Speech given at Nokia Siemens Networks Forum, Rome
Friday 21 September 2007
Printable version
Content is king vs distribute or die
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Two media industry clichés: "content is king" and "distribute or die". I believe that one of the single biggest issues we face in the broadcast industry is getting the balance right between, on the one hand, the investment in content creation, and on the other, the investment in technology and distribution.
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There's little point having great programmes if no one can find them, or they're not in the format our audience increasingly expect to consume them in – in the 1920s it took just five years for the technological innovation of the 'talkies' to effectively kill the silent movie era. How long before shifting audience demands see the demise of, say, one hour teen drama in favour of the five minute podcast?
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Likewise, the consumer electronics landscape is littered with failed distribution technologies that promised new, more convenient ways of accessing content and then failed because of the lack of a good range of quality content: From Betamax to Iridium, from Sega Dreamcast to Philips Laserdisc.
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So we broadcasters have to get the balance right between content spend and distribution spend, and we have to make the right distribution technology calls.
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It's perhaps not widely known that the ´óÏó´«Ã½ was not created by content people. It was set up in October 1922 by a group of leading radio manufacturers to help sell wireless sets. The relationship between technology and content has been interwoven ever since, and it is not always axiomatic that content is the driver.
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You may have heard that the ´óÏó´«Ã½ received a licence fee settlement from the British Government, that is below inflation and is forcing us to make some very real decisions about what content we make over the coming years, and how and where we distribute it. The message coming from the content side of our business is clear: apparently we have, and I quote, "obsessions with the red button, with interactivity, fatuous opinion polls, podcasts, multiplatform 360 degree programming, etc, etc, we've all heard the jargon, even if we're not entirely clear what some of it means. In the process, something's gone wrong. We've got too interested in the way we deliver what we do, at the expense of what we deliver. We have become obsessed with how the copper wire is organised, and forgotten about the electricity." This of course, from the ´óÏó´«Ã½'s own Jeremy Paxman in his recent speech at the Edinburgh TV conference.
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Is he right? Has the balance tipped too far from content to distribution? In a word, no. I believe we are in one of those once in a generation points of inflection – like the move from silent movies to talkies, or the introduction of colour, or the launch of multi-channel TV, that require content makers to fundamentally reappraise their business, and make significant adjustments not just to what they make, but how they make it, how much they make, and how they distribute it.
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We must get our content out to every platform where there is a strong and growing audience base. We do not need to spend vast amounts of money doing this. The old economics of broadcasting are changing. It costs £7million a year to broadcast over digital terrestrial, good old fashioned masts and antennae. It costs a tenth of that to run a channel over digital satellite, and a tenth as much again, just £70k, to run a tv channel over the internet. And that figure can fall away to zero, if you enter the right partnership deal with the likes of Joost or Babelgum, the new video aggregators on the block, or even better get our audience to willingly distribute for us, such as through a Facebook application.
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But this is a big strategic decision for us. Do we give our content away to these platforms, or do we offer it ourselves from our own website? There is a balance to be struck. We want the huge distribution that YouTube can bring us, the access to audiences many of whom may not come to ´óÏó´«Ã½ One or bbc.co.uk. We want our content to be found on Bebo, on MSN, on Yahoo! But we also want three other things at the same time: firstly we want to know what our audiences are consuming – so that we can offer them more of what they like, secondly we want to ensure our audiences get a quality experience – in our case without advertising, and thirdly we want brand recognition – if our audience don't appreciate that the content comes from the ´óÏó´«Ã½, they're going to be less likely to want to pay the licence fee. Customer Relationship Management, Guaranteed Quality, and Brand Recognition – three reasons why we want to retain some control over the where, how and when our audiences consume our content.
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In practice then, this means we will put a wide range of clips onto YouTube, and we've already broken the 3 million user number, but we will also try and bring them back to our website – to bbc.co.uk, which reaches 17 million in the UK – to watch the full length programme using the new ´óÏó´«Ã½ iPlayer.
