Giving his annual lecture on the state of British broadcasting to customers of satellite operator SES Neil said there as been no discernible effect on viewing, advertising or the profits of the mainstream broadcasters. “The average viewer watched almost four hours a day, but only three minutes of those four hours on mobile devices.”
Talking about the growth of OTT in the United States, Neil said on any given night Netflix represents one third of web traffic. “They remade House of Cards, which they’ve dined out on ever since.”
Netflix is aiming for 60 million subs, of which there are 44 million worldwide, and growing fast in UK and the Nordics.
Neil said the ability of people to binge view through services like Netflix – all 11 episodes of House of Cards were released at once – had given new opportunities for broadcasters. “The ability to download on demand has allowed TV to develop storytelling and depth of character that TV previously did not allow for. You’ve seen this in the UK where we now accept foreign language subtitled programming.
“I do wonder if we are coming to the end of the cable bundle, and we will look back on the days when operators bundled together a package of channels, and people would buy them even if they did not watch them.” Neil said that as viewers got more sophisticated, drawn in by services such as Netflix, the regulators might become more interested.
Neil questioned of BT would move into movies and entertainment as they had sport. “Sky has the movie deals tied up with the major Hollywood studios and has renewed early its output deal with HBO”. The six Hollywood deals, worth between £300 million and £400 million are up for renewal in 2017/2018.”
Neil said that ITV was hugely influenced by the success of ITV2, even with an audience share of just 2.5 per cent, it is the most popular channel after the Big Five. The commercial broadcaster is launching two new channels, Neil questioned where it would go without a major international play, but praised its relative success after several years in the doldrums.
According to Neil, everyone in the BBC knows that an increase in the licence fee will be a tough sell. The planned removal of BBC Three as a linear service indicates there will be no more salami slicing. “The decision to close BBC is a sign to the politicians that the BBC will play tough”.
Neil questioned how the BBC would be able to charge for the iPlayer, creating what he said was effectively a digital tax. “You could have a system where you put in your licence fee number to use the iPlayer, but the licence fee is per household, and you don’t know how many people there are in a household.”
An incoming Labour government might allow the BBC to maintain the licence fee at current levels, but no politician would be brave enough to allow an inflation busting increase.
The upcoming BBC Charter may be granted only for a few years. He said he did not believe that charging a subscription for BBC services would be accepted in this round.
Ultra High Definition
Neil had praise for the 4k format with availability of programming across genres and transmission tests largely successful. “The pictures jump off the screen and you don’t need glasses. 3D is dead in the water.” Like all early adopters people will have their friends round and they’ll say they want it too.
He said that broadcasters needed to make the move for fear of making audiences. “It’s HD squared. People feel rather cheated if they’re not watching something in HD”.