The fact that our content is in Welsh will remain our raison d’être, but commissioning more diverse content for our audiences, both long-form and short-form, available when and where they wish to consume it, will sit firmly at the heart of tomorrow’s S4C.

We have a clear view of the type of service we need to become - moving from the channel’s traditional position as a primarily linear broadcaster, into a provider of many forms of content, across multiple platforms. We need to engage more fully with a younger demographic, while still providing services for our loyal, core viewers. We need to provide a personalised service with a choice of content that reflects individual viewing habits, both in terms of content form and how it is viewed. The need to offer both broadcast and ‘personal-cast’ options is vital for S4C’s future.

To do so, we will need to work closely with all our partners – the BBC, independent producers and ITV Wales - to develop new ways of thinking about our audience’s wishes, while continuing to promote quality and originality of content.

Our ambition is to evolve from being a Public Service Broadcaster (PSB) to a Public Service Media (PSM) provider. This better reflects the way in which other UK PSBs are already operating and would bring S4C into line with UK and international best practice. It will allow us to commission and distribute content on any popular platform – broadcast or online.

S4C’s key Ambitions within the Vision

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

S4C content needs to be available where people are watching - on social media platforms, short-form video sites, linear TV, Smart TV, and any other popular platform now and in future. The vision is to become a complete Public Service Media content provider.

As a PSM provider we will build on the strengths of PSB, and maintain those elements, whilst recognising that broadcast is only one method - albeit an enduring one - of reaching audiences and meeting the needs of Welsh language public service content provision in the digital age.

It is no longer sufficient to create great content and then expect your audience to find it by tuning in to the television. While ‘broadcast’ is still important, from our own qualitative research we know that more and more people expect ‘personal-cast’, programming services that meet their own individual needs.

To be truly competitive today, S4C will aim to provide a more personalised viewing experience for some audience segments, curating content in meaningful ways so that people can readily access the most relevant content for them on whichever platforms they choose. Personalisation in turn informs S4C of audience choices and preferences for future content creation and delivery, and drives engagement.

We have made some headway into ensuring we are represented on key broadcast platforms (see S4C Today section) – and in prominent positions - and we have trialled new content on YouTube with Pump. But our overall digital offering does not fully take advantage of the potential of new technologies and the public’s appetite to use those technologies. Welsh language content is not available in the way it should be to meet the needs of today’s audience.

S4C Linear Channel

Research shows, that while it is clear that some age groups are currently watching less television in favour of accessing content via other platforms,⁷ there is no doubt that over the next decade at least, the popularity of TV amongst other age groups, as well as TV’s place as the home of family viewing, will remain strong.⁸ PSBs, with their continued substantial investment in mainstream linear programming, will ensure the continuing strategic importance of broadcast television as a primary means by which people access content.

We must therefore continue to invest in our presence on main TV platforms for years to come and continue to provide a competitive and ambitious linear service.

S4C’s Online Player: more content, more prominence, more engagement

At present, S4C operates a comparatively basic online ‘player’, primarily providing live and catch-up services for our long-form TV content – mainly available for 35 days after initial broadcast.

Our strategic partnership with the BBC has also made it possible for most recent S4C content to be made available on the BBC iPlayer. We want to build on the advantages of this partnership, whilst also using our own player to create a truly personalised service in line with audience expectations. The aim will be for it to offer access to all current and historic content for which the relevant distribution rights are held.

Driving engagement, efficiency and prominence

S4C’s new player will be the driving-force behind all S4C content on digital platforms. It will enable us to send direct and personalised communications to our subscribers with updates and information, as well as offering access to rich content suited to their own individual needs and viewing choices.

It will enable us to automate and streamline our procedures for making outgoing payments to contributors and rights holders based on the numbers of views.

This new player will naturally be available via S4C’s own website, but also via as many other platforms as possible, building on current plans to launch apps on Samsung Smart TV, for example. It will provide S4C with prominence on digital platforms as we aim to make our player available on all the most popular devices. But we will still be looking to ensure that S4C is included on as many third-party content platforms as possible.

All S4C content online

The new player’s technical capabilities will drive prominence and engagement with audiences, but we will also aim to revolutionise our online content offering.

