I’m not saying we told you so, but actually i am…….

“And it’s goodnight from the BBC.” Are we watching the end of traditional television broadcasting?

In January this year, Inverroy Crisis Management published a blog on the difficulties facing the BBC. The central point was that the BBC was continually losing market share to subscription services such as Netflix and Amazon, and that if they did not secure themselves a viable digital future, their problems would multiply.

It was therefore with great interest that I read Jim Waterson’s article in the Guardian, where he highlights that streaming services such as Netflix have been able to actually take advantage of the COVID-19 pandemic to outbid traditional British broadcasters for new shows.

Unsurprisingly, television audiences rose sharply during lockdown, creating a greater demand for new material. But at the same time, the near total shutdown of television production means that there is very little new material to go round. Add to this the reduction in both advertising revenue and license fee payments caused by the recession and the result is that organisations like the BBC and ITV have less money to bid for the (now very scarce) new material.

Demolition of the BBC Rehearsal Studios, Acton

ITV has already reported a substantial drop in ad revenue, while Channel 4 has been forced to cut its programme budget. Both channels had already been struggling with changing viewing habits. Even before the lockdown more than half of the UK’s households subscribed to a streaming service according to Ofcom, a number boosted further by the launch of Disney+, while the average age of a BBC One viewer is now 60+.

John McVay, head of the trade body Pact, which represents the UK’s independent television production companies, said the circumstances posed a significant challenge for traditional channels.

Independent/freelance producers who have high-quality, finished programmes will very likely sell to the highest bidder, and why would they not? Due to increased subscriptions the streaming services can now spend a lot more than traditional broadcasters on new material, which is exactly what they are doing, and again, why would they not?

This means that the subscription services are hoovering up any new TV shows that do exist by outbidding the traditional broadcasters, leaving the unpleasant prospect for the BBC/ITV etc of empty schedules or endless repeats in the years to come. Which means that even more people will probably go over to Netflix etc in future.

So what?

If an organisation struggles to stay relevant to its own market, it is ripe to be overtaken by energetic, fast-moving and disruptive rivals. Just look at Kodak or Thomas Cook. So a critical element of Business Continuity is to constantly scan the horizon, recognise what you see there for what it is and not what you would like it to be, and to adjust your business model accordingly. If you do that effectively, you may experience the best crisis of all, which is the one that you don’t have to go through.

McVay’s final comment may well prove remarkably prescient; “Unless we can get new, fresh content into the British schedules that is engaging and resonates with our experience of the world we’re living through, then I fear for our broadcasters.”