The BBC has retained its licence fee for the time being but it won’t for much longer unless it can persuade millennials to embrace it in the same way previous generations have.
Within the UK, the organisation has a culture of open access to its content, while being free of advertising. At the same time it demands a fee of £145.50-a-year from a public that, generation by generation, appears increasingly reluctant to pay for news, the BBC’s primary function.
Overseas, it’s under growing pressure to ﬁnd more commercial revenue to support its activities. This means chasing a digital advertising market dominated by Silicon Valley giants and increasingly fractured as young audiences reject traditional media for mobile platforms that vary enormously from one territory to another. So uncertain is this future, that the BBC admits it has started considering the once unimaginable prospect of putting its website behind some form of paywall outside of the UK.
That will be an extremely difficult decision, risking a marked decrease in global reach – particularly among the elusive millennial demographic.
James Montgomery, director of digital development for BBC News, acknowledges that millennials are what the BBC terms “an under-served audience”, along with low-income groups and women. “We recognise that our reach among younger cohorts of the population is less strong than it is for older ones.”
In attracting the attention of a generation that’s always on the lookout for the latest media platform, it’s not necessarily an advantage to be a brand that, in most parts of the world, is fondly regarded by their grandparents. Jim Egan, CEO of BBC Global News Ltd, which oversees BBC World News television and the BBC website outside of the UK, acknowledges that “we are sometimes seen as a bit of a legacy brand”.
Yet, for an organisation fast approaching its 100th birthday, the BBC is doing remarkably well in retaining the attention of millennial audiences domestically and overseas. Figures from the Global Web Index show that, internationally, the BBC reaches 53 per cent of affluent millennials (the most affluent quartile of 18-35s). That’s more than Twitter (39 per cent), the Hufﬁngton Post and BuzzFeed (both 17 per cent). In the US, it reaches 26 per cent of affluent millennials, more than BuzzFeed (24 per cent) and the New York Times (23 per cent).
Egan says trust and reputation matter to all generations, especially in online news. The BBC also has a long track record as a technological innovator, he points out. “It started as the British Broadcasting Company – a radio manufacturer – and then went from being in effect a technology startup in the 1920s into content production and through into black and white TV, into colour TV, Teletext, digital TV, BBC News online and so on…”
Breaking news on Snapchat and WhatsApp
Where once it was associated with the wireless, now the BBC communicates on chat apps. It reported the EU referendum on streaming services Snapchat Live Stories and Facebook Live. It talks to young Uzbeks on the encrypted Telegram platform, to young Russians through VKontakte, to Canadians on Yik Yak and to African audiences via WhatsApp. During Nepal’s earthquake it created BBC Nepali on the Viber app, and after Thailand’s military coup it set up BBC Thai as a pop-up service on Facebook (where the BBC has 30 million followers on its main page).
This is, remember, the organisation that gave us the pioneering streaming service iPlayer, the radio version of which will shortly land in the US, via iTunes.
Yet for all this willingness to embrace new platforms, and for all the impressive statistics around current monthly reach, the BBC still faces an immense challenge to develop deep and lasting engagement with an audience that is notoriously fickle. The BBC’s past honours in technological innovation are less impressive to those who never experienced them, and in many African and Asian countries the median age is in the early 20s. Egan admits young people are not likely to give the BBC “any credit for Ceefax”.
Montgomery recognises that it is on the mobile phone that the battle for young minds is likely to be won or lost. “We know that for millennial audiences the smartphone is probably their primary – and in some cases their only – source of news,” he says. Peak use of BBC News on mobile is between 7-8am and 9-10pm, very different from the 12-2pm peak on a PC, and content needs to meet the demand and the demographic.
The BBC is about to launch in beta a new service, Newstream, geared to optimising news for mobile. Its showcase feature within the BBC News App will be Ten to Watch, which Montgomery describes as “an on-demand bulletin of ten videos made in a vertical format designed for ease of consumption on a smartphone”.
But a problem for Egan, who is running a commercial operation outside the UK, is that mobile advertising rates “are lower than elsewhere” in media. Digital advertising already contributes more income to the BBC than television advertising – but it’s hard to compete with Facebook and Google, which hoover up two-thirds of the important US digital ad market.
