmute Caitriona, please. Yes.

I suppose the example that we often go to is the success—the global success—of Nordic noir, and of the representation of Scandinavia, though they would argue that, often, the distinctions between the different Scandinavian nations are collapsed in an effort to entertain audiences. But I suppose, in terms of the visuals, in terms of some of the political messages that some of this content contains, that has historically—well, over the last couple of years—been the kind of model that many countries have adopted, or many countries have thought about. But I think it is a difficult question.

And I think, going back to your other point about Welsh content, one of the things that was overlooked a little bit in this Ofcom report is the prominence of Welsh content on PSB platforms—on their own video-on-demand services. It talks a lot about the prominence of the BBC and of the broadcasters themselves on other places, but actually, what about—. It talks at one point, there's a phrase—'targeted curation'. And actually, I'd like to see that as an effort, as a kind of public service algorithm, for instance. Because, in the past, if you wanted to make something prominent on network television, you put it on at 9 o'clock at night, and you could be guaranteed x number of—. As we just talked about, people aren't doing that any more, so how do we make prominent Welsh content, not just within Wales, but actually also outside Wales? And obviously, one of the ways that Wales has been very prominent in the last year was in I'm a Celebrity, which is great, but where is Wales on a day-to-day basis? If you were outside Wales, where is it? And, also, within Wales, where is it on the iPlayer? There are moves obviously, but I'd like that to be potentially explored a little bit more by the broadcasters and be more specific, and also for Ofcom to be more specific.

I know that Hywel and Ruth want to come in. I'm afraid we're going to have to move on after this, because we're running out of time, but, Hywel, briefly please, and then, Ruth.

I will be brief. Just to say, there is a very interesting point here and it raises an important discussion when you think about the prominence, for example, on something like the iPlayer, of content from Wales. And you think in that context about the success of Un Bore Mercher/Keeping Faith, which increased and maintained a huge audience through iPlayer, not through the original broadcast of Keeping Faith, for example, on BBC Wales. Because people across the United Kingdom saw Keeping Faith on the iPlayer, that's why the audience numbers grew so significantly. So, the question that I think Caitriona raised about the prominence of content from Wales on the UK-wide iPlayer is a very live question, and I think that the BBC, as I understand it, is considering ideas about how to increase the prominence of that sort of content.

Thank you. Ruth, could you be succinct as well, please?

I think this goes to the absolute heart of the issue of where we think about the personalisation of content and where we think that impinges on a sense of universality and commonality of experience, so that issue of 'What should be personalised to me?' One of the things that the traditional linear schedule did was it surprised me. It's very easy for me now to personalise my content so that I'm never surprised, so that I'm not challenged. I think that is a really profound challenge for the digital universe that we are in; it isn't just limited to the public service broadcasters.

Okay. Thank you. We'll move on now to Heledd Fychan.

Thank you very much. I want to return to the points raised by Gareth in terms of the territory of public service broadcasters, and you mentioned 'decline management' potentially in this regard. You were clear in terms of the fact that the regulations or the suggestions and recommendations by Ofcom in this space don't perhaps go far enough in that direction. So, what would you like to see there that is missing at the moment, that we should be pressing for, as a committee, in our response too?

I think it's vitally important, in the first place, it comes to this question of funding public service broadcasting, because that is huge change we see, and I accept that this is an issue for Governments and for the DCMS as well, but what is fed in by Ofcom is vital in that regard too. If you look at the situation of Netflix committing to spending £750 million in the United Kingdom this year on new content for Netflix, well, that is more than the Channel 4 content budget in a year by some £100 million; it's significantly more, of course, than the content budget of S4C.

The impact that it has, very often, is that it brings new work, it brings new opportunities, there are opportunities to compete, which is fantastic, but competing against that work on the tariffs and the prices that are offered by PSBs is becoming more and more difficult. There has been pressure on those services as a result of the pandemic, of course. There's huge pressure on production companies as well, which have lost significant turnover and have had to pay significant costs to be able to produce and film under the COVID restrictions during this period. And that, in the long term, I think, as SVODs invest more and more and more—. Of course, Squid Game isn't an overnight success. Netflix has invested £0.5 billion in producing and commissioning new content from South Korea specifically, and has done very detailed work to analyse how that kind of very dark humour succeeds internationally, and supports and develops that.

