The On-Demand World is Finally Coming
Speech
given to the FT New Media & Broadcasting Conference 2004
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Last month,
according to BMRB, the UK internet population grew by almost two million
new subscribers, its fastest rate of growth ever.
It now
stands at half the UK adult population, some 22 million regular users.
It prompted
me to look back at predictions from late last century (when a little
something called a dot.com boom was in full swing) to see how wildly
over-optimistic the market growth claims were.
I was
very surprised. Far from over-estimating the market growth, many of
the brokers', banks' and consultants' forecasts were prone to under-predicting
the size the internet market would reach by 2004.
The Henley
Centre, for example, predicted reaching the 50% penetration mark only
as late as 2007.
So I looked at digital terrestrial TV predictions and according to city
analysts' forecasts from 1997, free to air DTT was due to reach only
5% penetration by 2003.
But in
fact, Freeview has already reached three million sales, 12.5% penetration.
There's
more to this than the truism of over-estimating the short term impact
of new technology and underestimating the longer implications.
Projections
were made on the usage patterns and trends of the time and ignored the
possibilities of more radical market interventions or shifts in societal
behaviour.
In both these instances, the web and digital terrestrial TV, adoption
has been higher or quicker than anyone anticipated.
A number
of factors have combined to make this so but, without overstating the
case, the 大象传媒 has played its part in making the markets in question.
As far
as the internet is concerned, a recent Mori poll found that two million
people first connected to the internet due to the 大象传媒's presence online
and, as for digital television, few people would deny that the 大象传媒's
technical re-launch of DTT and subsequent marketing of its digital TV
channels has helped drive sales of Freeview to its current level.
What should all this tell us then about the future of broadband?
On the
one hand, 3.2 million homes are currently connected to broadband and
BT is taking 45,000 new orders a week, with one in five of these connecting
directly to broadband, leapfrogging over the standard narrowband option.
And forecasters
predict that broadband could reach over 50% household penetration in
the next five years. If
they're being characteristically pessimistic, then that's good news
for the UK's broadband proposition.
But on
the other hand, as we all know, this 3.2 million is only equivalent
to 12% of homes and a very real digital divide still exists based, at
the very least, on wealth, age and location.
There
is a mountain to climb and so far we've only reached the foothills.
Converting the frustrated narrow-band users and early-adopters was the
easy bit, but the bulk of the climb lies ahead.
A high speed broadband infrastructure will be as important to the nation's
GDP as its physical equivalent, the motorway network, is.
But broadband
has huge implications not just for economic growth but also the wider
social fabric of the UK.
Communication,
content creation, and consumption as well as education, home working
and public service efficiency will all be changed for ever by the take
up of broadband.
On the
most superficial level everyday tasks will be made speedier and more
convenient, but on a more fundamental level broadband will allow us
to place greater emphasis on community and individual contribution.
A two-way
broadband UK could mean a more creative, personalised, social and affluent
Britain.
In other
words, it's still all to play for.
And the
大象传媒 has, I believe, a critical role to play in this growing market,
based on a clear vision of the kind of digital world that we predict
will be a reality by the end of this decade: a digitally empowered Britain
in which broadband, along with free digital TV and ubiquitous digital
home storage, are the new triple-play.
The word 'broadband' is clearly too wide and meaningless a phrase though.
Let's break it down into Evolutionary Broadband, Revolutionary Broadband,
and Convergent Broadband.
The evolutionary approach is a no-brainer. It is the gradual 'broadbanderising'
of our existing content, adding more audio-visual to the flat text and
still images currently predominating on bbc.co.uk.
This in
itself will help make a clear divide between our site and those of our
colleagues in the print industry. It will also enable us to deliver
on our traditional Reithian purposes of informing, educating and entertaining
with greater creativity, greater effect and greater efficiency.
To an
extent, this future is already becoming a reality and by enriching our
content we are helping to drive consumption particularly on our News
and Sport services.
But as
people currently tend to consume these video-rich services at work,
it is unlikely that this approach will take us far enough on the long
climb to a 100% broadband Britain.
The second broadband future, the revolutionary approach, means creating
wholly new, unique broadband content with enough of a 'wow' factor and
enough of a 'pull' to drive broadband take up.
The revolutionary
approach appeals to the heart of the 大象传媒 as a creative, innovative,
groundbreaking organisation. We've had some notable Bafta successes
with our early services, but we are still learning and might even find
that the very concept of 'killer content' on broadband remains elusive.
