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27 November 2014
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Mark Thompson


Mark Thompson


Speech given to the Society of Editors:

The BBC – Expensive Big Brother Or International Media Icon?

Monday 6 November 2006
Printable version

Check against delivery


One of the great pleasures of being Director-General of the BBC is the many contacts I have with the public. In meetings, on the street, on the phone, but most frequently through email and letter. There can't be many people who get such big postbag, or one so full of thoughtful, closely argued, coherent letters. But they're not all like that.


"Dear Sir, some years ago I wrote on behalf of my daughter to Mr Dick Van Dyke. He was kind enough to send some signed photographs of himself. Unfortunately, I have since lost his address and therefore cannot thank him. Can you help in any way?"


"Dear Director-General, are there no longer dress regulations at the BBC? Like many others, I am appalled at the tieless habit that has suddenly invaded our screens. How scruffy the open-necked community appear!" As another correspondent was kind enough to note: "the middle-aged male neck is not a thing of beauty!" Well, I think that's rather a matter of opinion actually...


One angry licence-payer wrote recently to complain about a story-line in that weighty drama, Bob the Builder, in which our small clay hero set about building an entire new town all by himself. To imply, the letter said, that Bob "is able to not only carry out building work but that he is capable of producing architectural, structural and services drawings for buildings and urban development plans when he does not have any training skills, or qualifications in this professions is a flagrant distortion of reality and should not be perpetuated."


Children's programmes are a notoriously dangerous area. A few years ago, when I was Controller of BBC Two, I was lucky enough to commission another enduring masterpiece, Teletubbies. It went on to be a big success for the BBC both here and around the world – oddly enough, we've recently done a deal to open a chain of gigantic Teletubby stores across the People's Republic of China. But when it was first launched, there was an aggressive press campaign which ran for weeks accusing the BBC of using the Teletubbies to dumb down the whole English language.


My subject this morning is: The BBC – Expensive Big Brother Or International Media Icon? Well, what a choice. Though of course you could argue that it's not really a choice at all – and that the bigness of the BBC, much bigger than public TV and radio in the US, for instance, or in Australia, that that bigness is a necessary if not sufficient reason why the BBC does indeed loom so large as a brand around the world.


A BBC which was boxed into a corner in the UK, which was defined and regulated out of every new media development – that kind of BBC wouldn't have much chance of standing out in global media markets. It's hard to think of many international media icons who don't begin with a strong position in their home markets.


And Britain seems to have decided once again that it wants a BBC of scale and scope. In the debate about the next Charter, of course there have been voices calling for containment, for boundaries to the BBC's future plans. Boundaries, and border guards patrolling the boundaries, make sense for all sorts of reasons. But very, very few organisations or individuals have argued for a step-change reduction in the BBC's mission. The BBC retains too much public support for that to be credible public policy.


No, surely the question is whether the BBC is big in the right way. Whether its bigness helps and supports the development of the wider creative industries – or whether it blocks out the light.


I was in China ten days ago where I learned a number of things. For instance that the Chinese for "end-to-end digital media asset workflow" is (rather charmingly) "one dragon". And that the BBC format most in demand in the People's Republic is Celebrity Sleepover. (I thought we'd buried that one years ago …).


Something else I learned was a fable told by a senior government official to illustrate China's difficult, sometimes rather alarming image in the rest of the world. It's about a family of frogs who live next to a family of elephants and the point of the story is that, as the Daddy frog tells his children, it doesn't matter whether the elephants love you or loathe you. Either way, you're liable to being squashed. He was talking about China. I know that some of you would say he might just as well as have been talking about the BBC.


But I don't recognise the image of the BBC as a Big Brother in either the George Orwell or Jade Goody sense. What I do accept is that the BBC's public status and in particular its public funding mean that it has to work much harder than a large, purely commercial player to convince those around it that it can be a useful partner and a friendly neighbour rather than an unintentional menace.


Nor is it enough for the BBC to argue that it tends to be good at what it does. With the security of the licence-fee, with its scale and with the access to talent which it has, it darn well should be good. Generally – though of course there's always room for improvement – we are. Indeed, over the past few years we've made real efforts to improve quality and to drive greater distinctiveness, whether you're talking about our website, BBC One drama, the Radio 1 schedule or the very strong performance of our services here in Scotland.


There was a lot of talk a few years ago of the BBC being too straightforwardly competitive, pushing too hard at the same ideas, the same stars, the same formats as its commercial rivals. More recently, I believe we've seen key BBC services actually moving away from their commercial opposite numbers.


If you take TV, nobody else makes programmes like Planet Earth. The BBC looks likely soon to become the only substantial commissioner of original UK children's programmes. By the same token, the BBC is moving progressively out of some programme markets. There was a flurry of competition a couple of weeks ago between Channel 4, ITV and Sky for two American hit shows: Lost and Desperate Housewives. Lost eventually went to Sky, Desperate Housewives to Channel 4 – for a reported one million pounds an episode, far more by the way than it costs the BBC to make an original UK drama like Torchwood.