In the age when services offered by the likes of Netflix and Apple TV are established in the audiences’ expectations, the aim is to give Welsh audiences a recognised one-stop-shop for all S4C content. We want to allow subscribers access to the broadest possible range of content and enable them to curate their own playlists.

In addition to live streaming of the linear channel, this new service would provide:

• catch-up facility for recent S4C long-form programming;
• supplementary short-form content about programming – behind-the-scenes, talent interviews etc;
• new original short-form content, curated by theme;
• archive content, curated by genre/interest areas;
• offer ‘box sets’, exploring the option of pay to keep.

A standalone children’s player

We have an ambition to create a standalone children’s online service, modelled on the above, to make Welsh language content more readily available to children who speak or are learning the language. It would have associated apps, allowing children to browse content easily on mobile devices without the risk of stumbling on content which is unsuitable or not age-appropriate.

These developments will require a raft of technical adaptions and upgrades to our current offering, as well as additional resources to digitise, code and curate content, and to secure the appropriate rights for content distribution.

On-demand TV providers

Several established TV providers offer live channels and operate as conduits for access to broadcasters’ on-demand facilities via TV sets. S4C launched on YouView in early 2014. Our aim is to incorporate S4C on further on-demand services where possible, with two platforms – Freeview Play and Freesat Freetime targeted early on.

Smart TVs and Media Streamers

Traditionally, PSBs have enjoyed prominence on television EPGs (Electronic Programme Guides). This has been extremely valuable in maintaining awareness of S4C’s programme offering in the digital age.

Now, with the rapid rise in take up of Smart TVs and the reduced profile given to the EPG by some platforms, Welsh speakers and other viewers may find it ever more challenging to find Welsh language public service content on digital media platforms if that content is not afforded appropriate prominence.

We have already worked with Amazon Fire and Samsung to get S4C pre-loaded as an integral Smart App, ensuring a degree of prominence when viewers turn on their TV sets.

Our vision is for S4C to be included on all new-build Smart TV sets. But this takes time and investment, both for app development and for ensuring app integration by manufacturers, and is likely to need a strong regulatory steer if it is to happen. We believe it is very important for the PSB prominence principle to be extended to include on-demand services which serve public service providers. It is particularly vital for the availability of Welsh language content as S4C is the only Welsh language PSB available – serving Welsh speakers throughout the UK.

External Video Platforms

A 2016 Ofcom report⁹ states that for the first time, children aged 5 to 15 now spend more time online than they do watching TV sets, with YouTube being the primary online destination. This was especially true for 12 to 15-year-olds, with 87% watching YouTube. The report also states that while they may be watching less content on TV, this does not mean that children are consuming less content.

The example of this one group demonstrates how important it is for top quality, appealing Welsh language content to be made available on external video platforms.

Our ambition with YouTube is to develop a small portfolio of Welsh language channels, targeted at different age groups and to populate them on a regular basis with compelling short-form content. Much of this will be standalone new content – as we have trialled for Pump – but some will also relate to content on our linear channel and act as tune-in promotion. In a similar way, we need to enhance our original video presence on Facebook, which has become a major video platform as well as a social platform, in order to further engage with those habitually using it – a relatively young demographic. We will also monitor trends as new opportunities and new platforms emerge over time.

Social Media and Engagement

Social media in all its forms is a vital component in the success of content today. Audiences, particularly the 16 to 34-year-old age group, are heavily invested in social media and want to share their views, comment on content, make demands of broadcasters and ask questions. Social media chatter can increase ratings, drive re-commissions and make stars of unknown talent – and indeed the social media users themselves.

We re-focused the energies of our engagement team in 2016 and as a result, increased our presence across key social media channels, achieving substantial increases in engagement levels with content.

This was achieved using promotional material and trialling a limited amount of short-form content, but we recognise that we are a long way from using social media at optimum levels. To achieve this and engage fully with audiences who consume more content via social media than any other medium, we must create more short-form content, and we must also be more responsive to our audience via social media and promote greater levels of communication and engagement. This requires additional resource.

The value of new content, accessible across a range of platforms, must be maximized by making sure our audience knows what we have and how it can be accessed. Enhanced social media activity will be key, spreading the word about the varied appeal of S4C’s content on all platforms. It will also enable us to finely target viewers with personalised messages.

