Ed Vaizey – 2012 Speech to Oxford Media Convention

Below is the text of the speech made by Ed Vaizey, the then Parliamentary Under Secretary of State for Culture, Communications and Creative Industries, at the Oxford Media Convention on 25 January 2012.

Delighted to be opening the tenth Oxford Media Convention. In 2002, I wasn’t even yet a Parliamentary candidate, and people in my constituency were campaigning for dial-up internet access. Nobody knew what a smartphone was, and very few people had digital television,

So we have come a long way.

But one theme that perhaps links the two dates is the continued success of what we now call – thanks to Chris Smith – the creative industries.

Let me begin by saying what a privilege it is to represent the creative industries in Government. It’s a commonplace nowadays to talk about the success of the creative sector in the UK, but it’s a commonplace because it’s true.

You know how successful you are but it is always good for a Minister to rehearse your success in public.

As I might say if I were presenting the BAFTAs, “let’s pause and look back on a successful year”…

In the last twelve months we’ve seen:

– UK films – from Harry Potter to the InBetweeners top the UK box office for 20 weeks in the UK;

– the King’s Speech become the most successful independent movie in history, earning £46 million in the UK and £266 million worldwide;

– Harry Potter and the Deathly Hallows, made in the UK, earning more than any other 2011 release (over £73 million in UK, which is the third highest ever);

– The highest ever amount of UK film production activity growing by 7% to £1.16bn;

– UK acts charting at number 1,2 and 3 in the same week in the US for the first time in 25 years, with Adele’s album, 21, the best-selling digital album of all time;

– UK TV formats dominating television schedules all across the globe, accounting for two in every five global programmes;

– and of course Downton Abbey continuing UK success at the Globes; exports of UK television content are worth more than £1.3 billion per year;

– the BBC’s global reputation for excellence cemented, with BBC Worldwide supporting the creative industries and increasing international sales by 9.6% in 2010-11;

– the UK consolidating its place as the European hub for video games, with 35% of video games software sold in Europe being developed by UK studios, with almost half of the world’s top 100 development studios based in the UK;

– UK-based games companies taking the lead in online markets:Jagex’ online multiplayer;

– Hand Circus’ iPhone App; Playfish’s social network games;

– VFX company Double Negative winning an Oscar for Inception;

– the VFX hub in Soho is home to four of the largest VFX companies in the world;

– one of the most innovative and successful advertising industries in the world grow despite the recession: 2010 revenue growth of 5.9 per cent to £15.5 billion, with forecasts of 1.4 per cent growth in 2011 and over 5 per cent in 2012. A recent PwC report predicted that the size of the UK advertising industry would grow 4.8 per cent in the next four years to £17.7 billion;
– one of the most successful and creative fashion capitals anywhere in the world continue to flourish, with Burberry a UK company increasing its sales by a quarter;

– and the largest of the UKs creative industries, the UK publishing industry, adapt and remain one of the most successful in the world for the breadth, depth and quality of content it creates, as well as the multiple ways in which that content is brought to market.

Publishing in the UK has a turnover of £19 billion.

Before I talk about the future, I hope you’ll indulge me further as I also want to highlight some of the achievements of my Department.

In the last 18 months we’ve established the Creative Industries Council and Creative England; merged the UK Film Council and the BFI and increased Lottery funding for film; brought forward revolutionary plans for local television; settled the licence fee until 2017; secured S4C’s future; launched our plans for digital radio switchover; put in place ambitious plans for broadband, both mobile and fixed; continued to implement the DEA and make progress on copyright infringement; implemented the e-privacy directive; launched the e-accessibility plan; persuaded the DfE to revolutionise the computer science curriculum …I could go on.
I want to take this opportunity to thank the officials in my Department who have worked to make this happen, as well as some of the organisations we work with, particularly Ofcom, which I think does an outstanding job.

Anyway, I’m now beginning to sound like I am delivering an Oscar acceptance speech. So. The future.

We know we have some of the tech savviest consumers in Europe: two-thirds shop on the web; one in four already have a smartphone; and soon one in four will have a tablet too. So again it’s become traditional to predict the end of big media, and the dominance of new internet companies. Throw in a prolonged downturn, and the doom mongers seem to hold all the cards.

But hold on a minute. This afternoon you’ll hear from Channel 4 how they have turned around from where they were a few years ago, angling for licence fee money; the BBC is launching the Space, a hugely significant cultural event; ITV has hugely ambitious plans focused on content; more and more international companies like Discovery are investing in UK content.

In the last two years, linear television viewing has increased by almost 8 per cent;86 per cent of people who can time-shift still choose to watch linear television; 9 out of 10 us together still consume a billion hours of radio a week.

The future’s not binary. It’s evolutionary. In a digital age, content is crucial.

