Memorandum submitted by the BBC
The following document contains answers to specific
questions raised by the Committee as part of the Committee's inquiry
into the Funding of the BBC.
The Committee asked four specific questions
and the BBC's response follows.
1. What was the expenditure in the financial
year 1998-99 on each of the BBC's digital channels and what is
the planned expenditure in 1999-2000 on each of the BBC's digital
channels?
The BBC response:
ANALYSIS OF DIGITAL SPEND
|
| 1998-99
| 1999-2000 |
|
| BBC One/Two W/screen | 29.5
| 46.01 |
| Choice (incl Regions) | 33.8
| 54.11 |
| News 24 | 50.3
| 53.9 |
| Knowledge | 0.0
| 19.02 |
| Parliament | 2.2
| 3.71 |
| Online (incl Education) | 23.0
| 26.0 |
| Digital Text/Enhanced TV | 0.0
| 9.93 |
| Digital Radio | 5.8
| 7.7 |
| Development | 9.3
| 6.8 |
|
| Total | 153.9
| 227.1 |
|
1 Service launched in October 1998 on DSat and in November
1998 on DTT. 1999-2000 is the first year of full funding.
2 Launched in Q1 of 1999-2000.
3 Launch anticipated during 1999-2000.
2. What are the latest available audience figures for each
of the BBC's digital television channels?
There are currently no industry standard (ie BARB) figures
for the reach and share of any digital television channels. The
broadcasters have employed other methodology to produce research
that attempts to ascertain the reach of the new channels. We are
only able to provide firm audience figures for BBC 24 News in
non-digital homes.
The BBC has two pieces of research from BMRB and RSGB that
asked digital viewers which channels they had watched in the past
seven days. These produce a wide range of results:
|
| BRMB (July)
per cent
| RSGB (September)
per cent
|
|
| BBC One | 89
| 78 |
| BBC Two | 72
| 50 |
| BBC Choice | 24
| 7 |
| BBC Knowledge | 5
| 5 |
| BBC News 24 | 33
| 9 |
| BBC Parliament | 7
| 2 |
|
It is clear from these results that this methodology is neither
a robust nor reliable method of measuring viewing reach or share:
as researchers have noted, there is often a wide gap between what
people believe they remember watching and what they really did
watch.
There are a number of further issues that the Committee should
bear in mind when examining these varying results:
— An additional feature—that can only be inferred
due to the unreliability of the current evidence—is that
the positioning of a channel on the Electronic Programme Guide
could have an impact on viewing figures. On the digital terrestrial
platform, the BBC's new services are listed as Channels 7-10.
On the digital satellite service, BBC Choice is listed as Channel
160, BBC Knowledge as 553, BBC News 24 as 507 and BBC Parliament
as 508. The BMRB research suggested that weekly reach of new channels
in digital terrestrial homes was significantly higher than in
digital satellite homes;
— Digital early adopters have very specific viewing
preferences. They are primarily interested in sports and films
channels—pay television channels. The recently published
DotECON report demonstrates that later adopters are attracted
by high quality, British originated programming in genres such
as current affairs, news and education. A copy of this report
is attached in other evidence.[1]
BBC News 24
Available on: digital terrestrial, digital satellite, digital
cable, analogue cable and overnight till 0600 on BBC1 weekdays
(0700 on weekends) and between 0800-0900 on BBC2 at the weekend.
Fifteen minute reach
News 24: 3.2 million (analogue cable and terrestrial overnight
audiences)
Sky News: 2.1 million (analogue cable and analogue satellite
audiences)
(September 1999)
Three minute reach
News 24: 5.4 million (analogue cable and terrestrial overnight
audiences)
Sky News: 3.8 million (analogue cable and analogue satellite
audiences)
(September 1999)
In cable only homes in September, News 24 had an audience
share of 0.49 per cent and Sky News had a share of 0.53 per cent.
