bbc.co.uk 2.0: Why it isn't happening and shouldn't happen

21 September 2007, 16:30

Bit of background: I've recently quit the BBC after 3 years in the New Media dept (now called Future Media & Technology), and now work for Google. This is all my personal point of view.

Due to the unique way the BBC is funded it is rapidly becoming obsolete in the brave new world of the friction-free innovation that Web 2.0 affords. They are hanging in there, and respect for doing so, but for how long will the corporations online efforts be able to continue to do so?

The BBC's royal charter allows the BBC to exist, and was granted in 1927. It's been revised and re-granted every 10 years and says that the BBC "public purposes" are as follows:

  1. sustaining citizenship and civil society;
  2. promoting education and learning;
  3. stimulating creativity and cultural excellence;
  4. representing the UK, its nations, regions and communities;
  5. bringing the UK to the world and the world to the UK;
  6. in promoting its other purposes, helping to deliver to the public the benefit of emerging communications technologies and services and, in addition, taking a leading role in the switchover to digital television.

All this is wrapped up in the BBC's "educate, inform and entertain" remit, and is delivered to an undeniable and probably unique quality - just look at Radio 4's Today programme, bbc.co.uk/news and the children's offerings. I think we can summarise the BBC's reason for existence and funding via the charter with these assumptions:

Whilst good TV and radio content still costs a lot of money to produce, distribution is now free or almost free. YouTube or the like, or P2P software replace expensive transmitter networks. Will we at some point see wholesale distribution of TV over IP? Probably, and radio to a lesser extent. Do new digital mediums need promoting anymore? Sky and Channel 4 are promoting HD and IP delivery of TV alright, and DAB is full of decent commercial stations now. Needless to say, its commercial interests that are driving innovation online. International influence is a doddle on the relatively borderless internet, and likewise longtails of small communities can be represented online to far greater extent than the charter envisages for the BBC's task.

The BBC's license fee funding is based on a broadcast model. The cost of producing and distributing the programme is fixed, and there is little or no variable costs that are acquired per user. A programme costs the same whether 10 or 10,000,000 people watch it. This 'push' broadcast model fits the BBC and its fairly fixed budget perfectly. Moving online we see a different model happening - a service here has both fixed and variable costs. First you need to develop the service in the first place (the fixed cost) then deliver it (the variable cost) - using servers and bandwidth, which have a cost-per-user. Whilst you can reduce the variable costs by driving the cost of each 'pull' transaction down by using cheap peering and the latest hardware and software - the cost is probably always going there (more on that later).

Commercial organisations (at least the good ones embracing the internet) find it easy to turn a profit from the variable costs of each user - it then just becomes a race to profitability by getting as many users as possible to cover your fixed costs.

One argument against this line of thought is that the tech will decrease in cost faster than the number of users will increase, therefore the BBC will just need to keep investing in new technology until the cost per user is so negligible it doesn't matter. Problem is that increasingly complex user expectations from online services mean that this will never happen. We're already seeing that the people using the technology the most efficiently (Google for example) are the most successful. The moment a new technique for decreasing the cost of these transactions (be it Moore's law, an equivalent such as Kryder's law, open source free software or a programming technique) a new cost comes along in the form of user expectation. Will this happen forever? Probably not, but we're a long way away from ubiquitous computing power and storage.

It's not just about computing juice though. Lets drag this blog post back to the BBC's problem with some examples. Flickr take my money, but it sure doesn't cost them $25 to serve my photos out for a year, which is probably the case for 99.9% of paying users. Posters to the BBC's 606 messageboard however did cost more in variable costs (technical and moderation costs) than the fixed cost that was allocated to the service. Dramatically so in fact, causing the site to have to be scaled back and restructured (much to the user's disgust) in order to stay alive. Upshot is that while a service like Flickr just needs to keep plugging away adding users to cover the cost of their employee's wages, the BBC has a substandard service and a load of pissed off licence fee payers.

This fixed vs variable income model brings about probably insurmountable cultural differences between successful internet businesses and the BBC as well. Auntie likes to have few, big, expensive, milestone projects to burn the cash in a predictable manner, whereas the more flexible internet industry takes a gamble on many small, inexpensive, iterative projects. "Please fail very quickly — so that you can try again" says Google's CEO Eric Schmidt. It's pretty much proven that a more agile, open and iterative approach produces services to a higher quality, and also to a release cycle length that the feature-clamouring user now rightly expects.

Moving away from the economic analysis of the situation facing the BBC, we can see the tide already turning. The BBC was an innovator in radio (2LO - in beta 1922, v1.0 when licenced in 1923) then TV (BBC Television Service - beta from 1929, v1.0 release 1946) but not now in the online age. Sky Anytime, 4OD, and ITV.com's video revamp have all launched before the BBC's iPlayer service (iMP beta 2005, iPlayer in beta, v1.0 not released at time of writing) showing commercial efforts in this field have trumped the BBC. One person working on the project called it "worse than boo.com". With the lead now lost, how can they pull it back?

Well, they have formed a Web 2.0 department to drive development of bbc.co.uk 2.0. This bizarre structure defeats the purpose of the sea-change they are trying to accomplish. Does Yahoo, Google, or any innovating startups have a Web 2.0 team? Of course not - the idea is ridiculous - they are Web 2.0.

Lets go through the some of the principals of Web 2.0 and the BBC...

All this seems very negative, and I suppose it is. The BBC is a big, easy target - but let me just point out the areas where I would defend the BBC. News and children's content is awesome, and with its non-commercial interest the BBC delivers the best services there are in these areas - even online. The problem I have is the BBC scrabbling to keep up in a trendy sub-sector of the industry where it's fundamental design makes it impossible to do so.

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Jason is a web developer living in London, working for Google and Ferrago Ltd.

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