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The future of broadcastingan example of a sector study
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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 & outletsBBC Worldwide - 50% of total BBC revenue
Europe’s leading exporter of TV progs and formatsGlobal TV operator – 19 commercial channels
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The evolution of broadcasting
• National Terrestrial
• Continental Satellite
• Global Broadband
• From broadcasting to narrowcasting
• From national audiences to specialist niches
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The value-delivery systemJeremy Mayhew (BBC Worldwide) Guardian 20/9/97
Production Distribution Retailing
Content Distribution Gateways
Transmitters‘Platforms’Networks:Terrestrial
CableSatelliteInternet
software:encryptiondecodinghardware:
set-top boxessmart cards
network servers
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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 musicCable, Satelliteand terrestrial
ComputersWAP phonesiTVHardware
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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)
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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
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New Media
• BBC website– Listen Again– interactive Media Player (iMP) – Creative Archive,
• Plans to sell pay-to-view programmes abroad via its website
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Global Media Ownership
• http://www.mediachannel.org/ownership/chart.shtml
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Rupert Murdoch - News Corpwww.newscorp.com
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
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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
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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 Chinese
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• 2003 Murdoch buys Direct TV USA• http://media.guardian.co.uk/rupertmurdoch/story/0,11136,933806,00.html
• Foxtel News set to rival CNN and BBC– ‘like the Sun in the Sky’ ?
• Buys minority stake in ITV– Battle with Virgin cable
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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?
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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
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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?