SPOTLIGHT ON: DIGITAL TV: Will the BBC’s digital promise affect commercial stations?

What implications do the BBC’s plans have for BDB? Alasdair Reid investigates.

What implications do the BBC’s plans have for BDB? Alasdair Reid

investigates.



Michael Grade gives good value, especially when he’s sharing his views

on the BBC. The ex-Channel 4 boss was once head of BBC 1, of course -

and he knows the BBC director-general, John Birt, rather well. Birt was

once Grade’s second-in-command at LWT and something akin to sibling

rivalry has always added an edge to their relationship as they’ve

pursued their parallel careers.



At the Royal Television Society dinner last week Grade was on top

form.



In a valedictory address to the television industry - Grade has now

joined First Leisure as chairman - he was scathing about Birt’s recently

announced medium-term strategy to put the BBC at the forefront of

digital TV.



’God, not another five-year plan - more pain, more misery,’ he groaned

before going on to mock the ’management tosh’ espoused by Birt and the

keenest of his middle management apparatchiks. In the eyes of Grade and

many like-minded critics, Birt is either a dalek or McKinsey crossed

with Stalin crossed with a linen suit.



But if White City resembles a state tractor factory, it has to be

admitted that production figures look good. BBC 1 and BBC 2 have been

boosting their audience share for the past four years. ITV has been

throwing money at its schedule but BBC 1 has continued to close the gap

- now at less than three percentage points.



Birt has committed a total of pounds 1 billion to the development of

digital services over the next five years. There will be a range of new

channels, both free-to-air and subscription, in addition to a flagship

24-hour news station.



Grade is probably right - it will involve more pain. But won’t much of

that pain be felt within the commercial sector? There was a big fuss a

couple of weeks ago about the Carlton and Granada consortium, British

Digital Broadcasting, winning the main digital terrestrial commercial

franchise. What implications does the BBC announcement have for that

venture?



Leslie Hill, the chairman of ITV, doesn’t think that necessarily

follows.



’ITV will have a significant presence in digital and the two biggest ITV

companies are also involved with BDB. They will be putting a great deal

of investment behind building BDB services and infrastructure - and it

must be remembered that BDB will be loss- making in its early years.

Digital needs a great deal of investment.’



Hill agrees you could argue that 9 per cent of the licence fee is an

extraordinary amount for the BBC to be committing to this new sector.

But he believes that digital deserves the involvement of as many quality

broadcasters as possible.



’It’s important digital works. It needs people with clout. That was why

Carlton and Granada were given the franchise,’ he adds.



But surely the BBC announcement isn’t good news for adver-tisers? With

little prospect of commercial audience growth over the conventional

airwaves, is it bad news to see the BBC so committed to grabbing

audience in digital formats?



Well, perhaps.



Alan James, the head of television buying at the Network, says: ’In the

short term, this could be good news for commercial audiences. The BBC

may be spending 9 per cent on digital but that’s 9 per cent it won’t be

spending on analogue services. ITV, Channel 4 and Channel 5 might

welcome that. I can see the BBC’s programming budgets being squeezed

over the next few years,’ he states.



’But everyone should welcome the BBC’s commitment to digital. The BBC

will probably set the quality threshold that rivals must cross. And they

will have an important part to play in creating a market in the first

place. Once that is created, commercial broadcasters could be in a

position to take a greater share of that market than the BBC will be

able to.’



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