I think that depending entirely on regulatory systems and having that unique remit for public broadcasters, which tends to be a snapshot of the period that has been, leading up to now, to compete successfully and effectively against companies whose priority now, just like Disney, is to have more subscribers worldwide than Netflix by 2026—. I just feel that the clock is ticking on this charter period. Yes, there are excellent suggestions here, but I think we have to have a more robust response, in terms of the prominence that Alun mentioned in previous sessions, if we're really going to ensure that these services succeed. And we need to be realistic: not every show is going to succeed internationally. There is demand; there are companies that specialise in creating programmes that are specifically of interest to listeners and viewers within Wales alone, and there's nothing wrong with that. That's a healthy part of our development. But there's a danger that that may become unsustainable financially, because insufficient funding is available to sustain that and that we see those elements that are vital in terms of public services succeeding and continuing.

So, I think we need to look at those two elements and not disregard one in favour of the other, because where else will that content be available? So, I go back to that example of rugby. That, to me, is a turning point. It reminds me of when Netflix announced that they were going to produce a series with David Attenborough. David Attenborough was seen as a sacrosanct BBC figure. He was a controller of BBC2; he introduced colour television for the first time, but now, his face is also seen on Netflix. So, I would really like to see a greater focus and greater will by DCMS and the Government to see public services succeeding. Some of the things—

I'm sorry—

—that you hear about Channel 4 and the BBC from some very notable politicians do not help the discussion at the moment, I don't think.

I'm sorry to interrupt, Gareth, but I think Ruth wanted to come in as well.

Can we unmute Ruth, please?

Thank you. I'll try to keep this very brief, but just to endorse what Gareth said. Two things very quickly: vitally important for the landscape of creating productions by independent producers is the fact that they have been able to keep hold of the intellectual property that they create. The business models of Netflix and Amazon and so on mean that companies don't retain that IP. What that means is that it's a good thing today in terms of the funding they have from Netflix to generate content, but what they don't get then is the internal flow of funding that comes with owning the IP in that way. I think that's a major difference.

And the second thing that I would say is in terms of skills and the role of public service broadcasters in the creative economy of Wales. We at the university are currently undertaking work with Creative Wales, looking at the industry across Wales. Over 90 per cent of the content that has been commissioned in the past year from small companies in Wales has come from the public service broadcasters. What that means, particularly in terms of returning series, is jobs, and jobs outside Cardiff too. So, I think it's important, in the way that Caitriona noted, to think about what the role of PSBs is in terms of companies, but also in terms of jobs.

I think Gareth wanted to come back in, but, Heledd, was there anything else that you wanted to ask? No. Okay, Gareth.

If I could come in very briefly, Ruth is entirely right and the reason that a number of the SVODs are targeting and appointing people specifically to commission content from the United Kingdom is because they recognise the distinctive production talent that there is in these nations—the talent that exists because of the work of PSBs such as Channel 4, and in Wales, such as S4C, the BBC and ITV. They have been vital, and it does concern me that that system, that chain of relationships, is going to be stretched because the prices and inflation in the market caused by the SVODs are huge. So, just to add the point, but what Ruth says about skills is vital. But I'm delighted—one good thing that has happened is that the PSBs, which have traditionally been competing against each other, are starting to collaborate now on projects to target and look at skills. I'm thinking of schemes like Factual Fast Track Wales—Channel 4, BBC Wales and S4C are collaborating on that. I would be delighted to see more of that happening in the future.

Thank you, Gareth. If Heledd is content, we'll move on to Hefin David, please.

