Speech given at the Edinburgh International Television Festival 2005
Saturday 27 August 2005
Check against delivery
So here we are. John and Greg and me. All in Edinburgh, all on platforms. Can I just say what incredible imagination this shows on the part of the organisers.
They know their audience. Oh yes: they know what turns you on. PSB plurality in the digital age. BBC governance. Higgs compliance. It doesn’t get any sexier than this, does it?
Some festivals would have been tempted to ration the DGs out. But not Edinburgh. They know that, as far as you're concerned, if listening to one BBC Director-General is great, listening to three in one weekend is like a dream come true.
Actually we're thinking of going on tour together. I've been talking to John Thoday and he says it's got real potential. A bit like the three tenors. I can see it up there in lights. Top-slicing: the Opera.
One year on
At last year's festival, I spent most of my time talking about programme strategy and the need, as I saw it, for the BBC to rethink its whole creative direction in the light of the new technologies. To focus investment and energy on those kinds of content where it could make the biggest difference in quality and originality and build the strongest and most lasting relationship with its audiences.
One year on, we're making real progress on this front. Soon after the festival, we launched Creative Future. Teams of producers, commissioners and content-creators from across the BBC have started with a blank sheet of paper and begun to re-imagine drama, news, music, children's and other key genres from scratch.
Perhaps the most important single team is the Beyond Broadcast group. They're exploring where and how BBC content can add the most value in the on-demand, pan-media universe we're hurtling towards.
Their insights are informing every part of Creative Future.
Over the next few months we'll be drawing the rest of the BBC into this creative conversation. Then our Governors. Then the public.
The Creative Future project is happening at a time when many of our key services are starting a new chapter with new leaders and when, I think without exception, every creative leader in the BBC is wrestling with the question of what the new technologies and audience behaviours mean for them and their service.
A year ago I also talked about our change programme and some of the other reviews we were conducting into key areas of our business.
The point of the change programme is to get the BBC ready for this future and to help pay for it, by freeing up money we can invest in new content and services for the public. Simple to say, of course, but difficult and painful to achieve.
The point of the other reviews was to answer other key questions about commissioning and the BBC's relationship with the independent sector, the future of its commercial activities and its role outside London.
One year on, again I believe we've made progress. Right now we're engaged in talks with unions at divisional level across the BBC. Of course, plans which call for quite large-scale redundancies, for outsourcing and in some cases for relocation, are never going to be easy for either unions or many members of staff to accept. But so far I believe all sides are approaching the talks in a constructive, practical spirit.
A few months after last year's Edinburgh, we also published our proposals for commissioning and a new relationship with the independent sector. Again, one year on we've made real progress.
I recognise that everyone – Pact, the indie sector, in-house producers, Governors, Ofcom - is waiting to see how the famous WOCC will work in practice. But it looks as if everyone is prepared to give it a chance to prove itself. And the mood of the relationship between the BBC and indies has, I think, improved strikingly.
Our Out Of London proposals remain on track, subject to the licence fee settlement, and John Smith and his team are on course to more than double Worldwide's profits. Now we're engaged in creating a far more ambitious global commercial plan for the BBC.
Towards total on-demand
But what I want to focus on briefly this afternoon is not content nor change programme nor commercial plans, but the future of the BBC's services to the public.
Most of the BBC's free market critics reluctantly accept that – despite their best advice – the BBC will receive both a Charter and licence-fee funding this time round. But not next time, they say. Next time, technological change means that the public simply won't want or need a large traditional broadcaster funded by a compulsory charge. Game over.
Now there are a number of possible responses to this. First that this is what they always say and that every time the Charter actually comes round, the British public and the British Government take a different view. There's an emotional and cultural intensity to the bond between the BBC and Britain which the market-focused critics always underestimate.
Well yes, that's true: graveyards are full of the bones of economists who predicted the imminent break-up of the BBC years ago. And yet the forces of technological and consumer change do feel different this time: more formidable, more unknowable and still accelerating.
It's a brave person who claims that the next ten years will be like the last or like any previous decade in the BBC's history.
You could also argue, of course, that technological change is just the latest tool used by the enemies of public service broadcasting who are prepared to exploit any trend or any argument for tactical advantage.
Many of the people who are arguing that the licence fee should be divided between different broadcasters also believe that the licence fee doesn't have a future. Far from being an attempt to stabilise non-BBC PSB in the long term, in other words, their actual intention seems to be to weaken the one part of the PSB system whose funding is guaranteed.
