0

PSB Annual Compliance

Report

2017

1

• Introduction

• Original programming quotas

• Independent production quota

• Out of London quotas

• News and Current Affairs quotas

• The AVMS Directive quota

Contents

2

• TV broadcasters must comply with a range of programme and output quotas that set minimum levels of types of programmes that they

must show. These obligations originate in the Communications Act 2003 (‘the Act’) or in European legislation, and Ofcom has a duty

under the Act to monitor and enforce compliance with these quotas.

• The level of regulatory intervention that Ofcom is required to apply depends on the category of broadcaster – public service broadcasters

operate under much tighter regulations than multichannel operators – therefore some quotas apply across the board while others are

specific to the PSBs.

• In terms of licensing and regulation, The Act requires Ofcom to set specific quota compliance obligations in the Channel 3 (held by ITV

plc, STV plc), Channel 4 and Channel 5 licences.

• On 3 April 2017, Ofcom became the first external regulator of the BBC. Under the Charter and Agreement, Ofcom must set and monitor

the BBC’s programming obligations. We are currently consulting on the proposed quotas as set out in the draft operating licence

published on 29 March 2017. See https://www.ofcom.org.uk/consultations-and-statements/ofcom-and-the-bbc for further details.

• Ofcom has a duty under the Act to review and report on compliance with programme obligations. As our new BBC responsibilities did not

start until April 2017 and this report is based on 2016 data, BBC quotas herein were set by the BBC Trust until the Ofcom publishes a

final operating licence in the second half of 2017. The BBC continues to be required to meet the conditions imposed in the Trust's

Service Licences.

• In this report, BBC Three data includes only the broadcast hours prior to the channel moving to online only, in February 2016.

Introduction I

Introduction

3

PSB quotas and the Communications Act 2003

• The Act sets out a range of obligations applying to public service channels, and Ofcom sets appropriate quotas to meet these obligations.

When setting the quotas, Ofcom takes into account the individual public service remit of each channel and other relevant criteria. The levels

are reviewed as necessary.

• The level of independent production quota (25%) is set by the legislation.

• A summary of the quotas applying to PSB channels is given below. These are applicable to the BBC channels, ITV, ITV Breakfast, Channel

4, Channel 5 and S4C in Wales. They do not apply to the commercial broadcasters’ digital services (such as ITV2, CITV, E4, More 4, Five

USA, Five Star) or to other multichannel operators. This pack reports on the first five of these quotas:

1. Original productions – programmes commissioned by broadcasters from in-house production resources or independent producers.

2. Independent productions – programmes made by companies that are independent of UK broadcasters.

3. Out of London productions – network programmes made in the UK outside the M25.

4. Networked national and international news.

5. Networked current affairs programmes.

6. Nations and regions programmes on Channel 3 and the BBC – made and shown in the nations and English regions. Data relating to

these quotas will be reported separately along with programming on S4C.

Introduction

4

European ‘AVMS’ quotas

• All television broadcasters licensed by Ofcom in the UK, including multichannel operators with an audience share exceeding 0.2%*, are

subject to the obligations of the Audio-visual Media Services (AVMS) Directive.

• The AVMS Directive of December 2007 amended the Television Without Frontiers Directive and was transposed into UK law legislation in

December 2009’.

• This requires that on each qualifying channel, at least 50% of programmes must be European (including from the UK) and at least 10%

must be made by independents. Of these independent productions, at least 50% must have been made within the past five years.

• The European Commission publishes a report on compliance by all EU Member States. The latest report can be found at

http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52012DC0522&from=EN

• Detailed guidelines can be found at

http://ec.europa.eu/archives/information_society/avpolicy/docs/reg/tvwf/eu_works/guidelines_2011_en.pdf

* In conformance with EC guidelines, in January 2012, television broadcasters licensed by Ofcom in the UK were exempt from reporting on the amount

of European original and independent content included in television programme services where there was an audience share less than 0.2%.

