Richard Dunn Memorial Lecture
24 August 2003
given at the MediaGuardian Edinburgh International Television Festival
checked against delivery
every generation has a media revolution. For my mother, it was radio;
for me it was television; for my children, it is digital.
is different, and we are still learning about how digital can make a
real difference to people's lives.
want to look at the future of the BBC in the context of what we already
know about how the digital revolution is unfolding.
that the next phase will be about how we, as a society, can harness
the new digital technologies to bring benefits to everyone, not only
those who can afford to pay.
benefits to communities, families, schools, universities, as well as
I agree with what Tessa Jowell said yesterday.
the second phase of the digital revolution will be more about public
than private value.
come back to this theme, and what it means for the BBC, later.
plan to revisit the MacTaggart speech I made here in Edinburgh three
with the benefit of hindsight, what did I get right and what did I get
wrong? As part of that, I'd like to say something about the future of
sorry to disappoint you but one thing I am not going to talk about today
is the Hutton inquiry.
as the inquiry is underway, I don't think it is appropriate for me to
talk about its implications for the BBC or for anyone else. There will
be plenty of time for that later.
though, I want to say a few words about Richard Dunn, who died suddenly
five years ago.
his death, Pearson Television decided to fund this annual event at the
Edinburgh Television Festival and I am very pleased to be this year's
Richard Dunn interviewee.
was in many ways the opposite of me. He was tall, suave and very good
joked with him that his biggest problem was that, because he looked
like Wyatt Earp, people expected him to be Wyatt Earp.
course no-one could actually be Wyatt Earp because romantic figures
like that didn't really exist - our industry invented them.
career Richard had great successes but also one great disappointment
- the unfair loss of Thames Television's licence in the farcical ITV
auction of 1991.
Richard came through that experience. With the support of his very close
family, Richard moved on and rebuilt his career with flair and dignity.
all Richard was a man of integrity. He was not always right - none of
us are - but in my experience of him his motives were always honourable.
come from a programme making background but he understood that broadcasting
was more than just a business, something I am not sure his successors
in ITV have ever recognised.
came that day in August 1998 when, out of nowhere, he died at the ridiculously
young age of 54.
lost a good man, many of us lost a good friend but of course the greatest
loss was his family's.
my MacTaggart speech of three years ago.
day, I outlined what we planned for the BBC in the first phase of the
read it again in preparation for today, I realised that we have delivered
on most of these plans. For instance:
We did move the news on BBC ONE from nine to ten o'clock and we did
it earlier than predicted
We have launched four new television channels - BBC THREE, BBC FOUR
and our two children's channels
We have reduced the cost of overheads in the BBC from 24% of total expenditure
in 1999 to 13% this year which is 2% better than I predicted
We have increased our real spending on programming by more than 30%,
as I promised we would
We have increased our spend out of London and in particular we have
increased the budgets for regional and national programming by £70
million - £20 million more than the £50 million I said we
And we have increased BBC ONE's budget by £165 million a year
- with nearly half of that money being spent on original drama, just
as I promised we would.
of course, of doing what we said we were going to do is that, three
years ago, people were still talking about the BBC being in terminal
the accusation is that the BBC is too successful, too powerful and too
As I have
said on many occasions, this is one of the few jobs in the world when
you get crap for losing and crap for doing well.
the biggest change since I gave that lecture has been the relative collapse
can't pretend that I predicted this would happen as quickly or as dramatically
I did say and I quote - "Channel fragmentation will gradually erode
the current revenue base of Britain's commercial channels. If in the
commercial world you lose share year after year, in the end you either
change your cost base or fall off the cliff."
So I did
predict the economic impact, over time, of share loss for ITV in a multi-channel
didn't foresee was the meltdown of the advertising market at the same
I predict the failure of ITV's management to deal with that situation
effect of these three factors has been devastating for ITV.
years, ITV1's audience share has fallen from 30% to 24%, and their revenues
from £2 billion a year to £1.7 billion.
well turn out that we won't see a single year this decade in which ITV's
revenue will, in real terms, reach the figure they achieved in the year
some senior people in ITV have blamed the BBC for their plight.
to that is they should look much closer to home for many of the reasons
for ITV's recent failures.
few examples of decisions by ITV's management over the past five years:
chose to invest £1.2 billion in ITV Digital only to let it go
changed the name of On Digital at a critical time and as a result seriously
damaged the brand name of ITV
set up the doomed ITV Sports channel and spent more than £100
million a year for sports rights which weren't conceivably worth more
than £30 million
decided to spend some 10% of ITV's total network budget on Premier League
highlights, and got back nowhere near that in revenue for the slot
moved the News at Ten from its traditional slot, which turned it into
News at When and as a result permanently damaged ITV's reputation as
a serious source of news
allowed Channel Five to buy Home and Away and as a result seriously
damaged ITV's early evening schedule while boosting Channel Five's
took millions of pounds of dot.com advertising money, which created
enormous cost inflation and in the process upset ITV's traditional advertisers,
who went on to take their revenge when the dot.com money went away.
