This document sets out S4C’s vision for the next ten years and will be a key element of our submission to the forthcoming independent review of the channel’s remit, funding and accountability.

Executive Summary

This document sets out S4C’s vision for the next ten years and will be a key element of our submission to the forthcoming independent review of the channel’s remit, funding and accountability.

In this executive summary we set out the key points outlined within the document chapter by chapter.

Chapter 1: S4C Today

In the first chapter, we set out S4C as it is today. We consider the context within which we operate, how this has evolved in the 35 years since the channel was created and what this means for the S4C of tomorrow.

S4C Today

  • S4C broadcasts more than 115 hours of programming every week, including a children’s service, drama, news, entertainment, sport, factual programming, music and events.
  • Our content reflects the diversity of life in modern Wales and of the Welsh speaking audience.
  • S4C commissions the vast majority of our Welsh-language content from a wide range of skilled, independent production companies (around 50 each year over recent years), based throughout Wales.
  • The economic impact of the public funds invested in the production sector and creative industries is significant – every £1 invested by S4C in the economy in Wales and the UK creates a total value of £2.09.
  • The BBC also provides a minimum of ten hours of programming per week to the service from its own budgets.
  • After broadcast, S4C programmes can be viewed via S4C’s own online catch-up facility or on the BBC iPlayer - a result of the wider strategic partnership with the BBC.
  • Our operation is lean, with organisational overheads maintained at around 4% and cost per hour of content reduced by over a third since 2009.
  • The number of Welsh speakers in Wales has risen by more than 10% since S4C was launched in 1982. The language today thrives and is used by nearly three quarters of a million people in Wales and the UK to differing extents in their lives – at home, school, work and leisure.
  • In 2015/16 we achieved our highest weekly UK television viewing figures in nine years, (629,000). Across the year, 9.9m people viewed S4C content throughout the UK (up from 8.4m in 2014/15)

The world is changing

  • When S4C was launched in 1982, there were just four TV channels. Today there are hundreds – increasing choice and competition.
  • Over recent years, there has been a huge increase in online platforms with audiences migrating to them from traditional TV channels.
  • Other Public Service Broadcasters (PSBs) have been able to launch channels to target migrating audiences.
  • In future S4C must ensure that we make Welsh language content available on as many platforms as possible.
  • S4C’s remit is old fashioned – created in line with media consumption habits from the past. It does not allow us to commission specifically for digital audiences.

Chapter 2: An S4C for Tomorrow – Our Vision

This chapter sets out in detail our vision for a new engaging and constantly evolving S4C in terms of the content we commission and how people access that content. We outline the steps we will take to provide modern and comprehensive public service media content to existing and new audiences.

Our vision is built on four key elements:

  1. Ubiquitous Content Delivery: Ensuring audience segments can access S4C content when, where and how they want.
  2. Creating the Right Content: Making it more relevant, competitive and diverse.
  3. Wider Public Service Value: Bringing about economic, linguistic and educational benefits from our work.
  4. A commercial strategy to help drive the vision: Enhancing our commercial capabilities and reputation.

Ubiquitous Content Delivery

S4C must become a Welsh language Public Service Media (PSM) provider on all popular platforms – broadcast, Smart TVs, social media, short-form video sites, online long-form, etc. We must do this at the same time as continuing to invest in our presence on main broadcast TV platforms.

S4C will:

  • develop a digital one-stop-shop which enables our audience to access all S4C content in one place, including archive content where relevant rights can be secured.
  • offer a personalised service for audience members – content that meets individual needs and the ability to curate accordingly on relevant platforms.
  • ensure that S4C’s brand and content becomes as prominent and easily accessible as other PSB providers on Smart TVs, media streamers and other on-demand providers.
  • develop and exploit appropriate platforms for digital content delivery to target different age groups, and populate them regularly with compelling new short-form content.

Creating the Right Content

S4C will revitalise the linear channel – delivering a more exciting, bolder and more varied linear channel which will play a greater part in our audience’s lives – using technology to allow further viewer interaction. To do this, S4C needs to be able to compete with other broadcasters who are currently offering higher tariffs, while S4C’s content budget is reducing due to funding reductions and inflationary pressures. The real terms value of S4C’s current content budget is forecast to fall over the next five years – £1.6m down next year, £8.7m down by 2021/22.

