Speech

Speech to The Future of Broadcasting conference

This speech was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

London

Thank you Richard [Lindsay-Davies Director General, DTG and conference Chair]. 

We are lucky in this country to have a thriving broadcasting sector. 

  • The BBC is the most respected and successful public broadcaster in the world. ITV is investing more in production. 
  • Channel 4 continues to innovate and thrive. 
  • Five is becoming profitable. 
  • Sky has transformed programming in news, sport and the arts, and is also now investing heavily in original drama and film. 
  • The UK is the largest per capita exporter of television programmes and formats in the world.
  • And of course we lead the world in digital radio.

And let’s also remember what a great place we are for inward investment. Companies like Discovery, Disney and Nickelodeon have a large footprint here, employing thousands of people and again investing in UK production.

So we start from a position of success. And we look at a world presenting great opportunities and also some threats.

Opportunities, in the sense that a whole definition of broadcasting is changing. 

From content platforms like Apple, to over the top services like NetFlix and LoveFilm, from social media players like Facebook, there are many more companies keen to get their hands on great content.

Broadcast platforms are changing, with consumers not only watching television, but also accessing content through mobile, tablet and games console.

There are also threats, not least the piracy of intellectual property in the digital age, as well as the recognition by other countries of the need to invest in content production.

But I am certainly an optimist. We are relatively unique in this country in having a heady mix of high quality content industries combined with a growing cutting-edge technology sector.

Flicking through the conference programme for the rest of today and tomorrow is a clear indicator that this mix is reaping rewards both for businesses and consumers.

Government needs to ensure that we lay the groundwork for future success.

Through the Communications Review we are working to secure the UK’s position as a leading marketplace for creating content.

We aim to provide a world-class infrastructure; the right incentives for investment in content; and support for open and dynamic markets through flexible, proportionate regulation.

We recently announced a series of seminars taking place in early July and in the autumn to help tease out some specific areas where people have told us there are issues to address. 

These will help inform a White Paper in early 2013.

The seminars in July will cover: spectrum management; the consumer perspective; competition in content markets; and investment in TV content. We will also look at a number of other issues in the Autumn, including radio, IP/copyright, content regulation and media plurality.

I spoke at length recently about the importance of consumer issues and the protections that should be put in place by government and industry to support them. 

Today I will be focusing on content.

The future of broadcasting is pretty easy to predict. In five, ten, even 15 years’ time people will still be watching soaps, the news, sport, drama and children’s television. 

They will probably be voting for their favourite talent show contestants and watching fly on the wall documentaries and they will still be listening to the Archers and to a range of music and talk programmes.

The one thing that is constant in the picture is good content.

What is changing is the way that businesses distribute and consumers access that content, and the nature of relationships all along the supply chain.

Alan Kay the pioneering computer scientist said the best way to predict the future is to invent it.

The best way for a Government to invent the future is to put in place the best enabling architecture and give industry the freedom to populate it with new things.

From BSkyB pioneering 3D television, Channel 4 at the cutting edge of data collection, and Virgin Media’s TIVO service converging platforms and services, what is critical is that business is free to invent, adapt and innovate to stay ahead of the curve. 

Connected television is here and will grow. When YouView hits our stores later this year it will revolutionise the public’s appetite for these new technologies by coupling them with free to air content. 

The Government will play its part in this convergence by designing a regulatory system that allows and supports innovation and growth.

But ultimately it is down to the people in this room to go and invent the future.

Content

The rapid changes in the content market mean that the value chain is changing shape.

The relationship between consumers and content is being reshaped through companies such as Base 79 - who specialise in licensing premium content to online platforms so consumers can access the content they like in different ways, through PCs, Tablets and Connected TV.

The use of innovations such as digital product placement is opening up opportunities for revenue generation to support content investment - as demonstrated by the recent deal between MirriAd and Viasat Broadcasting. 

The recent Audioboo deal between UBC media and Imagination Technologies demonstrates that players are investing in technology which integrates traditional content with user-generated material.

Channel 4s Million Pound Drop allows viewers can engage with the live show by downloading an app that lets them play along.

If our seminars had been taking place two years ago they would have been dominated by conversations about public service broadcasting, and of course the PSBs still play a vital part in the landscape.

But we want to move the debate along a bit and open up some discussions about what might be coming next and whether or not the existing reliance on regulation to sustain content growth will be relevant.

There are some traditional mechanisms for supporting greater investment, but there may be things that we are missing and we want to explore them further.

Competition in Content seminar

In our seminar on 9 July we will be opening a discussion on competition in content markets.

The competition regimes for broadcasting and telecommunications are different. Broadly speaking the former is a licence-based system whereas the latter follows a market-based approach as required by the European Communications Framework. 

The question is does this matter? As convergence between the telecommunications and broadcast markets continues apace, some people think it does and that greater consistency and/or clarity is required. 

The seminar will provide the perfect opportunity to test the arguments on both sides. We don’t have a firm view on what the answer should be but are keen that consumers benefit from an open and competitive market.

Marketforce/Institute of Economic Affairs (IEA) 10th anniversary The Future of Broadcasting Conference

Investment in Content seminar

Our Seminar on 16 July will look closely at investment in content.

As we have already demonstrated through our proposal for tax credits for high end drama, video games and animation, the Government is willing to put its money where its mouth is to support a strong content market. 

This will be one of the key themes of the seminar and will open discussions about the policy issues and practical implementation of this potential credit. 

This seminar is ideally timed to feed in views to the Treasury’s consultation on tax credits, which closes in September.

This seminar will also cover some of the other regulatory levers that could be used to support investment in content. The Channel three and Channel five licences are up for renewal soon. We look forward to discussions with licence holders over the coming months on the best way to maximise benefits for viewers.
 
You can’t look at the future of channels three and five without a wider understanding of the factors driving investment in content. 

We’ve been looking closely at some factors that could influence investment - EPG prominence and ‘re-transmission’ fees. 

Neither are straightforward issues, and we want a debate about whether the options open to us would result in a net increase in investment and a net reduction in regulation. 

We have commissioned research on both these issues and the outcomes will be presented at the seminar.

The seminar will also look closely at how we can make the future legislative framework support and not stifle innovation in the creation and delivery of digital content.

The way both consumers and industry pay for content is shifting - we can see that through the increasing prevalence of personally targeted marketing, micro-payments and over the top delivery platforms.

The emergence of these new technologies raises questions about how business models for investment in content will correspondingly evolve.

Government wants to determine whether it is possible, and desirable, to design regulatory solutions to mitigate any threats these changes pose to the UK content industry.

Radio seminar

In September we will hold a seminar on maximising growth in the radio sector. 

Radio has been subject to significant relaxation to its regulatory regimes in the last few years. 

However, it still remains one of the most regulated of the parts of the communications landscape. 

This is a changing landscape and the internet is likely to have a profound effect on music services and the provision of audio content. 

Therefore, we need to build a firm foundation for UK radio businesses to grow and adapt to new technologies, whilst protecting what listeners so passionately love about radio. 

Next steps

Invitations have been sent out for the seminars taking place in July.

Whether or not you are in the room on each occasion, there will be ample opportunity to feed in your views on the issues raised on the day and in the papers we have published to support each seminar.

The papers are currently on our website, and we will record and publish a video of each seminar for you to view when it has taken place.

I am very much looking forward to developing conversations about all of these issues with you throughout the coming months, and to listening to what you have to say about how best to support the world-class UK talent in this culturally and economically important sector.