Tessa Jowell's Speech to the Royal Television Society - "The TV Networks Strike Back” Conference
“The Politics & Economics of Digital” - Rt. Hon. Tessa Jowell MP, Secretary of State for Culture, Media & Sport
Introduction
1. Good morning. Before I begin, I’d like to take this opportunity to thank Charles for his hugely important contribution to British broadcasting.
2. In his McTaggart lecture, Charles spoke of seismic and accelerating changes that are sending tremors through television. At the epicentre lie the “three Cs” of digital convergence, user control and creation.
3. The media is an industry unlike any other. It is a major economic player; worth well over £10 billion a year to the economy. And it also lies at the heart of our social lives and is vital to the health of democracy. Programmes like Coronation Street or Dr. Who are part of the fabric of British life. The quality of our news and press reflect and influence the health of the body politic.
4. The challenge I’d like to talk about this morning is how to seize the democratic and economic potential of what the Director General of the CBI Richard Lambert calls “the third industrial revolution”.
5. I want to explore how this revolution is shaking the kaleidoscope of not only our media, but also our social and political landscape. I will argue that Government still has a clear and fundamental role in this maelstrom of change. To ensure that the regulatory framework is appropriate and light touch, to provide the media literacy tools to ensure adults and children alike can navigate safely in this shifting environment, and to enable a debate about the principles that should guide our policy-making in the future.
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The economics of digital
6. Computers, the internet and mobile phones are reshaping our lives in a profound way. Asking “Where next?” is a tough challenge.
7. On the one hand, people are still watch 8 times as much television as they spend online. TV viewers are watching for 11 minutes longer a week than they did in 2001. But on the other, digital technologies are reshaping the medium. Content responds to context.
8. Digital technology is embedding itself in our lives. In 1996 almost no one in the UK had ever sent a text message. In 2005, approximately 35 billion texts were sent. This Spring, Gnarls Barkley were the first band to reach Number 1 based on download sales alone.
9. There’s a generation who’ve never known a time when you have to be in to receive a call or couldn’t get online. Young people watch less public service broadcasting, make more mobile calls, send more texts and spend more time on the net. For many, Bebo and MySpace are their Youth Centres – at least 70% use websites to keep up with friends.
10. This is reshaping both the economics that have supported content production in the past and content itself.
11. Not only are hundreds more channels vying for our attention, but also, as vast libraries of content become available, programmes from the last fifty years suddenly come head to head.
12. The Bill up against Dixon of Dock Green.
13. The market is becoming defined by time - who owns the rights and when - rather than space - the platform of distribution. Companies must concentrate on where they have a competitive advantage.
14. At the same time globalisation continues apace.
15. China, as I found out on my visit there last week, is a fascinating example. While there’s apprehension about the threat that China represents to our creative industries, these business make up less than 1% of China’s GDP.
16. China may be producing four times as many graduates as a decade ago, but it is eager to learn from, and enter into partnerships with, UK companies.
17. The global economy is changing rapidly, but too often this is presented as a Manichean debate. These dramatic changes throw up challenges and opportunities, not simply threats and concerns.
18. The challenge for Government is to ensure that digital technologies help unleash people’s creativity, support innovation and enable British industry to continue to be the motor of prosperity, here and in the wider world.
19. And as I said, the media industry is unlike any other. It is at once a driver of economic growth and sits at the heart of the cultural and democratic life of the nation.
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The politics of digital
20. Thinking back to the early days of satellite distribution and the internet, it was thought by some that Government was going to be nothing more than a bystander on the information superhighway.
21. But Governments still can and do shape networks. Our decision to move to switchover combined with your ingenuity and creativity has given the UK the world’s leading digital television market.
22. In the United States there’s a vociferous debate on the future architecture of the internet, known as net neutrality. Thunder that’s growing louder here too. The Nordic nations are considering suing Apple for what they see as overly-restrictive Digital Rights Management.
23. As the media landscape changes, Government must constantly be ready to respond or we risk stifling creativity, hindering innovation and holding back prosperity.
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Principles for the future
24. But while how and where Government intervenes in the future will change, I think there are four long-standing principles that should guide us.
25. Firstly, our commitment to appropriate universal access. We know that markets and democracies work best when information and the means to share it are in the hands of the many and not the few.
26. That’s why from the advent of the postal service to telephones and broadcasting we’ve supported the principle of access to the essential tools of communication. And we hold firm to that principle today: Digital Switchover has the potential to help address the digital divide.