To further
complicate the picture, recent research from iSociety suggests that
people in broadband homes are far more likely to talk to each other
online and exchange comments, views, opinions with each other.
So maybe
its not just about one way content, but communities too. The 大象传媒's role
may be to act as the nation's digital campfire, around which communities,
broadband enabled, can form.
The third broadband future, the convergent approach, means building
the applications and utilities to enable existing television programmes
and radio stations - pictures and sound - to be enjoyed on demand, whether
that's on a PC or TV screen.
The convergent
approach means bringing you the 大象传媒 on demand - "Martini Media"-
anytime, anyplace, anywhere.
This third scenario, the convergent future, assumes that consumption
of on demand, broadband media will take place not at the PC screen but
via the TV and Hi-Fi.
The plethora
of hardware currently launching that will bring broadband content direct
to the TV shows that I am not alone in imagining this future.
It really
doesn't matter if the 'broadband-to-telly' box is a PC, as with the
Microsoft Media Centre, or a games console as with Sony's new PS-X,
or a set top box such as BT's proposed broadband Freeview box, or even
Sony's broadband connected Personal Video Recorder cum digibox called
Airtact which wirelessly distributes the signal around the house.
But, geek-appeal
aside, at the end of the day, it all comes down to the same thing -
a box which will offer unparalleled video and TV content, watched on
a screen!
In this
very near future world, you'll be watching a combination of programmes:
some from existing TV channels, some off the internet, others stored
on your own hard disk at home, or swapped via email with friends.
And not
just broadcast content, but your own content: photos, home videos, ripped
music, and highly local collaborative community content.
It will
be a single home solution that blurs the distinction between media sources.
In this on-demand world, broadband will be absolutely essential.
So what particular content and services should we be offering to drive
demand?
What is
'大象传媒 On-Demand'? Well, a look at the narrowband market is revealing.
大象传媒.co.uk
does not offer e-mail, e-commerce, or e-dating: ours is a pure content
related offering and yet we reach almost half the entire UK internet
population each month according to BMRB data and only a quarter of this
consumption is news related.
Again,
the market reckoned there would never be this level of demand for pure
education, information and entertainment content on the web.
But our
share remains comparatively low. Although lots of people are logging
on to the internet regularly they spend the lion's share of the time
doing other things online like email.
Early trials
suggest that in a broadband world this wouldn't necessarily be the case.
Broadband users spend more time online, they generally reckon they have
'more fun' online and are likely to spend more time in sites offering
audio visual.
Currently
the average narrowband user spends 7.1 hours online - the average broadband
user, 12 hours a week. Let's have a quick look at our current broadband
offering:
[Run VT]
This service is still relatively clunky, but results from this trial
service show that people want more rich video content and will make
time to view it.
This shouldn't
perhaps surprise us. Give people more control over their media consumption
and they'll consume more.
In Sky+
homes people watch more not less TV (up from 22 hours a week on average
to 25).
The first
version of our internet Radio Player has increased radio consumption
in general with audiences to some programmes like The Archers or Radio
1's Essential Selection increasing by up to 30% by offering shows on-demand
up to a week after transmission.
Let's have a look at the content and services we are developing to support
the third convergent scenario, 大象传媒 on-demand, where we take our radio
and TV output and make it available on-demand through the PC and TV
with a rich stream of additional information around it.
It will
start with the roll out of our broadband service from the Athens Olympics
in August.
Further off, in November, we hope that our internet media player (or
iMP) will move from technical trial to pilot, offering a wide range
of TV programmes to be downloaded up to a week after transmission.
We will also be working with the independent sector on the digital curriculum
for 2006, another good example of the way broadband will enable the
大象传媒 to continue to inform, educate and entertain, but with more relevance
to the modern digital world and more benefit to the licence fee payer.
The service
won't just transfer the traditional classroom online, but will create
an online space where students can discover and explore concepts in
innovative ways through video, flash animations, interactive games and
printable worksheets - developed to suit the specific nature of each
subject and the specific age of the students.
Now seems a good moment to mention the 大象传媒's Creative Archive which
was announced at the Edinburgh TV Festival last year, as I am today
in a position to talk in more detail about this service for the first
time.
The Creative Archive will give everyone in the UK the freedom to search
for and access clips from the 大象传媒's television and radio archives via
bbc.co.uk.
