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Speeches

Ashley Highfield

Director of New Media & Technology


It isn't all doom & gloom


4 March 2002
Printable version

Speech given to the FT New Media & Broadcasting Conference

If you listen to the so-called industry 'experts' or read any newspaper over the weekend, then the future is most certainly not bright. The never-ending cries of the 'new economy' stocks, has been joined by the death knell for ITV digital. Amongst the doom and gloom of the stalled set top box sales, the potential Murdoch monopoly, and the supposed apathy of viewers to convert to digital, comes the recent assertion that it will take up to 18 years to get at least one set top box in every household. And that's before we even start to talk about second TV sets or glacial Broadband roll out…

If all this is true, we may as well pack up and go now

Still here? Good, because I just don't buy that either. And neither does the BBC.

Why do we always focus on the negative? Let's not forget that over one in three households in the UK already have digital TV, that's around eight million homes, a significant number for such a young industry.

Over the next quarter of an hour, I want to talk to you about how the BBC plans to help drive this take up. I'd like to touch upon what other similar industries have done to reinvent themselves, when their market penetration had been considered to have plateaued to see if there are any lessons we could learn. And I'd like to look forward to a possible future analogue switch-off that happens sooner than all of the doom and gloom merchants predict.

The BBC at the heart of driving digital

NEW INNOVATIVE SERVICES

The BBC has set itself the goal of promoting digital take up as crucial to its role as a public service broadcaster. Part of the fulfilment of this mission is the creation of a portfolio of audience focussed digital channels across radio and television which includes the recently launched BBC FOUR.

At BBCi, the new name for all our Internet and interactive TV services, we are on a mission to create innovative, high-quality services across all DTV platforms. From last years' Wimbledon and Walking with Beasts (both BAFTA winners), to the recent Panorama Interactive, and Winter Olympics, the glue that binds all these services is their ease of use, reliability, and the way they help the scales fall from the eyes of those who thought digital TV either too complicated, or just not for them. And we've only just begun…

These are genuinely differentiated services which engender trust in digital television, and firmly establish Britain at the forefront of interactive applications globally. A recent trip to the West Coast of America – resulted in unsolicited praise from some of the world-leading broadcast and technology companies (including Microsoft, Paramount, Fox Entertainment, and Sony).

And we know that the creation of these ground-breaking, innovative services DO bring in the viewers – 8.1m of them accessed our interactive services during 2001, the first year that we went on air with them.

During the fortnight of the Wimbledon Championships in 2001 some 4.5 million individual satellite viewers (around two-thirds of those watching) tuned in to our interactive service. Some three million viewers tuned into BBC News interactive during the first six weeks of its launch. That's half the audience of the Six O'Clock news.

And we are doing more to demystify the whole digital experience, by deciding not to pay peanuts, and get monkeys… but by explaining the options to consumers through leaflets, TV trails, a web site and the creation of a hotline.


The creation of BBCi in November last year signified the next stage in our plans to make digital ever easier to understand, and the benefits ever more obvious. BBCi provides a single identity, a signpost for the connected generation, that signifies a place where audiences can access the full range of interactive content from the BBC whenever, however, and wherever they want it. For those of you that haven't heard what we said, here's a video refresher.

The role of innovation and reinvention

So great content, new channels and educating our audiences are key drivers for the BBC in encouraging digital uptake. But we'd be complacent if we relied on content and channels alone.


Technical innovation and reinvention are critical to the BBC, we've spent the last 80 years doing so. From the first local radio broadcasts in 1922, through the introduction of regular colour transmissions in 1969; from the invention and introduction of Nicam stereo, and the world's first analogue text services in the 70s to interactive TV in 1999 – the BBC has to enter and explore new markets, and then help set the standards and infrastructure to enable others to swim in the same waters.

 

It's what we're here for. Indeed, to steal one of Adam Singer's analogies, after all he's got enough to go round, we aim to create a rip tide of rising consumer demand, from which all content boats will benefit. And this rather casts our digital detractors as analogue King Canutes, trying to stop the inevitable.

And, as the BBC has gone from being in local radio to a national television broadcaster, so in recent years we have anticipated and moved with our audience, and become one of the world's most trusted brands on the web.

Its worth pointing out, for those who believe that internet is still struggling, and that plucky minnows are being still crowded out by the dominant sharks, that last year saw the number of unique consumer websites grow from 7.1 million to 8.4 million.


Indeed Yahoo's editorial staff check some 1,000 new web sites launches every single day. To put this growth in perspective, although BBCi has doubled its monthly user base to six million in the last 18 months, and doubled its page impressions to about half a billion a month, our market share in the UK remains at less than two per cent. Hardly dominance.

