The future of broadcasting an example of a sector study

British Broadcasting needs to go international Home market saturated and fragmenting Economies of scale needed for programmes Comparative advantage –‘ the best brand name in the business’ Global competition for supplies & outlets BBC WorldwideBBC Worldwide - 50% of total BBC revenue Europe’s leading exporter of TV progs and formats Global TV operator – 19 commercial channels

The evolution of broadcasting National Terrestrial ContinentalSatellite Global Broadband From broadcasting to narrowcasting From national audiences to specialist niches

The value-delivery system Jeremy Mayhew (BBC Worldwide) Guardian 20/9/97 ProductionDistributionRetailing ContentDistributionGateways Transmitters ‘Platforms’ Networks: Terrestrial Cable Satellite Internet software: encryption decoding hardware: set-top boxes smart cards network servers

Multimedia convergence Content is key to sales of subscriptions and hardware Multimedia mergers: –AOL Time Warner –Universal Vivendi (Canal Plus) Has this approach worked? Content Processing Transmission Film TV and music Cable, Satellite and terrestrial Computers WAP phones iTV Hardware

Where will the power reside? Strong content –to drive subscriptions, pay per view,audiences Well-placed monopolistic gateways BBC strategy trade on strengths in content avoid over-dependence on any one system joint ventures & deals with gateways/distributors (eg Freeview/Freesat)

Ways of entering the market Export sales (£660m - 40,000 hrs of programmes Licensing (Teletubbies in Chinese) Joint Ventures –Discovery, Foxtel, Atlantis, Flextech –Disney magazines, Hello fulfilment, CBS library Direct Investment - beeb.com –new digital channels BBC Prime, World, America

New Media BBC website –Listen Again –interactive Media Player (iMP) –Creative Archive, Plans to sell pay-to-view programmes abroad via its website

Global Media Ownership

Rupert Murdoch - News Corp the leading player Originally a newspaper publisher Vertical integration: Fox Studios/TV First-mover advantage in satellite & digital –content provider & gateway controls Global TV channels –Fox, BSkyB, C7 (Aus) Star TV Asia Uses sport as ‘the battering ram’ Guardian 16/10/96

Growth markets - Asia (exc USSR) 60% of world population Fastest economic growth rates Economic liberalisation of China –explosion in consumer demand (1.3 billion people) –Media and entertainment market worth £14.5 bn –110 million internet users –378 million mobile phone users

Star TV Star 20 channels English, Mandarin and Hindi 300 m viewers in 53 countries Majority shareholder NewsCorp Relations with Chinese government crucial BBC World News replaced by Sky Yet it still failed to win over the Chinesethe Chinese

2003 Murdoch buys Direct TV USA Foxtel News set to rival CNN and BBC –‘like the Sun in the Sky’ ? Buys minority stake in ITV –Battle with Virgin cable

How can the Government... Ease cross-media ownership restrictions? –create global-scale media groups –encourage innovation and entrepreneurship Ensure competition - consumer choice & access? Protect freedom of speech & news reporting? Preserve standards of decency? Ian Hargreaves FT Creative Business 5/12/00 The answer is Ofcom?

Communications Act Removed barriers to ownership –including foreign investment –allows a single ITV company Relies on normal competition law –and the existence of Public Service Broadcasting Regulates content through OFCOM –diversity, quality and impartiality but still limits cross-media ownership –prevents Murdoch getting control of ITV

Public Service Broadcasting aims sustaining citizenship and civil society promoting education and learning stimulating creativity and cultural excellence representing the UK, its Nations, regions & c ommunities bringing the UK to the world and the world t o the UK Who pays?