However, in line with our vision to target audiences on both TV and online platforms we must also continue to reach out to audiences who engage more regularly with more traditional forms of media.

Across all platforms, we aim to create a focused range of relevant and diverse content that captures and engages, surprises and delights all segments of the audience – on their platform of choice. This will include improving the content we offer to our current faithful viewers, as well as building a long-lasting relationship with those audiences who, according to our research, are currently less likely to see S4C as a regular part of their life e.g. younger people, mixed-language households, 45 to 64-year-olds, as well as lighter Welsh speaking viewers.

TV can in no way be seen as a thing of the past. Length of daily TV viewing in Welsh TV households is 13% higher than the UK average¹⁰ and with linear TV viewing expected to account for 75% of all UK viewing, even in 2025,¹¹ television is here to stay. This means that S4C has no choice but to continue to retain a strong focus on creating stand-out content for the TV channel, at the same time as developing new content to be made available on new and emerging platforms.

Peak time programming

Develop more content with commercial potential

We aim to build on our excellent reputation as an investor in co-production projects which have brought great benefits to the channel, our audience and Wales’ production sector. Our ambition is to be able to target more high potential projects which is why we work in partnership to develop formats and make good creative ideas great. For further detail see ‘A Commercial Strategy to Help Drive the Vision’.

Making Existing Content Work Harder

S4C has 35 years of content in its archive. Properly presented, in an appropriate context, it can still delight, inform and entertain. We will be looking to digitise as much of this back catalogue as possible and, where relevant, re-purpose for use – into short-form content for example – or look at ways in which it can be sensibly monetised. Some programming is constrained by rights issues but we will engage with various rights holders in the hope of reaching a mutually beneficial resolution.

There is no doubt that S4C’s public service content is widely valued and appreciated by our audience.¹⁶ Welsh speakers in particular see S4C as the channel that most effectively contributes to the culture of Wales, is best at reflecting modern Welsh life, and that reflects the diversity of people living in Wales in terms of age, gender, disability, sexual orientation, religion or ethnicity in its programmes better than any other channel.¹⁷

The research also indicates that the audience particularly appreciates that S4C portrays the whole of Wales.

When asked to choose channels that “show programmes about my area of Wales”, S4C is selected by a much higher percentage (78%) than the closest other channel (BBC One Wales at 22%). In all three regions all scores for S4C were at 70% or higher:

North Wales: 77%
Mid & West Wales: 81%
South Wales: 70%

But as the only Welsh language public service broadcaster and audio-visual content provider, we are committed to making a wider public service contribution to Wales and the Welsh language.

In the 35 years since the channel was created, S4C has:

• given the Welsh language status and prominence, and enabled Welsh speakers to see and hear the language being used in all walks of life and in every corner of Wales;
• embodied the principles of proactive diversity allowing Wales and its people, regardless of background, to portray, express and see themselves represented on screen;
• encouraged language transfer and provided learning resources in and through the Welsh language;
• helped to create and sustain a booming television and creative industries sector, creating jobs and supporting economic growth right across Wales.

Making our learning content available online

We know our existing content is valuable to both educators and students. We receive regular requests for materials that cover Welsh history and geography or, for example, Shakespearean dramas that have been produced in the Welsh language. Our goal is to ensure that all our best educational content is available in one rich and dynamic online platform.

As with our mainstream content plans, the ambition is to make this educational content available in the right format - whether long or short-form - easily searchable and as accessible as possible across various devices.

We want to be a reliable, relevant and userfriendly source of media content that supports and enriches the learning experience.

Becoming a life-long learning partner

To deliver on our ambitions, we need to make life-long learning a more entrenched and focused part of our business. Additional resource would allow us to:

• sort archive and current content as appropriate,
• explore the best channels to get content to students and educators,
• work with our technological and digital teams to ensure content is in the right format and accessible,
• create marketing communications initiatives that make students, teachers and guardians aware of what we have and where it can be found.

S4C and our commercial arm, S4C Masnachol/Commercial, have a proven track record of working successfully with commercial partners across the globe. S4C Commercial makes a variety of investments from its own commercial funds with the aim of returning sustainable dividends to S4C’s public service.

Since 2009, S4C Commercial has paid dividends averaging almost £2m per year into the public service fund.