had nothing to do with any of these decisions, yet, between them, they
explain a good part of ITV's recent problems.
said all that, a weak ITV is not in the BBC's interest; it is not in
the interests of the British broadcasting industry as a whole; and,
above all, it is not in the interests of the people who matter most,
broadcasting market in the UK needs a third gorilla alongside the BBC
and Sky - and that third gorilla should be an advertiser funded, free
to air television group with ITV at its heart.
you get a proper balance of influence; that way, no one player can call
too many of the shots; that way, no one player is too powerful.
we want to turn ITV into this third gorilla, some things will have to
don't, I believe the outlook for ITV is bleak.
If my analysis
of ITV is right, then it must be in the interests of both our broadcasting
system and its audiences for the merger of Carlton and Granada to be
allowed to go ahead on reasonable terms and for further consolidation
within advertiser funded broadcasting to be allowed.
means that, when the ITV licences start to come up for renewal in 2004,
both Ofcom and the Treasury should recognise that ITV is no longer a
to be paying more than £300 million a year for its licences is
not sustainable in even the short term.
past, regulatory changes like these could easily have happened. Today
they might well not.
television system was founded on the belief that the cultural imperative
was more important than the economic.
policy was more important than competition policy.
for the first time, competition policy dominates.
these vital changes don't happen, there are two likely results.
in the short term, ITV will have no option but to reduce its spending
on local and network programming.
know that, inside ITV, work is already underway to model the effects
of taking £100, £200 and £300 million out of the network
and perhaps more profound outcome is, I suspect, that sometime later
this decade the owners of ITV will decide that it is no longer worth
their while keeping ITV as a public service commercial broadcaster.
the magic number is around 80%.
of the population can receive digital television - and today that number
is 44% and growing fast thanks to Freeview - ITV could simply rent digital
capacity from satellite, cable and Freeview operators, and give up its
analogue spectrum and most if not all its public service obligations.
only keep the ones which made commercial sense.
could include much of ITV's regional output, children's programming,
religious programming, education, current affairs and the arts, to name
just a few.
As we speak,
I suspect there are people inside ITV doing this long term financial
suspect that some of the large US media companies, who sadly are now
allowed to own ITV, are doing exactly the same thing.
the question is - does it matter?
would to a lot of viewers.
scenario, 20% of the population would not, on day one, be able to receive
some of their favourite programmes like Coronation Street or Emmerdale,
but that might only be for a few years.
when analogue switch off happens, everyone would be able to receive
"new" ITV, an ITV not financially encumbered by public service
lasting effect of this fundamental change in ITV would be on the type
and volume of programmes being made in the UK.
be an inevitable drop in the total investment in the production sector
with far fewer public service programmes being commissioned.
terms this could work well for ITV.
in programme costs could easily outweigh the initial loss of audiences.
because the lost viewers would almost certainly be the least attractive
to advertisers - older, poorer and more rural.
is plenty of evidence from Europe that commercial broadcasters can be
very successful with much less investment in original production than
ITV currently spends.
business case for a non public service ITV may well stack up.
would be cultural costs to Britain which could be high.
commitment to public service broadcasting, alongside that of the BBC
and Channel Four, is one of the reasons why Britain's television output
reflects our culture, our tastes and our values.
chose to shed its public service commitments, this could all change.
what we all have to realise is that the government of the day would
not be in a position to stop ITV from doing this.
of the game are changing, and the balance of power between the regulator
and the regulated is changing with them.
old rules, the Government owned the spectrum and the commercial television
companies needed it.
the politicians the power to impose public service broadcasting.
the new rules, spectrum is plentiful and allocated largely by the market
valuable in this new world are strong and popular programme brands which,
week after week, can reach millions of people. ITV, and Granada in particular,
have a lot of these.
means that, under the new rules, politicians will have less power and
broadcasters with successful programme brands will have more.
So if governments
and regulators want to preserve some of the best features of commercial
broadcasting in this country they will have to change their approach.
have to make it commercially attractive for ITV to remain a public service
of doing it by decree are rapidly coming to an end, and the days of
charging ITV hundreds of millions of pounds for the privilege of being
a broadcaster are certainly numbered.
my MacTaggart lecture of three years ago.