At times of major incidents, viewers increasingly seek out
the latest information from rolling news services. During the
Kosovo conflict, for example, viewing reach for BBC News 24 peaked
at seven million people.
3. What methods are employed by the BBC to promote its
digital channels?
No-one is better placed to communicate to the whole UK than
the BBC. As part of our public service remit, the BBC has been
actively committed to utilising resources effectively to communicate
the advantages of digital to the UK viewer.
Despite the millions of pounds spent on marketing digital
television, the BBC remains the only broadcaster committed to
communicating the advantages of all digital services to all viewers.
We therefore welcome the Secretary of State's recent initiative
to create an industry wide campaign to overcome this anomaly.
The BBC has gone about communicating the benefits of digital
television in a number of ways, ensuring that the message is heard
by as many people as possible.
COMMUNICATIONS STRATEGY:
"THE ADVENTURE
STARTS HERE"Audience:
Viewers
Television industry
Retailing industry
Opinion Formers (Government, Parliament, Media, Think Tanks)
Activities:
Since the digital age has approached, the BBC has been actively
committed to:
— Educating the UK audience
— potential and current benefits of digital technology
— Correcting negative perceptions
— reassure on continued quality of services in the digital
age
— inform about free-to-air service options available
— Exciting interest in the digital future
— Demonstrating services to early adopters
— Helping electronic retailers educate the public
about digital at point of sale focussing on areas such as free-to-air
and widescreen (correcting much mythology).
The BBC's Campaigns "BBC Digital. The Adventure
Starts Here"
Initially the BBC sought to educate people about the benefits
of the whole digital proposition, whilst more recently the BBC
has focussed on demonstrating benefits via individual BBC digital
services such as BBC Knowledge. The ultimate goal is to provide
all viewers with an informed choice about going digital.
"The Adventure Starts Here" slogan was devised
to help the process of stimulating public interest whilst provable
benefits were few, particularly since the BBC launched a digital
communications campaign in order to generate interest and awareness
before the launch of the first services.
On Air Communication
| Phase 1 | "Enthuse and Educate"
| Launch Education Film | "This is digital technology"
|
| | Launch Film
| "The Future is Digital, TV, Radio and online"
|
| Phase 2 | "Demonstrate the Benefit"
| Specific service films: BBC Choice, BBC Online,
BBC News 24, BBC Knowledge
|
| "Reassure on quality"
| Extended launch film |
| "Reassure on cost"
| "Free-to-air" information films |
| Phase 3 | Continue Phase 2 Education
| Enhanced BBC Film |
| Deepen understanding of new BBC free-to-air digital services
| Analogue cross promotion |
These films have been supported by coverage of digital broadcasting
in BBC programmes such as Tomorrow's World, Computers Don't
Bite and the BBC's online Webwise campaign.
BBC Campaigns have reached 99 per cent of all adults at least
once and 96 per cent of the population more than three times.
A total of 6,900 adult TVRs have been dedicated in 1998-99
to BBC digital campaigns.
Paid For Advertising
For reasons of cost and effectiveness the BBC's main communication
has been on its own airwaves, but to ensure complete and appropriate
coverage of the UK audience some print has been undertaken in
support of the major campaign.
— "Adventure Starts Here" digital launch
campaign in national press;
— Outdoor poster activity to support launch of BBC
Choice; and
— Targeted press ads in digital listings magazines
supporting the BBC's new digital services.
Information Material and Helplines
— A dedicated digital helpline was established (0990
11 88 33) and has taken over 100,000 calls.
— The BBC Engineering line was enhanced to provide
specialist technical back-up.
— www.bbc.co.uk/digital—dedicated to digital
information has had over 1.2 million hits.
— Special information packs (eg Digital Fact Pack
with CDROM) were produced and delivered to over 8,000 retailers,
press and opinion formers.
— BBC Digital Focus newsletter is distributed monthly
to deliver the latest digital updates to over 16,000 people, including
8,000 retailers, industry partners and senior BBC staff.
