DTT - The People's Choice
4 March 2003
at the FT New Media Broadcasting Conference
It is almost
a year since ITV Digital collapsed.
conference had taken place in early November last year, not even the
optimists amongst us - including me - would have predicted that sales
of Freeview adaptors in the UK would be so good.
already approaching 500,000 units in just over four months since its
probably none of us would have predicted that in the Barb panel for
March the estimated number of live 'Freeview homes' would be nearly
this now leaves Freeview bigger than the highest ever level reached
by ITV digital.
with no churn on the platform and with sales still going strong, this
figure can only keep going up!
I have been asked to speak today as the person who happened to join
the BBC just before the busiest launch programme in its history. By
chance of timing, I’ve been involved at some level in every single
BBC digital launch of the last year. Unexpectedly, I also found myself
leading the launch of Freeview for the BBC last Autumn.
the above background I want to briefly cover four areas.
a perspective on the new TV and Radio services that the BBC has launched
in the last year, and why we do not plan any more launches in the foreseeable
Secondly, why Freeview really is 'the people's choice' - for a major
section of the UK population.
why we think launching Freeview was probably the most important thing
that the BBC did last year - and why it provides a key missing piece
of the jigsaw in moving to a fully digital Britain.
why I think that the use of marketing is more important than ever before
for the BBC in a world of digital broadcasting.
- The nine BBC launches of the last year
of BBC THREE on the 9 February, was a day of huge significance in the
BBC. This was the last of an unprecedented nine TV and Radio launches,
which had started with the launch of 5Live Sports Extra on 2 February
2002. In just over one year, we introduced almost as many services as
the BBC had launched in its entire history.
not the BBC going mad - although doing so much in such a short space
of time did sometimes feel like it. Even in my busiest periods in nearly
17 years at Unilever, both in a variety of Marketing and General Management
roles, I had never been involved in such an intense launch programme.
not about 'empire building' and expanding for the sake of it. Rather
it was an organisation making a critical but one-off transition. We
were adjusting from a portfolio which was suitable for the old 'analogue
world' of relative scarcity, to an appropriate public service broadcasting
portfolio for a new 'digital world' of relative plenty.
we launched are the implementation of the vision that Greg Dyke had
laid out in his MacTaggart lecture at Edinburgh a few years ago. Each
service had been based on careful analysis and understanding of the
audiences at which they were targeted.
we had the responsibility to provide distinctive, high quality and ambitious
programmes in a digital world that the public had come to expect from
us in the old analogue world.
services have included:
TV – in true BBC tradition, advertising free, with a high British
and educational content;
for both Black and Asian audiences;
and comedy speech radio;
arts, culture and ideas of BBC FOUR;
new talent and British production we are supporting with BBC THREE.
transition in our portfolio is now complete. We now have the right line-up,
and there will be no more new services for the foreseeable future.
is now firmly on making sure these services 'bed down' quickly and are
as strong as possible. Critically, we also want to make sure that as
many people in the UK can get our full range of services at the earliest
words of Lord Reith, the BBC is here to do what it has always done -
'To bring the best of everything to the greatest number of homes'.
me to my second point - Why Freeview really is 'the People's
has become central to the BBC's digital strategy.
There is no point in having these new services if not enough people
can see them. However we very nearly didn’t get to where we are
last year, digital TV was in trouble.
penetration was stalling, and millions of consumers were either confused
or quite clear that digital was not for them.
matters worse, in March 2002, we had the collapse of ITV digital. Its
eventual demise, after a long and painful death, could have destroyed
consumer confidence for good. The problems caused by this, including
widespread consumer confusion and apathy, made the prospects for digital
development look worse than ever. There was a real chance that DTT would
not survive in this country.
it was time for some fresh thinking.
it was critical to reach an understanding as to why people had not yet
gone digital. We did several major pieces of research to really 'get
underneath the skin' of what the 15 million households (over 35 million
people) who were still in analogue only homes really felt.
all the work we did, we found that the 15 million households split into
there were five million or so 'positives' - people who broadly liked
the idea of pay digital.
the idea of premium sports and movies, and didn't mind the thought of
paying for them along with the many other channels and choices.
this section of the audience was younger, male, and just hadn't got
round to going digital yet. Over time though, many in this group will
go towards pay digital.
and ITV digital had all been competing primarily for this group. With
hindsight, we now know that three pay platforms have not worked anywhere
in the world, and there’s no reason to believe that Britain could
have or would have been an exception to that rule.
group we found were people who were simply 'unsure' or confused about
group were plain 'negative'.
