Nick's post yesterday made a very important point that the proposed cut backs in digital programming and online represent a tiny fraction of the budgets currently allocated for TV. Indeed when you compare the likely savings associated with closing 6 Music compared to the salaries of some of the BBC's key presenter talent (see graphic below) you get an interesting sense of where priorities lie.
(The answer to the question in the title by the way is 9.5).
This morning, the BBC’s Director General Mark Thompson launched a new strategy document outlining the future direction of the BBC. Beneath the headlines about the cuts to its digital radio and online activities, what does the BBC’s positioning tell us about not just the corporation’s own priorities, but about the digital content landscape for broadcasters? And why is this important for the wider media industry?
When the BBC sneezes, much of the rest of the world’s media catches a cold.
This is not just a UK story. In every country I have visited as an analyst, clients want to talk to me about what the BBC is doing. In the UK, the BBC is the market leader in TV and radio, while online, it is the only UK-sourced web site in the top 10 destination for UK internet users. Internationally the BBC retains an impressive international footprint.
Under pressure, it has cut back on new platforms to prop up established services.
Facing ever-increasing demands for its services, the BBC has been under financial pressure, ratcheted up by commercial rivals and politicians from both main parties. But given a) the BBC’s legacy of creating new platforms for digital content, b) the long-term shift towards multi-platform and on-demand digital content, and c) the growth in time spent online, its decision to re-focus £600m on high end TV content seems a retrograde step.
Successful digital services still cost a fraction of core TV channels
As Apple often does with download milestones, it gave a prize to the 10 billionth download customer and revealed that the song downloaded was “Guess Things Happen That Way” by Johnny Cash, a song which originally dates back to 1958. Given that Country fans skew older than most music fans (nearly two thirds are over 45) it is interesting to contrast this with the downloader of the billionth Apple App Store App: Connor Mulcahey aged just 13.
Apple’s music and App stores straddle paid content’s demographic fault line. Apps - a fundamentally interactive experience - are tailor made for the digital natives, whereas the static 99 cents music download remains wedded to a bygone era. Of course the kids still like music, but the current digital music product doesn’t compel them to part with their cash in the way an App does. The simple fact is that Apps have far greater monetary value for youth than music does.