But my take on the question is a different one. I accept the premise that if the BBC remains nothing more than a traditional TV and radio broadcaster then we probably won't deserve or get licence fee funding beyond 2016. As I've tried to make as clear as I can over the past year, however, that is very definitely not our plan.
Already our digital services reach millions of licence-payers every day. The July reach for bbc.co.uk was 13.3 million UK adults – that's 54% of the entire UK internet universe. And the percentage is a lot higher in broadband homes and offices.
Much is often made of the inevitable long-term decline in overall share to BBC Television as households convert to multi-channel digital TV. In fact share has been more resilient over the past ten years than almost anyone predicted.
But even if we recognize that share for some established services is likely to reduce over time, it's equally important to acknowledge that usage, share and reach for some new services is growing very rapidly.
BBC interactive TV reach is now 45% in Sky homes. Across all platforms, we reckon it's now hitting around 14 million adults per month.
These services, in other words, are no longer marginal experiments but are already a central part of the value the BBC delivers to the public in exchange for the licence fee.
And we expect all of the measures of usage to continue to grow strongly – both in share and in absolute terms – as take-up itself grows and as consumer demand more high quality, easily accessible content on the new platforms.
I see no reason why BBC broadband reach shouldn't approach the historic levels achieved by the BBC's television and radio services.
Nonetheless, and despite the rapid strides we've made to date, we believe that on-demand changes the terms of the debate, indeed that it will change what we mean by the word 'broadcasting'.
It's not, of course, the only feature of this phase of digital, but we believe it's by far the most important as far as the BBC is concerned.
This decade will be the decade of on-demand. And we will arrive at a digital Britain not when we switch analogue terrestrial TV to digital – though that's important as well of course – but when every household has access to rich and interactive on demand services.
That's when the real gains in public value – in educational potential, in civic connectivity, in user-based creativity, in the opening up of resources like the BBC's amazing archive – that's when the real gains kick in.
Now we've already got quite a lot of experience in on-demand. There were around 20 million requests on our Radio Player on the website in July, around half for live radio but half for true on demand.
When we put the nine symphonies up on the site as part of the Beethoven Experience, we expected ten to twenty thousand requests for download. As many of you will know, the actual figure was 1.4 million.
In addition in July, by the way, there were 60 million requests for video footage from bbc.co.uk, up 31% on the previous month. The bombings obviously playing a significant part in the rise. Three of the top five requests were for clips generated from our audiences on video phones.
User-generated content is another key part of this revolution and will be of increasing importance to the BBC and its services.
We recently started an experiment premiering some BBC THREE programmes on broadband. As Jana [Bennett - BBC Director of Television] said yesterday, we hope to have at least one of our main TV channels streaming on broadband within a year.
We're also hard at work on the Digital Curriculum, which starts to roll out in early 2006.
The appetite is there and growing. But our plans for the future are much more ambitious.
In 2006 – of course subject to scrutiny and approval from our Governors and all necessary consents – we hope to launch a new offering with the working title of MyBBCPlayer, a window through which licence-payers will be able to access a host of BBC content. The last seven days worth of programmes from BBC Television and Radio. A bigger range of international, national and local news content than we could ever get into a single bulletin. And an ever-expanding proportion of the BBC's sound and video archive.
The BBC's core mission is to create great audio-visual content and to deliver it to the public as effectively and conveniently as it can. The mission transcends any one technical delivery system.
That's why the BBC reached beyond radio to television in 1936. Why it saw the potential of the web to enhance some of its public purposes in the 1990s. That's why it's a category error today to define or delimit the BBC around linear real-time TV and radio.
The point about on demand is that in many ways it’s actually a better environment for the BBC to build public value than either conventional TV or radio.
We have a lot of work to do on search, navigation and branding – not just on our own by the way but working with partners like Google and Autonomy – but using MyBBCPlayer alongside our linear services should make it easier for audiences to find the content they want whenever and wherever they want.
Pessimists suggest that the BBC might disappear amid the infinite choice of the broadband/on-demand world. That's because they have the wrong conceptual model in their heads – a model of some mad cornershop with a trillion different coloured sweets in different jars.
Everything we know about online world suggests that it's the big brands – the Ebays, the Amazons, the Microsofts – that punch through. And the BBC is one of the big brands. In content terms one of the biggest on-line brands in the world and by far the biggest British one. And that's before we begin to direct the full creative and marketing energy of the organisation in this direction.
I believe that a broadly-based, multimedia, licence-fee funded BBC with a brand that everyone knows and great, relevant content which everyone can use and which demonstrably creates public value, will actually make more sense than it does today.
Partnering the market
But I know that, if all of this can sound very exciting to consumers and indeed to policy-makers, it can also sound pretty alarming to our colleagues who are already operating in some of these fields.
