David Abraham RTS Speech, Cambridge 2013

12 September 2013

These are the opening and closing remarks given by Channel 4 Chief Executive David Abraham at the RTS Cambridge Convention 2013, in a session entitled Whose Side Are You On?, on Wednesday 11th September 2013.

Opening remarks

I’d like to welcome you all to the conference and set the scene for this opening session and for the conference as a whole. It’s always a challenge to try and encapsulate discussions on behalf of an entire industry into a coherent 48 hour event – especially when one considers the big beasts that have performed this role and the ideological battles that have played out here over the years.

The first RTS Cambridge I ever went to was the day after 9/11. What I remember was the debate that happened that year about the evolution of digital TV and the fightback of the terrestrials. E4 had been launched earlier that year and BBC3 and 4 were about to happen.

In 2003 Greg Dyke used this convention to set up a series of debatable scenarios about winners and losers in the process of digital switchover. At that point there was still uncertainty as to whether switchover was achievable at all, speculation about Sky launching a terrestrial Channel 6, how Carlton and Granada would merge and what the impact of broadband would be. In one prescient scenario, BT bid successfully for premiership football rights. Rather more pessimistically, the consensus in the room was that linear TV would be dead by 2010.

When I was initially approached about chairing this Cambridge I sounded out key figures in the industry, producers in particular, about a potential space between the creative festivities of Edinburgh and the strategy and policy debates for which Cambridge is commonly known.  Many of the people I spoke to admitted privately that much of the commentary about suits vs creatives in our field is increasingly redundant. So we formed an advisory group, to whom I am very grateful, and set as our goal a joined-up conversation that genuinely tried to bring the left and the right brains of our industries together properly for a rare meeting of minds. And I’m pleased that we made THAT our focus because THIS Convention now comes just a short while after Kevin Spacey’s McTaggart speech at Edinburgh, which clearly touched a nerve in our industry but which at the same time left many knotty issues in its wake.  I hope over the next two days we might begin to address them.

How indeed will creative risk be rewarded and by whom when increasingly, everyone in this room both competes and collaborates with each other? For content creators, global technology has made it an ever more complex challenge to choose whose corporate side to be on in the short, medium and long term. In this environment, avoiding a creeping sense of paranoia is never easy. Whose side are we really on, as executives, as owners, as investors as regulators as viewers, and even, as citizens? In this ever more confusing world we wanted to examine the key strategies, that, as both public and private organisations, we adopt to generate value from UK programming. Then, provoke a debate about where we all sit as links in a value chain that can continue to support the process of generating great creative work in the future.

For Kevin Spacey, the Golden Age of TV appears to be almost completely American. But I think this underestimates the huge, and particular, creative strengths of Britain’s television industry - it was here, in Britain, after all, that House of Cards was originated, and it is the UK that has led the world in exciting new format ideas, which invests more in original content per head than any other comparable country, and which is home to the most vibrant independent sector in the world.  British creativity is what underpins the industry we are all part of in this room today and this has emerged from a very British way of organizing ourselves. I’ve worked in US television and in my experience, despite being a nation of 300m people, America does not match the UK for our combination of quality and breadth in television – from Broadchurch to Southcliffe; from The King In The Car Park to Simon Schama, from Idiot Abroad to Dynamo. It was to the UK that I recall US executives looked for innovation and inspiration across the genres because of the amount of constant creative risk built into our system.  

As Deloitte are about to show, The TV industry has proved stronger and more resilient than anyone ever anticipated – with the latest data showing that television viewing has risen, sector revenue is on the increase, and employment and training activity has grown.

One of the things that struck me, reflecting back on the 2003 conference, was what a key point of change for our sector that year was – whether it was the birth of Ofcom and the terms of trade or the early days of broadband. So could 2013 also be such a critical moment in time? There are three reasons that suggest this might be the case.

First: Even just two years ago, at the last Cambridge, connected TV was just an idea. It is now a reality in 30% of homes – estimated to be 40% by the end of this year. Many in the sector believe we are moving inexorably towards either a second digital switchover, or, even more radically, a permanent shift to IP distribution. What might this mean for the whole edifice of Free to air TV?