It may seem odd to say this given the concerns we have around digital copyright infringement, but my view is that technology provides huge opportunities for the content industry in the UK. Technology may change the platform through which we view or hear content. But it will not remove the desire for the consumer to access great content. Our viewing habits will evolve – but they will not change fundamentally. And in a digital age, the chance to monetise content through advertising may well increase, as enhanced and targeted advertising commands higher prices.

In a world in which much is changing, but more will stay the same than perhaps we think, Government’s role is to provide regulatory certainty, and the right infrastructure for business. The publication of the Green Paper is imminent, but let me focus on just a couple of issues.

Infrastructure

To give us the infrastructure we need, we’re investing more than three-quarters of a billion in digital infrastructure – rural, mobile and urban – that will give us the best broadband network in Europe by 2015. This adds to BT’s investment of £2.5 billion as part of the most rapid broadband investment in the world. And Virgin Media has recently announced it is investing to double the speed for its existing customers.

The largest part of the Government funding is £530 million to extend superfast broadband to 90% of the UK and to ensure universal availability of standard broadband. We have asked local authorities and the devolved administrations to match this funding, to give total public funding of around £1 billion, which we expect to be supported by a further £1 billion of private investment.

Our aim is to complete this roll-out by 2015. This gives us a very tight timetable. We have asked local authorities to submit draft Local Broadband Plans by the end of February and to have these signed off by the end of April, so that they can complete procurement by December. I can announce that today we will have signed off the broadband plans for almost a third of the total areas in England, which is fantastic news.

As well as broadband, we’re looking at how spectrum policy can underpin innovation. In a world of mobile data, spectrum is the new railway. Ofcom has announced its plans for a 4G spectrum auction later this year. We’ve committed to releasing 500MHz of spectrum over the next ten years – more than double the amount being made available in the 4G auction. And we’re monitoring the trial of the use of white space in Cambridge to see how we can use this to stimulate innovation. All in all Ofcom estimates the net value of unlicensed spectrum might be as high as £100 billion over the next 20 years.

In short, we want to create the conditions to ensure that effective use of spectrum can continue to support economic growth and innovation, which is why it will feature heavily in the forthcoming Green Paper.

Content Regulation

As well as infrastructure, we need to put in place the right business conditions to support UK creative industries and encourage inward investment. We will address the regulatory environment across the board in the Green Paper, but today I want to focus on public service broadcasting.

Despite digital television, we still believe the obligations placed on public service broadcasters are important, to ensure a vibrant production sector throughout the UK. But the quid-pro-quo, of free, scarce spectrum, is not what it was.

So we need to find new ways to reward public service broadcasters who invest in UK content, and also to perhaps broaden our definition of what a public service broadcaster is.

One idea we are keen to explore is the potential for Government to encourage investment in UK content through the Electronic Programme Guide.

At present the EPG, though statutory, is governed by a Code of Practice policed by Ofcom. The main PSBs are meant to be given appropriate prominence, but the broadcasters have some discretion, and Ofcom does not have the power to prescribe or guarantee a position. Further, current regulations only apply to linear television.

In addition, many non-PSB channels invest in UK content that could fall within the traditional definition of public service content – obvious examples are news, current affairs, children’s television, documentaries and quality drama. So we need to look at whether the prominence rules could be used to reward those who invest in that kind of content.

So we have commissioned research on this issue, and we will seek further views in the Green Paper. It’s important that any new regime is sufficiently flexible and does not prejudice the UK’s huge success in attracting inward investment.

While we might look at one or two areas where we think regulation might help, I want to make it clear that we believe very firmly in self-regulation where possible. We have seen how the implementation of the e-privacy directive has caused huge problems for business. And we have now seen draft proposals from the Commission on amendments to the data protection directive, which will need careful scrutiny.

So we need to take a step back, and consider what it is we want to achieve. If viewers can access content in many different ways, top-down regulation won’t work on its own. We need to do two things – give viewers the tools to protect their kids from inappropriate content, and give viewers the guidance they need to choose what they want to watch.

We’ve seen this operate with some success already: the PEGI ratings for on-line games; the BBFC’s work in classifying websites; and UKCCIS’s work in encouraging ISPs to make parental controls available to their customers.

And given that data is now king, it is absolutely right that consumers should have a say in how their data is stored and used – so that means transparency, education and the right of redress where appropriate. Self-regulation, and engagement from industry in this area, can help reduce the burdens on business and ensure that you can continue to innovate.

Conclusion

These are just some of the successes and challenges facing this sector. It is a unique moment of change for the media, as we enter a new phase of the digital revolution, one that is transforming our lifestyles and touching deeper into personal and public life than ever before.

Predictions aren’t easy. We’ve got some very difficult balances to strike, but I’m confident that with your help, we can find the right solutions and keep British creative industries at the forefront of the new digital economy that’s emerging.