Can I ask about this complex landscape that I’m struggling to get my head around through the discussions this morning, and the Ofcom report, and then the requirement for the development of legislation? Regardless of what we think of that legislation at this point in time with regard to Wales, isn’t it likely that by the time the legislation is drafted and goes through and is produced, the landscape is changing again? Do you have concerns about that time lag that is inevitable and whether we can be effective in legislating our way out of this problem?

Who wants to start? Ruth and then Hywel.

I’ll start, but I can see others will want to come in. I understand, Hefin, it is a very, very complicated landscape. I think that’s because we’re at a moment of such profound change, and we are still working our way through to thinking about a regulatory framework that really deals with this digital universe that we’re all living in. I think that will be difficult to keep up to date. I think one of the things that we’ll have to be prepared for is that legislation might have to be reviewed more regularly and not have the kind of—. You know, the Communications Act 2003 is the Act that we all go back to—to think about how long a period of time has passed since that Act. But I think we have got to crack on with this in terms of the current legislation, and I think Ofcom is absolutely right to be pressing for this, and hopefully it will find its space in this next session.

I think that the issue will be how to devise the legislation in such a way that it is able to be amended or to be interpreted, including the powers given to the regulator, with enough flexibility to be able to speak to that issue that you’re mentioning of being able to keep up to date. So, you want legislation that is sufficiently precise, but which has also sufficient flexibility built into it to be able to respond to some of those changes. But I'm sure Hywel will have more to say on that.

I know from experience of helping to take legislation through committee that that is a very, very difficult thing to achieve.

It will be difficult, and it is really, really challenging. As Caitriona pointed out, this is something that legislatures across Europe and other parts of the world are all having to wrestle with.

Hywel, did you want to come in?

Well, Ruth has mentioned most of the things that I wanted to, but just to emphasise the need for a regulator such as Ofcom that can be flexible, that can ensure that what is agreed with providers is reviewed regularly. At the moment, for example, the review of public services only happens every five years. I think we'll need to hold those reviews far more often than that. I think that Ofcom, from what it has recommended, intends to undertake those reviews quite often, in terms of the provision. But I think, more broadly, there will need to be a great deal of work undertaken to review and consider the entire environment of production and content much more broadly. But, as I say, I'd just endorse what Ruth said.

I think that Caitriona wants to come in as well.

Just on a very quick point. It is very complex, and I think it’s made even more complex by the fact that we’re not just talking about media any more. Media regulation used to be a thing, and an obvious thing, and now we’re talking about media and technology, and the boundaries between those are so porous that it’s really difficult to legislate them. So, we’re having to think about legislation and regulation in a very different way. I just wanted to add that.

Okay. Thanks, Chair. I don't think I've got anything else I specifically want to raise.

Okay. Thank you, Hefin. We'll move on to Carolyn Thomas.

Diolch. What greater flexibility for additional providers to deliver new public service media content would benefit Welsh audiences, and what would be the impact on the current PSBs?

Who'd like to go first? Hywel.

Certainly, as a committee, when we responded and gave evidence to you as a committee too, we're aware, I think, of the opportunities that could emerge through new media and new technologies to provide new ideas, new services and content that is innovative or experimental in new ways. One of the things that we thought was important was to consider how we could fund those developments, because it would be good to have, I think, a range of new providers to come in, for example, to generate and produce content for people in Wales that would perhaps work side by side with the traditional providers such as BBC, S4C and ITV. You might have a range of bodies that might be quite expert, possibly providing small pieces of content, or innovative chunks of content that will be multiplatform, online, on the television and so on. So, I think we need specific funds to support that kind of work; I wouldn't want to see that being done out of the sources of funding that exist at the moment. And, in our paper, we talked about different ways perhaps we could consider mechanisms to fund those specifically.

Ruth.

