Βι¶ΉΤΌΕΔ

The On-Demand World is Finally Coming

2 March 2004
Printable version

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 Βι¶ΉΤΌΕΔ 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 Βι¶ΉΤΌΕΔ's presence online and, as for digital television, few people would deny that the Βι¶ΉΤΌΕΔ'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 Βι¶ΉΤΌΕΔ 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 Βι¶ΉΤΌΕΔ 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 Βι¶ΉΤΌΕΔ'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 Βι¶ΉΤΌΕΔ 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 'Βι¶ΉΤΌΕΔ On-Demand'? Well, a look at the narrowband market is revealing.

Βι¶ΉΤΌΕΔ.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, Βι¶ΉΤΌΕΔ 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 Βι¶ΉΤΌΕΔ 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 Βι¶ΉΤΌΕΔ'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 Βι¶ΉΤΌΕΔ'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 Βι¶ΉΤΌΕΔ'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 Βι¶ΉΤΌΕΔ 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 Βι¶ΉΤΌΕΔ 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 Βι¶ΉΤΌΕΔ 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 Βι¶ΉΤΌΕΔ 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 Βι¶ΉΤΌΕΔ 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 Βι¶ΉΤΌΕΔ 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 Βι¶ΉΤΌΕΔ 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 Βι¶ΉΤΌΕΔ'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 Βι¶ΉΤΌΕΔ'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 Βι¶ΉΤΌΕΔ'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 Βι¶ΉΤΌΕΔ 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 Βι¶ΉΤΌΕΔ, 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 Βι¶ΉΤΌΕΔ 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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