Battle for eyeballs: does the BBC face extinction?

With the UK finding itself in deeply uncertain political times, the importance of the BBC’s role as an impartial source of information that holds those in power to account only increases. However, its very existence is thrown into doubt by the internet and the rise of new digital players.

We are in the midst of a digital revolution. It is no exaggeration to say that the validity of dozens of established media business models is being fundamentally threatened. Music labels, print newspapers and broadcast TV players are in the midst of a fight to remain relevant as consumers’ consumption habits rapidly evolve. The British Broadcast Corporation (BBC) is an organisation at the heart of this flux.

The BBC is the world’s largest public service broadcaster (PSB), commissioning £2.2bn of content for UK audiences every year[1], a portion of which is distributed globally. It serves to universally inform, educate and entertain whilst remaining impartial and objective – free from governmental bias and unfettered by commercial agendas.

But the BBC finds itself in an environment of unprecedented change. 56% of UK households had a TV connected to the internet in 2015, with 83% able to receive superfast broadband[2]. This has vast implications for traditional TV viewing: audiences are increasingly shifting to catch-up and video-on-demand (VOD). Viewing of non-subscription VOD services (such as the BBC’s iPlayer) rose by 26% in 2014, and 16% of UK households now have a subscription to Netflix[3]. This, combined with mobile device proliferation, means that the old world of TV viewing is, if not yet obsolete, under strain:

Average minutes of viewing per day in UK, total TV: by activity, 2013-14[4]

So what is the scope of the BBC’s role as a PSB in this age of box-set on-demand viewing? Should the BBC be changing its model to remain relevant and adapt to over-the-top[5] providers?

The corporation has already done a lot of evolve. BBC Online was opened in 1997[6], bringing together the BBC’s journalism on a digital platform. They leveraged their archive of premium content assets to launch the iPlayer in 2007[7], the first ever VOD service, “really blazing the trail”[8] for players such as Netflix. In 2015, BBC Store was launched, a download-to-own proposition which allowed audiences to buy their favourite BBC shows online[9]. Most recently, the corporation unveiled the ‘BBC as a platform’ vision, which involves the BBC embracing its scale by being the go-to online brand that curates the best content from across the UK creative sector[10].

But the BBC can do more

Content is still king. Digital hasn’t changed that. However, the commissioning budgets of commercial VOD players are growing exponentially: Netflix and Amazon are forecasted to spend $5bn and $2bn respectively on original content next year[11]. This means that the BBC is increasingly unable to compete in premium genres. By increasing co-productions with Netflix et al, the BBC can put less money on the table but still gain access to this high-end content[12].

The ability to leverage data will also be crucial. Despite efforts with the ‘myBBC’ initiative[13], the BBC still lags behind here. It is essential they embrace data to connect with audiences and help them make sense of the wealth of online BBC content. This can involve content recommendations via a dedicated service personalised for each user. Data could also be used internally to drive commissioning decisions, as well as inform development teams on ancillary online content that can sit around TV programmes.

More controversially, there have also long been calls for the BBC to evolve its funding model. Abolishing the Licence Fee, the BBC’s current source of funding which takes the form of a fixed annual rate paid by all UK citizens who own a TV, would be radical. However, a move to subscription, whereby audiences are charged on what they consume, is arguably more appropriate in an on-demand world. Critics argue that such a move places into jeopardy the very essence of the BBC – a universal service that should not need to cater to individual interests, instead serving a greater good. Subscription would necessarily force the BBC to migrate towards more commercially viable content.

A hybrid future?

The future of future of TV lies “not with either linear or on-demand, but a creative and visual integration of the two worlds, blending the strengths of both into a single brand[14]”. To avoid extinction, the BBC must embrace this ethos. TV in the internet age for the world’s largest PSB means live broadcast programming offered within the same interface as VOD and interactive content. The two do not have to compete; they can be interdependent and complimentary.

As our society increasingly fragments and our social media pages become echo chambers that reflect our own opinions back at us, the need for the UK to have a unified, impartial, binding and trusted voice to bring the nation together is more important than ever. It is crucial that the BBC continues to evolve so that it remains to be that voice.