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´óÏó´«Ã½ iPlayer
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We soft-launched ´óÏó´«Ã½ iPlayer just over a month ago, and we've already seen hundreds of thousands of programmes being downloaded. Our vision is for ´óÏó´«Ã½ iPlayer to become a universal service available throughout the UK, not just over the internet, but also on cable and other TV platforms, and eventually on mobiles and smart handheld devices. It underpins our Creative Future strategy, to maintain the ´óÏó´«Ã½'s relevance among all audiences in the digital age.
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´óÏó´«Ã½ iPlayer makes all your favourite ´óÏó´«Ã½ programmes available for download, free for UK licence fee payers, at high quality, with no advertising, for up to a week after transmission. Once downloaded, you'll then have a longer window in which to get round to watching it. Once watched, the file clears itself up by deleting itself. Using DRM, we can protect our rights holders' fears that their programmes will be copied around the world.
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´óÏó´«Ã½ iPlayer will never be a replacement for the ´óÏó´«Ã½'s traditional channels. It is a complementary service that we expect will help keep ´óÏó´«Ã½ One, Two, Three and Four and their entire range of programming in front of an audience who may have less time or inclination to watch programmes live, or remember to record them, and who want to take them on the train, on their smart-phone, or even to bed with them on their lap top.
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Our trials showed that ´óÏó´«Ã½ iPlayer could account for 10% or more of viewing of ´óÏó´«Ã½ TV programmes in broadband homes. Where we have already been offering the ability to download programmes from our website the statistics speak for themselves. There have been over 5 million downloads since our video podcast trial less than a year ago (including 1.3 million downloads of Breakfast News and 1.1 million downloads of Newsnight).
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[So with this level of nascent demand, we want to make ´óÏó´«Ã½ iPlayer as widely available as possible, across as many platforms as is feasible. We're starting with the biggest available audience – the 22 million people who are broadband connected in Britain. The next biggest audience are 3 million cable homes. After that, it's Macs, media centres, and smart handheld devices. Once we've done all that, we'll turn to the really tricky platforms: DTT via either PVRs or IP hybrid boxes.]
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Let's have a look at the ´óÏó´«Ã½ iPlayer
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[Run ´óÏó´«Ã½ iPlayer VT]
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´óÏó´«Ã½ Archive Trial
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So that's about our plans for catch-up TV and current programming – the seven day window. I would like to move on now to the long-tail, our Archive.
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The long term aim is to unlock this treasure-trove of over a million hours of video and audio that has aired on the ´óÏó´«Ã½ over the last 70 years, with all the supporting programme notes and scripts. We launched the ´óÏó´«Ã½ Archive Trial on bbc.co.uk back in May. The long tail theory – that up to a third of demand for content comes from back catalogue, from outside the current charts, from way beyond the top blockbusters, has already been proven on Amazon, iTunes and Netflix. Our trial aims to establish if there is a similar level of demand for television's long tail – older programmes that are no longer aired in the very limited space we have on our channels ´óÏó´«Ã½ One thru Four. So far, the results are extremely encouraging: but beyond top line demand, we're also exploring how people want to access our archive - full length or clip compilations; and when they want them – in lean-forward exploratory mode similar to web surfing, or as a scheduled experience more akin to TV viewing.
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[Run Archive VT]
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The ´óÏó´«Ã½ Archive is an extension of the ´óÏó´«Ã½'s seven-day catch-up on demand service, the ´óÏó´«Ã½ iPlayer. Clearing our archive will be a massive undertaking. Ensuring the right split between licence fee funding and commercial funding will be complex.
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Turning now to mobile
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The promise of mobile phones being used for so much more than peer to peer communication, whether voice or text, has always been so tantalisingly and frustratingly close. From the first faltering steps in using SMS to send news headlines when I worked in mobile in the early Nineties, to the high hopes of WAP in the late Nineties as a provider of information, education and entertainment, mobile has always promised a great deal – but has it been able to deliver?
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We have always taken the potential of mobile phones seriously at the ´óÏó´«Ã½, and getting in early to the market, taking risks and innovating repeatedly has paid dividends – we are, according to ComScore research released earlier this summer, the UK's leading mobile website, with 2.3 million regular users a month, reaching some 40% of all users of mobile data services.
