EBU Director General Ingrid Deltenre delivered a keynote speech to the annual Public Broadcasters International (PBI) Conference in Munich on 10 September. She told delegates that innovation and cooperation as well as involving young audiences and demonstrating PSM's value were key to its continued success.
Dear Colleagues and PBI Delegates,
I am very flattered to have this opportunity to give you some insight into the major developments currently shaping our industry.
And if I may, I will also use this moment to share some ideas with you, the renowned media experts in this room, on how best to embrace the changes we all face.
But before that, I would like to convey a message to you.
Back home, many of you are facing increasing pressure and criticism.
You are forced to fight for adequate funding, for the scope of your remit and for political independence.
My point to you is: Do NOT allow yourselves to be pushed into a corner.
Public service media are and will always be the most trustworthy media in true democracies. They have the cleanest reputations and the highest credibility.
Never forget this truth, because it means you can take part in the political conversation, modestly yet with confidence.
Now that I've made my point, I would like to talk about four pillars that are critical to the success of PSM: cooperation, innovation, involvement, and demonstration.
I have chosen these topics based on some of the concerns we all share because we are living in a deeply connected society and we are all affected by the impact of the digital economy.
We'll first look at some facts and figures and then explore some of the developments in various countries.
We're living in a golden age of radio and television. There is more, and better quality, radio and TV content than ever before. And as consumers, we have so much more choice about how to enjoy it all, since it is available to us whenever and wherever.
This is what it means to live in a connected society:
3.2 billion people use the internet. In Europe it is almost 80% of the population. According to Cisco, internet traffic has increased fivefold over the last five years and will continue to increase in the years to come.
66% of internet traffic is for video distribution. By 2018 the share of video might increase to almost 80%.
Social media plays a huge role in driving this demand. One in seven people worldwide are active Facebook users (1.44 billion). One billion people are using it daily. 70% are doing so via a mobile device and access Facebook more than 5 times a day.
About 80% of journalists are using Facebook and Twitter for research, fact checking, and promoting or disseminating their information. Thanks to these platforms, viewers and listeners have become a much stronger part of the conversation with us.
It has never been easier to connect, let me give you a couple of examples.
YouTube and Google operate by far the biggest search engines. Their search rankings have a significant impact on consumer choices, mainly because users trust and choose higher-ranked results over lower-ranked results. Researchers have found evidence that search rankings can shift voting and buying preferences.
Normally the more popular a service or information is, the higher up it shows. Algorithms are crucial. But activists are looking for other ways to influence the search result. For example, by Google bombing. Have you heard about ISIS-chan. By flooding the web with images of the peaceful ISIS-chan and her smiley melon, the collective of Japanese activists who created her are trying to push violent pictures of the global terror group off the internet. When you google ISIS, the first thing you should find should be a cute little anime girl.
But YouTube also has the power to create new stars, who have no exposure on traditional broadcast media. I'm sure many of you have heard of Michelle Phan and her make-up tutorial channel. Her site has more than 350 uploaded videos, 7.9 million subscribers and 1.1 billion lifetime views. She has her own L'Oréal line and lifestyle media network, has just published a book ad is teaching more people how to paint their faces than anyone else in this world.
YouTube content doesn't just entertain – it also inspires. It's a great platform to learn from and share. Two gold medallists at the Beijing Olympics, javelin thrower Julius Yego, and 400 metre runner Nicholas Bett, both grew up in Kenya with extremely limited training facilities. But it was YouTube videos that enabled them to hone their techniques and become champions.
The digital economy is disruptive. The market capitalization of Netflix has just overtaken the market capitalization of CBS, which operates the largest TV broadcast network in the USA.
We're all impressed by the deep pockets of Netflix, but also of HBO and other US networks, which sometimes invest up to 10 million dollars per episode to make a global hit series. I'm not aware of any broadcaster or producer in Europe that does or could invest such vast amounts to provide similar production value.
We're also impressed by the quality of Netflix's user interface, the speed of its expansion into new markets, its programme offer and the very positive reaction of customers. It's currently building its market share in just a few months, where pay-tv operators once needed years to achieve the same position.
And all this is because we are living in a connected society. Technology has profoundly changed the way we interact, use and share content.
10% of the cars sold today are connected. According to the auto industry, in two to three years' time all new cars will be connected to the internet. And hopefully, sooner or later, they'll be self-driving most of the time too – it's a nice idea, anyway.
Google Maps today provides the best navigation tool around, including the best traffic information services. It outperforms every national traffic information system I am aware of.
The technology in cars will have an impact on how and when we listen to the radio while commuting.
Connected people, homes, cars, businesses, industries. Connected communities but also connected terrorism. The internet of things. Everything is connected. And this is why we share a whole set of common connected concerns and challenges.
Firstly - the Network
As the internet develops it also diverges. We still have an open internet, but more and more specialized, managed networks are emerging, with varying levels of freedom, transparency, security and controls.
As broadcasters, we are obsessed with providing access to our content on all platforms. When it comes to online content, we are spending on average 14% of our total distribution costs for 2% of the viewed content. The demand for streaming and VoD is increasing. It will most probably double within the next three years. How do we deal with the ever increasing distribution costs, including the related complexity of delivering to all platforms and devices?
