The BBC is rocked as digital wave gains strength

Fewer people are watching TV now in comparison to last year. Gideon Spanier explains why.

We are spending less time watching and listening to the Beeb — 18.5 hours a week in the year to March 2014 from 19.5 hours a year earlier (Picture: PA)

Gideon Spanier

23 July 2014

A new digital world of unlimited choice is posing a fundamental threat to the BBC’s right to claim the licence fee as a universal obligation, and it could hasten change.

That’s my verdict on this week’s BBC annual report, the Corporation’s yearly exercise in marking its own homework, which shows a worrying decline in the affections in which the BBC is held.

We are spending less time watching and listening to the Beeb — 18.5 hours a week in the year to March 2014 from 19.5 hours a year earlier — and our appreciation for its TV and radio services is in decline. Flagship channels BBC1 and BBC2 and youth channel BBC3 all saw audiences fall, with only highbrow BBC4 holding steady.

“Audience apprecation of BBC televison, while remaining high, has fallen slightly for the first time in a number of years,” admitted the BBC, which also saw appreciation of its radio service drop for the second year in a row.

The proportion of children aged six to 12 watching the CBBC channel also slumped from 30% to 25% a week as satellite TV and the internet offered more choice.

BBC Online, which includes the iPlayer, bucked the downward trend, as audience appreciation increased. But, generally, the BBC is appealing too much to older viewers and listeners — think Strictly Come Dancing, Top Gear and even news.

Director-general Tony Hall distracted attention with a little spin. A few minutes into his news conference, he casually mentioned during his review of his first year in charge that Evan Davis was replacing Jeremy Paxman as Newsnight’s top presenter. That guaranteed the media’s coverage focused on Davis, not the BBC’s underperformance.

Hall and director of television Danny Cohen shrugged off the declines, claiming it was always going to be hard to match 2012’s performance because the London Olympics were a one-off that pulled in huge audiences. The Government’s decision to freeze the £145.50 licence fee — a real-terms cut of 26% by 2017, according to the BBC — is also having an impact, they insisted.

But something more structural is happening too. The explosion in digital content across the web and the advent of high-speed broadband mean viewers and listeners are starting to move away from traditional broadcasting and consume more media online and on mobile. We are not yet at a tipping point but there is a sense that behaviour is changing — especially among smartphone-loving, digital-savvy under-25s.

This isn’t just a BBC problem. Virtually all the big UK broadcasters are seeing their reach decline in an expanding, fast-changing market. “This may be a long-term trend,” acknowledges the BBC annual report as it admits time spent listening to all radio in the UK “continues to decline”.

BBC bosses say privately it is not easy to know exactly how people are spending their new media time. However, they are not sticking to established outlets in a world where they are spoilt for choice with social media, games, apps and video. As FT.com boss Robert Shrimsley said the other day, the hit game Candy Crush Saga is as big a rival for FT readers’ attention as the Wall Street Journal and Bloomberg.

The BBC justifies its £3.7 billion in licence-fee revenue partly because it is an innovator and provides “risk capital” for the creative economy, as it did successfully with iPlayer. Hall hopes the controversial plan to make BBC3 online-only next year will work because younger viewers are already flocking online, and the Beeb can play a role in driving more people to the web.

That is a precursor to a bigger rethink about how the licence fee might work in future. As a voluntary subscription? As pay-per-click micropayments? As a form of poll tax alongside council tax?

But it is the medium that matters and the danger is the BBC will find it harder to stand out online. It already looks small against Google, Amazon and Apple. And all the trends point to content companies seeking greater global scale — witness Rupert Murdoch’s Fox bidding for Time Warner and John Malone’s Liberty Global eyeing ITV.

It is a sobering thought that the BBC’s influence is on the wane. Imagine how radical it could be if it were freed from the political interference that comes with the compulsory licence fee.

In the Air

Soho wants to do more to promote itself as a creative hub amid the rise of Shoreditch and King’s Cross.

Campaigning group Soho Create, which is backed by Westminster Council, has recruited advertising man Sir John Hegarty, pictured, creator of hit ads for Audi cars and Levi’s jeans, to be its chairman.

“Soho needs a lot of help — it’s hugely undersung globally,” says Soho Create chief executive Tom Harvey, who describes the area as “the most creative square mile in the world”.

Westminster Council has estimated Soho firms generate gross added value of £14 billion a year for the creative sector. But Harvey says it’s about more than that. “We see our job is having a more contextual debate about what it means to be creative — the whole subject of creativity.”

Rents and rates have been “really challenging” but he says landlords Soho Estates and Shaftesbury are backing Soho Create because they recognise “creative companies are really important” to the area’s mojo.

Tesco’s new chief executive, Dave Lewis from Unilever, doesn’t just bring consumer-goods experience. He is a non-executive director of BSkyB. That could be useful as Tesco has its online TV, music and e-books service Blinkbox as well as its own tablet Hudl. With fierce competition from Amazon, Apple, Netflix, Spotify and Sky’s own Now TV, Blinkbox is facing a lot of bigger rivals.

French advertising giant Publicis showed the ill-effects of its botched merger with America’s Omnicom as UK revenues have fallen 2%. It is said that Publicis really knew the merger was in trouble when the US firm failed to send a single French person from their side for talks between 60 top executives from both companies. Quelle snub!

The BBC is rocked as digital wave gains strength

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