So far, we've talked a lot about Netflix and Amazon Prime, but I'm very conscious that YouTube is often the one that's left out, and yet, actually, we've seen that something like 40 per cent of households are using YouTube as a source of their media content—and not just snippets, but actually programmes and so on. So, I think there probably is an area that we need to be thinking about: who is creating content on YouTube and what is distinctive about that? Is that to do with, for example, the voices that are not being heard, in the way that Alun, I think, was talking about earlier on: who's not being represented? And also, the average age of content producers, which, actually, I think, is not just about young content producers, but I think there is a very strong argument to think about how those people, who are being incredibly innovative and creative, through platforms like YouTube, to create content that comes from a life experience that some of the public service broadcasters haven't been capturing, and whether there might be a point where we actually think about how those voices are able to be supported and might also be able to develop themselves. You know, they might be the future indies equivalent in this world.

Hywel wants to come back in.

Just very quickly to add to what Ruth said: YouTube content can do things that traditional broadcasting couldn't do, because you can reach very specific audiences that are on an international stage. Of course, there are videos on how to change a tap on a sink, or how to change a tyre on a car and so on, things that broadcasters or conventional content providers—the structure wouldn't be there to provide that kind of content. But it can be innovative and it can be really useful in all aspects of our lives.

Diolch, Hywel. Forgive me, Caitriona, I should have called you then. I'll come to Caitriona and then to Gareth.

Thanks, Carolyn, and thanks, Delyth. I think, actually, there's an interesting experiment going on in the contestable fund that the BBC are running for young people, and I think, actually, I think that will deserve quite a lot of scrutiny about whether it achieved some of the objectives that it was supposed to do, and whether it actually—what kind of value it delivered and for whom. And so, I would be very keen—apparently it's finishing in 2022—and so I'd be very keen to hear, actually, what are some of the outcomes, and for the committee to also scrutinise some of the outcomes of that, and whether—. So, for instance, has there been content for young Welsh people and Welsh language and things like that? And I think that would be a key moment as a test of one of the potential models for new providers coming into the sector. Because I think we need to be careful, and as Ruth said, about YouTube, if we create a model where we have public service content on platforms like YouTube, effectively they are getting the benefit of that content, of publicly funded content. So, I think we need to be careful about what the models we adopt in the future are, and I think the contestable fund is an interesting moment to see whether that worked.

Diolch, Caitriona. And we will have made a note of that, certainly. Thank you for bringing that to us.

And Gareth finally.

I was going to raise the point that Caitriona finished with there. It goes back to—. If YouTube gets the content, YouTube is going to be an excellent place to show a great deal of content. I know that work is under way with S4C, for example, in terms of looking at what platform different content tends to find the most viewers on, particularly younger viewers. I was very pleased to see the excellent response to the Sgorio broadcasts, but especially on Twitter. When you put clips of the interviews and the responses, and goals, of course, up on Twitter, there's a huge response, particularly in the case of Sgorio. So, content that emanates from content funded by PSBs can of course sit on other platforms. I think that's a huge help in terms of the discussion on the availability of this content, because that might be the only place that some people might see that content; they wouldn't go to another platform. I hear many people telling us that YouTube is almost a unique portal of content for many people, and that's where they watch almost all of their content. So, certainly, in terms of the Welsh language, I think that having more content in the Welsh language available on YouTube would be a good thing, but, as Caitriona says, that there is a link, then, back to the public service that has created, to all intents and purposes, that content, and has funded it, of course.

Thank you very much for that. I'm very aware that we have five minutes left in the session. Do any Members have additional questions that they would like to ask, or, if not, do any of the witnesses have an additional point that they would like to get across but hasn't arisen in the questions so far? If not, you all look quite content. Oh—Caitriona.

Only because I was eavesdropping on the previous session and somebody asked about international models of funding, and so I just wanted to share, very quickly, the licence fee still is the most popular mode of funding in Europe in terms of public service broadcasting, where many countries are changing. And there are kind of, I suppose, four models of—well, three main models, and then there's kind of a supplementary model. There is a household fund—so, levying. So, Germany, I think, and Switzerland are both doing that, where there's kind of a digital levy on every household. Some countries are doing a public service media tax, which is outside state budget—so, Finland and, I think, Sweden are doing that. Some countries are doing state budgets. So, I think, Iceland, Romania and Norway have it out of—obviously, there is always care around that, around out-of-state budget. And the one that's been talked about in a few different countries is a levy on—so, it's to supplement public service broadcasting—the SVODs. So, for instance, in Poland, they're talking about a levy on Netflix, which will then go into—not necessarily directly into public service broadcasting, but into their screen industry and through their film agency. So, just to share those. And the European Broadcasting Union has done a lot of research around this and the mechanics of all these things.