Introduction

5

Broadcasters’ performance against original production quotas, all day

Original productions

Performance against quota, 2012-2016

Source: Ofcom / PSB Broadcasters

BBC Three data includes only the broadcast hours prior to the channel moving to online only.

70%

70%

70%

70%

70%

70%

90%

90%

65%

56%

50%

90%

82%

78%

81%

81%

81%

97%

98%

79%

63%

52%

84% 90

%

76% 85

%

79%

80%

96%

98%

80%

61%

51%

85% 89

%

75% 83

%

77%

72%

97%

98%

81%

63%

55%

84% 89

%

76% 86

%

74%

71%

98%

98%

87%

65%

57%

86%

89%

78% 88

%

78%

73%

99%

97%

85%

65%

61%

BBC One BBC Two BBC Three BBC Four CBBC Cbeebies BBC News BBCParliament

ITV Channel 4 Channel 5

Quota 2012 2013 2014 2015 2016

Hou

rs(%

)

6

Broadcasters’ performance against original production quotas, peak-time

Original productions

Performance against quota, 2012-2016

Source: Ofcom / PSB Broadcasters

Note: BBC figures include programmes made or commissioned for other BBC channels. BBC Three and BBC Four peak-time

hours run from 19:00 to midnight. Includes repeats. BBC Three data includes only the broadcast hours prior to the channel

moving to online only. Channel 5 quota increased from 40% to 45% in 2015.

90%

80%

70%

50%

85%

70%

45%

99%

98%

71% 80

%

96%

79%

49%

99%

98%

70% 82

% 93%

77%

52%

99%

97%

70% 79

%

93%

77%

57%

99%

96%

71% 83

% 94%

81%

65%

98%

96%

72%

85% 95

%

81%

70%

BBC One BBC Two BBC Three BBC Four ITV Channel 4 Channel 5

Quota 2012 2013 2014 2015 2016

Hou

rs (

%)

7

Qualifying hours commissioned from qualifying independent producers

Independent productions

Performance against quota, 2012-2016

Source: Ofcom/broadcasters

Note: The Broadcasting (Independent Productions) Order 1991 was amended on November 24th 2014. An explanatory note

and further information can be found at http://www.legislation.gov.uk/uksi/2014/3137/note/made

*One of the reasons for the fall in Channel 5 qualifying hours in 2015 was the production company Princess Productions,

producer of The Wright Stuff, being classed as a non-qualifying independent producer from that year.

36%

34% 40

%

39%

78%

93%

36%

35% 42

%

38%

75%

90%

31%

30% 37

%

38%

73%

91%

33%

30% 39

%

38%

64%

49%

30%

30% 37

%

38%

60%

34%

All BBC BBC One BBC Two ITV Channel 4 Channel 5

2012 2013 2014 2015 2016

Qua

lifyi

ng h

ours

(%

)

7

*

Quota

= 25%

8

Qualifying hours commissioned from qualifying independent producers

Independent productions

Performance by genre, 2016

8

39%

26%

100%

100%

33%

58%

73%

51%

94%

38%

35%

60%

13%

24%

1%

23%

14%

27%

59%

35%

49%

51%

3%

30%

42%

56%

54%

23%

35% 42

% 51%

50%

83%

50%

100%

100%

19%

100%

30%

23%

98%

99%

All BBC ITV Channel 4 Channel 5

Arts

Childrens

Comedy

Current Affairs

Drama

Entertainment

Factual

Factual Entertainment

Hob/ Leisure

Music

Religion

Sport

Qua

lifyi

ng h

ours

(%

)

Source: Ofcom/broadcasters

Note: The Broadcasting (Independent Productions) Order 1991 was amended on November 24th 2014. An explanatory note

and further information can be found at http://www.legislation.gov.uk/uksi/2014/3137/note/made

9

Broadcasters’ expenditure on Out of London productions

Out of London productions

Percentage of network programming by value (BBC, ITV, C4, C5 only), 2012 - 2016

Source: Ofcom/broadcasters

Note: A new category ‘Multi Nation/Region production’ was created in 2011 for Regional Productions from London Producers

which do not meet both 70% of spend and 50% of talent in any one particular nation or macro region. See

www.ofcom.org.uk/__data/assets/pdf_file/0019/87040/Regional-production-and-regional-programme-definitions.pdf on Ofcom

website for further details.

