The late, great Sir David Frost once said that television was ‘an invention that permits you to be entertained in your living room by people you wouldn’t have in your home.’ Having worked in the advertising industry for 20 years, I sort of know what he was getting at.
Well I don’t think many of us would have turned down a visit from Sir David. He was a towering figure in broadcasting and it was his funeral today and I think he is someone who will be sorely missed by many people here today.
Of course Sir David was one of the first people to become famous through his appearances on television.
And over his lifetime he saw a revolution in both the role and the reach of TV.
When he made his debut, in the early 60s, there were just two channels. Most shows were in black and white and an average television was just 12 inches in diameter.
What changes he saw.
Nowadays the average viewer has hundreds of channels to choose from… flat screen tellies in every room… and you can access television through tablets, smartphones, consoles… basically any device that is connected to the internet.
But as you know better than me, content which looks like television… sounds like television… perhaps even appears on the television is not necessarily television. Not technically at least.
With the rise of smart TVs, video-on-demand content, and a drift towards IPTV, definitions have to change. And so do the approaches that need to be taken.
There are regulatory implications for government, and we’ve used our recent strategy paper to set out our determination to tackle these.
But rather than dwell on what this means for government, I want to talk about what this means for the industry.
It is my belief that these technological changes offer countless opportunities to you, to your industry and to many others in the content business.
The world is changing, and it is changing fast, but those who rise to the challenge – who give viewers what they want, where they want it and how they want it – those will be the people who will stay ahead. This sort of viewer control is what Kevin Spacey recently referred to as marking television’s ‘third golden age’. Central to this golden age is content.
Technology and its implications
The range of content providers is large and growing. Just look at the reach of Netflix, Lovefilm and, of course, YouTube.
On YouTube alone, 100 hours of video are uploaded every minute and much of this content is user-generated, being produced – and uploaded – by individuals keen to share it with the world. Whether it is finger-biting babies, deer-chasing dogs and cats in shark outfits, these seem to be our new cultural icons.
Some of these people turn their passion into a profit…
Earlier in the year I met Jack and Finn at the YouTube studios last year. Their British charm is taking the US by storm with their channel, JacksGap.
There are now one million channels earning revenue through YouTube’s partner programme …YouTube was not even invented a decade ago and now people watch 6 billion hours of content on it each month.
Some might think this foretells the end of television as we know it. Indeed, at this conference some years ago that people predicted the internet would kill off television.
And I would be interested to hear your predictions this year.
Yet the astonishing thing is how well broadcasting is holding up. Families still sit down together around the telly and viewing in the UK is currently at record levels.
The average British viewer watches more than four hours of television every day… and 90% of that viewing is live and linear.
This might be a controversial view but I think it helps prove a simple argument: rather than the internet being bad for television, it is actually a benefit. Rather than acting as a substitute to traditional broadcasting, it can actually complement it.
The new opportunities are ably demonstrated by the advent of connected TVs, where extra content can be offered and certain channels can be viewed outside normal broadcast hours.
I believe online content, whether viewed through a connected TV or through a tablet, will support traditional viewing by allowing new audiences to be developed, new specialist interest groups to be reached and new catch-up opportunities to be offered. In short, the appetite for content is great and growing.
This is just as true in Shanghai as it is in Sao Paulo. The demand is truly global.
Where Britain sits
There are enormous implications for the economic potential of television.
Britain is well placed I believe to profit as a result, thanks to our unique model of public service broadcasting, existing alongside commercial broadcasters, with both fuelling our world-beating Indies.
In 2012, Pact estimated that the UK independent production sector was worth £2.8 billion – which is 16.5% more than in the previous year. How many other sectors can claim that sort of growth?
This country has an astonishing record of producing content which is popular all around the world. Shows like ‘Top Gear’ and ‘Downton Abbey’ top the ratings across the globe.
And Great British formats are just as successful – ‘Strictly’ is licensed to 48 countries worldwide and boasts a global audience of more than a quarter of a billion people.
We have a hugely successful television industry in this country and are attracting record levels of investment. But we all want to build on that success.
That is why the government has introduced a series of tax reliefs for high end television and animation. The recent announcement that Cumbernauld has been picked as the location for ‘Outlander’ shows these reliefs are already having an impact.
We have become a global hub for content production. We have a greater range of players investing in the TV sector and in UK television content than ever before.
And success breeds further success. Our television industry supports jobs and growth in the wider creative industries, as well as fuelling the creative fire of the script-writers, and the content creators, of tomorrow.
Contribution of PSBs
Commercial broadcasters are making a significant and growing investment in UK content, spending over £600m in 2012. But our public service broadcasters still account for the lion’s share, taking over £3 billion last year.
Because of this investment, and because public service content continues to attract the most viewers, it’s important that they are given the means and the mission to capitalise on those new online opportunities.
As a government we are clear that:
When people switch on, no matter what device they are using, PSB channels should be easy to find
Our PSBs should not have to pay other platforms and service providers to carry their content, especially given the clear value this content provides
And websites should not be freeloading off PSBs’ content. This is intellectual property which needs to be protected so that money will flow back to create more great television
But, in return, there are specific areas I think Public Service Broadcasters ought to focus on.
Firstly – I want them to think about what they can do give our country an even greater global profile.
