It isn't all doom & gloom
Speech
given to the FT New Media & Broadcasting Conference
If you listen to the so-called industry 'experts' or read any newspaper
over the weekend, then the future is most certainly not bright. The
never-ending cries of the 'new economy' stocks, has been joined by the
death knell for ITV digital. Amongst the doom and gloom of the stalled
set top box sales, the potential Murdoch monopoly, and the supposed
apathy of viewers to convert to digital, comes the recent assertion
that it will take up to 18 years to get at least one set top box in
every household. And that's before we even start to talk about second
TV sets or glacial Broadband roll out聟
If all this is true, we may as well pack up and go now
Still here? Good, because I just don't buy that either. And neither
does the 麻豆官网首页入口.
Why do we always focus on the negative? Let's not forget that over one
in three households in the UK already have digital TV, that's around
eight million homes, a significant number for such a young industry.
Over the next quarter of an hour, I want to talk to you about how the
麻豆官网首页入口 plans to help drive this take up. I'd like to touch upon what other
similar industries have done to reinvent themselves, when their market
penetration had been considered to have plateaued to see if there are
any lessons we could learn. And I'd like to look forward to a possible
future analogue switch-off that happens sooner than all of the doom
and gloom merchants predict.
The 麻豆官网首页入口 at the heart of driving digital
NEW
INNOVATIVE SERVICES
The
麻豆官网首页入口 has set itself the goal of promoting digital take up as crucial
to its role as a public service broadcaster. Part of the fulfilment
of this mission is the creation of a portfolio of audience focussed
digital channels across radio and television which includes the recently
launched 麻豆官网首页入口 FOUR.
At
麻豆官网首页入口i, the new name for all our Internet and interactive TV services,
we are on a mission to create innovative, high-quality services across
all DTV platforms. From last years' Wimbledon and Walking with Beasts
(both BAFTA winners), to the recent Panorama Interactive, and Winter
Olympics, the glue that binds all these services is their ease of use,
reliability, and the way they help the scales fall from the eyes of
those who thought digital TV either too complicated, or just not for
them. And we've only just begun聟
These are genuinely differentiated services which engender trust in
digital television, and firmly establish Britain at the forefront of
interactive applications globally. A recent trip to the West Coast of
America 聳 resulted in unsolicited praise from some of the world-leading
broadcast and technology companies (including Microsoft, Paramount,
Fox Entertainment, and Sony).
And
we know that the creation of these ground-breaking, innovative services
DO bring in the viewers 聳 8.1m of them accessed our interactive
services during 2001, the first year that we went on air with them.
During
the fortnight of the Wimbledon Championships in 2001 some 4.5 million
individual satellite viewers (around two-thirds of those watching) tuned
in to our interactive service. Some three million viewers tuned into
麻豆官网首页入口 News interactive during the first six weeks of its launch. That's
half the audience of the Six O'Clock news.
And we are doing more to demystify the whole digital experience, by
deciding not to pay peanuts, and get monkeys聟 but by explaining
the options to consumers through leaflets, TV trails, a web site and
the creation of a hotline.
The creation
of 麻豆官网首页入口i in November last year signified the next stage in our plans
to make digital ever easier to understand, and the benefits ever more
obvious. 麻豆官网首页入口i provides a single identity, a signpost for the connected
generation, that signifies a place where audiences can access the full
range of interactive content from the 麻豆官网首页入口 whenever, however, and wherever
they want it. For those of you that haven't heard what we said, here's
a video refresher.
The role of innovation and reinvention
So great content, new channels and educating our audiences are key drivers
for the 麻豆官网首页入口 in encouraging digital uptake. But we'd be complacent if
we relied on content and channels alone.
Technical
innovation and reinvention are critical to the 麻豆官网首页入口, we've spent the
last 80 years doing so. From the first local radio broadcasts in 1922,
through the introduction of regular colour transmissions in 1969; from
the invention and introduction of Nicam stereo, and the world's first
analogue text services in the 70s to interactive TV in 1999 聳 the
麻豆官网首页入口 has to enter and explore new markets, and then help set the standards
and infrastructure to enable others to swim in the same waters.
听
It's what
we're here for. Indeed, to steal one of Adam Singer's analogies, after
all he's got enough to go round, we aim to create a rip tide of rising
consumer demand, from which all content boats will benefit. And this
rather casts our digital detractors as analogue King Canutes, trying
to stop the inevitable.
And, as the 麻豆官网首页入口 has gone from being in local radio to a national television
broadcaster, so in recent years we have anticipated and moved with our
audience, and become one of the world's most trusted brands on the web.
Its worth pointing out, for those who believe that internet is still
struggling, and that plucky minnows are being still crowded out by the
dominant sharks, that last year saw the number of unique consumer websites
grow from 7.1 million to 8.4 million.