What we can learn from the Internet

But it's from the web that we might learn the lessons needed to determine how we should 'create the right environment' for digital – as Barry Cox Chairman of the Digital Television Stakeholders Group puts it. That is, by combining great content with compelling applications.

By 1994, the Internet had already reinvented itself from a basic communication tool to the source of a wealth of content. And a far-sighted BBC launched it first content offering on the web. But the net reinvented itself again and again during the 90s, adding e-mail, e-commerce, e-trading, instant messaging, such that pure content offerings now only occupy 20% of internet users' time.

It was something that we realised at the BBC, albeit not immediately, and within the last twelve months we have been slowly changing our position from offering solely content to introducing online communities, forums and user generated material. Maybe digital TV is only running at 20% of its potential too.

The industry claims that digital TV has reached a plateau. Well that's what they said about mobile phones seven years ago when they'd reached 55% penetration. But look where we are now: nearly 90 per cent of adults possess at least one mobile phone. So how did they do that?

Innovative approach worked with mobile phones

In the mid-1990s the rate of mobile phone take-up had dropped dramatically in this country, but this new industry, refusing to accept that this was a mature market, responded on three fronts:

Firstly with new Applications. We all know technology by itself doesn't sell. New content, and particularly new features and functionality might. It did in the case of GSM mobile with SMS. By allowing users to a new way to connect with each other and generate their own content and indeed language, mobiles found a new lease of life with SMS, especially amongst the young. The four major network operators in the UK will generate over £1 billion from SMS messaging in FY 2001/2 alone. While in Japan, the craze of sending flirty photos and downloading new ringtones over the NTT DoCoMo network shows no signs of abating. Neither markets existed four years ago.


Secondly pricing. The introduction of an innovative payment method - pre-pay - took the risk out of buying a mobile phone and encouraged millions to take the plunge. Could a non-subscription sub £100 set top box do the same? Especially if Moore's law means that within three years the box will cost the same as just four West End cinema tickets? Why wouldn't you buy one?


And lastly Marketing. Operators fought hard to rid mobiles of the association with yuppy Gordon Gecko businessmen - with great success

The results speak for themselves.

Is this what digital requires and if so what shape might it take?

So the question I ask myself every day is, based on the learning from the mobile and internet industries, what more could the TV industry do?

Well, for a start, we could take good notice not of set top boxes, but set bottom boxes. Figures indicate the DVD is the fastest growing piece of consumer electronics ever.


Industry history suggests that as CD killed vinyl, so DVD will erase that last bit of anachronistic tape in our homes: the Video. And it appears that each new wave of home entertainment, radio, TV, CD, PC, DVD, penetrates faster than the previous, and converts more homes to digital, and has, at long bloody last, a convergence effect.


Every Microsoft X-box shipped puts a broadband ready and hungry animal into your home. Every DVD player shipped makes households aware of what enhanced and interactive TV can do. And, as next year's DVD players have recordability in them, and hard drives, and the year after will come DTT ready, (they're based on the same MHEG technology did you know?) so it will not be left to one firm, or one device to get us to analogue switch off.

And the BBC will be there, developing innovative formats and setting the content standards.

And what kind of new services might we expect to drive demand? The possibilities could be endless (slide 5 with screenshots):

The potential for downloadable search: imagine downloading overnight (using spare capacity) entire sections of the Encyclopaedia Britannica onto DVD or hard-drive, and then browsing at leisure (and speed) through them the next day or the next week


The possibility of revolutionary educational content: curriculum guides broadcast weekly, with A-level history content sent out one week, and GCSE French the next.


DSat quality interactivity: providing multi-stream choices that we saw with Wimbledon, Walking with Beasts and Winter Olympics, but this time across all digital platforms


Completely new services: what if the red button on your remote connected you to the emergency services, a home panic button in effect, with, if required, an NHS Direct nurse who appeared on screen whilst you spoke to her through the phone: who wouldn't spent £99 on that? This isn't even fantasy, its trialling now, in Birmingham.

Allowing us to shape our destinies

So rather than bemoaning that the digital dog has had its day – before we've even let its muzzle off – I think we're only at the beginning of the journey.


But to get there it'll take four things: one, great audience focussed content, two: useful and compelling consumer services and applications, three: transformation of the pricing model, and four: a radically different marketing message. Then, as with mobile, we might take the next quantum leap from 40% penetration to 80% or even beyond. And then we're into the analogue end-game.

The future of digital is, ultimately, in our hands.



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