Memorandum submitted by Telewest Broadband/Flextech
Television
Telewest Broadband provides multi-channel television,
telephone and internet services to 1.74 million UK households.
Flextech Television is the content division of Telewest Broadband;
it provides eight wholly owned channels and is a 50% partner in
UKTV, a joint venture with BBC Worldwide. Flextech is the largest
supplier of basic channels to the UK pay-TV market.
This paper outlines the views of Telewest Broadband/Flextech
Television in relation to the potential impact of technological
developments, notably broadband, on broadcasting and on some of
the core issues faced by a basic pay channel operator in a changing
world.
Telewest Broadband provides "converged"
services over a fibre-based network; ie it provides telecoms services,
digital television channels, analogue television channels, FM
radio services and high speed (broadband) internet (up to 3Mps)
on the same "pipe". Therefore, it has first hand experience
of changing customer trends in the use of television and other
communications services and sees broadband leading a trend towards
a more on demand world.
For example, TV is moving from "push only"
to "push and pull", from scheduled linear broadcasting
to time-shifted linear broadcasting and interactive broadcasting
towards video on demand (VOD). Significant extensions of VOD are
on the horizon. In addition, PVRs are changing viewing patterns,
as will extensions of PC functionality for recording and content
storage. In this respect, we note a comment from the BBC in a
recent submission to DCMS in relation to the digital switchover:
"It has to be borne in mind that PVR
technology, and consumer expectations carried over from online,
are re-shaping digital TV into much more of an on-demand medium
such that (rights permitting) broadband could have a considerable
role in helping to take analogue viewers into a future of digital
consumption of audiovisual media".
In other words, although the market has evolved
radically since the last Charter Review was undertaken, the changes
are likely to be even more marked over the next 10 years. Therefore,
we share the concerns that a 10-year cycle may be too long unless
it can be made to be responsive to technology and market changes,
based on input from Government, the industry or the regulator.
Consequently, we would support a mid term review.
Without a review point, there is no real protection offered to
the commercial market, the citizen and consumer, Government or
the BBC to review funding, remit and governance issues.
Flextech Television's portfolio includes LivingTV,
Bravo, Trouble, Challenge and ftn. These channels have been established,
individually, to cater for niche audiences, whilst collectively
they have wide appeal.
In the multi-channel market, we have established
"community creation" television, introducing strip scheduling
and clear signposting of programmes to enable viewers to understand
the environment and the nature of the programmes that they can
expect.
For example, Trouble has concentrated upon brand
development and its core targeted niche audience, 13 to 19 year
olds, has created a community which trusts, relies upon and engages
fully with the channel. By building and concentrating the service
towards this age group, we have created an audience affinity with
the channel. We have extended the brand into on-line communities
and have been congratulated by industry bodies for the educational
remit that we satisfy through this service. The audience is a
difficult one to reach, and the messages that need to be conveyed
are critically important—safety, self respect, safe sex,
alcohol, smoking, drugs etc. Furthermore, whilst targeting 13
to 19 year olds, we cannot ignore the fact that 10 to 12 year
olds aspire to this age group and emulate what they regard to
be their peer group. Therefore, it is important that the channel
does not alienate these age groups, as they too need to be prepared
for the challenges ahead.
In essence, this channel could be seen as providing
a public service. Our main concern, having developed such niche
channels, is that, if the format is seen as successful by the
terrestrial broadcasters, they will copy the concept and undermine
the integrity and value of the original work that we have undertaken.
Therefore, although we recognise the value of competition in the
market, we would question the validity of direct competition by
PSBs with other providers that could be deemed to be meeting public
service objectives.
Competition in the broadcast market over recent
years has affected all players, not just the terrestrial broadcasters.
With the increasing number of channels available, it is inevitable
that the guaranteed audience for PSB services will have been eroded.
However, we do not believe that the "burden" of PSB
obligations has had a significant impact on the market shares
of terrestrial broadcasters. We have seen services grow from 155
channels in 2001 to 243 by the beginning if 2004, much of which
has come from tele-shopping services, a growing number of pay-per-view
movie channels, religious and ethnic channels, factual, children's
and multiplexed or time shifted services.
Digital TV expansion will continue to increase
diversity and quality within the market but the terrestrial broadcasters
will still enjoy privileges in relation to the "must carry"
obligation and EPG positioning. Furthermore, their background
in British TV has enabled them to build strong brands that are
interwoven into the very fabric of television culture and they
have a fairly secure planning base from which they can launch
new digital services, cross promote and cross brand.
As a result, they have a head start on newer
channels that have to "punch above their weight" to
attract audiences and advertisers as they do not enjoy programming
budgets available to PSB services. Therefore, new channels need
to establish points of difference, and brands, to attract investment
and to grow programme budgets.
We recognise also that the BBC has played an
active role in driving digital switchover, and in innovating interactivity.
The investment into BBCi has enabled more innovative enhanced
programming to work across multi-platforms. This has afforded
consumers, who were perhaps web cautious, to undergo a shared
experience that they perhaps would not have been brave enough
to undertake without the kudos of the BBC brand guiding them.
However, this does raise the issue of how best to apportion the
licence fee income in the interests of public service.
In summary, we support the model of a BBC that
provides services for the "converged" world but we see
the need for a tighter remit and governance structure that would
provide a clear define of public service broadcasting and ways
to measure the extent to which the market is either meeting, or
likely to meet, the need at any point in time.
24 June 2004
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