Pro

duct

ion

valu

e (%

)

55.4% 51.9% 51.7% 54.4% 56.8%

2.6% 2.1% 1.6% 1.1% 1.9%20.0%

19.9% 22.5% 20.3%21.5%

12.1% 13.6% 13.3% 14.0% 7.8%

4.4% 5.9% 5.2% 4.3% 5.7%3.5% 3.3% 3.2% 3.5% 3.2%0.8% 1.1% 1.2% 0.9% 1.5%

1.2% 2.2% 1.3% 1.5% 1.5%

2012 2013 2014 2015 2016

Other

Northern Ireland

Wales

Scotland

Southern England

Northern England

Midlands & East

London

10

Broadcasters’ hours of Out of London productions

Out of London productions

Percentage of network programming by volume (BBC, ITV, C4, C5 only), 2012 - 2016

Source: Ofcom/broadcasters

Note: A new category ‘Multi Nation/Region production’ was created in 2011 for Regional Productions from London Producers

which do not meet both 70% of spend and 50% of talent in any one particular nation or macro region' See

www.ofcom.org.uk/__data/assets/pdf_file/0019/87040/Regional-production-and-regional-programme-definitions.pdf on Ofcom

website for further details.

Pro

duct

ion

volu

me

(%)

54.7% 49.4% 49.0% 50.8% 49.4%

6.3%6.1% 5.1% 5.5% 6.7%

18.2%21.1% 24.1% 21.8% 23.1%

10.1% 11.9% 11.1% 10.4% 8.0%

7.2% 8.4% 7.5% 7.2% 8.6%1.7% 1.4% 1.8% 2.7% 2.5%0.9% 0.9% 0.8% 0.9% 1.0%

0.8% 0.8% 0.6% 0.7% 0.7%

2012 2013 2014 2015 2016

Other

Northern Ireland

Wales

Scotland

Southern England

Northern England

Midlands & East

London

11

Broadcasters’ performance against the Out of London quota

Out of London productions

Programming produced outside London (BBC, ITV, C4, C5 only), 2012 - 2016

Source: Ofcom/broadcasters

Note: Channel 4 quota increased from 30% to 35% in 2012.

30% 35

%

35%

10%

25%

35%

35%

10%

46%

48%

41%

20%

50%

47%

48%

11%

53%

47%

46%

20%

59%

46%

55%

13%

53%

50%

42%

13%

62%

45% 51

%

10%

48% 52

%

39%

12%

58%

46% 53

%

12%

51%

41%

40%

10%

62%

47% 55

%

10%

All BBC ITV Channel 4 Channel 5 All BBC ITV Channel 4 Channel 5

Value Volume

Quota 2016 Achieved 2012 Achieved 2013 Achieved 2014 Achieved 2015 Achieved 2016

Net

wor

k pr

oduc

tion

prod

uced

out

side

Lon

don

(%)

12

Channel 4 performance against the Out of England quota

Out of England productions

Programming produced outside England (C4 only), 2012 - 2016

Source: Ofcom/Channel 4. For details see page 39 of the attachment to variations of the Channel 4 licence at

https://www.ofcom.org.uk/__data/assets/pdf_file/0018/40266/channel_4_attachment_to_variation_no._18.pdf

3% 3%

5%

7%

6%

7%

6% 6%

7%

9%

8%

9%

Channel 4 Channel 4

Value Volume

Quota 2016 Achieved 2012 Achieved 2013 Achieved 2014 Achieved 2015 Achieved 2016

Net

wor

k pr

oduc

tion

prod

uced

out

side

Eng

land

(%

)

