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Situation critical | Media | MediaGuardian.co.uk

Situation critical

The BBC's desperate attempt to lead the new media revolution has been fraught with controversy, delays and huge costs. Bobbie Johnson asks how it all went wrong

Monday May 14, 2007
The Guardian

Here's a picture for you: BBC new media guru Ashley Highfield takes to the stage to announce something revolutionary - an on-demand media player, a piece of software that lets members of the public download and watch BBC television and radio shows for nothing. Amid a swirl of hype and excitement, the iPlayer promises to help change what the BBC is, deliver more value to licence fee payers and take the corporation into the future.

Sound familiar? It should. The first announcement of a groundbreaking download service for the BBC came four years ago. Back then it was called the Interactive Media Player, and was one of a number of ambitious projects to push the BBC into the future.

Since then iPlayer has been officially announced at least three times, rebranded twice, trialled several times and seen more than £3m invested in its development. Even then, it was only two weeks ago that the BBC Trust officially sanctioned it.

The staggering delay has given rival broadcasters the chance to steal a march on the corporation, despite the BBC's remarkable online credentials. Even ITV, much derided but reinvigorated under the leadership of Michael Grade, has made inroads with its plans for on-demand TV through ITV.com. The postponements are causing frustration inside and out - leading former BBC director general Greg Dyke to accuse the corporation last week of dropping the ball. "They could have been ahead of the game," he told a House of Commons select committee, "and they should have been".

The saga of iPlayer sounds dangerously close to "vapourware"; the name given in the technology industry to a whizzbang new product which is announced but never arrives. However, the problems with iPlayer are far from unique - in fact, insiders say the turmoil surrounding it is merely indicative of a wider problem that is now engulfing the BBC.

After years of being technologically ahead of its rivals in both the public and private sector, people at the heart of the corporation say that it is paralysed by fear, and innovation has been crippled by a power struggle between different factions.

As a result, the corporation is suffering a brain drain as bright technologists quit for fresh - and less frustrating - pastures. A decade after leading the dotcom charge, the BBC is in danger of falling into a dot coma from which it may never awake.

So who is responsible? Many blame the BBC Trust, the body which took over from the board of governors and now acts as a regulator for the corporation. Others say the BBC's new media chief, Ashley Highfield, picured right, should carry the can. Until now Highfield - a polished performer in public - has escaped serious flak. But there are signs, of which more later, that this is changing.

As for Dyke, he firmly believes the Trust is hampering innovation and stopping the BBC from fulfilling its public service remit. "It's bloody Tessa Jowell's fault - she has got a lot to answer for," he told MediaGuardian. "They didn't want an outside solution, Ofcom regulating the BBC, so they built it in with the BBC Trust. And Michael Grade did not stand up and say that this wouldn't work, even though we all knew it wouldn't."

In his parliamentary evidence, Dyke put Freeview forward as just one example of how the BBC can push technology. It was launched in a matter of months in order to open up the BBC's digital programming to the wider public - not just those who pay money to Sky or cable companies - and where ITV Digital had been a dismal failure, it proved a wild success. But since then similar projects, such as the Creative Archive scheme to open up the massive catalogue of material contained in the corporation's vaults, have been mothballed as bureaucracy overwhelms development.

With the Trust now the arbiter of which projects get the go-ahead - and even making retrospective decisions over whether services live or die - insiders say that innovative thinking is finding it harder to surface. And with commercial companies (including the Guardian) lobbying to try to scale back the BBC's impact on the commercial world, the Trust is finding it difficult to balance a public service commitment against the fear of damaging the interests of industry stakeholders.

"The great thing about the BBC is its ability to move fast at times," Dyke said. "The last charter document never mentioned the online world because it didn't really exist, but John Birt took it there ahead of the rest of the media. If you had this system now, the BBC wouldn't have the same presence online; you wouldn't have Freeview; you wouldn't have the Digital Curriculum [BBC Jam]."

But while the bureacracy of the Trust is causing frustration for many inside the organisation, some are highly critical of its chieftains. Among them, Highfield, the corporation's director of future media and technology, has been criticised for an inability to finish the iPlayer project and move on to more exciting areas.

Now one of director general Mark Thompson's closest lieutenants, Highfield, who began his career as a programmer before moving into management consultancy and media strategy, has spent six years at the BBC building up an extensive empire and a long list of unfinished projects. While recognised as a good politician and a driving force behind spreading the gospel to some other parts of the BBC, he has been accused of struggling to fulfil the glitzy promises made to the media. He now has an estimated 4,000 staff under his control, and a growing number of them are grafting on the iPlayer project to try to push it to a conclusion.

"iPlayer is swarming with people," one source, who asked to remain anonymous, told MediaGuardian. "They're throwing more and more people at it - a classic mistake - while McKinsey suits run around carrying wads of paper and trying to look important. The BBC often tries to be a software development company, and fails every time."

Highfield, however, rejects that claim. "It's simply not true," he says. "I can understand people on the ground being frustrated by the process . . . but I think that most people are understanding that it's a necessary outcome of the way the BBC is funded. Does it mean innovation is dead at the BBC? No." But there may be other causes for worry, too. Many people have publicly expressed concern over the increasingly close relationship between the BBC and Microsoft, bookended by a "memorandum of understanding" between the two last year and the recent hiring of former Microsoft executive Eric Huggers as one of Highfield's deputies earlier this month.

Others suggest that serious problems were signposted by the sale of BBC Technology in 2004. Started by Dyke and signed off by his successors, the sale was originally intended to free up resources and alleviate budgetary pressure coming from the government. Instead it has left the organisation without any control over huge portions of its infrastructure - ironic for an organisation now trying to position itself as a technology player.

"The BBC's new media enterprises were built as little fiefdoms - now it's time to bring them together," says Highfield. "That kind of growing up means that you're always going to get some people who kick up: it doesn't mean that what we're doing isn't right."

"This is increasingly the way that business is done - instead of the way we previously operated, very remotely, we have now identified a number of companies, IBM, Microsoft, Apple, Google, Siemens and the like, who we need to work more closely with. If that means entering strategic alliances, then so be it. For the BBC to stand in splendid isolation would just be the death knell."

Any suggestion that the situation at the BBC is problematic is unfounded, he says. But not everybody agrees.

"This is all bananas: it's death by strangulation," says Dyke. "The trouble is it won't explode, it just doesn't do the things it should. I fear it will be the long term death of the BBC."

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