The BBC today buys fewer US programmes than it has ever done, fewer movies too – because there are plenty of other places where viewers can find them. And because we would rather direct the licence fee to those areas and those genres where we can add the most distinctive value.


I think that's good news for our audiences. At the moment they're telling us they believe that the quality of many of our services is going up. It's been striking too how little talk there has been in this Charter round about programme quality or public service direction. That, if you like, has been the dog that didn't bark.


Nonetheless, I appreciate that a focus on quality and on a rather more limited range of editorial priorities isn't in itself a great comfort to competitors who fear that they may still find themselves in the BBC's path. I remember one of the commercial objectors to the BBC's Digital Curriculum – now called BBC jam – said to me privately: "We're not frightened you're going to do it badly, we're frightened that you're going to do it well."


That fear and the widespread uncertainty which used to surround new BBC services – not just what will they be like at launch, but how will they evolve? – is why I believe the Government was right to reform the whole way in which possible new services are considered for approval, and in particular to insist on an independent market assessment carried out by Ofcom and to require that the new BBC Trust should consult extensively throughout the process.


The Trust has a critical job to do in building confidence in the system – and in demonstrating to typically pretty sceptical commercial players that their views and anxieties are being taken fully into account.


But BBC management also has a big task to demonstrate to the outside world that we can work as a partner, that we can add value and build and condition markets rather than threaten them.


The Coming Storm


I'll say a bit more about that in a moment. First though I want to spend a little time exploring the world we're heading into. We used to talk a lot about digital convergence. Now it's happening for real – indeed it's because of convergence that the whole issue of the BBC's market impact has become so sharp.


Historically, everyone knew where they were. The BBC did TV and radio. Newspapers did print. The BBC had had an educational mission since the 1920s but it rarely bumped into educational publishers because it got its content into schools by broadcasting it, while they sold books to them.


Well, it should be clear that these divisions by platform are on the way out. Everyone is bumping into everyone. People who were used to having a media market more or less to themselves are suddenly finding multiple new entrants, some with entirely different business models, some with very deep pockets. It's not surprising then that media companies who once regarded the BBC as wholly irrelevant to their commercial interests now regard it as a potential threat.


But it's worth adding that this digital disruption is having its effect in all markets in the developed world, including those markets where there is no equivalent of the BBC. Falling audiences to traditional broadcast media, falling sales of newspapers, the shift towards web-based advertising from traditional media, the challenge of persuading users of the web to pay for content, especially text-based content: these trends are all just as visible – indeed more visible in the US – than they are here. The story of NBC and its struggle to break a cycle of creative underperformance and plummeting advertiser confidence is strikingly like the current experience at ITV.


You don't need a large-scale, publicly-funded PSB like the BBC, in other words, to find yourself going through the eye of the storm. Exactly the same things are happening in markets with little or no public service broadcasting tradition.


The BBC and market impact


Nor, I believe, do the underlying economics support the idea that the BBC is currently having a major adverse effect on UK media markets. The BBC's public service portfolio of channels and portals doesn't compete for advertising in the UK or attempt to monetise consumers in other ways. The categories where it is strongest on the web – news and information, weather, in-depth knowledge-based content on history, natural history and other subjects, and on-demand access to its radio and TV content – these are not the categories where the big money is being made on the internet here or in most markets around the world.


A few years ago, the DCMS set up three major studies to examine the BBC's three big forays into the digital world: the Barwise report into our digital TV channels, the Gardam report in digital radio, and the Graf report into our work on the web. Although all three had useful insights into the issue of market impact and Philip Graf in particular recommended taking a "precautionary" approach going forward, none of them found tangible evidence of serious market impact or "crowding out". As I noted a few weeks ago, the BBC has spent getting on for £30bn on content for its UK audiences during the present charter. So far no one has come up with a single, evidenced example of a private company suffering serious loss because of the BBC's services.


Some people argue, of course, that the real danger lies in the future. With its plans for local TV, for instance, isn't the BBC on a head-on collision course with other players, notably the local and regional newspaper groups, who also see much of their financial future in the provision of local news and information online?


If the BBC is allowed to launch such a service, isn't there a real and substantial danger that consumers will get everything they need from the BBC's free service and not both to turn to rival sites at all?


This is exactly the kind of question which the Market Impact Assessment is designed to attempt to answer. As of today, Local TV is an idea inside the BBC, one which has also been the subject of a trial in the West Midlands. If it becomes a formal proposal, then the Trust and Ofcom will jointly commission an MIA and Ofcom will carry it out. Only after that and the whole Public Value Test is concluded will the Trust decide whether or not the service can go ahead.


The MIA is bound to look very closely at the West Midlands trial – and in particular at to what extent use of the BBC's local audio-visual content impacted on use of other sources of local news and information.


For now I'll restrict myself to noting that there is no evidence – either in the West Midlands trial or more generally – that web usage in the field of local information is substitutional in the way that some forms of conventional media are. Many people clearly do decide to buy one newspaper rather than another – and a free newspaper, like the ones flooding the London market really could substitute from a paid one. But it is by no means clear that the same holds true for websites. People who are interested in news will often use a range of different websites.