They will
be able to download clips free of charge and use them in a way that
will enable them, we hope, to explore their own interests more fully.
The clips
won't expire, users will be able to keep them forever and will be able
to manipulate and add to them.
They will
be able to pass clips on to one other and, at a later date, we will
encourage some of the resulting user-generated material to be posted
back on the 大象传媒's website.
This scheme
has the potential to lead in a number of different directions and is
radical in the sense that it will be largely defined by the behaviour
of the people accessing the initiative.
This is
the 大象传媒 taking an innovation risk, but a risk that will add to the creative
capital of the UK as a whole.
It's all
part of the 大象传媒 providing public access to its sound, television and
film archives in a way that appeals to the new generation of media consumers.
The first phase of the roll out will begin in autumn this year. We plan
to make about 2,000 factual clips of up to three minutes long (or 100
hours of content) available for people to access online.
As we learn
more about how people are accessing the archive and what they are using
it for, we will increase the material available.
For this
initial phase, we will concentrate on material that is fully owned by
the 大象传媒 but we will be talking to indies and other rights holders we
work with about clearing the rights to other clips.
If the
first phase is a success, the Creative Archive will be rolled out across
other programming genres which would mean a considerable expansion in
both the scale and range on content we can offer.
We will
also work closely with other publicly funded archives to share our experience
and work with them to further grow the quantity of audio visual material
available in the public domain.
This scheme builds on some of the behavioural trends we already know
exist amongst broadband users.
We know
people with broadband like to manipulate digital media such as photo
libraries or their own websites and they are more likely to share files
and use material for their own 'home-made' media compilations.
66% of
them, according to our consumer research, feel that the 大象传媒 is a natural
provider for a national resource like the Creative Archive - something
that has the potential to be so mainstream, so enticing and practical
for people's everyday lives, that it will actually help drive broadband
take up amongst those people previously unconnected.
You can
imagine a scenario where a child working on a science project for school
could use 大象传媒 content to research and explore the topic she was interested
in and even download a clip to use as part of her homework.
Or an
amateur DJ, wanting to create a video for his next performance, editing
and mixing a selection of footage together to form the perfect backdrop.
The only
limit is the imagination of the people involved. Although it is too
early to show an actual prototype, natural history on the Creative Archive
might look like this:
[Run VT]
So that was a brief run through of some of the products and services
the 大象传媒 will provide to drive demand in the same way as we still do
with the narrowband internet and we are already collaborating on this
with broadband service providers such as AOL and Freeserve.
In addition,
we'll be using our open centres in places like Preston and Blackburn,
our 大象传媒 buses, and webwise courses to drive broadband.
We have
already seen tens of thousands of people sign up for both formal and
informal learning in computer skills - through which we are able to
actively promote the take up on online and encourage a web literate
UK.
Education
and digital media literacy should be increasingly at the heart of our
online output.
For just
as certainly as this broadband convergent world is coming, so too is
it certain that many people in our society could get left behind, could
fall on the wrong side of the digital divide.
With the
price of equipment and connectivity to this on-demand world outside
the reach of many, and the technological complexity too much for others,
the appeal of these products and services remains unclear.
As Britain
becomes increasingly broadband, the commercial attractiveness of connecting
the last difficult to reach 20%, whether because of rural location,
or economic status, may mean that a classic case of market failure will
occur and the 大象传媒's role in this situation is very clear, just as it
will be with helping to convert the last 20% of analogue TV viewers.
The emerging new media landscape therefore presents both social challenges
and opportunities for us as an industry and it is against this backdrop
that I see the 大象传媒's online services having an increasingly important
role to play in helping to create a 100% connected, digital Britain.
As many
of you will know, the 大象传媒's online services are currently under review
by the DCMS - which presents us with a golden opportunity to define
our role in the future of this digital Britain.
We see
a clear role for the 大象传媒 in helping to drive a broadband Britain and
would like to see that reflected in the outcome of the review.
I believe
we have passed the tipping point, that take-up of the internet is increasing,
that the on-demand world is finally coming, and fast.
I believe
that industry projections are, like they were four years ago, wrong.
I believe
that an unholy trinity of the 大象传媒, regulators, and the industry players
from the likes of BT to Bulldog can actively drive this second mass-market
phase of broadband growth.
And that
the 大象传媒 has an additional role to help ensure in this on-demand world
that no-one gets left on the wrong side of the digital divide.
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