Much has been happening at the Beeb of late; a direct result of shifting sands and disruptive influences in the sector. Most recently Michael Grade resigned from his post as Chairman and moved over to the Beebs principal competitor – ITV.
Such a move was not predicted, but the following email exchange between Prof Peter Kawalek and Prof Tudor Rickards (dated July 2006) suggests that change will be more like a close sister than a distant cousin.
(Both Tudor and Peter have given their permission to publish this blog entry).
Prof Peter Kawalek
…could be directly relevant to your thesis as a primary function of the show was to provide access to markets
This is a really important case and should be held up as yet more evidence that technology is shifting cultural and commercial changes in the sector. The former more so than the latter, perhaps, as I would argue that monies will still flow, just through different channels.
Culturally, if Grandstand and Top of the Pops were axed 10 years ago, maybe even 3, there would have been a public out cry. Instead, today, I expect the reaction to extend only to a public concern for the BBC. Many will ask about their future? What is their product? Will they survive etc? But, as we have noted, the Beeb are innovating at a rapid pace – on demand world cup, citizen cinema, blogging, real time news services, whilst maintaining superior quality services and output.
Perhaps Microsoft should take note of how the BBC is ruthlessly attacking its core business and allowing innovation to emerge from the basement (Christen stuff I guess?).
Perhaps a case comparison with the BBC and Microsoft might be interesting, Tudor? Certainly at the leadership level.
The access to markets angle is also critical.
Prof Tudor Rickards
I agree about the interest in the case. The context seems to be the dynamics of institutional change, with BBC and Microsoft as simplifying exemplars to study. Both organisations face the challenges of competitive change in mass markets. BBC increasingly sees threats/opportunities of a more global and multi-media positioning from an international one; Microsoft sees threats/opportunities from a global position, but still re-positioning in multi-media competition.
The culling of products is perhaps Schumpetarian creative destruction. But the leadership at the organisations differs in its power relationships internally and externally. Bill Gates has ‘founder and owner power’, the BBC leadership is more custodial, emerging in the first instance out of the interests inherent in the BBC charter, the establishment, government etc.
What’s going on? An external battle for survival through adaptation to circumstances; internally a battle for renewed identity (‘the vision thing’).
The deeper scholarly challenge: modelling such processes. For that, exploring our comfort zone within types of conceptual model.
The immediate steps: preparing to have a ‘line’ on what’s happening, and why, and what might happen and why’.
Fascinating analysis, Tudor. You’ll have to point me to some resources on Schumpetarian creative destruction.
As you noted, who would have once thought that the BBC and Microsoft would be measured in the same sentence? The convergence, or battle even, between tech companies and media organisations has to be one of the most captivating subject matters in the business world today. Nokia, Motorola, Apple, Nintendo, Disney, EMI, Sony Music Entertainment are all cementing a position in the media/ tech network, either through partnerships, mergers, or associations. I must read more on the merger of AOL and Warner Bros, but I believe this is far from a match made in heaven.
Still, with the BBC I have recently suggested that Mark Thompson, the Director General, may well be crafting this established institution into a commercial entity. I think there is a growing sense amongst the license payer that says ‘Why should I, in the UK, have to pay a fee when those across the world can all access BBC news, programming, and media for free?? I could be wrong, as there are potentially clever technologies that would deliver a richer experience to the license payer, but the model attached (The BBC’s new media design) would suggest a simple step from license fee payment to that of downloads payments. Pounds, Dollars, and Yen can, and would freely flow through that system.
So, the BBC developing itself into a commercial entity, maybe? Whereas, Microsoft is suffering because its market is now more often than not defined by the term free. Google ? free, Skype ? free, Blogging ? free etc. Michael Scharge in the FT, 2006, put this forward in an article titled ‘The Best Things in Life are Free’.
I should also mention the MSc ISOM students. They presented some outstanding work from a question I recently set (refer to documents attached). Fundamentally, the students observed that many of the CEO’s across tech and media companies reflect a background in that very field. We might expect this, but in winning the convergence race we find that each are sticking to that very position and focussing on their core competence. Companies, like Apple, believe that software is key to success, whereas MTV places its belief in media. MTV propose that no matter the technology we will always need organisations to develop quality content and organise the abundance of information and media out there in the world today.