Our aim is to build on current achievements, and deliver even more value for the public service. We plan to achieve this by successfully engaging in the following areas of commercial activity:

Extending the reach of on-air brands - Taking selected on-air brands and investigating ways in which further value can be extracted via S4C Commercial projects; seeing if they can live off-air in a commercial setting, while promoting face-to-face interactions and high-quality S4C brand experiences in the community. For example:

• We are already scoping plans for Fferm Cyw/Cyw Farm as a commercial visitor attraction based on our popular on-air brand for young children.

We are currently considering how to further embed the Cyw brand within the early years’ curriculum in a way that supports language transfer, as well as generating income to invest back in to our services.

Selling advertising, sponsorship and teleshopping – an income stream which has considerably reduced since Digital Switchover and the loss of C4 programmes, but which is still important. Sky is S4C’s agent and local advertisers are incentivised to advertise in Welsh, by the availability of a subsidy for production costs. This increases the number of Welsh companies advertising on S4C, in a market which tends to be heavily influenced by factors in London.

Our aim is to continue to explore ways of generating further advertising and sponsorship income, particularly from online and digital content delivery. Realising the aims set out in this vision would lay the groundwork to enable S4C to put further advertising offers in place which meet our needs and those of our advertisers.

Revenue returns from international programme sales – While this is a field in which S4C has traditionally achieved success, the statutory framework in more recent years has meant that exploitation rights are now held by producers rather than S4C. Today, we work with partners to invest in suitable co-production projects. This is our primary template for future exploitation of the commercial value of selected programmes. We have an ongoing relationship with Sony, designed to inspire producers to create formats for international distribution.

Significantly, as with any commercial activities, these are not just an investment in our own future; they are also potentially an investment in the economy. The creation of formats for Sony to distribute, will deliver additional revenue generating opportunities for the Welsh production sector.

Equity investments in relevant projects - Investing in business or co-production opportunities that can both help deliver our vision, and deliver financial returns. These tend to be longer-term investments and we aim to maintain a portfolio approach to this kind of investment. Recent examples of this kind of activity include:

• Series one and two of Y Gwyll/Hinterland have now sold to more than 20 territories around the world and have been seen in 130 further territories on Netflix, generating more than £2.6m in gross sales income shared across investors. Series three has now transmitted on S4C and will start its global journey shortly. High-quality TV drama from Wales is poised to achieve a wider impact on the international stage.

Working collaboratively with others – developing partnerships with other interested parties or those with expertise and experience which can deliver results for S4C:

• Developing new creative and commercial partnerships e.g. with consumer brands, organisations, venues or attractions which could generate new types of content for the linear channel, our website, or social media.
• Investigating new technological/media partnerships e.g. with ISPs/social media platforms, that could further enable new audience relationships/engagements with S4C.
• S4C has been instrumental in facilitating the creation of a new society lottery for Wales. Exclusive rights have been secured to broadcast the lottery results and to explore programming opportunities around the good causes that will benefit from the lottery.

Commercial Investment Targets

When considering commercial investments, we expect the business in question to demonstrate a positive NPV (Net Present Value) of cash-flow over three to five years using a discount rate of 15%. The return to S4C Commercial is likely to be through a combination of capital growth and dividends, although it is not possible to accurately forecast when returns will be delivered to S4C Commercial as often no exit is forecast for five years or more.

Enabling S4C’s Commercial Potential

The current statutory provisions relating to S4C’s ability to invest in new commercial activities can be cumbersome and disproportionate, limiting S4C’s ability to generate our own new commercial revenue streams.

If we wish to engage in a new type of commercial activity with our own commercial money, which is not closely aligned with S4C’s core service, we have to seek the Secretary of State’s approval to lay a piece of legislation before Parliament and for Parliament to consider whether S4C should be allowed to enter into a new commercial project.

S4C believes that its commercial powers could be set out so as to allow S4C to invest and participate in a wider range of commercial projects without having to seek parliamentary approval.

Implementing new commercial powers

S4C proposes that our commercial powers be defined more broadly, in line with Channel 4’s, by way for example of a general enabling order that could allow us to use our commercial funds to facilitate a greater number of commercial projects in Wales and to try and generate further commercial income. Such an order could be made by the Secretary of State by way of a Negative Resolution Order.²⁴