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Yet, our PC based web audience – the number of people in the UK who regularly use bbc.co.uk on a PC or Mac - is over 17 million, seven times the number who access us via mobile. Some of this disparity in usage of ´óÏó´«Ã½ content (the 16 million or 56% reach for internet vs the 2.3 million or 40% for mobile) can be explained away by the fact that fewer than half of all mobile phones are fully data enabled. But this still doesn't nearly explain the disparity. And it's not as if the mobile data market has stalled: the growth in the content-enabled mobile phone market has pretty much matched the growth in broadband take-up over the last five years. So why the discrepancy? Is the ´óÏó´«Ã½'s content less appealing to mobile users? Are mobile users just not interested in content outside a few niches like ring tones, adult content and perhaps news headlines? Maybe. But I don't think so.
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I think a number of factors are now coming into alignment that will presage an explosive growth in the consumption of content over mobile. We are I believe, from a close examination of the consumption trends of our own content, at a tipping point between Mobile 1.0 and Mobile 2.0. These factors include:
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- The advent of simple price plans for mobile data. This is a brave move by the industry that when combined with...
- A more open approach to the mobile web, by which I mean less closed gateways and easier routes from content producer to their audience and back, are together creating a solid platform for more innovative services whilst removing the most significant barrier to growth. Naturally the ´óÏó´«Ã½ applauds this innovation.
- Further, we have been waiting for a number of years for the more advanced handsets to both stabilise and make their way to the key audience we hope to reach through mobile. This is clearly happening with the arrival of devices such as the Nokia N95 and the Apple iPhone, which promise a usable web experience, and the ability to offer geographic-based services through built in GPS and WiFi. Other factors that are causing this move to Mobile 2.0 include:
- Higher bandwidths, faster connection and download speeds and finally
- More efficient multi-platform content production systems and more flexible rights frameworks are making it cheaper for content providers.
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So, right across the value chain, from the content provider to the handset, everything is loosening up, and speeding up, and I really feel we are on the edge of a great opportunity.
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This is a good point to ask you a couple of questions, firstly:
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[Question 1: Which do you think will be the more successful means of video consumption: 3G or WiFi?]
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[Question 2: Broadband take-up in the UK has been flat for the last seven months at around 60%. What do you think will be the key drivers of the next phase of broadband penetration – faster access speeds or richer A/V content?]
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Taking a step back, why is mobile content important for the ´óÏó´«Ã½ at all? A number of reasons – it should help us remain relevant in the digital age; It helps us to reach younger audiences who consume less of what the ´óÏó´«Ã½ has to offer; It helps us build a new relationship with them and engage with them in a two way dialogue. Which is why back in April, we started a 12-month trial to syndicate a range of ´óÏó´«Ã½ television channels and radio networks via 3G to mobile phones with operators Orange, Vodafone and 3.
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Conclusion
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So in conclusion, a final video clip. We have started to release some of our code, some of our web applications, so that the wider community of software engineers can create the services they want, and put them on the websites they want to see our content on. We let the developer community take the ´óÏó´«Ã½ iPlayer, and mash it into Facebook. This enables our audience to share what they're watching on the ´óÏó´«Ã½ with each other – free marketing and free distribution for us, and hopefully a fun and useful service for our audience.
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[Show ´óÏó´«Ã½ iPlayer-Facebook VT]
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This is the future of the ´óÏó´«Ã½, the same great content as ever – EastEnders – but shown in new ways, on new platforms. It's about reaching out to our audiences, working much harder to showcase ´óÏó´«Ã½ content to them where they are, in a way which is relevant and of value to them. The ´óÏó´«Ã½ is, according to Superbrands Web Survey, the most trusted brand on the web. We want to make it the most loved, and the most relevant too.
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That is our mission, to help keep the ´óÏó´«Ã½ relevant in the digital age; in the process, we help to build digital Britain. Creativity, ingenuity and innovation in the way we distribute are as important as what we distribute.
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Thank you.