Also worrying is the behaviour of major internet providers. Liberty Global has approached the Dutch Broadcaster NPO and said that it is no longer willing to distribute its video over the internet, unless NPO pays for it.
A similar discussion took place between Netflix and Comcast, which triggered the debate about net neutrality. In this context it is no surprise that Google is testing the launch of a new low orbit satellite constellation to reduce its dependency on networks.
How do we ensure that the internet remains open, reliable and accessible at an affordable cost for all of us?
Data security and privacy is another major challenge.
We all know, how important user-generated data is for every service provider, including the media. Some say that data is the new oil of the economy. For some industries, including ours, this might really be true. How do we manage this data so we can take informed decisions and improve our services?
How do we ensure that we have access to the data generated by our customers? How do we ensure that the privacy of our audience is maintained and the data protected? How do we make sure that the data is deleted if the customer wants us to do this? What is our data policy? Do we share a data policy?
Being connected as we are today, we are more vulnerable than ever. The hacking of Sony revealed some embarrassing but probably pretty honest emails. Initially we thought that the cyberattack on TV5 Monde was the result of sloppily protecting passwords - something many of us still need to work on, and I'm as guilty as anyone!
But in the end it was clear that TV5 Monde was the victim of an extremely sophisticated cyberattack with incredible consequences. Not just that the hackers took control of channels, but the organization lost its backup system, because that was attacked as well. TV5 Monde is now spending 10% of its annual turnover on replacing equipment.
Honestly, the more you know about it, the scarier it is. And why did the hackers choose TV 5 Monde? Was this just a test for something bigger?
How do we protect our own operations?
Another major challenge is Talent & Content.
Technology has a broader indirect impact on our content. Our partners, the satellite, cable and telecom operators, are in a battle to own the home. For the time being, the most effective value proposition to distinguish their offer is content.
Owning content is crucial, especially now there are so many ways of distributing and selling it. That is why they buy not only channels (pay-TV and free-to-air) but also production companies that come with copyright libraries and in-situ talent. The most recent examples are the acquisitions made by UPC Liberty Global in the Benelux region and in the UK. In Belgium they acquired the strongest cable operator, the most relevant commercial channels but also the highly successful production company Woesteijnvis. In the UK they bought All3Media and increased their shares in ITV. Just to give you some examples.
Our national competitors are increasingly part of an international network, owning the most relevant production companies as well. How do we ensure that the best talent will continue to produce great programmes for us?
Some of the new players that most of you had probably never heard of until two years ago are investing in news as well. Altice, owned by Patrick Drahi, is buying flagging telecom and cable operators in various countries. The group emerged on the radar after its IPO in January 2014, which generated USD 1.8 billion. Since then, the company has continued to invest in many countries. In France the scale of its expansion is staggering. It bought the largest cable operator (Numericable), a telecom operator (SFR), and a mobile operator (Virgin Mobile France). It has acquired the daily newspaper Libération, the weekly L'Express with a dozen other magazines as well as the largest independent radio and TV network that operates RMC and the news channel BFM. The aim of Altice is to develop the most integrated, trusted and most popular news platform in France. I assume that they are also looking to what Jeff Bezos and the Washington Post are currently up to.
We all know that it is not about more news, but about better news and journalism. How do we make sure that we continue to provide high quality information, adding context and sometimes helping to find solutions with the limited resources we have?
The latest decision by the IOC regarding the Olympic Games is quite an eye-opener as well. For the first time in broadcasting history, PSM in Europe are no longer the preferred partner for the IOC. Discovery, strongly encouraged by its main shareholder John Malone, who is also the main shareholder of Liberty Global, has acquired the rights for Europe. PSM will become sub-licensing partners of Discovery/Eurosport. Most probably 50% of the sports coverage of the Olympic Games will disappear behind pay walls in many countries.
For the time being most other triple-A sports federations are still following a free-to-air strategy. If this changes, the impact will be dramatic for us. Without live coverage of popular sports we will lose relevance, market share and we might be forced to close down some of the channels we operate today.
How do we ensure that we are still able to acquire the most attractive sports properties in the future?
So what is my CONCLUSION?
Our industry is shaped by technology, the changing and emerging needs of society, and by global players. Many new players are emerging, providing not only high-quality content but promoting their services and making them accessible in new, more attractive ways.
But there is nevertheless good news. Despite these major changes and the ever-increasing offers from the new kids on the block, the traditional usage of radio and television is remaining remarkably resilient. Our audiences continue to listen to live radio and watch live TV. They continue to read newspapers both on paper and on line.
Younger audiences might be listening to more music and watching more movies and TV series than ever before but importantly they are also still listening to radio and watching TV. New on-demand services provided by Spotify, Netflix and others now seem to be complementing live programming but not replacing it completely as many have predicted.
This is because we too have learned and have adapted to the new media ecosystem as far and as well as our specific media regulations have allowed us to.
We have invested in quality and in the diversity of our programmes. We connect entertainment programmes with culture, we connect information with sport. We connect people at home with the outside world.
