Wednesday 17 Sep 2014
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In broadcasting, the future is not what it used to be.
If you'd asked the BBC in 2005 what TV viewing would look like in 2011, we would have shown you a mid-case which suggested that up to half would be time-shifted via PVRs like Sky+ and IPTV platforms like Youview.
User-generated-content would be well on its way to becoming a mainstream activity – indeed it might have already become an important substitute for traditional media.
What about competitors? Around that time the CEO of Vodafone was asked to name that company's number one competitor: perhaps the BBC, he said.
Broadcasters, search companies, mobile phone companies, ISPs – it felt as if, no matter where they'd started, everyone was about to meet in a new emerging, converging middle.To be in broadcasting was to be assaulted from all angles – the internet threatened to disrupt business models; media brands were under attack from the disaggregating affect of tech start-ups in California; the take-up of digital television looked like it would fragment audiences; and the traditional craft of journalism would be usurped by citizen journalists. The future looked chaotic to say the least and very uncertain.
Well, so far at least that's not the way things have really turned out.
Time-shifting, user generated content and convergence across the value chain all remain fundamental trends, but none of them has developed along the lines that we and most of the rest of the industry predicted.
Today asynchronous viewing accounts for not half, but as little as 10% of total TV viewing. A mid-case prediction is that it might grow to little more than 15% by 2016.
Given the sheer scale of TV consumption in the UK and much of the rest of the world, proportions like 10% and 15% represent highly significant shifts – they do not, however, add up to the bloody revolution and the death of the spot advertising market that many predicted.
And there is an obstinate fact that almost no one foresaw and people are in denial about: despite the many other competing forms of electronic entertainment in the home, television consumption as a whole has grown in this country over the period and continues to grow. People are watching more TV in a conventional passive way than they did before.
UGC, creatively and journalistically and democratically fascinating and influential as it is, feels more like a complement or extension to professional media than a straightforward substitution.
Our experience at the BBC is that it adds a further dimension to our reporting, but it doesn't substitute it. When it comes to reporting on Libya you still need John Simpson and Jeremy Bowen.
When it comes to user generated content, the old 1-9-90 rule seems to apply: 1% make, 9% comment, 90% are content to consume and observe.
Convergence is a reality in 2011 in a way it wasn't in 2005, but here too the future feels different. The provision of networks and the creation of content are still fundamentally distinct activities, while the different characteristics of different networks – fixed and mobile, wide and narrow, open or closed – still matter.
Broadcasters have more to do with mobile phone operators than ever before, but it still has the character of a conversation, or a partnership, between two very different businesses.
So was the talk of a seismic shift in broadcasting wrong? Should we look forward to a future of gradualist change rather than sharp discontinuities? Well, that doesn't feel quite right either.
Another way in which our 2005 prediction of the media world of the future fell short is in what it left out.
Smart phones and the world of the app store, let alone the tablet. The power of social media: Facebook, Twitter and the rest. Computer gaming, 3D.
We knew in 2005 that we wanted to launch a seven-day TV and radio catch-up service and we wanted to make it available not just on personal computers but on as many devices as possible. But we didn't know what those devices would be, and certainly not just how many people would choose to watch the BBC iPlayer not just in the home, but in bed, on a mobile smart phone or tablet.
In 2005, the concept of the 'social discovery of media' existed but consisted largely of word of mouth and emails. Today we can very easily imagine a future where social recommendation of specific content on services like Facebook could be as mission critical as our position on an EPG.
This morning I want to take one broadcast medium – television – and to give you some sense of where I think we're headed today. In a way, it's a somewhat more evolutionary, conservative picture of the next few years than the one we'd have painted five years ago – but with important caveats.
The dictum – that we tend to overestimate change over the next couple of years and underestimate it over the next 10 feels like good advice when you look at the future of television. Especially when you look at the behaviour of younger viewers – I think there's reason to believe that we may see a period of continuity followed by discontinuity, evolution followed by revolution.
My first proposition this morning is that different kinds of TV are advancing into the future at different speeds.
If we take John Reith's division of broadcasting into information, education and entertainment, it's fair to say that the world of news and information is our advance party into the digital world.
Even today, we expect our news to be available in real time wherever, whenever and on whatever device is most convenient to us. In fact it's often quite difficult to remember exactly where we first heard or saw or read a given piece of news, say about developments in a political story, on TV, radio, in a newspaper, on a Blackberry, on an iPad, on a PC and so on.