S4C will:

  • create more viewing opportunities for families to enjoy as a group – cementing the role of the TV channel as the home of family viewing in Welsh.
  • create significant high-profile events – highlights in the schedules that draw people together and get people talking in communities and on social media.
  • create two main types of short-form content – original, standalone content which drives completely new audience interactions across non-linear platforms; and content that promotes, extends interest in and supplements existing programmes.
  • change our way of commissioning to encompass all forms of content.
  • improve communication with producers and nurture a clear understanding of our increasing creative expectations.

S4C’s Wider Public Service Value

S4C’s public service content is widely valued and appreciated by our audience. But as the only Welsh language public service broadcaster and content provider, we make a considerable and wider public service contribution to Wales and the Welsh language and we will work hard to enhance our impact over the next ten years.

S4C will:

  • support the Welsh language to claim its place in the digital world through commissioning and making available a range of digital content.
  • place a greater focus on championing diversity, inclusivity and social mobility through our content and commissioning.
  • offer more content which provides and reaffirms educational experiences for all ages.
  • do more to encourage language transfer through programming.
  • do more to help develop media skills – including those which feed into the Welsh production sector.
  • increase investment in the digital and creative industries in line with budgets.

A Commercial Strategy to Help Drive the Vision

S4C’s Commercial arm aims to return sustainable dividends to S4C’s public service. Our aim over the next five years is to build on current achievements, and deliver even more value for the public service.

S4C Masnachol/Commercial will:

  • take on-air brands and investigate ways in which we can extract more value – further developing plans already in the pipeline.
  • create more big, bold drama co-productions and formats for exploitation internationally – building on existing projects.
  • develop new partnerships to generate new types of content for all S4C platforms.
  • make business investments that help meet the vision and create financial returns for the service.

Chapter 3: Delivering the Vision

In this chapter we set out the strategic priorities we believe the review of S4C should consider. These will enable us to deliver the vision set out in Chapter 2 and meet the Welsh speaking population’s expectations.

A new remit

S4C needs an updated, flexible remit to enable us to carry out our vision. This would see S4C evolving into a Public Service Media content provider – incorporating the current TV remit and the ability to create and deliver content on other platforms and recognising our role in serving audiences throughout the UK.

The new remit should enable the channel to provide:

  1. high-quality, Welsh language Public Service Media content;
  2. on television and digital platforms;
  3. to the audience in Wales, across the UK and beyond.

Financial investment

Stable and sufficient funding

To deliver our vision, stability and sufficiency of funding are crucial.

Under the Public Bodes Act 2011, the Secretary of State has a duty to consider the amount of funding required by S4C and to make arrangements to ensure that this amount of money is provided to S4C each year – either from Government money, or by making arrangements with other bodies.

Currently S4C has an income of just over £83m. To deliver and sustain the new levels of service we have described, additional investment is required each year on top of our existing budget.

What is sufficient funding?

(a)Realising ubiquitous content delivery:

Our aim is to deliver the platform and digital element of “Ubiquitous Content Delivery” over a five-year period. To do this without impacting on current levels of investment in content requires:

  • additional annual investment of £6m p.a. This will enable S4C to deliver its service on broadcast TV as well as digital platforms, to invest in new content for audiences on digital platforms and to incorporate archive content into the online offer.

(b)The cost of creating the right content

There can never be an absolutely definitive answer to the question “how much funding does S4C require to create the right content?” The broadcaster’s job is to provide the best possible service which can be delivered with the money that is available.

However, S4C’s current content budget is not sufficient to deliver the vision set out in Chapter 2 and therefore additional funding is needed if it is to be achieved.

S4C has outlined the factors we consider appropriate and relevant for the independent review to consider whilst examining the question of what is sufficient funding. They are:

  • benchmarks set by other broadcasters, and the way they change over time;
  • the fact that S4C is the only Welsh language television channel;
  • S4C’s repeat levels, currently up to 58%;
  • S4C’s cost per hour across all genres compared to other PSBs’ ability to invest;
  • the need to insulate S4C’s budget against inflationary pressures;
  • the likely positive impact of a substantial increase in investment on the service.