I’d propose that the MSc analysis should be woven into to the material offered for public consumption. In fact, I was thinking of sending the work to Judy McGrath’s office in New York? I probably should, as MTV is an organisation whose success can be attributed to the views and opinions of youth.
Prof Tudor Rickards
You raised several very interesting points. I would like to take one, and ‘play around with it’ a bit. Suppose the new BBC model captures the Beeb’s current thinking. What if we then take the challenge of the licence payers ‘why should we pay’.
Now how about a model that takes the current licence-fee arrangement but treats each licensee as a stakeholder/special shareholder in the new eBBC? One licence gives access and some stake holding. There can be various subtleties around the main ‘cunning plan’. Advantages: addresses the ‘what’s in it for us’ question in a nice way.
Encourages participative ownership, and more future inputs from viewers as stakeholders. Maybe there could be global licence holders. We could work up the model to extend the BBC functional / production oriented one.
‘How’s about that then?’
Brilliant. I’ll sleep on this one, but turning a potential strategy on its head opens up numerous talking points.
I think the new model begins to think about new modes of participation and democracy… a big question for government. It also points to your idea, Tudor, about the influence of an individual in the group. In this case, a group of stakeholders.
I’ll keep thinking.
Prof Peter Kawalek
Like a ‘mutual?’
Might be something in this …. in the Capitalist, Murdoch-ist, State-ist, Terrorist, Monopolist, Berlusconi-ist, conflicted, debated, confused, multimedia, multi-mirrored world …..
A broadcasting company that is as truthful as its members.
Made in Manchester? The first broadcasting mutual.
Prof Tudor Rickards
Latest rumblings re BBC:
BBC pay awards drew some press attention. Director-General Mark Thompson saw his pay packet rise by £59,000 to £619,000. The additional ingredients in the story are the decline in performance criteria of the BBC, (loss of half a million TV viewers to rivals, and media switching); plans for an estimated 4000 redundancies (estimates varied in news reports) and a pay-offer vigorously contested by the Unions.
According to the Guardian newspaper:
“The broadcasting union Bectu complained the rises were “extremely arrogant” when staff had been made redundant, the final salary pension scheme had been closed to new staff and a below-inflation pay deal of 2.6% had been offered. Union leaders will meet on Monday but said it was “extremely likely” that a ballot for strike action would follow, with possible action in August. Last year, Mr Thompson came to an agreement with the unions following a one-day strike and extensive negotiations designed to reduce the number of compulsory redundancies to no more than a handful”.
Prof Peter Kawalek
Yes, its a brilliant story to watch unfold.
I cannot convince myself that I understand how Thompson is playing this. Not yet anyway. But I have a bit of a hunch that the new technology/youth combination will end the BBC’s days as a leader, or even serious player, in entertainment. And that the same technology/youth combination will actually further elevate its value as a news/opinion provider. We might also see it rising rapidly as an education brand (or should I say, continue to rise rapidly as an education brand).
From The Guardian article:
“The governor’s review of BBC services, although broadly positive, warned that it risked losing touch with a whole generation of TV viewers. BBC1 had lost a million viewers overall during the year and the rate of flight was even faster among those who have grown up with multichannel television and the internet.”
Prof Tudor Rickards
Latest BBC watch report:
BBC Leaders in action: The 21st Century Knowledge Business
“BBC continues its actions signalling its commitment to a ‘more creative future’. DG announces changes: ‘Today is about making creative culture a reality. It’s about how we can make the BBC the most creative organisation in the world, delivering content that our audiences will simply love…”We need a simpler, more open BBC with the licence-fee flowing down simple, direct lines to the right people, a simpler structure, clearer responsibilities and fewer layers’. The marketing, communications and audiences division will be led by Tim Davie; The future media and technology division by Ashley Highfield; Jenny Abramsky, becomes director of radio, which will deliver audio content for all platforms from on-demand in the home to podcasts and mobile phones; The factual, drama, entertainment, learning and children’s department will come together in a new group, BBC Vision, led by director of television Jana Bennett”.
The structure still suggests the difficulties of achieving the DG’s explicit restructuring goals. It’s hard to see how the new structure (or any other structure I can think of) will lead to ‘a simpler, more open BBC with the licence-fee flowing down simple, direct lines to the right people, a simpler structure, clearer responsibilities and fewer layers’. The simplest structures have turned out to be unresponsive to change; the more responsive ones complex and less-than-clear responsibilities vested in individuals, and more in teams of various kinds.