The BBC's a large beast and the sound of it trampling through the undergrowth apparently in your general direction can fill the stoutest heart with dread.
So it’s important to say that, in all these developments, we want to work with rather than against the market.
Take the archive, where I know that talk particularly about the creative archive has worried some commercial players. We think it does make sense to open up some of the BBC archive to the public, but we also recognise that rights-holders have significant interests in much of the archive as well.
We recently signed a deal with Universal Music to work together to exploit parts of the BBC music archive where we have shared interests. That's a good model.
Does it make sense to open up as much of our news archive to the public as possible – for information, education or just for private interest? Yes it does. Should we look very closely indeed at how that might impact on, say, ITN's business-to-business news archive business? Yes again. We want to work with ITN and indeed everyone else in the archive space to figure out ways of maximising both the public value and the positive market value of what we can do, while minimising any negative market impact.
The controls which both Governors and Government are putting in place to assess public value before agreeing to new BBC services will be more transparent and objective than anything we've seen before. I have to say that, even if these controls did not exist, I believe that it would be in the BBC's interests to work in collaboration with commercial players.
As a partner, we think we can help open up new markets and new value for commercial rights-holders and platform-owners. Everyone I think accepts that in the context of DTT. It's equally true of on-demand.
Now we won't convince everyone of course. I also recognise that in some areas we're dealing with a legacy of distrust and suspicion. But I have to say that I also detect a new mood among many of our commercial partners and colleagues and a willingness to work with us to develop solutions that work for all parties.
A need for new models
But the new world also requires some radical new thinking within the BBC. Historically, strategists and broadcast policy-makers have tried to use a number of simple distinctions to help navigate through the emerging digital world. Fixed versus mobile devices. One-to-many as opposed to one-to-one. Real-time as opposed to stored. And of course, the public service/commercial boundary.
Increasingly, this entire conceptual landscape seems outmoded. Mobile devices can of course have special, bespoke services but they can also address exactly the same web resources as fixed devices. The cost of versioning content for different kinds of devices is collapsing and will tend to zero.
BBC news-users can develop their own personalised news services – again at close to zero marginal cost per marginal user.
And take a look at the Jamie Kane game on our website. Young people using it enter an adventure where the other characters not only web-chat with them but phone them on their mobiles. An intensely personal experience delivered by some cutting edge AI technology again at marginal incremental cost per user. Broadcasting and personalisation used to be opposite terms: no longer.
Even the idea – an article of faith as recently as a year or so ago – that there needs to be a vast cordon sanitaire between the public service zone and pages or areas where commercial transactions can take place flies now, I believe, in the face of the way the public actually use the new media.
Of course the user needs to know where they are. Of course boundaries need to be clear. And of course when the BBC points users, say, towards opportunities to buy, the choice of commercial providers is fair and open. There are, in other words, big challenges in both navigation and labelling.
But the idea that, in the age of the i-pod, the public would not welcome the opportunity to actually buy a download of a piece of music they have heard on a BBC site – and to be able to buy in a simple and clear way without having to go through 29 pages of health warnings – seems to me ridiculous.
So we need to look hard at all these questions – again not in isolation but in partnership with the rest of the industry.
The future I see will of course include encrypted content, some of which will quite properly be aimed at particular devices. At the BBC we want to work with others both at UK and European level to help develop and support robust digital rights management systems. We will need them ourselves to support many of our commercial activities.
We also believe it is right in principle to ensure that rights-holders can continue to enjoy the value of the intellectual property they create and exploit.
But I also believe that these digital rights solutions will exist in a world which is increasingly open and inter-operable and we are working with partners like Microsoft and Kontiki to find them.
The first stage of digital was notable not just for the world wide web but for its many successful walled gardens and pieces of proprietary hardware – from the first Sky digibox to the i-pod.
I'm sure some proprietary products and services will continue to flourish in this second stage – we're partners both with Sky in satellite TV and with providers of linear services on both cable and ADSL.
But the biggest momentum at present seems to be behind open solutions where choice is wider, where the consumer is fully in control and where awesome network effects can get to work.
Now openness and universal access are at the heart of the BBC's mission and its heritage. It's an environment in which we can succeed and which we should help to develop not just for ourselves but for the country as a whole.
It's an environment in which the original promise of public service broadcasting – the very best available to all – could actually be achieved.
So let's work hard at finding practical and effective ways of protecting intellectual property. Of understanding the best way of maximising public and commercial value alongside each other. And of seizing the amazing creative opportunity in front of us. Thank you.