Technological developments are making it easier to present UK content to the world, which will help shape the way people view our country abroad.
Last year’s Olympic and Paralympic Games – covered brilliantly by the BBC and Channel 4 – showed us at our very best. This demonstrates the powerful role the PSBs can play in promoting Britain.
This has important implications… influencing the way we are perceived… encouraging people to visit our shores… and increasing the willingness of people in other countries to do business with us.
To be blunt, TV reaches the parts that our ambassadors don’t. I think that ‘soft power’ agenda is one of Tim Davie’s big priorities and I will be working with him, and with the other broadcasters, on this very important issue.
Secondly, I think that PSBs can work even harder to support our creative industries, by sparking this country’s creative talent, by developing the skills that are needed for the future and by showcasing the best of British content.
I ask myself if the PSBs can use new technology and their online platforms to make more content available from other parts of the creative industries…? Or indeed from our amazing arts sector…?
Or could they share their audience insights to help others monetize their content – particularly in overseas markets?
I think PSBs have a significant role to play in driving the international growth of the British creative economy… increasing the UK’s total share of that pie – not just their piece of it.
Last, but by no means least, the PSBs must continue to play their part on the home front, producing the type of content that UK audiences value, but which might not be as ripe for global or commercial exploitation.
They will always have an important role to play catering for audiences young or old, from across the UK, reflecting the range of political, cultural and religious beliefs.
As the biggest provider of content, the BBC is particularly important.
Governance of the BBC
The BBC. A phenomenal worldwide brand, a mighty partner, and a formidable competitor.
But this has undoubtedly been one of the most challenging years in its history. Monday was a grim day for its senior management.
There is a risk of events like this overshadowing the unstinting work of its staff.
I don’t think this should be allowed to happen. The corporate dramas of the BBC should never eclipse its actual dramas on screen.
The collective talent of the BBC won 15 BAFTAs in May. Stars like Ben Whishaw of ‘The Hollow Crown’ and Olivia Coleman in ‘Twenty Twelve’ picked up important and impressive awards.
Underpinning their success were talented production teams, supported by dedicated staff throughout the BBC and I pay tribute to each and every one of them.
But the recent focus has unfortunately been on the BBC’s governance.
It is worth reminding ourselves that the Trust was borne out of the aftermath of the Hutton inquiry, when the governance of the BBC, particularly its Board of Governors, came in for significant criticism.
This criticism focused on insufficient independence and a lack of clarity over the separation of roles. It sounds pretty familiar to me today.
I have been clear that there is on-going confusion over where the roles and responsibilities of the Executive stop and the Trust start.
This must be addressed. It will come as no surprise to anyone here that we always keep governance arrangements under review.
Concerns over the Trust are not new. In 2009, the last Labour Culture Secretary told this conference that he was not convinced that the BBC’s governance model should stretch beyond 2016. He pointed to a tension implicit in the Trust being “both regulator and cheerleader”.
And in the aftermath of Monday’s hearing a whole host of MPs and commentators once again lined up to declare the Trust model as ‘broken’.
But I don’t think it’s any good waiting until the next charter in 2017.
Under the leadership of Tony Hall, a new team is being put in place. Some changes have already been announced – for example the £150K cap on pay-offs. And I believe more will be done by the BBC to remove this confusion over the two bodies’ respective roles.
As you would expect, given all of these changes, I will continue to keep the BBC’s structures and effectiveness under review.
These are significant changes. Ultimately, licence fee payers rely not only on having the right structures and governance being in place but also upon the BBC’s executive management using their good judgement. And I think serious questions were raised about the judgement of those individuals by the scale of the severance payments made.
Licence fee payers expect their money to be spent properly.
This government has done more to deliver transparency around the BBC’s spending than any other, opening up their accounts to an unprecedented level of scrutiny by the National Audit Office.
But we now need to ask if more should be done.
The NAO’s work has been pivotal in bringing some of these issues to light so I want us to strengthen its role further. It simply wasn’t right that the NAO was prevented from immediately looking at the details of George Entwistle’s severance package.
I want a system where the NAO can look at any area of concern without hindrance or delay.
It wouldn’t be an RTS speech without a bold prediction about the future.
I think it has certainly been an annus horribilis for the BBC. But we all know that institutions can recover and come back stronger from years like that. The BBC will bounce back.
The changing world presents them … and indeed everyone else here … with new challenges… but also with new opportunities.
Despite the fact we are starting to interact with television in a different way, the appetite for live broadcasting retains its strong appeal.
But the viewer will come to expect more. Both in terms of how content is delivered, but also what is delivered.
Viewers will think that their favourite content should be available at all times, on all devices. And their desire for customised content will become greater.
As an industry you are already responding to those growing demands, driven by an unwavering focus on giving the consumer what they want.
And your ability to respond to these demands will be helped by new technologies and better infrastructure, whether that is in the form of superfast broadband or a 4G - or even a 5G - signal.
As a result, broadcasting will retain its unique place at the heart of British life.
It will continue to bind us together, through events of national significance… It will also educate, inform and entertain us… And it will remain a big beast of the economy, investing in home-grown talent and exporting to the world.
What drives this all is that content. And no-one creates content quite like the British television industry.