He says that engagement of the affluent millennials sought by the BBC’s advertisers – typically tourism authorities, hotel chains, financial services companies and luxury brands – is “essential to our commercial future”.
BBC Global News may have just enjoyed its “best ever” financial year but Egan says: “I don’t want to give the slightest impression from that that it’s easy going. It’s very, very hard out there for the BBC and I think for our British peers.” With the rise of ad-blocking and other factors undermining confidence in digital advertising, questions are being raised about future media funding models.
Egan was impressed by the recent “very eloquent” comments from the former BBC director general Mark Thompson, now CEO of the New York Times Company, arguing that advertising revenue was insufficient on its own.
A BBC paywall?
So would the BBC – which has a newsroom of 5,000 journalists to support – ever put some form of paywall around bbc.com? “We like everyone else are starting to think what the options might be for the BBC, moving beyond advertising,” Egan says. He stresses that he is not implying that the organisation is “about to put a paywall up”, only that “I think everyone now is thinking about this. If anyone is not thinking about it, they are probably not doing their job.”
Even if more news organisations do attempt to charge for content, the BBC’s position is more complex. Egan says a fee for its website in the UK is “completely beyond the question”, especially so soon after the Charter debate reinforced the importance of it being free to access. But even overseas – where some audiences pay for BBC TV content – there are problems with charging for online news. The BBC is a much smaller player in these markets, and users have many alternatives. “In the end what is on offer at BBC.com is generalist type content – we are not a specialist provider in the way the Economist and Financial Times are, who have had a really very successful paid-for digital strategy. So we would need to weigh up the reach impact very carefully of any paid-for, behind any sort of wall, model.”
BBC director general Tony Hall has set a global audience target of 500 million by the BBC’s centenary in 2022 (it currently reaches around 350 million). Any form of online charge would jeopardise this.
Egan’s remit is a “break-even business model” and BBC Global News has other revenue streams; wholesale subscriptions from pay-TV networks which carry BBC World News, distribution fees from airlines and cruise ships, and syndication deals with the likes of AOL and Spotify.
Connecting with the millennial demographic domestically is vital if the BBC is to maintain the universal public service justification for its licence fee model. A generation that largely shuns the TV set and is used to getting content for nothing must ultimately be persuaded to pay an annual toll.
Inside the UK the BBC currently engages millennials on a scale that most other news organisations dream of. BBC News on TV reaches 5.3 million young people (16-34s) a week, and BBC News Online reaches 3.9 million. Some of this will be down to family viewing of the evening news or the inevitable consequence of a vast news operation proliferating on social media, rather than young people actively seeking out the BBC brand.
BBC Three could hold the key
To deepen relationships with young audiences the BBC is looking to two key outlets: Newsbeat and BBC Three. Newsbeat’s two bulletins, at 12.45pm and 5.45pm, reach 1.9 million, 11 per cent of its total target demographic. Many stories are told, perhaps inevitably, through the prism of celebrity.
BBC Three, the youth-focused channel that went online-only in February, is not big on news. Its main news feature, the Daily Drop, is dominated by entertainment and sport. This year there are plans to experiment more in documentary, through exciting projects such as Unsolved, an imaginative multi-platform investigation into the disappearance, 20 years ago, of Isle of Wight teenager Damien Nettles. The approach resembles techniques seen in hit American podcast Serial and the Netﬂix real life crime format Making a Murderer.
For all this, the millennial generation – used to seeing themselves reflected in young entrepreneurs who shape their media worlds – there are not many youthful faces at the forefront of BBC News, unless you count grime rapper-turned-TV presenter Professor Green, or Stacey Dooley or the impressive Reggie Yates, who transitioned to documentaries from hosting the Radio 1 chart show.
The BBC has serious work to do if it’s to make the future case for the licence fee not just to this phone-clutching demographic but to their even more wired-up younger siblings, who may abandon traditional TV and radio altogether.
At least executives such as Montgomery seem aware of this. “In the long term,” he says, “we want a relationship with audiences through digital platforms which is as good as we’ve had through broadcast, where people listen to the Today programme religiously every morning for 40 years.”
The News Business column is published on The Drum each Thursday. Follow Ian Burrell on Twitter @iburrell