— Over 275,000 leaflets have been distributed via
mail, exhibitions and events. The BBC directs the public to all
the major sources of digital information (including some 22 telephone
numbers) to ensure a fair platform for everyone.
Retailers
The BBC identified electrical retailers as holding a key
relationship with consumers in the digital arena. They are the
most direct and possibly influential source that consumers will
ultimately turn to when interested in learning about or going
digital. Thus the BBC has fostered strong relations with retailers
in order to ensure that consumers are given the best opportunity
of making an informed choice at point of purchase.
— The BBC proactively developed the first ever educational
based partnerships with retailers. Key relationships have been
built with retailers such as DSG, Comet, Powerhouse, Granada,
Tandy and Thorn as well as industry organisations such as RETRA.
— BBC Digital has participated in over 50 retailer
training events, held exhibition stands at key retailing trade
shows such as ERS and have supported specific retailer events.
In addition, the BBC has presented at numerous conferences such
as the annual RETRA conference for independent electrical retailers.
— Informational materials have been mailed direct
to retailers including digital and widescreen leaflets, research
information and monthly newsletters sent to 8,000 retailers.
— Numerous articles and print ads have been placed
in key retailer trade journals.
Exhibitions and Conferences
The best way to communicate new and complex information is
face to face so the BBC has hit the road talking to a variety
of audiences, educating, exciting and reassuring people about
what digital broadcasting means to them.
— BBC Digital created a major presence at the successful
consumer show, Live 98, with over 100,000 people in attendance
keen to learn more about the theme of digital broadcasting, the
BBC provided informational materials as well as an exciting stageshow.
The BBC was voted Favourite Exhibitor of the entire show (source:
Miller Freeman post show research October 1999).
— BBC Knowledge launched its new internet and digital
TV service to consumers attending both the Personal Development
Show and Tomorrow's World show in June 1999.
— Retailers have been supported with stands at industry
tradeshows such as ERS and conferences such as CAI and RETRA.
— Press officers around the UK have been invited
to quarterly digital press briefings hosted by the BBC as well
as trade briefings jointly hosted by the Digital Network group.
— MPs were kept abreast of the latest digital developments
via the BBC stand at the 1998 and 1999 party conferences, as well
as through a programme of digital demonstrations in Westminster.
Forging New Partnerships
Apart from Electrical Retailers the BBC has built partnerships
across the industry in support of public awareness and understanding:
— with manufacturers such as Sony and Philips, helping
in awareness building events and enhancing instruction leaflets
and technical information provision;
— with platform providers, Sky and ONdigital supporting
staff and retailer training initiatives; and
— with terrestrial broadcasters on joint initiatives
supporting digital TV through an aerial.
4. What means are there of accessing the BBC's digital
channels other than subscription to ONdigital and BSkyB; what
is the cost of these other means; and what are the figures available
on current and projected take-up of these other means?
The BBC is committed to enabling viewers, wherever practicable,
to receive its public services free at the point of delivery.
The means of achieving this differ between the respective digital
platforms.
The BBC's projections for take up of all digital platforms—both
free-to-air and pay—are set out on page 15 of the Davies
Report.
DIGITAL TERRESTRIAL
Viewers who have purchased an integrated digital TV (idTV)
set are able to watch the BBC's digital services (and those of
the other free-to-air broadcasters) directly and without need
to purchase a subscription to a pay television operator or using
a smart card to decode the broadcast signal. idTVs are coming
onto the market from £300-400 which also gives viewers the
option to take pay TV services on subscription to pay TV providers.
Digital terrestrial set-top boxes also allow viewers to receive
BBC and other free-to-air services without a smart card (It is
a requirement of the European Directive on Conditional Access
that receiving equipment should be able to receive services transmitted
"in clear"). However, ONdigital provide a subsidy for
their DTT set top box (in effect making it a "free"
rental for as long as a viewer subscribes to one of the ONdigital
pay television packages.) It is possible to buy unsubsidised DTT
set top boxes but prices vary widely. They cost about £400
on average.
