Tuesday, October 12, 2004

Resource update: Measuring the value of the BBC

This is interesting in its own right, but within the scope of this blog, it may offer some useful background as the PTTs gird their loins to enter the brutal world of television. The study shows the "consumer value" of the BBC to be GBP18.35 - 18.70 per month, and when asked how much they would be willing to pay to keep the BBC in existence, 81% of respondents said they would pay at least GBP10 per month (in other words, the same as under the current license regime). The result in the previous survey in 1990 showed that 90% of respondents would be willing to pay the same amount as the current license fee (then GBP6 per month). Nearly half (42%) of the respondents in the 2004 survey said they would stump up GBP20 per month, and 19% would be willing to pay GBP30.

However, when the emotional appeal of "saving the BBC" is taken away, a different picture emerges. Respondents were asked about price levels for a subscription-based service, and 4% said they would pay GBP7 per month for BBC One (!), 17% said they would pay GBP9 for BBC One and Two, and 22% said they would pay GBP11 for a package of BBC One, Two and BBC Digital channels. A full 58% said that, if these were the only packages available, they would opt out altogether. This 58% figure is very, very close to the household penetration rate for multichannel TV in the UK (59% in Q2, if we include analogue cable, 56% if we include only digital). In other words, we might go out on a limb and say that the only people who appear willing to pay (if it were a voluntary system, rather than compulsory, as it is now) at this point are people who would otherwise go without. Those who have a choice and are able/willing to take it appear to have voted already.

There are probably a lot of complex factors involved in this development (the growth of pay TV, public dissatisfaction with BBC programming, the advent of the internet as a leisure activity/information source), but the message seems to be fairly clear for anyone looking to enter a mature TV market. If you expect someone to pay for it, it has to offer something different, it has to be good value, and it ought to be a good candidate for displacing something else in the consumer's already crowded media diet.

The BBC survey can be downloaded here:(http://www.bbc.co.uk/thefuture/pdfs/value_bbc.pdf)

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