Indeed
Yahoo's editorial staff check some 1,000 new web sites launches every
single day. To put this growth in perspective, although 麻豆官网首页入口i has doubled
its monthly user base to six million in the last 18 months, and doubled
its page impressions to about half a billion a month, our market share
in the UK remains at less than two per cent. Hardly dominance.
What we can learn from the Internet
But it's from the web that we might learn the lessons needed to determine
how we should 'create the right environment' for digital 聳 as Barry
Cox Chairman of the Digital Television Stakeholders Group puts it. That
is, by combining great content with compelling applications.
By 1994, the Internet had already reinvented itself from a basic communication
tool to the source of a wealth of content. And a far-sighted 麻豆官网首页入口 launched
it first content offering on the web. But the net reinvented itself
again and again during the 90s, adding e-mail, e-commerce, e-trading,
instant messaging, such that pure content offerings now only occupy
20% of internet users' time.
It was something that we realised at the 麻豆官网首页入口, albeit not immediately,
and within the last twelve months we have been slowly changing our position
from offering solely content to introducing online communities, forums
and user generated material. Maybe digital TV is only running at 20%
of its potential too.
The industry claims that digital TV has reached a plateau. Well that's
what they said about mobile phones seven years ago when they'd reached
55% penetration. But look where we are now: nearly 90 per cent of adults
possess at least one mobile phone. So how did they do that?
Innovative approach worked with mobile phones
In the mid-1990s the rate of mobile phone take-up had dropped dramatically
in this country, but this new industry, refusing to accept that this
was a mature market, responded on three fronts:
Firstly with new Applications. We all know technology by itself doesn't
sell. New content, and particularly new features and functionality might.
It did in the case of GSM mobile with SMS. By allowing users to a new
way to connect with each other and generate their own content and indeed
language, mobiles found a new lease of life with SMS, especially amongst
the young. The four major network operators in the UK will generate
over 拢1 billion from SMS messaging in FY 2001/2 alone. While in
Japan, the craze of sending flirty photos and downloading new ringtones
over the NTT DoCoMo network shows no signs of abating. Neither markets
existed four years ago.
Secondly pricing. The introduction of an innovative payment method -
pre-pay - took the risk out of buying a mobile phone and encouraged
millions to take the plunge. Could a non-subscription sub 拢100
set top box do the same? Especially if Moore's law means that within
three years the box will cost the same as just four West End cinema
tickets? Why wouldn't you buy one?
And lastly
Marketing. Operators fought hard to rid mobiles of the association with
yuppy Gordon Gecko businessmen - with great success
The results speak for themselves.
Is this what digital requires and if so what shape might it take?
So the question I ask myself every day is, based on the learning from
the mobile and internet industries, what more could the TV industry
do?
Well, for a start, we could take good notice not of set top boxes, but
set bottom boxes. Figures indicate the DVD is the fastest growing piece
of consumer electronics ever.
Industry
history suggests that as CD killed vinyl, so DVD will erase that last
bit of anachronistic tape in our homes: the Video. And it appears that
each new wave of home entertainment, radio, TV, CD, PC, DVD, penetrates
faster than the previous, and converts more homes to digital, and has,
at long bloody last, a convergence effect.
Every Microsoft
X-box shipped puts a broadband ready and hungry animal into your home.
Every DVD player shipped makes households aware of what enhanced and
interactive TV can do. And, as next year's DVD players have recordability
in them, and hard drives, and the year after will come DTT ready, (they're
based on the same MHEG technology did you know?) so it will not be left
to one firm, or one device to get us to analogue switch off.
And the 麻豆官网首页入口 will be there, developing innovative formats and setting
the content standards.
And what kind of new services might we expect to drive demand? The possibilities
could be endless (slide 5 with screenshots):
The potential for downloadable search: imagine downloading overnight
(using spare capacity) entire sections of the Encyclopaedia Britannica
onto DVD or hard-drive, and then browsing at leisure (and speed) through
them the next day or the next week
The possibility of revolutionary educational content: curriculum
guides broadcast weekly, with A-level history content sent out one week,
and GCSE French the next.
DSat quality interactivity: providing multi-stream choices that
we saw with Wimbledon, Walking with Beasts and Winter Olympics, but
this time across all digital platforms
Completely new services: what if the red button on your remote
connected you to the emergency services, a home panic button in effect,
with, if required, an NHS Direct nurse who appeared on screen whilst
you spoke to her through the phone: who wouldn't spent 拢99 on
that? This isn't even fantasy, its trialling now, in Birmingham.
Allowing
us to shape our destinies
So rather than bemoaning that the digital dog has had its day 聳
before we've even let its muzzle off 聳 I think we're only at the
beginning of the journey.
But to
get there it'll take four things: one, great audience focussed content,
two: useful and compelling consumer services and applications, three:
transformation of the pricing model, and four: a radically different
marketing message. Then, as with mobile, we might take the next quantum
leap from 40% penetration to 80% or even beyond. And then we're into
the analogue end-game.
The
future of digital is, ultimately, in our hands.
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