Whatever people say the BBC's digital future is, that's what it's not

Last night saw the final episode of Top of the Pops (BBC), its forty-plus year run brought to an end out of a timely recognition on the part of the BBC that young music consumers simply don't need a scheduled TV broadcast of the week's top tunes when they have MySpace, Last.fm and iTunes. We have gone through a digital music revolution, and the BBC was well advised to stop pretending that its hit parade was telling the audience anything it didn't already know. (The show itself included a nod to the download-only success of Gnarls Barkley and Arctic Monkeys, a tacit admission that the gyre has widened and the power to break the music news has shifted decisively to the people formerly known as the audience.)

Yet what distinguishes Top of the Pops from the rest of the BBC's TV output? Little more than that its former audience was the digitally-native, early-adopter demographic who have already moved over to MySpace and on-demand music - the first but by no means the last demographic for whom broadcast has become an irrelevance. This is not an isolated and unusual shift in media consumption habits. This is merely the sharp end of a much bigger trend which the BBC's Creative Futures plan does little to address. 

We already know, of course, that the digital revolution isn't about people being able to consume content over different, smaller or faster devices. A revolution in music consumption has not been caused by the iPod qua iPod but by the habit it inculcates in users of regarding music not in terms of albums but tracks. The digital revolution is about unbundling packets of content from packages - about the power of consumers to buy two tracks from iTunes instead of a whole album from Tower Records, or to read one relevant article in an RSS feed instead of buying a whole magazine, or download one episode of Lost from the web rather than wait for it to reach Channel 4. The digital revolution is about the Long Tail and the Arctic Monkeys and Snowballs (Umair's big ppt) - the fragmentation of content into on-demand packets and the disintermediation of the bundlers. As Jay Small puts it,

"Must we live or die by the bundle? I think not. Unbundling and examining each value proposition for its new media potential would be the best way to manage both cost and revenue curves."

This weekend my friend Tim Harford, who writes amongst other things the FT's "Dear Economist" column, received the following question about the BBC's world cup coverage;

"During the World Cup, I was struck that everyone I know prefers the BBC’s football coverage to ITV’s, because the BBC carries no commercials. Yet ITV continues to win the rights to cover international matches. Assuming this is the majority view, is it a market failure that customers’ preferences are not coming first - and what can we do about it?"

His answer, which you would do well to read in full at his site, noted that "the market failure, in fact, is not the one you think. The real problem is that television broadcasting is imperfectly competitive. In an ideal world you would be able to choose between thousands of perfectly tailored packages of programmes, pay as you watched, and also be able to accept a discount in exchange for sitting through the advertisements."

Indeed. And what holds for Top of the Pops holds for the rest of the BBC's broadcast output. The BBC's ongoing broadcasting raison d'etre is to redress market failures (Times) in the creative media industries by producing or dissemnating content that the market would be unable to support directly. The Creative Futures reorganisation at the BBC simply skirts around the issues this raises.

In fact, the BBC's pursuit of a Creative Future is confusing two issues. The BBC exists to correct the failure of the TV broadcasting market as a market - the fact that due to the expense of broadcasting equipment and a limited number of spectrum licenses there is not an open market for the supply and demand of TV programming over the airwaves but a handful of providers for sixty million UK consumers. Given this lack of a real market its is useful, goes the argument for the BBC, to have someone offering the programming that the commercial broadcasters could not support.

The second strand to the argument for a BBC, however, is more paternalistic in nature. The corporation's own statement of purpose makes very plain the ways in which the BBC is intended use its forced subscription (the license fee) to redress perceived market failures - "sustaining citizenship and civil society; stimulting creativity and cultural excellence; promoting education and learning; reflecting the UK's nations, regions and communities; bringing the world to the UK and the UK to the world". This is a highly paternalistic view, a forced subscription model ultimately taking the position that irrespective of whether viewers want soaps, soft porn, sports and reality TV what they should have is current affairs, educational programming, worthy costume drama and highbrow cultural output. What "redress market failures" means, in this context, is distort the market in favour of output that promotes, for example, citizenship and civil society. It's a very worthy ambition, from a certain point of view. Distorting the market so that it artificially supplies consumers with programming in favour of citizenship and civil society is a debatably commendable way of creating social capital out what might otherwise "just" be entertainment.

However...in the context of the digital revolution, both of these ambitions look increasingly absurd. The limitations of the broadcast market, and its attendant failures, are not replicated in IPTV. Consumers with a broadband connection really can select from an almost limitless menu of programming, and the need for a benevolent public service that supplies those choices that would have been omitted by the market evaporates. Moreover, in the context of the quantity of choice facilitated by IPTV, the idea of paternalistically imposing worthier programming on the viewing public is nonsense. Limitation of airwaves has become abundance of bandwidth. More than ever, people can watch what they like when they like and trying to give them something "better" will fail.

The people running the BBC manifestly understand this contradiction at the heart of their new mission - Ashely Highfield said in an Independent interview earlier this year that his main professional ambition was to oversee the end of broadcasting as we know it. Last night saw the final episode of Top of the Pops, its forty-plus year run brought to an end out of a timely recognition that young music consumers simply don't need a scheduled broadcast of the week's top tunes when they have MySpace, Last.fm and iTunes.

It is by such moves that the BBC signals it knows that this thing we called broadcasting is finished. What holds good for Top of the Pops will hold good for everything else about the broadcast medium in a handful of years. Rather than waiting for it to die the BBC is helping broadcast on its way. Yet with this so evidently the case - what, in a digital future, is the justification for the BBC? There will soon be no imperfectly competitive broadcast market to redress. There will be no opportunity to serve up worthier programing to people who wouldn't watch it by choice because the digital market is so free that consumer decisions will be based upon pure populism. What, without those drivers, can a "digital BBC" possibly imagine it is for?