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29 October 2014
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Speeches

Greg Dyke

Director-General


Advancing the National Broadcaster


London, 24 June 2002
Printable version

Speech given to the Institute of Economic Affairs Conference on The Future of Broadcasting

Good Morning and thank you for inviting me here today. I'm pleased to be a guest of the Institute of Economic Affairs - an organisation which was founded in 1955 - which also happened to be a very significant year for television in Britain. 1955 saw the birth of ITV – for the first time viewers had choice. Competition in the market was born.

Since then, we’ve gone from two television channels to two hundred, with approaching half of all homes now enjoying the benefits of multichannel television. The same is now happening in radio.

So - as if you need me to tell you this - we live in changing times. And who could doubt, looking at today's broadcasting environment, that the pace of that change is faster than ever.

The BBC alone now offers you eight television channels, up to 14 national radio networks and one of the most popular online offerings in the world.

And if that wasn't enough, the government is about to deregulate the UK market even further - urging us all to speed ahead in the drive towards a fully digital Britain.


So as the landscape changes, so too must broadcasters if they want to survive. And that includes the BBC.


I'll start by saying today what I have said many times since I became Director General – the BBC has no God-given right to exist. A glorious history doesn’t guarantee a glorious future. The BBC has to stay relevant in a fast changing world if it is to deserve the privilege of public funding.


There are some things which I hope we'd all agree make broadcasting important:


- TV and radio is where people get most of their information about what's going on in the world.


- Its where most of us turn to be entertained or to unite to celebrate a shared sense of Britishness. You only have to see the audience figures for BBC Jubilee coverage –15m for the rock concert – or the World Cup matches to see that.


- And it's where we turn at times of crisis - almost two-thirds of people turned to BBC services on September 11.


Quality broadcasting enriches people's lives and plays a vital role in the democratic health of the nation.

Back in 1955 the arrival of ITV was undoubtedly a rude awakening for the BBC. But once it had recovered from the shock, which took about five years, the injection of competition galvanised it to work harder for viewers and listeners, developing successful shows on both television and radio. In fact, what many people believe to be the golden era of the BBC – the sixties – came as a direct response to the arrival of competition.

Competition undoubtedly improved the quality, creativity and choice offered by British broadcasting, a process which continued with the more recent arrival of Channels 4, 5 and BSkyB.

Now we have hundreds of channels and thousands of programmes for viewers to choose from every day.

Some people say that this explosion of choice makes the BBC less important than it used to be. Indeed some question its role altogether.

Some argue the BBC should be stopped from competing against commercial operators.

Others that we should stick to just plugging gaps left uncovered by the market


…Or maybe that the licence fee should be scrapped altogether.

Only last week the Shadow Secretary of State Tim Yeo raised these issues in an important speech in which he argued for cuts in the licence fee and for the BBC's publicly funded role to be restricted. Of course he is perfectly entitled to do so. It is important that in the run-up to the next BBC Charter in 2006 we have an open and honest debate about the value of the BBC to Britain in the digital age.


However I'm sure it won't surprise you when I say I disagree with these arguments. In fact I'd go further to say that I believe the role of the BBC in our society will be more important in a decade's time than it is today.


The digital age does not signal the end of the BBC's ability to inform, to educate and to entertain people - something it has done successfully for the last 70 years. On the contrary, there is a need to fulfill that role more than ever in a rapidly fragmenting media world.


I don't deny that the market has a vital role to play in the digital age but leaving broadcasting to the market alone would be a terrible mistake. Surely what we have all learnt in recent years is that in many areas of economic activity the market alone will not suffice.


Crucially, the Communications Bill sets out something we all know instinctively - that the UK's mix of broadcasters are all there to do different things while all retaining a public service core. The Bill sends a clear signal that the BBC is there to do something special - to be the heart and soul of public service broadcasting - or the "venture capital" for the whole industry as Tessa Jowell put it - with a distinctive remit which quite rightly is more demanding than for other broadcasters.


So if the BBC is to help define public service broadcasting - what should we be aiming to deliver in the digital age?


Quite simply - great programmes and services which are available to everyone. Programmes and services which celebrate modern British life and culture and invest in British talent and creativity. My fear is if the BBC doesn’t carry out this role the amount of British programming will be significantly reduced.