A few years ago, the BBC – like many others – believed that the right strategy was to keep users of its site in: to make the site so compelling and with so many attractive internal links that no one would ever want to leave.


Well, we've learned that that's not the way the web works. People want to wander and explore. That's why today we make an active point of linking to other news sites, of encouraging people who have looked at our coverage to sample what's on offer from other news providers. We don't want to be on the web, we want to be part of the web. We want our content to be open and porous. We link extensively into the blogosphere, for instance. Perhaps partly as a result, we are also one of the news sites most widely referenced and linked back to by individual blogs.


To imagine that consumers will select one provider of local news and information and stick with that – unless some rival comes along and steals them – may have been true once, but I believe it is not the way the web works. Localness will permeate many different parts of the web – entertainment news, auction sites like eBay, social networks. It will be a horizontal slice of the way people access information about music, say, or sport, as much as a vertical silo. And no one set of media interests is going to own it.


If we go ahead for our vision of local TV, the scale of what we offer will be limited – we have in mind a core of no more than ten minutes of audio-visual material per day, delivered over broadband and possibly also by digital satellite and cable. Editorially, it would aim to complement the market. There would be a particular focus, for instance, on local democracy and community issues – one of the highlights of the West Midlands pilot was the night of the local elections where we had a camera at every single count.


Potentially lucrative features – detailed entertainment listings, for instance, with the opportunity to click through to purchase tickets, or classified advertisements – would be left to others and, in my view, should be explicitly excluded in any consent.


Partnering the market


Above all, we would commit to working with rather than in opposition to other providers of local news and information. The BBC's local TV is intended to enrich our current local offering, represented by local radio in England and by our Where I Live sites across the UK. It will not be any more local than they are – that means that, on average, each local TV service will hit a catchment of around a million people.


Of course many local newspapers are far more local than that. Rather than compete with them, or attempt to replace them, we want to partner with them and draw on the journalistic strength they already have on the ground.


In the West Midlands trial, we entered into a contractual arrangement with the Press Association in which we paid for video news supplied from their new Birmingham bureau. PA took the contract as a cue to introduce video skills at the bureau. We also signed a letter of intent with one newspaper group, Trinity Mirror, as well as entering into a number of local one-off partnerships – a shared photographic competition and a "letter of the week" with the Shropshire Star, for instance.


Now I certainly wouldn't claim that these limited partnerships mean that the companies in question have in any way already given their consent to the BBC service. But they do give a clue about how we at the BBC want to proceed if the service gets approved and launched.


First, in addition to our own local and regional newsrooms, we want to draw on the newsgathering clout of the UK's local and regional newspapers – and we'll pay for it. That means a revenue stream, but also visibility and credit on the BBC's new local service.


Second, we want to use these partnerships to exchange knowledge and skills. Local newspapers can offer us granularity much finer than our own local services. They also offer an extraordinary depth of local knowledge. But we can bring skills to the table as well – in particular in audio-visual newsgathering, editing and packaging. For newspapers who want to add sound and moving pictures to their web offering, a partnership with the BBC could make a lot of sense.


Thirdly and finally, we will make sure that we link, not just to our partners, but to a full spectrum of local information providers. I believe that that way we potentially all gain, because if the amount of high quality local content grows and consumers can easily navigate around it, we have a chance to grow the entire category. People often accuse the BBC of constraining markets. Actually, whether you look at digital radio or Freeview or channels like 6 Music or BBC Three, you can also often find evidence of the BBC helping to grow new markets. That's what we want to do in local media.


In conclusion


The theme of your conference is The Next Generation – and no doubt I won't be the last speaker to warn of just how steep an angle of change we all now face.


In broadcasting, we see the evidence almost every day. Last week, Andy Duncan noted that Google's advertising take in the UK had already exceeded Channel 4's. Some analysts believe it won't be long before it overtakes ITV too. And Google's march is not just about advertising dollars. One recent survey of trustworthiness in news in the UK had the BBC at the top but in second place Google News – not bad for a company which has a strategy of not employing journalists!


How are we responding to this revolution at the BBC? By trying to be clear as possible about what we stand for and about the areas of content where we can stand out and make a real difference. By trying to raise standards of quality wherever we can – we believe that high quality content is a commanding position to occupy in the value chain in this new world. Above all, by being more open and responsive to audiences – and by letting them share in the process of making and debating the news.


I wouldn't presume to predict what all this means for your business. Some of the themes may be relevant – for instance the way the best content and the best stars become even more important in a crowded on-demand environment – but some may not.


I would like to leave you with one thought however. In this disruptive and unsettling period of change, it can be tempting to turn on those closest to you. Any competition – even familiar competition – can seem threatening and dangerous. In fact, the disruptive forces we face are global ones, and often spearheaded by global businesses. It may be that – within the right context and, of course, with the right safeguards – we can meet some of these forces more successfully together.


At the BBC, we're ready for a new partnership with the UK's local, regional and national newspapers. It's a partnership that I hope many of you will feel able to join. Thank you.


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