27. The second is our commitment to dynamic competitive markets. Households are benefiting from lower prices and increased innovation as a result of competition. In a global economy the temptation will be to erect barriers to competition and support national champions. The lessons of the past demonstrate that this kind of short-term protectionism leads to long-term decline.
28. Third is the ongoing public interest in the range and quality of content. Time and time again, people have told us of the enormous value they place on high quality content – whether it be drama, independent and impartial news, or local services.
29. When I visited China recently, I urged the Chinese Government to let the media have unfettered access during the Beijing Olympics. They agreed to this because they recognise that the success the 2008 Olympics will rest so heavily on how much access the media are given.
30. Finally, Government must protect the weak and the vulnerable. While the extent of current broadcasting regulation is probably neither feasible nor desirable in a broadband environment, protection from harm remains essential.
31. Consumers rightly expect certain standards from radio and television. In the online world, the controls are much more in the hands of the user. So we need to find ways of helping people manage the transition and enable them to control what they, or their children, see.
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Challenges and opportunities
32. As we look to the future the potential pitfalls are well known.
33. That, economically, we drag our feet and fail to capitalise on our historic strengths in the creative industries.
34. That, socially, we end up with a society divided between the digital have’s and the have not’s. In 2003, only 12% of the lowest income groups had the internet at home compared to 86% of households in the highest.
35. That, politically, we end up with citizens increasingly turned off democracy. Non-voters disconnected from the political process and its personnel – journalists and politicians alike.
36. But there’s also breathtaking opportunity.
37. New markets for our creative industries. Within the next fifteen, there could be 200 million people in the Chinese and Indian economies with incomes over 15,000 dollars a year. By 2020 UK household income is projected to increase by almost two-thirds.
38. Digital technologies have the potential to reconnect citizens with one another and with Government. Websites like Pledgebank and the North King’s Cross blog are helping reconnect citizens with the democratic process.
39. Digital technologies are unleashing creativity. Last month Grayson Perry described the internet as art’s final frontier.
Looking to the future
40. Looking to the future there are clear challenges for the industry and Government. And I’d like to conclude with some ideas on where we might focus the debate.
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Skills & innovation
41. The Leitch review identified the need for 5 million more highly skilled workers by 2020. Supporting competition and boosting productivity, require investment in the skills and creativity of the workforce.
42. And that means investing in everyone’s skills – creativity doesn’t belong to any single group in society. New findings from my Department show it’s difficult for young people from less well-off backgrounds to break into the creative industries. If we’re going to get the best Britain can offer we all need to tackle this.
43. You have to be able to bring creative ideas to the market. So valuable ideas must receive adequate protection. The challenge here is what I call “the Goldilocks problem”. We need to get the length and breadth of IP protection right - not too much, not too little, but just right.
44. One problem found by our research is that many small businesses don’t understand their rights. Getting the best out of the UK’s strengths in independent production on the world stage will mean ensuring everyone can capitalise on their creativity.
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Protection from harm
45. The old walls between different media and regulatory environments are, if not tumbling down, then at least becoming porous. As choice increases and people receive services in new ways, the responsibility for choosing what to watch will move from regulators toward individuals, and will be a particular challenge for parents.
46. So we need to empower people to make informed choices about what they see, read and listen to. That’s why we’ve asked Ofcom to promote media literacy.
47. Because media literacy – the ability to create, critique and communicate using the media – will be increasingly important in the future.
48. Government will continue to have a duty to protect the weak and the vulnerable. We all – Government and industry alike – have a responsibility to ensure that everyone comes with us on this tidal wave of expansion and innovation – and that includes the elderly, the isolated, the less well-off.
49. So we must manage this transition with care. That doesn’t mean imposing old-fashioned regulation on dynamic new media. We need to be clever and go with the grain, not against it.
50. That means light touch regulation that won’t chill the development of new media services that are going to be so important in making the EU the world’s most dynamic knowledge economy.
51. That’s why we’ve said that we think it is a mistake to include non-linear services in the new Television Without Frontiers Directive. But if any of them must be included, they have to be restricted to video-on-demand.
52. A service that’s currently understood and clearly defined, – and already self-regulated in the UK through ATVOD - so that it’s clear new information services are not covered. And promote self-regulation for the on-demand world.
53. One way of meeting consumer expectations might be to have “opt-in” regulation. We know that the number one thing people look for in a company when choosing what to buy is honesty. A trusted kitemark for new services could have real value both for businesses, enabling providers to build trusted brands online, and in empowering consumers.