Word count: 789

 

[1] Various authors, “BBC Annual Reports and Account 2016/16”, BBC, 2016 http://downloads.bbc.co.uk/aboutthebbc/insidethebbc/reports/pdf/bbc-annualreport-201516.pdf

[2] Various authors, “The Communications Market Report”, Ofcom, 2016, https://www.ofcom.org.uk/__data/assets/pdf_file/0022/20668/cmr_uk_2015.pdf

[3] C. Johnson, “Not Linear or On-Demand: Television in the Internet Age”, Antenna, 2015, http://blog.commarts.wisc.edu/2015/12/03/television-in-the-internet-age/

[4] Various authors, “The Communications Market Report”, Ofcom, 2016, https://www.ofcom.org.uk/__data/assets/pdf_file/0022/20668/cmr_uk_2015.pdf

[5] Over-the-top content is the delivery of audio, video, and other media over the Internet without the involvement of a multiple-system operator in the control or distribution of the content

[6] R. Rivera, “Fifteen years of BBC Online”, BBC Internet Blog, 2012, http://www.bbc.co.uk/blogs/internet/entries/bed6ccbc-2511-3cfe-a22d-40b9c64efa11

[7] Various authors, “BBC announces iPlayer launch date”, Digital Trends, 2007, http://www.digitaltrends.com/home/bbc-announces-iplayer-launch-date/

[8] C. Williams, “Netflix chief Reed Hastings takes on telcos, cinemas and global expansion”, Telegraph, 2014, http://www.telegraph.co.uk/finance/newsbysector/mediatechnologyandtelecoms/media/11141864/Netflix-chief-Reed-Hastings-takes-on-telcos-cinemas-and-global-expansion.html

[9] M. Rundle, “BBC launches a paid downloads store built into iPlayer”, Wired, 2015, http://www.wired.co.uk/article/bbc-store

[10] This proposition aims to help the BBC become more than the sum of its constitution parts – increasing the relevance of not only itself, but other content-creators facing similar challenges

[11] R. Morrison, “Huge rise in Netflix original spend”, Up Your Ego, 2016 http://upyourego.com/2016/01/huge-rise-in-netflix-original-spend-for-2016/

[12] T. Hall, “The BBC in an internet era”, BBC Media Centre, 2016, http://www.bbc.co.uk/mediacentre/speeches/2015/tony-hall-bbc-internet-era (the BBC now funds less than 70% of the budget for a typical drama title)

[13] ‘myBBC’ is an initiative to use data in order to link up the BBC’s content online to help serve audiences better

[14] D. Wyatt, “Channel 4 to scrap 4OD in favour of new online hub All 4”, Independent, 2014, http://www.independent.co.uk/arts-entertainment/tv/news/channel-4-to-scrap-4od-in-favour-of-new-online-hub-all-4-9725776.html

Previous:

All hands on deck! How Miniluxe is disrupting the the nail salon industry with data

Next:

The future of money-transferring

4 thoughts on “Battle for eyeballs: does the BBC face extinction?

  1. Super article. I fear for the BBC that as it comes into contact with governing interests and those of private broadcaster lobbyists. I wonder how the BBC can survive in an age also where younger people are unwilling to pay for content and even Neflix content is online for free.

  2. Jack – Very interesting article. I am a huge fan of the BBC and it would truly sad if they are unable to keep up with the likes of Netflix, HBO, Showtime, Amazon, etc. While it may seem that BBC and Netflix are natural competitors, where Netflix would be considered the dominating entity because of its digital reach and deep pockets, I would also like to consider BBC and Netflix as complementary services. In this scenario BBC is a source of high quality content that Netflix is continually trying to add to retain its customers. This type of partnership has already had huge success in the airing of Downton Abbey and The Great British Baking Show on Netflix. I recommend that the BBC continue to grow this strategy of licensing its content. This would be an excellent source of revenue that could enable the BBC to continue to invest in the production of the great content it is know to produce.

  3. Definitely a very relevant topic in the current political climate. As you mention, I fear that any change to the funding model would require the BBC to exclusively cater to individual interests in order to generate/maintain the subscriber base/revenue base. I don’t particularly view the big budgets of Amazon and Netflix as a major threat to the BBC because large-scale budgets were always something that the BBC had to compete with through private TV networks and other forms of media and entertainment. I think the BBC really has to focus on its distribution methods (ie. streaming, mobile, etc) in order to account for changing consumption habits. As mentioned above, I think innovative licensing and co-partnerships will be crucial as the BBC plays catch-up in the distribution space.

  4. Great post, Jack. Media companies, like the BBC, are towing such a fine line between quality content and content that will engage our ever-shortening attention spans. The issue of low-quality content and fake news are top of mind after the US election. A recent BuzzFeed News Analysis found that the 20 top-performing false election stories from hoax sites generated more shares, reactions, and comments than the 20 top-performing election stories from legitimate news sites. As an important non-partisan news source, I hope the BBC can find creative ways to capture and hold the attention of millennials.

Leave a comment