13

Out of London productions by channel/macro-region: value

Out of London productions

Distribution of spend on qualifying productions by macro region and channel (%), 2012 - 2016

Source: Broadcaster returns

2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016

London 54.2% 47.5% 46.7% 51.9% 49.4% 51.7% 53.1% 49.9% 47.9% 58.9% 58.9% 53.6% 57.7% 61.5% 59.9% 80.5% 80.5% 87.2% 88.4% 90.0%

Midlands & East 3.7% 2.7% 1.7% 1.8% 1.5% 0.3% 0.1% 0.0% 0.0% 0.1% 3.4% 3.2% 3.2% 1.0% 5.2% 4.0% 4.7% 3.9% 2.6% 2.4%

Northern England 16.7% 17.2% 23.1% 17.4% 19.7% 27.4% 24.8% 28.0% 27.6% 33.0% 20.6% 22.2% 17.6% 19.2% 15.6% 0.1% 0.9% 1.9% 3.1% 3.0%

Southern England 7.4% 8.5% 7.6% 9.3% 7.6% 20.3% 21.9% 22.0% 24.1% 7.4% 11.0% 13.1% 15.3% 9.9% 10.0% 10.1% 8.7% 5.9% 4.5% 3.6%

Scotland 7.6% 10.9% 9.2% 7.7% 10.3% 0.3% 0.0% 0.0% 0.0% 0.0% 3.2% 3.8% 4.6% 5.0% 5.2% 3.6% 4.9% 1.0% 0.5% 0.2%

Wales 6.8% 6.8% 6.5% 7.1% 5.8% 0.03% 0.00% 0.06% 0.28% 0.10% 1.9% 1.4% 1.1% 2.0% 2.8% 0.0% 0.3% 0.0% 0.0% 0.2%

Northern Ireland 1.3% 2.2% 2.5% 1.8% 3.1% 0.00% 0.00% 0.04% 0.04% 0.00% 0.4% 0.7% 0.3% 0.3% 0.5% 1.6% 0.0% 0.0% 0.9% 0.6%

Other 2.3% 4.1% 2.8% 3.0% 2.6% 0.00% 0.00% 0.00% 0.03% 0.45% 0.7% 2.1% 0.3% 1.1% 0.9% 0.0% 0.0% 0.0% 0.0% 0.0%

Total Regional 45.8% 52.5% 53.3% 48.1% 50.6% 48.3% 46.9% 50.1% 52.1% 41.1% 41.1% 46.4% 42.3% 38.5% 40.1% 19.5% 19.5% 12.8% 11.6% 10.0%

BBC ITV Channel 4 Channel 5

14

Out of London productions by channel/macro-region: volume

Out of London productions

Distribution of hours of qualifying productions by macro region and channel (%), 2012 - 2016

Source: Broadcaster returns

2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016

London 50.2% 41.5% 37.6% 41.8% 37.8% 52.8% 53.9% 54.8% 53.6% 53.4% 52.0% 44.6% 48.7% 46.8% 45.5% 88.9% 86.9% 89.6% 87.9% 89.7%

Midlands & East 3.9% 2.7% 1.8% 2.0% 1.6% 16.0% 15.2% 15.1% 16.4% 17.6% 2.6% 3.5% 2.1% 1.1% 7.4% 2.5% 3.5% 2.8% 1.9% 2.4%

Northern England 18.4% 23.3% 30.6% 24.5% 27.7% 21.0% 20.2% 21.3% 22.0% 24.2% 22.4% 26.1% 23.4% 26.3% 24.4% 0.1% 0.8% 1.1% 2.6% 2.5%

Southern England 8.4% 11.3% 10.0% 10.6% 8.6% 10.1% 10.8% 8.6% 7.6% 4.5% 15.7% 18.3% 19.5% 16.0% 13.2% 6.1% 5.9% 5.7% 6.6% 4.5%