I expressed concern two years ago in the McTaggart lecture at the Edinburgh Television Festival that, as the market and audiences fragment, we could not be certain that the commercial channels will be able to invest in the whole range of quality British programming which they have in the past.


I explained then that if you lost share year in and year out as had happened in the USA and was now happening in Britain the commercial networks would have to fundamentally change their cost base or they would fall off the cliff. That inevitably means less original programming. Events since then have proved just how right I was.


Now with the laws on ownership about to change, potentially enabling large American media companies to own ITV, I think more people share those fears.

While the BBC is funded by a licence fee we will always be able to invest in creativity and take risks. I suspect the brute pressure of the market will make it increasingly difficult for commercial operators to do likewise in such uncertain times.

So while all the public service broadcasters may provide some similar things, in the future the BBC will stand out for our determination to pursue the public, rather than the commercial, interest.

For example:


- the market will deliver coverage of big events such as the jubilee but there is no commercial model which would allow any broadcaster to pay to stage those amazing concerts at the Palace - something I am very proud of.


- the market will provide football coverage - but not the giant BBC screens in nine towns and cities which have brought thousands of people together to share the excitement of the World Cup.


- There is no way the market would have paid for the quality and quantity of the BBC's coverage of the last Olympics – a Games held at an unattractive time for broadcasters funded by advertising


- The market may deliver broadband - we'll have to wait and see - but in the meantime, the BBC is investing in a major trial of services in Hull - Britain's first broadband city - to explore the possibilities for a new kind of public service broadcasting. One thing I'm already certain of is that there are many exciting opportunities for using broadband to unite local communities which the market will not fund


- The market will deliver radio but cannot begin to match the range and quality of BBC radio largely because the potential commercial income isn't large enough to do what the BBC does.


- And we have created Europe's number one content site on the web. Having witnessed the bursting of the dot com bubble and the deep downturn in advertising, there can be no doubt that the commercial online sector would not, and could not, have done what the BBC has done on-line. It is classic public service.


- And in news the BBC is now the biggest international collector of broadcast news in the world. Why? Because at a time when the American networks can no longer afford to do it the BBC can, precisely because we are not reliant on the market.


Now our remit is to serve everyone in the UK. Everyone pays for the BBC - everyone should enjoy some of the services. Now if you believe this, as I do, it means having successful, mass appeal channels such as BBC ONE alongside a range of other channels and services aimed at more specialist sections of the market.


Some argue that the very success of BBC ONE puts into question its place in a public service portfolio. They argue the public should pay for it by subscription.


If this were to happen I think this would signal the end for the BBC. What matters about the BBC is that it is universally available, that it is there for everyone, rich or poor, northerner or southerner, black or white. It is part of the glue which binds the UK together. As I said earlier it is the place people turn to at moments of great national joy or sadness be it the World Cup, The Queen Mother's funeral or the Jubilee. All that would be lost if the BBC's output were to be restricted or narrowed, if anything likely to be popular was to be put on subscription television. That old adage that it was the BBC's role to try to make the good popular and the popular good stands as much today as it did 10, 20 or 30 years ago.


So to sum up this part of my speech: in the years ahead a fragmented commercial broadcasting market will not provide the British public with what they want, what they need and what they expect. And that is why I have every confidence that the BBC, funded by a licence fee, will be here for a lot longer yet.


For the second part of my speech today I'd like to turn to the topic of the month - Digital Terrestrial Television. It's clear that the survival of DTT hangs in the balance.


Some industries can withstand massive failure because the sunk costs are so great. The assets get sold to someone else and the business carries on. I call it the Canary Wharf effect. The railways were built like this, and the UK cable industry may be heading the same way.


But DTT is not like the railways. After the catastrophic failure of ITV Digital, it is very close to disappearing for good. If it did, some other important things would disappear too.

In the nearer term, consumers would lose the option of a low-cost, easy way to take the leap to digital.


But more importantly in the longer term, analogue switch off and digital switchover would simply not be possible – and remember this is not just a government policy, but a policy supported by all the main political parties.


So I'd like to take a few minutes on what needs to happen to give DTT a second chance.