Some of the major internet access providers are developing
plans for relatively low cost free-to-air set top boxes coupled
with internet access. The market expects such boxes to be available
from around the end of 2000. The BBC welcomes such developments,
believing that they may make the benefits of the e-society and
e-commerce widely available at low cost.
DIGITAL SATELLITE
The BBC's public services (and those of Channel 4 and Channel
5) are encoded on digital satellite to protect the interests of
rights' holders from signal overspill (which in the case of the
Astra Satellite would otherwise extend over much of mainland Europe).
Viewers therefore need a smart card to decode the signal.
The arrangements which the BBC has with SSSL permit viewers
who do not wish to subscribe to any pay television services to
receive a smart card, at no cost to the viewer, which decodes
the BBC's public digital services and also allows such viewers
to receive digital simulcasts of Channel 4 and Channel 5 if they
wish.
BIB make set top boxes available free to any viewer, whether
or not they subscribe to pay television services provided that
the viewer agrees to connect their set top box to a telephone
line to enable them to receive, at no charge, the services provided
by OPEN (the e-commerce joint venture between BT, BSkyB, Matsushita
and HSBC). The BBC understands that these arrangements reflect
the conditions imposed by the European Commission when they approved
the OPEN venture.
The differential charge paid by viewers who choose to take
only free-to-air services is a one-off £60 supplement for
installation: BSkyB charge £100 for installation but provide
a subsidised installation charge of £40 for viewers who choose
to subscribe to Sky Digital's pay television services.
The BBC believes it is right, wherever practicable, to make
arrangements for viewers to receive free-to-air digital services
without the need to subscribe to pay television services. To date
several thousand have chosen to do so. This is particularly relevant
to multi-occupancy blocks of flats whose occupants wish to receive
good quality reception digital television services and the benefits
of additional free-to-air services, where the feed is taken from
digital satellite and then made available via local cabling within
the building.
In addition there may well be many viewers who, having once
subscribed to pay television decide they no longer wish to do
so, but wish to continue to receive free-to-air digital services
through their set top box. That was the experience on analogue
satellite (though churn rates on digital may prove to be lower).
The BBC's arrangements with SSSL permit such viewers to continue
to receive the BBC's public digital services and, if they choose,
the digital simulcasts of Channel 4 and Channel 5 at no additional
cost to the viewer. It is too early to say with precision how
many such viewers there will be; experience from the age of analogue
satellite suggests that this may over time rise to be a significant
number.
Viewers wishing to acquire (or retain) free-to-air only services
receive their smart card and decoding entitlement at no cost to
them from a call centre run by SSSL; and from next year by BT
on behalf jointly of the BBC, Channel 4 and Channel 5. The BBC
would support ITV joining such a co-operative arrangement if ITV
decide to make their free-to-air digital services available via
digital satellite.
DIGITAL CABLE
In anticipation of any national launch of digital cable,
it remains to be seen what provision is available for viewers
who wish to receive only free-to-air digital services. In the
case of analogue cable BBC1, BBC2, ITV and Channel 4 are designated
as "must carry" channels and longstanding practice has
in many cases allowed viewers who cease subscribing to pay channels
on cable to continue to receive these services via their cable
box. The conditions necessary for the ITC to trigger the "must
carry" provisions in digital cable, under the 1996 Broadcasting
Act have not yet been met.
The arrangements in respect of digital cable are further
complicated by the fact that cable services are not simply multi-channel
television; cable telephony is frequently bundled as part of the
basic access package for cable subscribers. It is a stipulation
of the Secretary of State's agreement to the provision of the
BBC's public digital services on cable that where a cable company
carries any BBC public service channel, that channel must be made
available to the viewer in any cable access tier, including the
lowest cost cable access tier.
November 1999
1
Not printed. Back
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