Scotland 13.4% 15.7% 13.8% 13.2% 16.6% 0.09% 0.03% 0.03% 0.14% 0.03% 4.1% 4.8% 4.8% 6.3% 6.3% 1.8% 2.6% 0.8% 0.4% 0.1%

Wales 2.6% 2.5% 3.3% 4.9% 4.3% 0.03% 0.00% 0.12% 0.14% 0.09% 2.2% 1.1% 1.1% 2.6% 2.4% 0.1% 0.3% 0.0% 0.1% 0.4%

Northern Ireland 1.5% 1.7% 1.5% 1.8% 2.1% 0.00% 0.00% 0.03% 0.08% 0.00% 0.7% 0.7% 0.2% 0.3% 0.5% 0.6% 0.0% 0.0% 0.5% 0.3%

Other 1.6% 1.3% 1.3% 1.2% 1.3% 0.00% 0.00% 0.00% 0.03% 0.09% 0.4% 0.9% 0.1% 0.7% 0.4% 0.0% 0.0% 0.0% 0.0% 0.0%

Total Regional 49.8% 58.5% 62.4% 58.2% 62.2% 47.2% 46.1% 45.2% 46.4% 46.6% 48.0% 55.4% 51.3% 53.2% 54.5% 11.1% 13.1% 10.4% 12.1% 10.3%

BBC ITV Channel 4 Channel 5

15

News and Current Affairs

Performance against national and international news quota, all day

Annual number of hours of broadcast news and weather, all day 2012 – 2016

1,38

0

365

208

280

1,63

8

396

234

297

1,64

6

399

240

301

1,61

9

392

242

309

1,63

0

398

246

318

1,68

3

414

244 32

2

BBC One ITV Channel 4 Channel 5

Quota 2012 2013 2014 2015 2016

Hou

rs p

er y

ear

Source: Ofcom/broadcasters

Channel 5 quota increased from 260 to 280 hours in 2015

16

News and Current Affairs

Performance against national and international news quota, peak-time

Annual number of hours of broadcast news and weather in peak-time, 2012 – 2016

275

125

208

120

281

237209

139

292

242216

143

286

242219

160

296

248

215

174

296

253

210

176

BBC One ITV Channel 4 Channel 5

Quota 2012 2013 2014 2015 2016

Hou

rs p

er y

ear

Source: Ofcom/broadcasters.

Channel 5 quota increased from 100 to 120 hours in 2015

17

News and Current Affairs

Performance against the Current Affairs quota, all day

Annual number of hours of broadcast Current Affairs programming, 2012 – 2016

Source: Ofcom/broadcasters.

365

43

208

130

539

64

217

526571

77

245

528

621

68

238

523552

66

284

539

602

109

315

575

BBC One & Two ITV Channel 4 Channel 5

Quota 2012 2013 2014 2015 2016

Hou

rs p

er y

ear

18

News and Current Affairs

Performance against the Current Affairs quota, peak time

Annual number of hours of broadcast Current Affairs programming, 2012 – 2016

Source: Ofcom/broadcasters.

105

35

80

10

117

38

136

28

109

46

141

33

106

39

143

22

107

38

159

10

108

51

171

15

BBC One & Two ITV Channel 4 Channel 5

Quota 2012 2013 2014 2015 2016

Hou

rs p

er y

ear

19

European Programming

Performance against European programming requirements

Performance of PSB broadcasters against the AVMS Directive quota, 2016

50%

93%

89%

78%

95%

82%

97%

87%

70%

65%

10%

35%

26%

42%

27%

25%

37%

20% 30

%

55%

50%

99%

92%

81%

83% 88

%

64%

93%

96%

78%

Target BBC One BBC Two BBC Three BBC Four CBBC Cbeebies ITV (excl.GMTV)

Channel 4 Channel 5

Programming produced within Europe European programming produced by independents

European independent productions produced within last 5 years

Hou

rs (

%)

Source: Ofcom/broadcasters. BBC Three data includes only the broadcast hours prior to the channel moving to online only.

See Introduction (III) for details of AVMS quota system.