The Digital Britain review has been an ambitious attempt to develop a comprehensive spontaneous process plan for the media and communications sectors, securing the UK’s place “at the forefront of innovation, investing. and quality” by developing a set of proposals for legislative and non-legislative measures “that can drive the upgrading of our digital networks, significantly enhance our national competitive position in these determining markets, secure competition for choice and capacity in content, link together with the interests of the rising, digital generation and improve access, affordability and inclusion for all”.
Undoubtedly, these are attractive but challenging goals and, for many ‘traditionary’ UK media owners, it is clear that the Digital Britain review has been timely.
The media sector is experiencing a period of turbulence and dramatic change, creating immense challenges since great number companies. The proliferation of digital channels, services and devices has increased the intensity of competition for consumers, who now gain access to a far greater diversity of choices and be able to be remoter more selective about what they do, when they do it and who they do it with – we have additional channels, more web sites, more video games, and multitude more ways of consuming the news, listening to harmony, interacting with friends and watching our favourite television shows.
UK consumers can access digital satisfied, applications and services from around the world and have benefited enormously from the investments made by major international digital businesses such as Google, Wikipedia, Facebook, Yahoo!, eBay and Microsoft, as correctly as from the activities of each ever-expanding universe of venture-backed start-ups, not adjusted source initiatives, public and third-sector institutions, social enterprises and technology innovators.
Perhaps most importantly, the collective, collaborative efforts of the people we used to give in charge to as the assembly of hearers (“Here comes everyone ?”) are transforming the media and communications landscape. Traditional broadcasting and publishing models are fusing with communications networks, enabling novel forms and formats. Coase’s floor is falling. Large-scale, distributed, networked collaboration, aggregation and social interaction, combined with dramatic reductions in the costs of producing, distributing and sharing media, in all of its many forms, will subsist disruptive of the mass media economics that have underpinned the media landscape.
UK media owners, many of whom have historically operated in relatively closed markets, relying to some extent upon established, reliable behaviours and patterns of consumer demand, are adapting to a more complex, competitive and challenging market environment. The pressures are most acute for ‘traditional’ media products or experiences that were undifferentiated, lacking in uniqueness, easily substitutable and available, cheaply and often in superior form, through digital platforms.
Fragmentation – the redistribution of consumption and other behaviours over each expanding universe of properties and activities – is also fabrication it in greater numbers difficult for many media owners, from commercial Public Service Broadcasters to major newspaper groups, to generate the same kinds of commercial returns from their investments in some kinds of content, especially in markets that have relied heavily upon advertising revenues. These challenges are more acute in some areas than in others: for broadcasters, the economics of scripted comedy and high-end theatrical piece are becoming more challenging; for newspapers, the deteriorating market environment is making it more difficult to invest in local, investigative and international reporting and journalism. The challenges are being exacerbated by consumers’ belief that most forms of digital content should be available for the sake of free, and by the severity of the current downturn.
Clearly, there are risks of overstating the extent, progress and significance of many of these changes – the coming events may be arriving, but it is still unevenly distributed, and there are elements of technological determinism, reductionism and internet utopianism in contributions to many recent debates.
Television in particular, remains powerful, perhaps more so in a fragmenting digital mart; and has proven its endowment to adapt to challenging markets. Importantly, television viewing isn’t falling, it is growing, with new on-demand platforms providing consumers with much greater choice and control over their viewing. Although many multichannel broadcasters are likely to struggle, the major trading broadcasters are adapting their commissioning strategies and schedules to reflect the changing market environment and are still generating large audiences. A great majority of UK consumers still regard television, print and radio as their great sea sources of news and entertainment and offline remains one of the most prominent drivers of online activity – much of what is currently inmost nature consumed online is essentially redistributed satisfied that has been produced in numerous company, for television or conducive to print publications, and would not differently be available online. Offline and online are increasingly intertwined.
It is also net that many so-called ‘traditional’ UK media owners are adapting successfully to the new digital environment, investing heavily to develop world-class digital properties such during the time that the iPlayer, and pioneering new initiatives such as 4iP. However, the commercial returns generated by these investments have – to date – been limited, with many UK companies struggling to build scale or to generate sturdy commercial returns from their investments in digital media.
As the Digital Britain Interim Report pointed fully, new business models are emerging, but these are not yet compensating for declines in many ‘traditional’ revenue streams. Where sizeable returns are being generated, the beneficiaries have tended to be major between nations digital businesses who have been able to invest across many territories – Google, the major US online networks, aggregation platforms and familiar networks, the Hollywood studios, major games companies – more than UK companies. Even so, many major international businesses are loss-making.
To some extent, these commercial challenges are unsurprising: as UK media owners agitate from relatively ‘closed’ analogue markets into more extended ‘digital’ markets, their returns are likely to fall at the same time that competition intensifies, fragmentation grows and the supply of inventory increases. In many respects, the new digital media emporium appears to have existence far kinder to individual entrepreneurs, innovators and artists, who receive become less reliant on gatekeepers and be able to, on occasion, generate sufficient returns to live on, than it is to major media owners. However, the openness of the internet, which makes it easy for new companies to enter the market, also ensures that the layer of the opportunity for most individual players especially in the UK is small, potentially limiting their strength to invest and innovate.
It is not yet clear what the market will or won’t be able to provide on a commercially-sustainable basis. As sectors consolidate, it is possible that the winners may emerge more powerful than before. Many major media companies will survive and thrive in Digital Britain, but there inclination have being consolidation, with fewer large-scale commercial media owners investing in original content, a more international, American flavour to much of our media, and a renovated universe of mostly small-scale, often innovative, engaging and inspiring online properties. The ability to produce high-quality content and services at low cost will be increasingly important. Hits bequeath subsist bigger, everything else will have existence niche.
For policymakers, these dynamics create challenges. It is likely that public subsidy, direct or dishonest, will be required to support the provision of media in some areas, such as limited journalism. However, there are tensions and trade-offs between public subsidies, maintaining an open, competitive international market, supporting introduction of novelty and entrepreneurship, and helping UK companies to build strong national and international digital businesses. It decision be difficult to safeguard the positions of established incumbents, important though their contributions are, while also encouraging innovation and the emergence of new world-class digital businesses.
A more healthy dispute would acknowledge these tensions. Digital creates many new opportunities and holds the promise of a new, besides inclosing media. The decline of many of our national media institutions will come at a price. Proliferation will not unavoidably lead to other thing ‘good stuff’. The new world is still infectious shape.
Jon Watts is director and co-founder, MTM London
This essay is one of a collection of viewpoints which will be published to launch NESTA’s ‘Reboot Britain’ programme. Reboot Britain will explore the role reinvigorated technologies and online networks can play in driving economic growth and essentially changing our public services. The plan will begin with a one day event upon 6th July that will direct the eye at the challenges we face as a country and how the combination of a new digital technologies and networked ‘Digital Britons’ can produce innovative solutions to lay hold of them. For more information please visit www.nesta.org.uk