(c)A transparent process for the future

The Public Bodies Act 2011 makes no reference to any process the Secretary of State should follow in coming to a decision as to the amount required to fund S4C. This weakness has made S4C vulnerable to periodic cuts and allowed fears to be expressed regarding the continuation of the Government’s commitment.

It should be a priority for the review to recommend an objective and transparent process for deciding what constitutes sufficient funding for S4C, based on a new remit.

S4C recommends that the funding principles put forward by the European Broadcasting Union are adopted in relation to S4C. These are:

  • stable and adequate
  • independent from political interference
  • fair and justifiable
  • transparent and accountable

The process for defining S4C’s overall funding needs should also include consideration of the following factors:

  1. Audience expectations
  2. The availability of Welsh language content on media platforms
  3. Comparative costs of content creation and rights acquisition
  4. S4C’s own efficiency
  5. The principle of “read across” to the licence fee
  6. Inflation and other cost pressures

Appropriate Sources of Support

A change in remit to become a PSM provider (incorporating our current PSB status) should encourage those involved with the review to look more broadly as to where this additional investment might come from.

We are keen to be given the opportunity to raise more money from our own activities but the back-bone of our public service will be publicly sourced funding.

We have worked hard to ensure that the licence fee-sourced contribution towards S4C’s funding works well – co-operating with both DCMS and the BBC to establish sound processes and appropriate accountability. S4C will continue to effectively access this important source of funding, while maintaining our independence.

With licence fee funding channelled through the BBC, maintaining a funding link with the UK Government, via the DCMS, has been vital for our continued independence and for our ability to carry out our Welsh language remit.

Plurality of funding remains beneficial and a principle to be safeguarded for the future. Any future funding options must maintain S4C’s status as an independent, trusted and impartial content provider.

Chapter 4: Accountability, Governance and Regulation

In this chapter we do not put forward a fixed corporate view as to the best accountability, governance and regulation structures for the future. Instead, we identify the elements which we believe to be fundamental to support S4C’s ambition for the future and our role in the lives of people in Wales, the UK and throughout the world.

S4C suggests that the elements are as follows:

  • S4C exists as an independent organisation to provide television and media services in the Welsh language and to collaborate with a wide range of partners in the content industry.
  • S4C should have a revised remit, which should include the specific duty of providing Welsh language television and media services for the audience across the UK; and provides us with the ability to adapt and develop our service provision as technology and user needs develop.
  • S4C is funded primarily by public funds but has the ability to undertake commercial activities through subsidiary companies which may not, however, draw on public funds.
  • S4C has the ability to exercise powers to borrow funds for defined purposes within limits set out by the Secretary of State and the Chancellor of the Exchequer.
  • The processes by which S4C accounts for its use of public funds and for delivery of its remit are appropriate and clear.
  • The processes by which decisions are reached as to what constitutes sufficient funding for S4C to fulfil it’s remit are appropriate and clear.
  • Accountability to Ofcom for most regulatory matters (with the exception of certain specific subjects, such as language guidelines and policies) is confirmed.
  • Non-executive appointees, fulfilling a broad range of criteria related to the new remit, should represent a clear majority of the governing body or Board.
  • The appointment of such non-executives should be made via a transparent public appointments process.
  • The Chief Executive should be appointed by the non-executive members of the Board.
  • The Board should be responsible for ensuring appropriate, highquality corporate governance arrangements, in line with UK best practice.
  • The Board should be responsible for implementing an appropriate process for evaluation and reporting on service performance measured against objectives.
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Final word

In S4C: Pushing the Boundaries, we have set out an achievable vision for the next ten years.

In order to deliver the vision, S4C needs:

  • an agreement that it is right for S4C to want to be a Public Service Media provider in the Welsh language, and not simply a broadcaster
  • a recognition of what that implies and the benefits it can deliver; and
  • a process for defining the funding requirement.

We look forward to taking part in the public discussion which we hope the review, and this vision for the future of S4C, will bring about.