Media: All about ... The funding of children's TV

Ofcom's full report into kids' TV is set to raise eyebrows.

It's rare that Ofcom casts itself as the harbinger of doom. Following consultation, it is more likely to beaver away quietly on a matter before delivering a relatively even-handed verdict.

On the subject of the funding of children's television, however, it seems set to deliver some strong opinions. Its full report on the matter is not due until August, but its preliminary statements, issued last week, warn the findings will be "stark" and cause for concern.

Ofcom has found that spend on producing children's TV fell from £110 million in 1998 to £90 million in 2006 (this across the public service channels BBC, ITV, Channel 4 and five). Also, it says, the cost per hour of producing this programming fell from £85,000 in 1998 to £56,800 in 2006.

Then again, it's a bit rich, some say, for Ofcom to get its knickers in a twist given its actions on advertising aimed at children. Last November, it announced a ban on the advertising of high-sugar, fat and salt products during children's shows. The ad industry predicts this will take around £40 million of ad revenue a year out of the TV market. Critics say this hardly encourages broadcasters to invest in children's programming, let alone increase spend.

So, what possible actions might Ofcom recommend, and how are the broadcasters reacting?

1. Ofcom announced its intentions to look at the future of children's programming last December. Work began in February, with the findings expected to be published in August. Its reasons for launching the review ahead of one of the wider public-service broadcasting market (due to commence next year) included the ban on some food advertising. It also said a faster than expected decline in children's viewing, coupled with commercial pressures on the BBC's competitors, were significant factors driving the review.

2. The regulator has hinted at possible ways forward. However, James Thickett, the director of market research at Ofcom, has made it clear it has no powers to compel broadcasters such as ITV to increase their spend or commitment to children's output. Independent producers of such content are keen that Ofcom recommends government intervention to create a so-called "children's fund" to subsidise the production of programming. Thickett says Ofcom is still considering a range of policy options.

3. ITV's dwindling support for children's programming has created headlines. It recently applied to Ofcom to reduce the output of children's programming on ITV1 to only five hours a week. In the past year, ITV has stripped children's shows out of its afternoon schedule to replace them with quiz shows and detective drama such as Midsomer Murders. Strong competition from Channel 4 partly drove the switch. Now GMTV is responsible for much of the children's output on ITV1.

4. Provision of children's content is complicated by the strong presence of the BBC in this market. The corporation launched its children's digital channels, CBeebies and CBBC, in 2002. And competition is growing for the commercial public-service broadcasters with the presence of 18 dedicated children's outlets on multichannel platforms, contributing to a large increase in volume, if not quality, of children's content. Ofcom concedes these dedicated channels are available in 63 per cent of households with children, and that a further 20 per cent of homes can access the BBC channels via Freeview. This may play in favour of the commercial channels that are attempting to lessen their commitment to children's hours.

5. Five has made children's programming a significant plank of its strategy, with its pre-school Milkshake strand airing each weekday morning. Jane Lighting, the chief executive of five, recently affirmed its commitment to Milkshake. However, five recently dropped its Shake strand, aimed at older children. Following Ofcom's announcement of the food-ad ban, Lighting described the future of children's programming as "bleak".

6. Dedicated children's channels such as Nickelodeon also expressed disappointment with the ban, but have continued to invest in some original programming. Many of these digital channels are helped because they are part of international networks and can share production or rerun costs.

WHAT IT MEANS FOR ...

ADVERTISERS

- Despite the relative shortage of children's programming on ITV, Channel 4 and five, the presence of more than a dozen commercial children's outlets on multichannel platforms provides advertisers with options.

- Clearly, the big issue for advertisers is whether or not they are allowed a presence around children's programming. The ones that are allowed might be concerned that UK production budgets are decreasing, potentially affecting the quality of children's programming.

- The creation of a government-backed fund to support children's programming, while easing the pressure on broadcasters, would therefore be a welcome step.

BROADCASTERS

- Broadcasters expressed their anger last autumn at Ofcom's plans to ban certain types of food advertising from children's programming. They argue children's TV is now harder to fund, and some, notably ITV and five, have cut back the number of hours they dedicate to children's shows.

- Most general entertainment channels have made it clear they have no plans to increase the number of hours of children's programming. However, they are likely to welcome any assistance from government in creating a fund to help with the production costs of such programming.

- Dedicated children's outlets on multichannel platforms remain convinced they have a strong future, but are less reliant on original, domestic content.

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