As a result, traditional TV sources of news and information have already faced significant disruption. The many new sources and modes of absorbing news are weakening the business models for newsgathering and the scheduling of traditional news bulletins just as they are with newspapers. It's possible for providers to counter these trends by launching new portfolios of news and information services – and it helps if, like the BBC, you already have a tradition of offering news across multiple platforms – but you have to work much harder at it.
Look at the BBC's coverage of last year's election campaign. [SLIDE]. In total, we reached some 83% of the UK population with the coverage, but as you can see here we did so through many, many different outlets.
In the UK we have maintained our reach and internationally have extended it because we generally do not rely on single platforms.
In English and in other strategically important languages, our view is that a broadcaster can really only hope to have a significant impact with news if they are offering it on television and the web and radio and mobile.
This is why in recent years we have launched BBC Arabic and Persian TV channels in addition to our radio and web services. It is also why the BBC will never retreat from delivering news online.
It's important to say that the choice now available in digital platforms does not mean that traditional shortwave radio services have had their day yet – we profoundly regret the current wave of BBC World Service closures which are the result of the Government's Comprehensive Spending Review.
It does mean, though, that as far as we can see at least, the future of news and information is intrinsically multi-platform, multi-device and multi-media. No one medium, neither TV, nor radio, nor print, nor even the web are sufficient in themselves.
In the UK, it is those players who control or have an interest in multiple platforms who are capturing the highest amounts of news consumption.
Be careful about taking too much comfort if you are in traditional media.
[SLIDE] This chart from Enders shows consumption of news by minutes. There are a couple of health warnings: newspapers offer much more than straight news and, in the context of news, minutes consumed may not be the best guide to value – if I'm looking for headlines, I may feel that the less time I spend finding and consuming them the better, which is why that 1% of time spent on online news probably understates the importance of the web in news. But the chart makes the broad point.
But it's a very different story when you come to entertainment. Entertainment is the principal reason people turn to TV. Here, predictions that passive consumption of TV would give way rapidly to lean-forward, active participation now look not just premature but wrong.
Instead, the main impact of the new technologies has been to extend choice, first through the provision of many more channels and second through asynchronicity, in other words to make content available outside the time-constraint of the linear schedule, through local storage, catch-up services like BBC iPlayer, and streaming or downloading on demand.
In most markets including the UK, the impact of the first and older of these structural changes – multichannel – is still the dominant one and, decades after the first new channels arrived, is still working its way through the system.
It is multichannel rather than the web which explains why the economics of cable TV have overtaken broadcast TV in the States and why Europe's traditional free-to-air broadcasters have also felt the pinch – though the decision by the UK's original broadcasters, first the BBC then Channel 4 and ITV, to launch their own portfolios has a significant effect in off-setting the audience fragmentation which multi-channel inevitably brings.
These new PSB portfolios have joined an extraordinary plethora of satellite, cable and DTT channels to offer those who are looking for essentially passive entertainment a diversity of choice which, as you've heard, has kept TV consumption growing in this country.
In addition, there continues to be rapid innovation in the passive TV experience. Large plasma and LCD screens, projectors, HD, Dolby 5.1 sound and home cinema, 3D. The new screens invite communal viewing.
Again – contrary to many of the predictions of 1990s – far from atomising into a series of individuals watching different things in different rooms, family viewing is alive and well and event television, from X Factor to Doctor Who is as big or bigger as ever.
No one, no one, could have predicted that in 2011, the world's most successful entertainment format would be one based on a late-night 1960s ballroom dancing show on BBC One.
The evidence of the past five years is that television as a social glue remains very sticky indeed, particularly when it comes to big entertainment formats or national events.
You heard me say at the start that time-shifting has not been adopted as quickly as we predicted. Easier perhaps just to flip channels to find something you might want to watch than the palaver of remembering to record something in advance.
There was a time when people suggested that the VHS recorder would destroy live television, but for most people most of the time it just proved too fiddly. There is strong behavioural evidence – including from the most recent IPTV trials – that most viewers want passive viewing to be just that.
But be careful. When time-shifting is easy and intuitive and available on the device you happen to have in your hand or in front of you right now, people use it.