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From PSB to PSC
54. Our great public service broadcasters will need to adapt to these changing circumstances. I believe that the public’s desire for high quality, original content that serves a variety of tastes and is free at the point of use will remain, if not grow.
55. But the world is changing.
56. Public service broadcasting is becoming public service communications. That means serving citizens and consumers in new ways and acting as trusted guides to new horizons. And, as I’ve made clear before, Channel Four will continue to have a vital role in the future and ITV and FIVE are also still making strong contributions.
57. But there are challenges and opportunities ahead.
58. The UK production sector provides the public with one of the highest levels of domestically produced original content in the world (£2.6 billion a year). We need to take this rich tradition forward and make sure public service content is available to the networked generation. But it will take new forms and may well be produced from an increasing range of sources.
59. I know you’ve already discussed how the new economics of digital distribution are transforming the traditional economics that support production. Those changes are impacting on the public service funding model.
60. This means asking ourselves, in the longer term, what will public service content in the digital world look like? In a world of greater choice, and lower barriers to entry, how much will the market provide of its own accord? What’s the future role for other organisations beyond the BBC? And what other forms of intervention might be necessary?
61. It means asking tough questions about the extent of universal access. In the past content has been available free-at-the-point of use while hardware hasn’t. But as the distinction between devices breaks down and they become more embedded in our lives these questions may perhaps become harder to answer in the future.
62. The fact is Britain’s public service ecology has never been set in stone. It’s evolved to meet new needs and exploit new technology. So we need to keep the scale, scope and means of intervention under review.
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BBC Willingness-to-Pay
63. My argument this morning has been that the media industry lies at the nexus of our social, economic and democratic lives. In Britain the media has been shaped by our tradition of public service broadcasting. And at its heart has been the BBC.
64. The BBC is different. By virtue of its funding, its remit and its responsibilities. That’s why we put the public at the heart of the Charter review process. Practicing, not just preaching, public value.
65. That’s also why we commissioned the Work Foundation to conduct research into the public’s view of the licence fee. They asked seven thousand people how much they were willing to pay for the BBC and new services.
66. They asked people how much they’d pay both as an individual consumer, and because the BBC is a public service, like the NHS, how much they’d pay based on the BBC’s wider value to society.
67. People agreed that the BBC is a public service. And new services like very local news and learning opportunities for 14- to 18-year-olds were seen to have a value for society at large beyond that for individual consumers. And the public are willing to pay for them.
68. But the research also revealed that the public won’t hand over a blank cheque. Digital Do-it-All simply isn’t on the agenda.
69. People want more of a say in the future of the BBC. They want more choice over what they pay. They want more control over what services they receive.
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Politics on digital
70. That desire for choice and control isn’t just limited to the BBC. Later today you’ll be discussing the public’s desire to interact with and shape content around what they want. Digital technologies are helping to combine creative products and creative services, resulting in a better experience for consumers.
71. This morning I’ve argued that the government shapes the media and, of course, the media also influences the political. I think your experience also has important lessons for the future of politics and public services.
72. The paradox of digital in civic life is that it can at once connect and divide.
73. We need to do more to tap into the public’s increasing desire to interact and shape the world around them. This is why digital technologies have the potential to reinvigorate democracy.
74. The public want engagement that goes deeper than the ballot box.
75. Websites like “They Work For You” that links people to their elected representatives are helping to bring people back into civic life. These kinds of innovations bring people back into the debate giving them a real sense of ownership and control. Creating public value.
76. So my challenge to you is to help shape the debate about what more we can do to help the public interact with one another and with their representatives. What more we can do to open up Government. And what we can do to help people feed into the decisions that affect their lives and local area.
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Conclusion
77. This third industrial revolution presents us with an incredible opportunity. An opportunity to tap into the creativity of the public, to help you all continue to be an engine of Britain’s creative economy, and to reinvigorate our democratic life.
78. The challenge for Government is how to ensure that regulation is as light touch as possible, leaving you free to create and innovate, while ensuring that the needs of citizens are met.
79. All too often these interests are painted as poles apart when nothing could be further from the truth. Some might say we should step back and leave this to the market. But as I’ve set out today politics, economics and the media exercise an unyielding influence on one another.
80. Just as the development of mass literacy in the nineteenth century led to an explosion in book production and economic progress, media literate citizens will be curious consumers ready to embrace new technology in the twenty-first.
81. What is clear is that the value of the potential market for our cultural products worldwide is growing more rapidly, and the technologies for exploiting that growth are changing more fundamentally, than ever before in the history of electronic media. We must grasp this opportunity.
82. Thank you.
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