How are broadcasters facing up to the broadband challenge?

Broadband is a nebulous adjective that has been thrown around the media industry over the past two years as the final solution to all content delivery limitations, consumer apprehensions and business model failures.

For broadcasters especially, this was to be a technology revolution that would turn humble websites into competitors. Content creators, like football clubs and productions houses, would have any easy channel to the consumer and could (supposedly) break free of content aggregators like TV channels and radio stations.

At the Guardian Edinburgh TV Festival last year it was interesting to catch sight of the burgeoning paranoia as TV executives were bombarded with a new generation of threats. More than once, delegates were warned that broadband and/or PVR’s would bring about the demise of the commercial broadcasting model as we know it (within the next 2 years some even said!) As producer of this year’s Festival session on “Broadband”, its been interesting to gauge the shift in perception - not just in the industry press over the past six months, but also from a series of interviews with senior personnel at a range of TV corporations.

Firstly, I need to define what I mean by “broadband”. It’s a high-speed, two-way, fixed price, always-on digital channel to consumers. (By “high-speed” let’s say something greater than 250kbps). The two technologies that provide this to households in the UK are ADSL and Cable Modem. In laymen’s terms, ADSL makes your existing copper phone line a whole lot more efficient and capable of high bandwidth downstream connection to the consumer. A cable modem connects your PC to the Internet via the existing cable network that has previously provided phone and television. The number of consumers with these types of broadband connections is about 50 000. Significantly more, if you include at-work connections, but if we’re discussing entertainment-based applications and revenue models its prudent to limit measurement to the at-home audience.

And the market in two years time? Not a whole lot better. Don’t expect massive growth while OFTEL/BT conspire to stall the rollout of ADSL and the cable companies struggle to sort out their ageing networks and massive debts they have amounted over the past few years.

In short, TV broadcasters should not waste time worrying about a broadband consumer market that will have a massive and immediate impact on established media consumption behaviour. At the same time, they should certainly not just sit back and wait for the technology to hit. Many of the key players are being quite proactive and are launching services that, although they are not technically “broadband” applications, from a consumer perspective they could certainly be perceived that way. This “near broadband” or “nBrod” (terms coined by Ashley Highfield, New Media Director of the BBC) will be the area of focus in the media sector over the next two years. Basically, in the absence of true broadband, broadcasters use digital TV to simulate the broadband experience. Sky’s Interactive services (especially betting and enhanced TV) are examples, as is the BBC’s Interactive Wimbledon coverage. Just because its not over the PC, it doesn’t mean its not meeting the same basic need that many consumers thought would be addressed by the PC-Internet. Many even argue that interactive TV services will steal a march on PC-Internet broadband, become entrenched as the technology of the masses, and retard ADSL/cable modem demand in the long-term. Sky and BBC seem to be hedging their ADSL bets as well. Both have been involved with Kingston Interactive Television (an ADSL service based in Hull), with the BBC conducting trials of interactive formats on the service during the summer.

Full broadband penetration is definitely a case of “when” and not “if”. In the mean time, proactive broadcasters stand to make revenue and build audience by making the most of technology that is available to a significant portion of the market, right now. Perhaps more importantly, an aggressive approach in this area will see them well positioned to take advantage of broadband when it does arrive.

Mmmm... I'm very suspicious of this so called good news. I can certainly buy into the fact that people want faster internet connections ("broadband"). But what are they buying here? Are they buying into the sheer excitement of being able to access a "broadband portal" with all that wonderful new content? I sincerely doubt it.

All the evidence (admittedly some anecdotal, much 'straw poll' or qualitatively significant but quantitatively not...) that I am aware of says that people buy into broadband for the following reasons:

- they want a faster version of the *existing* surfing experience. They are frustrated that an e-mail attachment (possibly some nice fat AVI video funny sent by a friend) blocks up their mail box. They get bored of the way pages take so long to download.

- they want to pay a flat rate for unlimited web access to they don't have to watch the clock as they download their friend's not-so-funny-but-massive file attachment

- (when they get broadband) they realise the joys of the 'always on' connection. None of that squealing modem business each time you want to connect. And as it's flat rate you can just leave it on all the time.

- they can use the phone, the web (and, in many cases TV and fax) all at the same time and down the same line so they pay only one line rental and their partners, wives, husbands, children etc. can use the phone whilst they're online.

I hope that the industry and web sites do not disappoint people by 'going broadband' too quickly and fattening up web sites to 'take advantage of this new opportunity'. Have we learnt nothing about the risks of using cutting edge technology before the market is there?

Of course there will be some people for whom dedicated broadband web content will be of great interest and relevence and the extra speed can certainly enhance existing sites and allow for more multimedia 'value add' content (e.g. 3D tours of flats you're looking to rent, webcams of the beach you're about to holiday on etc.). But in the vast majority of cases I think 'broadband' is about making existing web sites much more of a pleasure to use. (The porn industry will of course benefit immensely...)

What does 138% audience growth really mean anyway? That's not very difficult if you started with 10 users... How many total users do they have? What with all their vastly expensive marketing I would have hoped for a higher rate of growth than 138%. And why are people looking at these 'broadband portals'? Because they want to or because when the service was set up the broadband portal was set as the users' homepage? I would like to compare the rates of usage growth of these portals with rates of subscriber uptake - I suspect they would track each other. If you could show me people were willingly going to broadband portals *because of the content proposition* then I would be more convinced.

Yours

Broadband user

On 14:31:37 27 July 2001 kiff wrote:
>Whilst I certainly agree with murray's analysis of the
>likely spread of the installed base, there are two equally
>interesting questions. Firstly whether there is a model
>for the content creation and aggregation that is
>connecting with enabled users, secondly whether there is a
>model for profit.
>
>On the first, an interesting recent result in the UK
>
>
>"Just when you least expected it, here is some good
>news about broadband. A survey of internet trends in the
>fourth quarter of 2000 shows broadband portals making
>their first real impact.
>
>BTopenwworld.com, which acts as a content gateway for BT's
>ADSL subscribers, showed the biggest audience growth (138
>per cent) in "at home" users. The research by
>Nielsen/ NetRatings also found broadband-focused sites by
>BT, NTL and Telewest among the top six UK domains, ranked
>by visits per person in December. "
>
>The second fact is the more interesting, showing the
>numbers stacking up against all-internet users, despite
>the low installation base. If I am interpreting the
>admittedly vauge statement correctly, the implication is
>that the portal and commisioned content strategies the
>platforms are throwing out have hit the target with users
>and driving unusual usage levels.
>
>In an environment where TV is presuming that the Net as an
>entertainment deveice will have little impact in Britain,
>that's an interesting development.
>
>I wonder how much that content is costing and what revenue
>models it is advancing. Anyone know?