Second: The independent sector is maturing. 10 years after the terms of trade were introduced, it is now a world-renowned sector worth more than £2.5bn, including dozens of players owned by multinationals. But are the frameworks set in place in 2003 now fit for purpose? Critically, if our USP as a nation is in producing new ideas, how do we protect the system that currently supports idea generation in the future given the increasingly borderless nature of tech platforms?

Next, we are in another moment of genuine policy potential. After a few years of consultation, the Government is now taking forward proposals on legislative change, as outlined in their Communications Strategy Paper. It cannot be long before the BBC’s Charter Review is kicked off. This is the last Cambridge before the 2015 general election, and lines between the parties are beginning to be drawn as manifestos are shaped.

So this conference is designed to work as a series of interconnected arguments. And this being a Channel 4 backed event – at times I predict you will want to disagree with what you will see and hear and I encourage you to do so vocally. The shape of the next two days will follow the creative value chain through from start to finish and, in parallel, stop off along the way and examine new issues that are being thrown up. Our approach is to interleave discussions on key issues with spotlights on individual organisations and pose questions to the conference throughout.

To help orientate us, Deloitte have created a holistic picture of how content creation is working today. Their findings are illuminating and we will be sharing them with you in a moment. But before we do, let’s get a quick temperature check in the room.  Let’s spend a few moments taking a look at the opinions that we’ve brought with us here today – and see how we differ according to who we work for, and whose side we are naturally on. And to highlight a prevailing sense of global paranoia, let’s hear now from our first expert provocateur, Mr Charlie Brooker. (VT)

 

Closing remarks

It probably won’t surprise you to hear that I’m on the side of the PSB broadcasters who still take the bulk of creative risk, and provide the scheduling and marketing so that producers have the space in which to develop their work and to have it distributed globally.

I also believe that the enlightened policy interventions of public service broadcasting in recent decades remain absolutely key to what makes British content creation so great today. We have a very deliberate plurality of models, ranging from the public service, publicly funded BBC to the more purely commercial ITV and Channel 5, with the hybrid Channel 4 as the inbetweener. If properly looked after, I think it is these interventions that will stand the UK in great stead in the future.

SO, my main message to today’s policy makers – and I’m delighted that both the Secretary of State and her Labour shadow will be here to talk to us – is that we cannot take the PSB model for granted. 

What we have did not arrive by accident: the PSBs are granted defined privileges in return for delivering defined social and economic benefits.

The central challenge for government is how to update these privileges to ensure that in the future, maximum investment can be directed towards content investment. 

Three areas, for example, have been touched on in the recent DCMS discussion paper: EPG prominence, platform fees and DTT spectrum – and on each we are only partially reassured that the government intends to robustly defend the long term interest of content creation and universal access as opposed to the demands of the telecoms sector.  Will prominence really mean prominence?  And will DTT continue to be recognised as a vital means of providing cultural, social and economic benefits? And are there other ways of increasing investment – for example in our view looking at advertising minutage rules could provide a major boost?

But in one other area, our industry message has already been heard loud and clear by government: I’m delighted to share with you the news that an outline bid by Creative Skillset, for a major new mutual investment opportunity in training, is being taken to the next stage – something that will benefit all parts of the creative industries. Progress is now being made to the detailed bid stage and Creative Skillset needs all of us in the industry, in this room, to lend our support once again by re-affirming our commitment to this opportunity

But quite clearly, there are also things that we can – and should be doing ourselves - to innovate at both a creative and commercial level. 

This is absolutely front and centre for Channel 4 so first I’d like to touch on the topical issue of how programmes are supplied to Channel 4 from the production sector.

When I arrived at Channel 4 three years ago, many smaller producers complained to me that the Channel was a closed shop working with a diminishing group of super-consolidated companies. Since then, via a series of initiatives centred around our Alpha Fund, we have significantly diversified our supply base and are spending less with the largest companies as a proportion of the total – working with 460 indies last year, over 90 of those being digital companies – a shift that during this long recession was an important one.

