Ironically, just as Netflix senior management have been talking about the need to keep ahead of the traditional TV broadcasters, the UK government has begun a controversial review of the future of the BBC in a digital age.
The BBC’s Royal Charter comes up for renewal at the end of next year and for the next 12 weeks, the Department of Culture, Media and Sport is conducting a public consultation on what the next Charter needs to include.
There are those in the UK who fear that the government’s agenda is to cut the BBC down to size; there are others who argue that the BBC has drifted away from its public service broadcasting mission and has fingers in too many corporate pies.
Launching the consultation document today, John Whitingdale, Secretary of State for Culture, Media and Sport, put a lot of emphasis on the digital disruption that has impacted - and will continue to impact - on the BBC’s role:
Ten years ago, the last time the Government ran a Charter Review, the media landscape looked very different. Millions of households still received a choice of just five television channels. Facebook was yet to reach the UK, YouTube was only just being launched and the iPhone was unheard of. When the Royal Charter came into force in January 2007 nobody could have predicted quite how the emerging technologies of the day would end up shaping the way we use the media and live our lives, nor the extent to which some things would stay the same.
The explosion in the use of the internet and mobile devices mean that people are now spending more time using media and communicating than sleeping,1 and are using mobile tablets and smartphones to stream live and ‘on demand’ video and audio content at the touch of a button.
But critics of the BBC argue that the sheer scope and scale of its capabilities and interests can have a negative impact on competition. The consultation document states:
[The BBC’s] provision of extensive free online content risks impacting a wide range of players.
For example, the popularity of BBC News in the UK (BBC News website had an average 27 million UK weekly browsers in early 2015, and more than 65 million worldwide)27 has led to suggestions that the scale of BBC’s online offer is impeding the ability of other UK news outlets to develop profitable business models, such as paywalls and subscriptions, in existing and new markets.
The consultation document also notes:
Alongside the development of the hugely successful iPlayer the BBC is now exploring emerging online platforms for delivering content through providers such as Facebook and Netflix. It has also used new types of digital services to enhance traditional ones, such as Radio 1’s YouTube channel which has 1.3 million subscribers (a third of them 13-17 years old) and which led to the launch of a dedicated Radio 1 iPlayer video channel. This has been supported by research and development into audience behaviours.
Overall, BBC Online accounts for about 5 per cent of the BBC’s total content budget, amounting to £125 million in 2014-15. This includes expenditure on the BBC’s desktop, TV, tablet and mobile online services covering the range of content provided by the BBC’s websites. It also covers the digital interactive services delivered through the BBC’s Red Button and the services available through the BBC’s iPlayer.
The consultation document argues there needs to discussion about the BBC’s future role in technology innovation:
On the one hand, there is the view that by developing at the cutting edge the BBC is able to adapt to changing consumer demand and continue to serve diverse and fragmented audiences, particularly young people.
However, there is the counter argument that the rapid growth in digital and online services more broadly means that the market is already well served and that the BBC, as a major player, potentially squeezes out others who want to develop new ways of managing and distributing content.
It is argued that the media sector and the UK economy has benefited from the BBC’s role in innovation with the BBC undertaking research and development which would not have been picked up by the wider market. This includes improvements in compression technology, the development of ultra HD standards and collaboration with groups such as the Digital Television Group and international technical standards bodies. The BBC has also worked with Innovate UK (formerly the Technology Strategy Board) on a number of projects including Thira35 and the RadioPlayer.
There are legitimate questions, however, about whether the BBC should continue to try to lead the way development of new technology ahead of the market. The cost of BBC development last year was £83 million. The BBC’s role in the development and deployment of new technologies – particularly online distribution – has the potential to impact negatively on the ability of commercial competitors to monetise emerging technologies, and could crowd out new start-ups.
And all of that, of course, is before we get into the question of abolishing the licence fee...
The mainstream media - most of which is stacked against the BBC - seems to think the really big question for the Charter Review is whether the BBC should be paying £20 million to buy in formats like the The Voice in order to compete with The X-Factor.
That’s actually a quite legitimate question to my mind. The BBC created and then franchised out formats like Strictly Come Dancing and Great British Bake Off, profiting from its own invention. But buying in copycat shows like The Voice is on the margins of strict definitions of public service broadcasting.
But the wider issue is the scope of the BBC’s role as a public service broadcaster in an age of box-set binge viewing digital platforms like Netflix. Does the BBC adapt to that model? Do we get all 13 episodes of the new series of Doctor Who released on one day to consume in one sitting rather than one a week?
To a large degree the BBC’s already done a lot to adapt to the on demand viewing pattern thanks to the success of iPlayer. The overnight numbers for TV shows on the BBC are considerably less important than the ultimate reach of the program at the end of its on demand viewing period. On the other hand, if the X-Factor live show audience numbers struggle against Strictly Come Dancing, that that’s a major issue for ITV’s advertising-driven revenue model.
But where does it go next? Later this year, for example, the BBC plans to open an iTunes competitor, an online store that will tap into the BBC’s vast archive and offer content up for paid downloads. Personally I think that’s an excellent use of a rich heritage of material. Critics will decry it as an attempt to take on Apple and Amazon and not something the BBC should be doing. We've already questioned the BBC's role in giving away coding devices to the UK's kids or its decision to move into commercial content marketing creation. Mission creep is a term that comes to mind.
This is a very difficult time for the BBC. While there are those that argue, not without credibility, that there are vested interests with a pre-determined agenda lining up against the Corporation, it can’t be denied that there are some genuine legitimate questions that need to be asked about how it operates in a Netflix era. The consultation is open to comment from the public for the next 12 weeks. It is to be hoped that everyone who watches EastEnders, Sherlock or Bake Off takes the time to make their voice heard. You can do that online from here.