A London conference provided industry reaction to the recent Digital Britain report. Generally, industry stakeholders welcomed the statement of government policy on the future of communications convergence. There was a sense that the devil is in the digital detail. Any initial excitement already seems to be wearing off, with concerns that the project could lose momentum.
Caroline Thomson, the chief operating officer of the BBC, said “for the BBC this report is really good news.” This is despite one of its many recommendations being to find various uses for its forecast underspend of money originally ring-fenced to support people with digital switchover, effectively taking revenue from the television licence fee away from the BBC. She suggested that the BBC can drive demand for broadband among the 40% of the country that has yet to connect.
Tony Cohen, the chief executive of FreemantleMedia, was proposing the possibility of micropayments in the region of 5-10 pence for on-demand programmes. The production company, responsible for formats like Idols and X Factor, is co-funding a feasibility study for the idea that also appears to have found favour at commercial broadcaster ITV.
Mike Rawlinson, speaking on behalf of the computer games industry, pointed out that nearly £2 billion was spent on video games in the United Kingdom last year. With one in three people regularly playing some form of computer game, it is a sizeable sector in its own right. He described the 2Mbps proposed baseline speed for broadband as “pretty puny” by comparison to some other countries.
Patrick Barwise, an emeritus professor from the London Business School, argued that “once consumers have a PVR, the incremental value of video on demand is marginal.” He cited recent research suggesting that PVR owners actually watch more live television than they think and watch less on demand than that. He proposed that a levy on recording equipment could help fund public service programming. Those that have yet to be persuaded of the benefits of broadband do not need high speeds for video. He suggested that 2Mbps is adequate for email, shopping and accessing public services.
Andrew Harrison of the RadioCentre, pointed to the significance of radio as a medium and noted that 20% of all radio listening is now digital. However, he said that “the internet is unlikely to replace broadcast radio during our careers”.
Carolyn McCall, the chief executive of the Guardian Media Group, said that the reason that newspaper publishers could not charge for online material was a result of the BBC providing its service free at the point of consumption. She conceded that given its remit the BBC should nevertheless be expected to do so. She reserved her criticism for online aggregators like Google that index and reference third-party material, although she admitted that pulling out of Google News would be suicide because of the traffic it delivers.
Peter Barron, a director of communications for Google, said that as a technology company it makes no apology for not investing in content but is investing huge resources is making search better and the internet a better place, as well as returning over $5 billion to its advertising partners last year. Google has declined to break that down nationally, but he said that the United Kingdom was the world’s leading digital economy, spending three times as much per person online than Americans. Google would like to have seen a more ambitious target than 2Mbps as a broadband baseline.
Anna Bradley, who is chair of the communications consumer panel, established to advise the regulator Ofcom, said that the universal service commitment of 2Mbps needs to guaranteed, rather than simply being an advertised speed, and she suggested that it “won’t be enough for long”.
Emma Gilthorpe, responsible for industry policy and regulation at BT, welcomed the intent of the Digital Britain report, which was generally quite generous towards the incumbent telco. “It’s the first time that the convergence nettle has been grasped,” she said. “Critically, it recognises convergence in both demand and supply”. However, she was concerned that many of the proposals might not survive the next election, with many other competing priorities. With Lord Stephen Carter announcing his resignation before the publication of his report, and leaving before the job is done, Digital Britain could lose momentum.
With various parties lobbying for their own interests, over relatively small sums in terms of the national economy and the scale of investment that is really required, the real loser could be the British consumer.
The Westminster Media Forum and eForum seminar on Priorities for Digital Britian took place at The Royal Society in London on 9 July