The Nearest thing to Broadband

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.