The BBC’s dismantling has officially begun, some five months since the UK government announced that TV license fees would be frozen for two years, before plans to abolish the BBC’s primary revenue stream entirely by 2027.
Rather than reading the news as the beginning of the end, we prefer to think of it as a natural extension of the British public broadcaster’s trendsetting streaming pedigree – one spearheaded by a technology R&D department revered the world over.
While the BBC will be a shell of its former glory ten years from now, other broadcasters experiencing similar financial setbacks are not in such positions of strength – with the BBC benefiting from global audiences and distribution channels ready and waiting for monetization. For some, the bloodshed will be fatal, and the BBC will therefore be looked to as a shining example of how to execute transformation.
That means the BBC better get things right. Unfortunately, there is no way to sugarcoat the slashing of over 1,000 jobs in the coming years, as BBC management implements the first wave of plans to find some £285 million ($357 million) in annual savings. The bad news, on top of the existing bad news, is that BBC director general Tim Davie has gone ultra-aggressive over this initial target – raising the bar to £500 million ($628 million) in annual savings.
The good news for the broader context of video streaming, is that Davie wants to “build a digital-first BBC” – one that must “evolve faster and embrace huge shifts in the market around us.” These words will do little but sting the wounds of outgoing BBC employees, but for us they show unrelenting ambition.
Approach with caution, however, as Davie has a history of fumbling his budgeting – infamously flip-flopping after facing a wrath of public backlash after attempting to shutter two of the BBC’s most popular radio stations, 6 Music and BBC Asian Network.
Davie’s latest words are nothing new. Broadcasters have been trying to adapt to the digital age for going on two decades – some much faster than others. With a birth year of 2007, the streaming portal BBC iPlayer looks ancient alongside younger rivals, yet the live and on-demand streaming platform has watched newer entrants launch and shutter, while iPlayer has chugged along for nearly 15 years thanks to the financial backing of TV license fees.
The elephant in the room is advertising. While Davie dodged this bullet in his latest statement, if the BBC successfully achieves this brutal budget-slashing target of over $600 million, then its content may not even need to incorporate advertising. This will be a discussion kicked down the road closer to the 2027 doomsday, when TV license fees will be completely cut-off.
Right now, it would seem a subscription-based model would be preferred to advertising, to preserve the clean ad-free integrity the BBC has long maintained. We’ve heard that one before (*cough* Netflix), and besides, the market will look very different in five years’ time.
In the meantime, two TV channels – CBBC and BBC Four – and one radio channel – Radio 4 Extra – have been shifted to online-only services through the BBC iPlayer platform in the past week, much to the disappointment of millions of FTA viewers with weak or no internet access. These channels will eventually be expunged from the BBC channel list and swallowed inside the iPlayer archive, in what is the tip of a rather sizable iceberg.
The closure of the children’s channel CBBC is interesting, as a once vital source of education and entertainment for kids and parents alike. Targeted at kids from 6 years old and upwards, CBBC has become victim to the reality that kids as young as 5 or 6 have access to smartphones, tablets, and connected TVs – with younger and younger viewers preferring the freedom of choice on the likes of YouTube.
To the reassurance of parents with even younger children, the BBC has confirmed that the pre-school CBeebies channel will remain, although even children younger than 5 years old are streaming savvy these days, so CBeebies is likely to also face a shrinking viewership.
Also heading for convergence is the BBC World news channel and the UK-centric BBC News channel, which will be merged to create one global TV news channel.
It’s obvious that the BBC has to eventually overhaul its business model while consolidating its live channels, but what the organization does under the hood with its technology stack in that time will be significant – with IP as the nucleus.
Looking back to 2011, four years after iPlayer’s inception, things got serious across the BBC broadcast’s operations. The organization triggered a major IP technology overhaul project across six major broadcaster centers, bringing components of traditional SDI closer together with IP, in a painfully long-term procedure over many years, rather than an overnight switch.
Broadcasters like the BBC take file-based content from memory cards, turn them into IP, send them over an encoder where they come out as baseband video. Then, content is ingested into a media asset management system. While this is a simplified explanation, this is not a simple workflow.
MAM systems have taken some of the costs out and new technologies have meant the long-term investment plan to switch from SDI to IP does not require ripping out full infrastructures, and ultimately the BBC is trying to gain as much efficiency in operational activities as possible via its IP migration.
Something scarcely mentioned is that the BBC’s relentless cost-cutting over the next five years must also consider the shortage of IP and network engineers, forcing broadcasters like the BBC to pay higher salaries to attract IP engineering talent.
As for future UX plans, the BBC outlined an ambitious reinvention of iPlayer about two years ago, involving the introduction of AI, voice recognition and personalization technologies.
For our overseas readers, TV license fees are currently mandatory in the UK market for viewing any BBC content – video or audio, live or on-demand – regardless of the delivery mechanism, be it cable, satellite, OTA, OTT, or DAB radio. TV licenses bring in approximately £3.2 billion ($4.4 billion) a year for the BBC, while other income streams come from the BBC International business, one which will become increasingly important for a BBC cut-off from government support.