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Wednesday, June 14, 2006

Beeb 2.0 – Help My Business Model Sucks

How would you like to be in a company where demand for their services is growing at an incredible rate?

The company would be the UK market leader by far.

It would also own a huge multi-media library, perhaps the biggest in the world.

It would also have market leading platforms in old media, where not only cross-promotion is allowed but it is free and actively encouraged.

Competition is not only fragmented but slow to react.

That is the upside, the downside is that:

  • Revenues are more or less fixed and are regulated
  • Costs are directly proportional to consumption
  • The quality of services are poor compared to other platforms and need a big upgrade which will only increase costs further

The action that anyone would take is to try and alter their business model and the BBC is trying to do this with four key initiatives:

  1. Change from a unicast environment to a multicast environment for live events and therefore change the cost model from being proportional to more or less fixed.
  2. Get the consumers to pay for additional consumption themselves of on-demand broadcasting via the establishment of peer-to-peer networks. This is in addition to the annual licence fee charge.
  3. Design a mechanism for non-UK residents to pay for services.
  4. Lobby like fury for a huge increase in the regulated revenue.

Personally, I think the actions of the BBC in the internet deserve extremely close attention, especially as they try and break free from the straightjacket of their business model and seem to have an insatiable desire to dominate every Media channel.