Memorandum submitted by ITV Wales (DIW 26)

Introduction

Since the late 1950s, ITV in Wales has played an important role in delivering a national news and programme service to Welsh viewers.  More recently, ITV has had an integral role in the digital switchover process.  This has involved massive on-screen marketing, working alongside other public service broadcasters (PSBs) and the wider industry as part of Digital UK - the independent, not-for-profit organisation leading the process of digital TV switchover in the UK.  Alongside other PSBs, ITV has substantial roll-out obligations for digital which means that ITV will broadcast to virtually the whole of Wales post switchover.

ITV was a founding partner of Freeview, which remains the most popular form of digital television across the UK and continues to grow in popularity. More recently, ITV, in joint partnership with the BBC, launched Freesat, a free HD digital TV satellite service which is available to 98% of UK households, including around 25% of those households out of Freeview reception. In summary, ITV is ensuring its family of channels are available to the widest possible audience across Wales.

There are, however, uncertainties regarding ITV's longer term role as a public service broadcaster.  This is because the switch to digital is radically undermining the traditional model for commercial public service broadcasting.  The value of ITV's PSB licences are declining which means the cost of ITV's public service obligations will outweigh the benefits very shortly

There is an important debate taking place now about the future of PSB in the digital age, and ITV's role within the new landscape.  Ofcom's Review of Public Service Broadcasting and the Government's Digital Britain report both set out possible options, including those for ITV.

Public Service Broadcasting

As digital switchover completes there has been a debate about the value of the ITV Wales licence.  In effect, digital switchover in Wales has already occurred with 84% of households already having access to digital TV.  These households now have hundreds of channels to choose from.  With audiences and advertising revenue fragmenting across these additional channels, as well as online, the value of the Channel 3 licence is declining.  ITV has been arguing for its PSB obligations to be brought in line with the reduced value of its licences. 

The Regulator agrees with this analysis and for the need for urgent regulatory reform.  On 21^st January, 2009, Ofcom published its final report on the Future of Public Service Broadcasting.  It said that the benefit of holding the Wales and West licence will be less than the cost of making news and non-news programmes as early as 2009.  Therefore, Ofcom has agreed to ITV producing four hours a week of news in Wales (which will include the weekly news programme, Wales Tonight, and bulletins during the week and at weekends) and one and a half hours a week of non-news programmes. 

For the medium to long-term, there is uncertainty about our precise future PSB role and,  given that Ofcom acknowledges that our Welsh licence is in loss, things will have to evolve further.  ITV is currently in discussion with the BBC about sharing facilities and technology as a means of reducing the cost of regional news.  

Beyond this, Ofcom recommends that Government should plan in parallel for an alternative way of securing news for the English regions and the devolved nations from 2011.  Their alternative proposal is for a series of "independently funded news consortia", based on competitive tender processes, with a non-BBC broadcaster (probably Channel 3) providing slots in its schedule. Ofcom identifies "unused funds currently allocated towards digital switchover before 2012 and the Licence Fee switchover surplus after 2012 (if retained)" as a credible option for funding these new arrangements.

ITV in Wales

ITV news programmes regularly reach 500,000 viewers in Wales every day (taking into account Wales Tonight and the other bulletins). Other popular programmes, such as, Fishlock's Wild Tracks, The Ferret and Wales This Week regularly attract 200,000 viewers each episode.  ITV, therefore, reaches much of the Welsh viewing public with our Welsh programming.

In the Welsh language, ITV produces the current affairs programme, Y Byd ar Bedwar, and a current affairs series for young people, Hacio.  ITV also makes one of the most popular series on S4C, Cefn Gwlad, we produce S4C's weather service as well as a number of documentaries and drama series.

ITV also has the ability to use its well loved brands to engage people online in large numbers -  nationally and locally.  UK visitors to ITV.com have increased by 270% since its re-launch in August 2007. 

ITV Local, ITV's local news and information service, provides up-to-date stories and information from around Wales.  2008 saw the launch of a number of new channels including Your News, the fastest growing channel where citizen journalists upload their own reports, and My Europe, dedicated to disseminating information about European politics and the impact of the EU on the UK regions.

ITV has also developed an on-line service in conjunction with S4C, ITV Local Cymru, which carries the best of ITV's Welsh language programmes, plus highlights from the Welsh language archive.      

Increased usage of the internet will provide the catalyst for further investment in broadband.

Background: History of ITV in Wales

ITV in Wales was launched in 1958 with the TWW service.  TWW covered Wales and the West of England and that franchise area remains the same today.  The matching of Wales with the West of England was, at the time, for commercial and transmitter reasons.

TWW in its first few years covered mainly South Wales, although as more transmitters were built the whole of Wales was covered.

In 1962 another channel was created, WWN (Wales, West and North) which was designed to cater mainly for Welsh speakers in West and North Wales.  The service folded after barely a year and was taken over by TWW creating an all Wales channel for the first time.  By then TWW had two separate services, one for the West Country and one for Wales.

In 1968, TWW lost the franchise to Harlech Television, which later became HTV.  It continued to make English and Welsh language news and programmes about Wales.  At that time there were only three television services in Wales, BBC1 Wales, the newly launched BBC2 and HTV.

This changed in 1982 with the creation and launch of S4C, a channel dedicated to making Welsh language programmes about Wales.  Welsh language programmes were then taken off HTV and shown on S4C.

It was decided that the BBC would supply S4C with Welsh language news and HTV would supply current affairs programming. This ensured there was plurality of voice in Wales.

HTV also provided a range of other programmes, including drama, documentaries and long-running popular series, such as Cefn Gwlad.  By the 1990's, while HTV was making less programmes for S4C, it continued to make current affairs, drama, documentaries and Cefn Gwlad.  It also made 12 hours a week of news and non-news programming in the English language for Wales.

In 1997 HTV was taken over by United News and Media who were eventually taken over by Granada. In 2000 the HTV franchise was sold to Carlton and, in 2003, when ITV plc was created with the merger of Carlton and Granada, HTV became ITV Wales.

March 2009