But in recent months it has been made clear that the Indy sector regards the quality and depth of relationships as important as the breadth and so, in addition to continually improving our working practices, which we are committed to doing, we are now thinking about a second phase of initiatives looking at how to strengthen the sustainability of the sector and help these smaller companies to grow. And it is growing from an initial start-up to a more sustainable business where the challenges lie for an increasing number of companies in this economy.

So we are now developing the idea of a new Channel 4 Growth Fund that would seek to directly invest into emergent companies. Distinctive to other forms of investment, this could provide growth capital and business advice to help fledgling companies become more sustainable. Of course our stakes in such companies would always have to be minor ones and they would have to be managed at some distance from our day to day commissioning process to maintain a level industry playing field. We have had some early discussions on how this could work in practice with our stakeholders and we sense there is a gap in the investment pipeline that we could usefully help to address.

At the last RTS Cambridge I also spoke about our plans at Channel 4 to connect more directly with our viewers by investing in a new kind of engagement strategy – one never tried before by a broadcaster. As of today Channel 4 has attracted 9 million individuals who are registered and engaging directly with us via 4oD. That’s a very powerful new data platform in its own right and continues to grow. This strategy is helping us to support healthy digital growth as advertisers increasingly experiment with blending their customer data with ours to deliver measurably greater brand engagement. New marketing technologies are proliferating rapidly and globally and at Channel 4 we believe that TV has to innovate to compete in the future.

This week our plans move into a new phase as we begin trialing our mobile second screen app, 4 Now, exclusively to our registered viewers, which will further enrich the engagement layer with our content; and soon, we will integrate short-form content seamlessly to 4oD which is the growth area in the mobile space.

There are broader public benefits to our data strategy as well. By definition the internet tends to acquiesce to the wisdom of crowds, to amplify what is already known, to remake what is familiar, rather than providing platforms for all that is as yet unknown, unsaid or unchampioned. There is a new need for cultural counterweights in the system that provides ‘algorithms of surprise’ rather than recommendation and repetition.

Channel 4 is both a social enterprise and a highly trusted brand that now delivers personalisation in return for personal information. Our ultimate aim is to evolve this information exchange with our viewers into an innovative new way to support British creativity, enabling us to continue taking creative risks at breadth and scale and to the degree that the market would not choose to make.

So that’s the overview from Horseferry Road. You may well disagree with some of what I have said – but I call on you to continue thinking about the questions we have posed  - who is going to play the biggest role in content creation? And whose side are you on? I look forward to the spirited debate that I hope will take place amongst us all over the next two days.

Now on with the convention, which I’m pleased to say contains a number of firsts.

In a moment we will hear the first industry appearance by Mike Fries since Liberty bought Virgin Media and Maria Miller’s first address at Cambridge. This will be the first time the Brit Paul Lee from ABC will be here to talk to his fellow countrymen. The US veteran Nancy Tellem will also be here speaking about her new work with Microsoft. Richard Desmond will not just be making his first RTS keynote but, will also be entertaining us with his band, the RD Crusaders tomorrow night! This will be Tim Davie’s first RTS since taking over the helm at BBCW and of course we welcome the new Director General and his team here too. This will be our first opportunity to hear from BT since the launch of BT Sport. Another debut, the result of Teresa Wise’s vision for an RTS more greatly focused on developing talent, is that many of you have nominated young leaders to join us and challenge us on Friday – which I hope will start a new tradition here at Cambridge.

And in a topical addition to the schedule on Thursday before lunch, Steve Hewlett will lead a discussion on the implications of recent events on the future of the BBC.

We have another innovation in the form of a morning ‘Thought For The Day’ both tomorrow and on Friday in which outsiders will kick start the day with short pieces of stimulation to open our minds.  With Clare Balding and Alistair Campbell as your after-dinner speakers I hope that the next two days will be stimulating and worthwhile.

Before I hand back to Jon and Sir Peter, one final piece of video: throughout the convention, we will be showing extracts from a new documentary that looks at how media companies are reacting to changes in the value chain. Let’s take a quick look at part one now (VT)