I now want
to show you a video of some ordinary consumers who were in these two
groups – the 'unsures' and then the 'negatives'.
that there were around four million 'unsures'. The sort of people you
saw on the video. A mix of ages and social grades, but with one thing
in common - they were confused.
we found there were around six million 'negatives'. Again this group
covered a wide range, but were older, slightly more upmarket, heavy
TV viewers with a significant minority living alone.
work, we found that for many in these last 2 groups - the 'unsures'
and the 'negatives' - what they wanted was something clear and simple
which would cut through the apathy and negativity.
this insight - and counter to prevailing wisdom at the time, came the
real breakthrough - THE BIRTH OF FREEVIEW.
a completely fresh start for DTT. For a one off payment of less than
£100, you could now get a range of up to 30 TV channels (importantly,
not too many), including interactive content, and a range of Radio networks,
were addressing the significant technical issues the platform had suffered,
and promising a robust and improved quality of service.
of four - five channels in your 'old analogue world', this represented
a compelling alternative, especially as it followed the 'old model'
that this audience had grown up with.
had bought the equipment, just like a TV or radio, you would never have
to pay again. Suddenly with Freeview we had a proposition which really
could become the people's choice - certainly for many of these 'unsures'
the bid for the ex-ITV digital licences on the 4 July.
the Freeview service on the 30 October - less than four months later.
what the cynics said, the three companies, BBC, Crown Castle and Sky
worked very well and closely together throughout the period and, to
this day, we continue to work in a way which harnesses the different
strengths of each player. We believe this is a world record for the
launch of any digital platform.
as the basic simplicity and appeal of the consumer proposition, there
were other crucial things which were achieved in this period.
fixing the technology problems, working out how to deal with the coverage
issues, making sure all the channels were up and ready in time. We also
had to liaise with the all important retailers and manufacturers who
would be selling and making the adapters and iDTVs.
we believed we had created something which had responded to the market
failure of ITV digital and which could truly meet a big consumer need.
me to my third point, which is why launching Freeview, along
with our partners Crown Castle and Sky, was probably the most important
thing we did at the BBC last year, and why it provides a key missing
piece of the jigsaw in moving to a fully digital Britain.
now a major new way for millions of our licence fee payers to receive
all our services, and the Freeview format meant it appealed to the very
audiences that had previously been least likely to go digital.
response has surprised us all. In just over four months, we have had
well over two million inquiries in our call centre and on our website.
as I mentioned earlier sales of adaptors since launch are around 500,000
retailer put it, "Freeview adapters are selling like hot cakes".
also surprised retailers and manufacturers, and this sales level has
been achieved despite widespread out of stocks. In total 1.4 million
homes (over three million people are already enjoying Freeview).
two other broadly encouraging pieces of information.
return levels have been lower than expected - in line with the normal
level for electrical goods, and substantially below the old ITV Digital
that the technology improvements and discipline about selling to households
in coverage are both working.
the profile of people contacting our call centre do have a different
profile to the average pay subscriber eg. they are typically older,
and more upmarket. This is a sure sign that Freeview is appealing to
a different profile of audience.
a crucial point.
does appeal to a different audience. It is entirely complementary to
pay digital. It may be a key missing piece of the jigsaw, but it is
not the only piece.
now something for everyone. For many - pay digital will still be the
right approach. For a fast growing number of others, Freeview is the
right offer. For some, there will be room for both, with pay digital
on the main TV, and Freeview providing a good option for the TV in the
bedroom or kitchen.
clear, however, is the fact that Freeview is on course to become a vital
third platform in the UK market.
the Freeview project, and our other activity in launching and promoting
the new BBC digital channels, has demonstrated how the BBC legitimately
uses modern marketing techniques.
this is more vital in a world of digital broadcasting than in the old
simpler analogue world.
with making more effort to better understand the audience. This is an
important priority for the BBC going forward.
this was crucial in coming up with the insight to develop the Freeview
idea in the first place.
the confusion, clutter and noise of the modern world, it is critical
that we keep our messages to the audience as simple as possible.
It is also more important than ever that we communicate to our audiences
the full range of services and programmes available to them –
after all, they pay.
is to give people the information they need. This might be the choice
between a pay or free digital package. This might be the choice between
different digital channels. It might be simply a choice about which
programme to watch. But it is always about creative excellence, giving
our messages in an interesting way, and it’s a compliment when
a small minority criticise the BBC for marketing and trying to promote
our programmes and channels, the vast majority of the public like our
communication and find it really helpful.
digital services and programmes now available from the BBC, it all comes
back to wanting as many people as possible to get them as soon as possible,
and helping them find the programmes and services most relevant to them.
reason over the years ahead, the BBC will continue to promote, hard,
both our digital channels and services and information on how you can
our next campaign for our digital TV line up starts later this month
- and will run right through until after Easter. This will be as big
– and, we hope, as successful - as our first digital TV portfolio
push in November / December last year.
also be doing our first major push for our digital radio line-up in
June this year, with more significant activity planned for the Autumn.
the BBC has now launched all our new services. There are no more planned.
We have made the transition in the BBC portfolio from an analogue world
to a digital world.
we at the BBC really believe that Freeview is the 'People's choice'
- for many of the 15 million households who are yet to go digital.
we believe Freeview is a key missing piece of the jigsaw, and provides
a key complementary offering alongside Cable and Satellite.
in the more complex world of digital broadcasting, modern marketing
techniques are more important than ever.
next few years we will continue to promote the BBC digital services
both in TV and Radio – with the next stage of major activity planned
later this month.
we believe that the prospect of getting a fully digital Britain is now
brighter than ever. With the right cross industry co-operation and the
appropriate lead and framework from Government, millions more UK citizens
can go on to enjoy the full benefits that digital offers, in the relatively
near future. Now is the time for us all to get behind the long term
in the short term, if our activity continues to have a big impact, alongside
that of all the others promoting digital, perhaps 2003 promises to be
the biggest and best yet for digital in the UK!