Ten days ago, the BBC with Crown Castle put in a bid to the ITC to take over the DTT capacity freed-up by the failure of ITV Digital.


Our proposal is simple. DTT would become a free-to-view only platform offering 24 channels.


Consumers would buy a free to view box for under £100, take it home, plug it in and receive 19 new digital channels, in addition to the 5 traditional ones. They would also have access to proper interactivity and up to 16 new radio services.


Most important of all – there'd be no subscription, no monthly payments.


And it would work - poor reception problems would largely be fixed by reducing the number of channels on the platform from over 40 to 24.


So why do we think our idea will work where ITV Digital failed?


There are 4 main reasons.


First, it's offering something people want – more free-to-view television, easy to make work, no catch.


BBC research shows that around 6 million households actively reject pay television, and a further 4 million are simply turned off by the complexity.


However, they do like the idea of more free-to-view television - they see it as a welcome extension to normal television.


But many people are suspicious – they want to know "where's the catch?" They expect free-to-view television to be a Trojan Horse for pay services. Any hint of pay on the platform puts them off.


Second, our idea for DTT is simple - which is essential if we're going to cut through the confusion for the 15 million homes which haven't yet got digital TV. And they are confused. At the moment people think pay TV and digital TV are the same thing.


Third, we're committed to putting together the best possible line-up for consumers. In the BBC's plans there will be four spare channel slots and anyone is invited to apply for them – including ITV. The BBC and Sky have less than half the channels on the platform – and no power to block new ones.


This is vital. Unless DTT has the channels and programmes people most want to watch, consumers will go to a platform with better ones or, more likely, stick with 5 channels.


The fourth reason has to do with know-how and commitment. What the BBC can bring is its content – over £200 million investment in channels and interactivity.


The new BBC FOUR, the two new children's channels, interactivity around events like Wimbledon and the World Cup, new ways of learning. All this can be available on DTT.


The BBC is ready to mount the biggest on-air promotional campaign it has ever done. We won't just promote our channels. We’ll promote the whole free-to-view 24-channel line up.


Some people have asked – why involve BSkyB in this? Well, if there's another operator with nearly 6 million satisfied digital customers and one of the best customer service operations around, then we’ll involve them instead.


BSkyB know about making digital platforms work.


So we think that this combination of simplicity, quality channels, and real know-how can give DTT the fresh start it so badly needs.


It starts with what will work for consumers, not what's in the interests of broadcasters.


The prize, we believe, could be around 5 million DTT households within 6 years and a chance of analogue switch-off in this decade.


But why is the BBC doing this at all? Why don't we stick to content?


Well, the answer is that we don't have to do it. If another bid could give DTT a secure future, we'd back it. But it would have to meet four criteria:


First, it must offer a strong and simple free-to-view proposition to consumers. In future those wanting pay digital would go to BSkyB or cable. Those wanting free-to-air digital would go to DTT.


Second, the technology must be fixed so it works for most people. Remember ITV Digital failed mainly because the technology didn't work. Less than 40% could actually receive the service and of those half had interference when you opened the fridge door or a bus or lorry went past. There is no doubt Carlton and Granada were sold a technological pup.


Third, the platform must be open and competitive. No-one should be able to block new channels coming onto DTT to protect the share of channels they already have on the platform. It's not in the BBC's interest to have Sky News on the platform and yet we are welcoming it on.


Fourth, it must be financially secure. The worst thing would be another high profile failure. We can't afford a bid funded by a bunch of venture capitalists who'll run a mile if the going gets rough.


If another bid wins without meeting them, and therefore has a high chance of resulting in the failure of DTT, it's hard to see how the BBC could justify spending even more money on DTT.


We will, of course, continue to broadcast our channels, but we're already spending around £20 million a year on DTT to reach around a million people – this is not good value for licence fee money. We’d have to think very hard before spending extra money on transmission and marketing or giving it extra on-air promotion if we couldn't see it pulling through.


So – there is only one last chance for DTT. This is not a time for splitting differences, backroom politics or settling old scores.


Ladies and gentlemen, every citizen of the UK has a right to reap the rewards on offer from digital technology. Thank you.




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