We’re not sure that what Bill Gates says about TV is really news these days, but he typified something that we have been going on about at Faultline for the past 4 years when speaking this week at the World Economic Forum in Switzerland ‘ he reckons that the internet is going to make TV unrecognizable. By that he means unrecognizably better.
You’d have to be living on another planet for the past five years not to know that and although Bill has enough money to live on another planet he hasn’t been living on one, as far as we know. But essentially he’s right, the TV that we remember is dead and the TV of the future isn’t quite within our reach to fully predict its full capabilities, but it will make viewing easier.
Gates said that in five years people will laugh at what we’ve had. Well we’re not sure about the five years, but it IS changing rapidly, and if TV is changing we need to be happy to engage in a genuine rethinking process about all aspects of TV and one we want to think about this week is publicly funded broadcasters.
We have addressed most of the changes coming to TV in the Faultline paper, ‘Danger on the Digital Horizon,’ but the debate going on in the UK this week, about the future of the BBC, gives us a nice concrete example of something being amiss in this new future.
The BBC, through the UK government, charges a TV license fee of around $20 a month. In total that comes to around $5 billion a year subsidy to make quality TV programming for the British public. This may sound archaic to our US readers, but then perhaps that’s the point of this piece, to point out an anachronism, and remember, most European countries have similar, though cheaper, arrangements.
For the past three years the BBC has been spending time, effort and energy working towards new ways of giving its TV content away to that British public. One of those new ways is called the iPlayer which will allow non-linear digestion of existing broadcast content.
Over those three years it has never occurred to anyone who sits on the Board of Governors of the BBC, or in the corridors of power at the UK government, or at the new BBC Trust that decides on what the BBC can and cannot do, to ask whether or not the iPlayer is a good idea at all, or not. It is a P2P client that allows anyone in the UK to download any BBC program up to 7 days after it has been broadcast and give them a further 7 days in which to view it. It even allows a TV series to be downloaded in its entirety at the end of that series.
The reason for heavily funded public service broadcasting is because the commercial sector is not doing a good job. But if the BBC does too good a job it makes it impossible for private companies to thrive. If BBC services appear to be free (the license fee is not optional so you have to pay it if you have a TV set, even if you don’t watch the BBC) then how can the commercial sector compete.
Broadcasters already find it tough to compete for attention against new devices, DVRs, DVDs, internet User Generated Content, more video realistic gaming, and just plain increased time at a PC, without having to go head to head for content quality with a $5 billion sponsored, government protected entity that is going to use the internet to create a great big ‘free’ DVR.
The beauty of independent companies like Joost, and their video efforts, is that they don’t actually own any content. They have to attract content owners by creating something that is genuinely appealing and new for the customer. But when a government content owner changes the rules like this it makes it very hard to compete.
The nascent film downloading market is suffering in its early days, mostly due to overpriced film content from the big US studios. But free content in one country, versus expensive versions of some of the most valuable content in the world, will mean that the only way to compete with BBC content over the internet, is to offer other free services. Which means that the BBC’s existence is going to dictate commercial business models to everyone else.
If you happen to be a film studio, or a pay TV service or an online DVD rental business or even a Cinema, or even a major retailer relying on selling DVDs of BBC TV series, your business will get a serious jolt from the amount of viewing that the iPlayer is going to take away from each of these services.
And in order to compete with the BBC everyone feels that they too have to offer services that are free to air, or more to the point, free to the internet. And that means video services cluttered up with advertising, even if that’s not what consumers want.
And this is happening all over Europe. Government sponsored content delivery is a dangerous thing, even in these enlightened democracies, because it is always tempting to be prescriptive at government level about what people can and cannot view. The revolution that Gates says we should be enjoying is specifically getting away from when someone else tells you what entertainment you can watch, and when.
What should happen instead is, we think, glaringly obvious. The iPlayer is too useful a thing to block, but it should belong to an arms length company that buys the system (on a prolonged earn out) from the BBC. The BBC should be one of many primary users of the iPlayer, but it should 1) Allow the installed base of all the BBC driven P2P players (supplied by Kontiki which got bought by Verisign) to be used to deliver any other company’s content. This way everyone in the content business can use the resource for the right fees.
The BBC content would not be charged for, but some initial registration fee might be charged for the software, so that Verisign makes a profit and so the arms length company makes a profit (it will have some seed server and bandwidth costs). The company can then tune itself to make a decent profit, and a chunk of that initially can go back to the BBC for making its content available in the right format, at the right time etc’. The whole thing would be like taking the DVB-T terrestrial free to air service and dropping it onto the internet.
If all public broadcasters across Europe (the world) did the same thing, they could all use the iPlayer (or the same P2P client under it) and enjoy the economies of scale that a huge network gives P2P operations.
Everyone could have free video delivery paid for by the uploading bandwidth that telcos everywhere have supplied within broadband lines.
Finally the BBC could sell programming where it was consumed overseas, and was not consumed by its license payers. This would mean that the quality of the programming could be supported partly by commercial activity, and partly by the license payer, leading gradually to the point when the BBC could become a fully commercial entity without relying on a switch to advertising based delivery, a problem it has been trying to solve for the past two decades. In the end this is inevitable, we feel, as video becomes more fragmented and travels over a greater and greater number of networks and device types, a government sponsored broadcaster enjoy just too many advantages over a multitude of smaller commercial operations.
The BBC might also supply the content that it is planning to give away to other networks and other online services providers so that there is a level playing field among them all, and so that a company like Verisign cannot create a monopoly in internet content delivery.
It seems odd that the BBC even sells DVDs of the series that it pays to create, and that this week it has struck a deal to put much of its programming on Google video and later on YouTube, which is now a part of Google video.
On the one hand it is seeking ways to make money from its content, in some cases from the very people that pay its license fee, while on the other it uses the idea of free content to destroy the route to market for legitimate businesses.
But before the BBC Trust can work all of this out, and take the right steps for the BBC, modern commercial P2P services like Joost will instead have already likely performed this role for the greater global public, with an arms length model of its own, not tainted by the domination of a content owner.
It has taken 3 years to negotiate the niceties of the iPlayer, and yet Joost was only thought of 6 months ago and is already likely to launch earlier. Trust good old public services to be so slow as to make not difference.
Late addition: Representatives from the content and broadcasting industry, meeting with the BBC Trust last night were told that revised terms are being suggested for the BBC iPlayer, with no content allowed from it older than 30 days, the use of a wider range of DRM options other than just Windows Media DRM, the addition of parental controls, and the fact that all BBC content that goes on the iPlayer will also be offered free to other commercial services. Most of this was called for in a recent comment paper from regulator Ofcom. It was also revealed that the BBC would offer a version of the iPlayer for overseas viewers that levied charges for the BBC programming, an idea Faultline has been pushing at the BBC for the past three years.