I've talked about what I got right, but I also got some things pretty
then I thought personal video recorders like Tivo and Sky Plus would
revolutionise our viewing.
believe that will happen in the long term but so far only 150,000 homes
have PVRs, and it will take far longer than I thought for them to have
a real impact.
ago I was also partly persuaded by the idea of more and more channel
specialisation, with BBC ONE becoming more entertainment based and BBC
TWO more factual.
I no longer
think this will or should happen in this decade.
stay as mixed genre channels, at least until analogue switch off and
probably beyond that.
to demonstrate how wrong you can be, back in my earlier MacTaggart lecture
which I gave here in 1994, I predicted that multi-channel television
was stalling and that penetration could be less than 30% by 2002.
the figure was nearly 50%. I think it must have been wishful thinking.
to return now to the theme I opened with in this lecture - the changes
we are seeing in this, the first decade of the digital age.
revolution has many things in common with the radio and television revolutions
of the last century.
it is making new and wonderful things possible.
it is changing the way people use their time.
before, it is changing the structure of our industry in profound ways.
latest revolution is also different in one important respect - it has
been a private sector revolution, whereas for radio and television,
it was the public sector that came first.
led the launch of radio in 1922 and television in 1936.
sector followed many years behind.
that stage, the sources of public value were well established.
revolution has happened the other way around.
has not led it - commercial companies have.
advances in digital television have been driven largely by BSkyB.
internet phenomenon in Britain was led by American giants like AOL and
thousands of small start ups, many of which no longer exist.
digital television and online services followed on.
phase of this revolution has produced some great things - in television,
200 channels, movies on-tap, imaginative interactivity, and 24-hour
sport and news.
it is bringing many new specialist stations, and, in the world of online,
it has brought information and new types of communication to your fingertips.
I said at the beginning of this speech, I believe that we are about
to move into a second phase of the digital revolution, a phase which
will be more about public than private value; about free, not pay services;
and about inclusivity, not exclusion.
it will be about how public money can be combined with new digital technologies
to transform everyone's lives.
As we move
forward, the BBC will not, should not and cannot be the only publicly
funded player committed to making the most of these opportunities.
need the involvement, skills and financial support of government, local
government, schools, universities, art galleries, museums, the voluntary
sector and many other parts of our society.
also be opportunities for commercial companies in partnership with publicly
are areas where the BBC can play a vital role, and some where only the
BBC can make a real difference.
recent example of the turnaround of DTT and the success of Freeview.
ways, Freeview was the starting gun for the second phase of digital
because it makes digital television and radio simple, easy and affordable
wouldn't have happened without the BBC.
ahead, let me give you one example of the kind of thing the BBC will
be able to do in the future.
probably has the best television library in the world.
years we have had an obligation to make our archive available to the
public, it was even in the terms of the last charter.
have we done about it?
all know the problem.
now, this huge resource has remained locked up, inaccessible to the
public because there hasn't been an effective mechanism for distribution.
digital revolution and broadband are changing all that.
first time, there is an easy and affordable way of making this treasure
trove of BBC content available to all.
explain with an easy example.
your child comes home from school with homework to make a presentation
to the class on lions, or dinosaurs, or Argentina or on the industrial
He or she
goes to the nearest broadband connection - in the library, the school
or even at home - and logs onto the BBC library.
for real moving pictures which would turn their project into an exciting
them and, hey presto, they are able to use the BBC material in their
presentation for free.
is a dream which we will soon be able to turn into reality.
to allow parts of our programmes, where we own the rights, to be available
to anyone in the UK to download so long as they don't use them for commercial
a simple licensing system, we will allow users to adapt BBC content
for their own use.
calling this the BBC Creative Archive.
the BBC will have taken a massive step forward in opening our content
to all - be they young or old, rich or poor.
it's not really our content - the people of Britain have paid for it
and our role should be to help them use it.
just one example of the kind of public value which I believe will come
with the second phase of the digital revolution, but there will be many
broadband gives you the opportunity to develop truly local television
services for the first time.
experiment in Hull has shown just how much audiences want these.
aim should be to use public money and the new technologies to enrich
our society in ways the commercial market place alone won't.
the BBC could lead, in others we could be a partner or a catalyst.
the BBC won't have a part to play at all.
ago on this platform I said that I thought that the BBC's role would
be clearer ten years into the digital age than it was then.
I don't think it is taking that long to define.
have outlined today is the kind of idea we're looking at as part of
our charter review process.
more to say about this idea, and others, in a few months time.
challenge is to work out how we preserve the best traditions of BBC
broadcasting while at the same time taking advantage of what new technologies
can offer, at a price everyone can afford, to bring benefit to all.
MacTaggart Lecture given by BBC Director-General Greg Dyke at the Guardian
Edinburgh International Television Festival, 25 August 2000