Thank you so much for bringing that to us; that's really useful to know. Hang on, I'll bring in Gareth, and then Alun wants to make a point as well, or ask—. Gareth, briefly, if possible.

Just two very brief points. One to refer you, if I may, to a survey—an excellent survey—by Televisual, a magazine for the industry about the sector, which has been published very recently. Many of the challenges that PSBs face are summarised very well in that, and I can send you the link to that.

That would be fantastic.

Another statistic that came out of the Pact census recently—this is relevant to the discussion about the BBC and Channel 4 and the plans 'Across the UK' and '4 All the UK' about expenditure and increasing expenditure in the nations and regions. But there's one statistic that gave me pause, which is that only 37 per cent of posts in the television industry are outwith London at the moment. So, there is a still a great deal of catch-up work to be done, and I think that's part of the discussion about skills and the lack of skills, which is going to be an increasing problem unless we tackle it now.

Thank you very much, Gareth. Alun.

Thank you. I was just thinking, it was very useful to understand those different means of funding streams for both public service broadcasting, but also different funding streams for the creation of content in the wider sense. And I think it may be useful if anybody on the camera at the moment can provide something it would be even more useful, but otherwise, if our researchers or the committee secretariat could search around for those models of international funding streams, but also international regulation as well. Because, I think, one of the dangers is we're going to get rushed down this road of tweaking a British model, which hasn't exactly paid us dividends over the last couple of decades, and I would like to look around, as well as just look towards tweaking the current model.

Diolch, Alun. We are into our last minute, but, Ruth, you put your hand up. I don't know if you were volunteering, or if your hand went up before Alun put that full question out.

Not volunteering so much as I'm just going to say that the European Broadcasting Union has a report on this, which you will be able to access online. So, you can just go and download that—your researchers. It is about funding models, specifically. I think the one point I would really draw out is the relationship between the funding model and accountability and transparency of where the funding goes. That, I think, is perhaps even more important than what the actual funding mechanism is. I think, Alun, what you're pointing to here about comparative work on regulators is really interesting, and it's something that we will take away and have a conversation about, so thank you for that challenge.

Fantastic. Thank you very much. We've run out of time, but this has been really interesting and useful to us as well. So, a draft transcript will be sent to you to check for accuracy, and I'm sure that we will want to pursue some of the topics with you as well. But thank you very much to all of you for giving of your time this morning, and this afternoon now, as well, we really appreciate it. Thank you very much to all of you.

Members, before we move on to the private session, item 5 is papers to note. There are several papers, I'll just go through them briefly. Item 5.1 is a letter from us to the Llywydd with regard to a request for additional meetings. Item 5.2 is a letter from the Minister for Economy to us with regard to border control posts. Item 5.3 is a letter from the Deputy Minister for Arts and Sport, and Chief Whip to us with regard to the impact of the sale of Bad Wolf. Item 5.4, a letter from us to the First Minister with regard to ministerial scrutiny of international relations. Item 5.5, a letter from us to the Minister for Education and Welsh Language regarding an update on the progress of support for the Welsh language. And finally, item 5.6 is a letter from us to the Welsh Language Commissioner about support for the Welsh language and annual scrutiny. Are you all content to note those papers? I see that you are, great, okay.

We'll move to item 6, and in accordance with Standing Order 17.42(ix), I resolve to exclude the public from the remainder of the meeting. Are Members content to agree that? I see that you are. We'll move to private session and we'll wait for confirmation that we are in private session.