Strategy: Modernization – the S4C way

It is now widely accepted that at the end of the 1990s, S4C was struggling.
December 1, 2007

It is now widely accepted that at the end of the 1990s, S4C was struggling.

Viewing figures had plummeted and relationships with our key suppliers in the production sector had soured. There was a lack of consistency in the schedule and too many mediocre programs were making it to screen. The attitude was inward-looking and defensive.

There was also a sense of exasperation from external quarters and people were beginning to think the unthinkable – that S4C’s days were numbered.

The advent of digital television had certainly increased competition. Changing language patterns were another factor. Currently some 600,000 people speak Welsh – about 20% of Wales’ population – but there has been a huge growth in the number of children and young people learning the language.

I wasn’t convinced we had done enough internally to strengthen our position in the run-up to digital switchover in Wales in 2009/10. When I rejoined S4C some four years ago as director of programs, I believed we had the creative ability – within S4C and the production sector – to carve out a sustainable future.

Two key factors were needed to drive forward change: creative excellence and economic prosperity. So how were these factors translated into policy?

I devised a five-year creative strategy, which has formed the bedrock of all subsequent policy decisions. The strategy covers content, distribution and communications and builds on our strength in key genres – sport, music, drama, factual and children’s. It places an emphasis on entertainment and visual flair.

The vision was clearly set out: get the strategy and you get us.

In order to support delivery of the strategy, we restructured our internal organization and transformed our relationship with our suppliers.

A board of directors and six new directorates were established, including a new model for commissioning. A director of commissioning was appointed, along with a head of content, head of children’s services and five content editors for sport, culture, fiction, entertainment and factual. The aim was to give the production sector stronger strategic leadership.

Staff numbers were also reduced, with work previously undertaken in-house transferred to external suppliers.

New Terms of Trade had already been agreed on between S4C and the production sector, which saw us license programs for a certain period of time rather than buying content outright.

We established more stringent criteria for securing commissions. As the creative strategy is designed to meet the challenge of declining audiences and increased competition, it became evident that our development process was critical to securing success.

Money for ideas and scripts used to be distributed on an ad-hoc basis, with very few projects reaching the commissioning stage. We pooled all the development monies into a £1 million pot and devised a tendering process to identify companies which could demonstrate the capacity to think in terms of both creative and economic sustainability.

Five companies met the criteria. Substantial investment gave these companies the financial security to establish proper talent structures and develop ideas alongside production work. For too long, companies had operated in a ‘boom and bust’ cycle – work up an idea, get a commission, produce it, then start all over. This was not a sustainable model.

A secondary result of the development re-think was a consolidation within the industry, something S4C encourages. Mergers and acquisitions to form larger production units mean companies can compete for work outside Wales. They gain a stronger understanding of markets, audiences and programming trends – which all benefit S4C.

We operate an open commissioning process. We also tender major contracts, which has allowed for greater transparency and generated more competition between the producers themselves. We are currently undertaking a review of the content supply chain to identify any other barriers which need to be removed to facilitate creative and economic development.

Key genre zones were reinforced within the schedule. For example, Sunday for drama and Tuesday for current affairs and factual. We introduced definable highpoints in the schedule too, with landmark programming such as the international coproduction China.

In terms of distribution, S4C had some catching up to do. We were already available on DTT and digital cable in Wales and on digital satellite outside Wales. We now turned our attention to the Internet. Within a space of 18 months, we’ve gone from non-availability on broadband to a comprehensive video-on-demand service and live streaming of S4C. We’ve also negotiated a deal to deliver S4C through the Freewire IPTV system.

And so to communications: once content had improved, we had to look at the packaging and presentation of that content to help it stand out in the plethora of channels available. Earlier this year we undertook a wholesale rebrand of S4C – the first in 13 years. The new brand has been adopted on- and off-screen and online. It even extends to our headquarters in Cardiff, once an ordinary office unit, now transformed into an inspiring environment. The new brand is contemporary and fresh, yet distinctly Welsh. It has already won awards at both uk and European levels.

As part of the new commercial attitude, we’ve taken other bold steps. We’ve reassigned program rights over the channel’s 25-year history to the producers themselves, enabling TV companies to repackage and re-sell their own content. This is over and above the requirement placed on broadcasters by the 2003 Broadcasting Act.

We also agreed on new media terms early on with our production companies.

Those weren’t the only changes. We agreed on a strategic partnership with the BBC, which provides for editorial and financial discussions which ultimately work to deliver S4C’s strategic requirements. This unique arrangement means the BBC has made a significant allocation to Welsh-language content delivered on a non-BBC channel.

The killer question, of course, is ‘has all this change borne fruit?’

We now have a robust management system in place and have reinvigorated our internal operation with a streamlined approach. We have worked in partnership with the production sector, offering strategic leadership, clarity of requirement and transparency of operation.

Creative and commercial freedom has been transferred externally. The Welsh production sector is remodeling itself to support S4C’s creative demands and to take advantage of new markets in the UK and abroad.

There has been a great deal of support externally – from the UK government, National Assembly for Wales and regulatory body Ofcom. There is a recognition of S4C’s place in the UK public service broadcasting ecology.

Ultimately, however, the test is in relation to consumers. There are definitely positive signs. We have arrested the drop in viewing figures. There has been an increase in viewing during peak: 11% in 2005 compounded by 3% in 2006. Our audience in peak is also getting younger: 31% of the audience was under 45 in 2006 compared to 25% the previous year – another encouraging sign.

The Web is increasingly important. During October, S4C received almost five million hits on its website and increasing use is being made of the broadband context.

To the future, we want to expand our children’s output. A public consultation has demonstrated a will for a separate children’s channel and we hope to launch such a service – with the government’s say so – next year. We will also be looking more closely at the schedule to identify where we can build on our strengths. The emphasis on visual flair and entertainment will continue and the next creative strategy will be designed and implemented by 2009.

We had to move fast to make changes. I am now confident of S4C’s role as a catalyst for creative and commercial activity, and we can all look towards the future with renewed confidence.


In what is a unique UK funding model, S4C, a Welsh-language public service TV channel, is financed by a variety of revenue streams.

S4C is funded primarily by the UK government, and in 2007 received £96 million to commission content from the independent production sector. The channel enjoys an exclusive agreement with the BBC, which guarantees £72 million of programming over the next three years. In addition, commercial revenue is raised from advertising and program sales.

Despite the pressures on commercial monies, the stability provided by a statutory funding formula has enabled S4C to plan for the future and deploy resources in line with a new creative strategy.

About The Author
Jonathan Paul is a Toronto-based writer into creativity, content, advertising, tech, comics, video games, film, TV, time and space travel.