Why broadcasters need to turn into content retailers

The convergence of media has left broadcasters asking what their brands mean once television content is available on demand

It’s an interesting coincidence that the BBC announced its first tie-up with video-sharing website YouTube the day after Sky pulled its channels off Virgin Media’s cable TV service. It would be hard to think of a neater illustration of the changing face of television.

In fact, the row between Sky and Virgin feels like the last gasp of a pre-internet television mentality. Two media giants fail to agree terms for one to carry the other’s channels and, as a result, Virgin’s customers are left without Lost, 24 and The Simpsons.

Except, of course, they’re not. Most of them will also be getting broadband access from Virgin, so they can download the latest episodes of pretty much any programme they want, certainly those for the US. It’s illegal, of course, although moves are being made by some of the download sites to go legit, but that doesn’t seem to be much of a deterrent.

According to David Price, head of piracy intelligence at internet intelligence company Envisional, TV piracy has exploded in the last two years, to the point where single episodes of top TV programmes are now the most pirated things on the internet. And the UK is one of the biggest downloaders of pirated US TV in the world.

What’s more, according to Price, the attitude of TV downloaders is markedly different to those who download films. Downloaders of films know they’re doing something wrong, but those who download TV programmes either don’t think what they’re doing is wrong – because they’ve already paid their Sky subscription – or they don’t think it should be wrong, for exactly the same reason.

So while the failure of Virgin and Sky to reach a deal may from a corporate standpoint look like media giants playing hardball over market share, from a digital consumer’s point of view it more resembles two bald men fighting over a comb, in Jorge Luis Borges’s immortal phrase.

And this is the future that all the broadcasters have been worrying about for the past few years. The convergence of media that digital evangelists talked about back in the late 1990s is happening. TV content is now being delivered over the Web. But what this means is that, just as downloading music has meant that the basic unit has become the song rather than the album, so the basic unit of TV is becoming the programme rather than the channel.

In fact, if viewers are rejecting the schedules created for them by channels in favour of constructing their own via BitTorrent and Google Video, what does it mean to be a broadcaster?

Obviously there is some content that has to be watched live, principally sport – a fact that may help account for the astounding sums being paid for the rights to screen Premiership football. Everything else, however, can be time-shifted by the viewer. The BBC in particular has acknowledged these changing viewing habits by offering the next episode of its drama series on BBC3 or 4 straight after showing the previous one on BBC1 or 2.

But the implications for broadcasters are far greater than that. What do their brands mean when content is increasingly available on-demand? Five, for example, has virtually reinvented itself through its canny buying of US programming, but if all viewers care about is individual programmes, won’t the ident for the production company behind CSI mean more than that of the channel that’s showing it?

One possibility, of course, is that broadcasters become much more like retailers, selling their content for consumers to watch whenever and wherever they want. This could allow them to take advantage of the “long tail”, Wired magazine editor Chris Anderson’s name for a phenomenon whereby, if you can stock enough items, the aggregated value of the demand for items outside the best-seller lists becomes greater than that for the best-sellers.

But to do that, the broadcasters would have to own the rights to allow their back-catalogue to be distributed online, and that’s still being resolved.

This is what makes the BBC’s deal with YouTube so interesting. Channel 4 has already launched its on-demand service, 4oD, and the BBC’s version – the interactive media player (iMP) – is on its way through the corporation’s public value test, but all these really do is allow you to catch up (legally) on stuff you missed. Even though the deal initially looks more like a way for the BBC to promote its (broadcast) content to the YouTube audience, it also takes the corporation much closer to the world of broadcaster-as-retailer.

Of course, for the BBC it’s all about access to content that’s already been paid for. For the commercial channels, there are much tougher questions to be answered about how to make money from content.

Michael Nutley is editor-in-chief of New Media Age

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