[SLIDE] This is the story of the growth in use of the BBC iPlayer over recent months. You can see that in January, we hit a new all-time peak of 162 million programme requests served in a single month. That's 162 million served to a country of 25 million households – an average of more than six per household. The greatest month-on-month growth now is not on PCs or cable TVs but on iPads, iPhones, other smart phones and games consoles.
BBC iPlayer worked, I believe, because from Day One it was so behaviourally straightforward – no log in, no client to download, you just went to the site, clicked on a picture of a TV programme and it played. Simple.
So let me lay out my second proposition which is this: simplicity, immediacy and intuitiveness of findability, access and use are critical success factors for catch-up and for all TV on demand more generally.
The more quickly and completely we solve these challenges, the more rapidly the relative take-up of on demand in the entertainment space will be.
This has important implications for IPTV. It suggests that the more computer-like or even web-like the experience, the less attractive it will be in the context of main TV viewing or even viewing on the fly using mobile devices.
Users will want plenty of choice, but if I'm right, they won't want to boil the ocean. In one recent IPTV trial, after a few weeks many of the participants drifted back to the linear schedules because of the effort required to find anything else.
Part of the philosophy behind Youview is the idea that the entire experience should be as TV-like and as continuous with the TV experience as possible.
My third proposition is that so far as an industry we have given too little attention to TV, by which I mean broadcast or broadcast-like TV, to mobile devices.
We know from services like BBC iPlayer, that consumers enjoy viewing television programmes on mobile devices. We know that mobile TV has proven very popular in those countries like Japan and South Korea where it's been introduced.
I believe that there's a strong case for the UK's broadcasters, mobile phone operators, Ofcom and Government to come together to develop a roadmap for the introduction of mobile TV in this country.
This would be complementary to the availability of TV content on demand, whether streamed or cached on the device and would enable the public to access time-critical content – news, major sports events and so on – wherever they are.
The remarkable persistence of linear TV consumption should not make us complacent about the future. If that current prediction is right and around 15% of viewing in 2016 is asynchronous, even that would be roughly the equivalent of Channel 4 and BBC Two combined. And it may be that, beneath the headline numbers, profounder forces are at work.
People have always watched less TV as they move through adolescence and early adulthood with their consumption increasing thereafter with age.
But there's good evidence that this dip is becoming sharper.
This is the cohort born in 1985, now aged 25 [SLIDE] and this the cohort born in 1990, now aged 20 [SLIDE] and this the cohort born in 1995, now aged 15.
We can now see clearly that each cohort of teenagers does seem to be watching less TV.
But – and this is the surprise – as the years go by people are still watching as much TV when they hit the over-20 lifestage as they were years ago.
The question, which we don't have an answer to yet, is whether the even younger cohorts – those who are growing up in a completely digital world – will follow this pattern and return to these very high levels of viewing as they grow older. Or, whether there will be a permanent shift downwards in future consumption.
We also recognise another shift in behaviour among younger viewers which is that they are far more likely than older audiences to be using one or more other electronic devices at the same time as watching TV.
There are clearly opportunities for the broadcasters in that – we are exploring ways of using so-called 'second screens' to enhance or deepen the viewing experience.
Imagine the educational potential, for the BBC for example, of providing additional synchronous information, background, maps, diagrams alongside a news or history programme or even an episode of Doctor Who.
Let me end with a few words about what all this means for the BBC.
In a way, I think it's relatively simple. The BBC's response to the first digital wave was to broaden the choice it offered on TV and radio by developing wider channel portfolios while also establishing a strong presence – centred on its long-range historic strength in news – on the web and other digital devices.
As a result, we have maintained our reach across audiences and, at around nineteen and a half hours a week, average consumption of the BBC is actually growing.
Quality and approval measures have also increased over the past five years.
The challenge for us now (and I suspect it's a challenge for many in this room) is to concentrate on the quality, value and memorability of our content, not just in television but across our services. To ensure that in this very crowded media landscape that we make the programmes that people will want to seek out and come back to, that are increasingly distinct from those offered by commercial players.
Science on BBC One with Bang Goes The Theory, last week's Newsnight Special on Libya, the Proms which last year reached eighteen million people in the UK across the season. That's our direction of travel.
For 80 years, we've been involved in developing platforms and broadcast technologies. We still need to do that – not least because we are the only big player prepared to share our innovations and technology with the industry at large.
But we never forget that platforms and devices are a means to an end – and the end is putting outstanding, worthwhile content in front of the public.
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