We have made our content available on all platforms. We don't underestimate the disruptive forces and we will continue to adapt our services. When radio was invented, we quickly understood that it was more than just reading the newspaper in front of a microphone. When TV was invented it meant more than just operating a camera in a radio studio, and now where we understand the internet better, we know that it is more than just a distribution channel - linear and on demand - for our radio and TV programmes.
But when a game-changing development takes place, even the most successful industry players may be hit hard, if they just rest on their laurels. And this goes for PSM as well. We should never take our success for granted. And the challenges we are facing are increasing, not at least because of the globalization of our industry.
All the examples and developments I have shared with you in the last few of minutes have something in common. They have the potential to be disruptive for all of us, they cannot be solved at a national level alone, and that's why we cannot overcome these challenges alone. Let me finish up with four recommendations.
The first: Cooperate
Break down the silos in your company, for example between radio, TV and online. Open up your organization to more cooperation at a national and international level. Open up!
Just to give you one example: In Switzerland SRG, the national PSM, Swisscom, by far the largest national telecom operator, and Ringier, for many years the biggest newspaper publisher, have announced a joint venture to acquire advertising for newspapers, online platforms and radio and TV programmes all together. This is ground-breaking and triggers enormous debates of course. But it is – in my opinion – the appropriate reaction at a national level to an increasingly globalized media industry.
If we cooperate more at an international level, we can afford the best talent to create the best content in the world. This is what the EBU excels at.
The Eurovision Song Contest celebrated its 60th anniversary this year with 40 countries taking part – including Australia! It's the most successful entertainment show, with 200 million viewers, in the world with the highest production values. Our Eurovision news exchange sees our Members share 50,000 items a year and it is the richest news source in Europe I am aware of. Our Euroradio music exchange provides Members with 4,000 concerts every year – an incredibly distinctive music library.
Cooperating with regard to research and development will help us drive innovation and set new industry standards. Cooperation is the key.
My second recommendation: Innovate.
Our funding model, based on a license fee or tax with or without advertising revenues, is a license to innovate. We can take more risks and we are obliged to provide better quality than private and commercial media. We do not depend on only commercial revenues. We are not dependent on shareholders who focus on quarterly reports and year-end profits.
Sometimes we might ask ourselves, what will be the next big thing? The answer is simple. Our content is the next big thing. We should make sure that we have the talent to innovate and to create fresh, sometimes surprising, existing, inspiring ideas that everybody talks about. We must create the room to experiment.
We can take risks and surprise audiences, while at the same time providing familiar content they know and cherish. We should monitor new channels and platforms, and look for talent in different places. And we should not underestimate the force of social media to provide the public service of the future.
My third recommendation is to Involve young audiences.
How will we develop future public service offerings without understanding the evolving needs of the citizens that will vote tomorrow?
When we develop new services, we should involve the relevant stakeholders of our industry, producers, writers, actors and especially also younger people. Let them have a say in what we should do and involve them in our strategic projects as equal peers.
I have explained how much YouTube matters to our audience. Our online platform could play a similar role, by being open and connecting the most ambitious content, people and projects that matter.
We need fresh young talent to work with us and to learn from them. How old is our staff on average? Do we have the right digital natives on board with whom we can regularly discuss how we could improve, change or adapt? Have we asked them what we could do better on the internet and on our social media platforms?
My fourth and final recommendation is to Demonstrate.
What does the public service media of the future look like? Why should society invest in PSM in the first place? Because people expect something valuable that otherwise would not exist. Because PSM contribute to media pluralism and the functioning of democracy, because PSM are essential drivers of the creative industries and enrich the cultural diversity of society, because PSM contribute to the cohesion of an ever-fragmenting society... and there are many more reasons.
We all know this, but apparently we are lacking the support of important stakeholders in many countries. This is why we should invest much more in demonstrating our contribution and our value to society. What is the impact we generate with our programmes. How do we measure it?
Members of the EBU are currently working on a project called "PSM contribution to society". By the end of this year we will have finalized our set of recommendations and will make the best practices available to all interested parties so that together we can make the case for PSM more effectively.
We are the most important cultural institutions in our countries.
We reach the widest possible audiences.
We contribute to society more than any other media organization.
We face increasing challenges and share many concerns.
So far we have been very successful. This is why – knowing about all the hardships and challenges many of you are facing – I remain confident about the future of PSM.
But we should not forget what made us what we are today, the most trusted media in the world. It is our impartial, trustworthy journalism, wherever and whenever it counts.
We are witnessing a terrible crisis across Europe right now. Thousands of desperate people are fleeing their countries and risking their lives to escape often hopelessness back home. At the same time we can see a tremendous wave of solidarity with these people here in Germany. We have a duty as Public Service Media to report honestly and fairly about this crisis. By working together, we can help our audiences build more knowledge and insight and this is exactly what you are doing.
I am confident about the future of PSM, because impartial trustworthy news matters more than ever. And I hope my speech has convinced you to be just as confident as well.
If we cooperate more, continue to innovate, engage with and involve all stakeholders and demonstrate our value to society better, we will be even more relevant in the future than we are today.
Thank you for your attention."