Defends increased BBC web spending
Highfield defends the previous year’s decision by the BBC to almost double the amount invested in the corporation’s websites. The corporation spent £100.4m on the internet last year, compared with £54.2m the year before. Including interactive television, the total expenditure rises to £111.6m. Highfield says future spending will be capped at 3%. Commercial rivals and some MPs have criticised the BBC’s spending, arguing it is using licence fee-payers’ money to provide online services already offered by the commercial sector.
Having arrived from the commercial sector, I’m always acutely aware of this. Whenever I think about where we’re going to put our money, I always carefully consider the consequences for the private sector. I trebled the amount we spend on nations and regions, increasing the number of Where I Live regional sites from 13 to 37. It doesn’t block out any commercial interest because most existing regional sites are heavily based on classified advertising.
A large proportion of the extra money was spent on upgrading the BBC’s server technology to cope with the increase in users following September 11.
Part of our original commitment was to encourage people to come on to the web and I think we’re doing that. Of the 500,000 visitors who used the Test the Nation site on the day of the broadcast, 300,000 had never visited the BBC site before.
Announces 100 job cuts
The BBC announces 100 job losses across its websites as it looks to control costs. Highfield says the corporation’s spending on the web will fall by £6m in the next financial year to £68m and by a similar amount the following year. After several years of explosive growth in staffing and spending, BBCi will only receive inflation-linked budget increases from now on.
We have strategically positioned the move towards interactive TV because we’ve seen how popular it can be and it reaches people that don’t necessarily spend a lot of time on the web…We’ve got to work out what people look at and what they don’t.
Plans to challenge Google
In an interview with The Guardian, Highfield says that the BBC has the potential to challenge Google.
We have got the best content in the world and a more flexible rights framework than anyone. We have the best brand, I would argue, online in the world in terms of trust and impartiality. We’ve also got access to some of the best technology in the world. If you glue all of that together we should be in a prime position to create the best next-generation search navigation tool in the world. We haven’t yet found out across all genres what new media can do. Where we have, like in education, the digital curriculum has become a great example of a product that owes very little to radio or television and is very much of the medium.
In response to the BBC governors’ response to Philip Graf’s review of BBC Online he has been required to cut funding by 10%, axing sites deemed not to pass the corporation’s new “public value” guidelines.
In order to free up the required funding we must start to behave more like television and radio, decommissioning sites or cutting back on funding, or even archiving them as circumstances change.
Royal Television Society speech
In a speech to the Royal Television Society, Highfield clarifies the role of the BBC in the commercial Internet landscape. In the previous week, a group of companies, including Associated Newspapers, the Commercial Radio Companies Association, the Newspaper Society, News International and the Telegraph Group, called for greater restrictions on the BBC asking for limits to be imposed on its digital remit.
[The Corporation] absolutely doesn’t want to be a MySpace or a Flickr or a Friends Reunited. [We want our digital presence] to shift from being a gateway to being a conduit, a channel for conveying content and frequently neither the start nor the end of the journey…I believe our audiences value bbc.co.uk as a portal, as a safe haven for many, which offers a starting point and a trusted guide. But we also believe our audience want much more as well. To find our content where they want it, whether within their favourite portal like MSN, their community like YouTube, or their environment like the Second Life virtual world website. They want to contribute their content – this we know – but not necessarily always on our site.
Independent interview
The Independent interviews Highfield, in his new position as head of Future Media and Technology at the BBC. He says he plans to use the department’s £250m to £400m budget and and 1500 staff to put Britain at the forefront of internet-based technology by opening the BBC’s video archive of the BBC, some 1.2 million hours of film, for free.
I think we are about to go from the predominantly text-based, predominantly static world into the video-rich, dynamic, two-way engaging environment. That for me is when it starts to get really interesting. It’s more than putting a newspaper online it’s where you can really start to empower people and give them total control over their media consumption…What we [The British] have is an opportunity now in Web 2.0 to actually get ahead of the game, because we do have one of the most advanced creative industries, our television industry is world renowned…[The BBC] has one of the world’s largest archives, if not the largest archive. And yet, because we’ve got so few channels – routes to our audience – inevitably 99.9 per cent of that content stays on the shelves. We ought to liberate it and make it available, how, when and where our audience would like to consume it.
On the UK approach to education and technology:
The streaming of people in England into arts and science means that people who can explain technology are few and far between. It’s so rare in the creative industries to find creatives who are interested in technology, because a lot of them look down on it. It wouldn’t happen in America or Germany. It’s very rare as well to find technologists who have been taught how to sell their ideas. It’s one of the reasons why the entrepreneurial culture here hasn’t made many dotcom successes.
BBC ‘still innovative’
Responding to Greg Dyke’s comments that the iPlayer is losing ground, Highfield defends innovation at the BBC.
No one in the UK content market could innovate faster. The only thing that might stifle innovation would be the process of approving new services because that can take a long time. With BBC Trust approval framework for new services, we won’t always be able to be number one to market, but that doesn’t mean we wouldn’t or couldn’t be innovators.
He says the Company can help the transition to mobile:
The BBC can play this role of trusted guide, taking audiences through new mobile experiences and helping to build the market.
Bournemouth University media masterclass
Highfield gives a media masterclass at Bournemouth University’s media school.
The Internet market is now worth £4 billion, in just ten years. Half of that is access, so the ISPs have £2 billion. To put that in context, the whole television market in 50 years is only £8 billion. The whole radio market is half a billion It wasn’t wrong, the dotcom bubble, it was just vastly inflated, and the expectations were too soon. To give you the BBC statistics: A couple of years ago, during the height of the dotcom boom in 2000 we had an audience of about three million to our website. Our audience in February was 8.5 million in the UK. Our audience has best part of trebled in just two years. That to me is the dotcom revolution.
Sky News Tech Talk
Highfield is asked four questions by Sky News Tech Talk. Why did Microsoft create MSN? How successful is MSN today? How will the online media landscape and MSN evolve going forward? and If you had to leave your job today, what three businesses would you start? On the latter:
The first trend is obviously mobile. We [Microsoft] have seen the explosion of mobile consumption of all our services. So something around the mobile, particularly in location services…like the next generation of Foursquare. On the web, highly-visual search…we are just at the beginning of a new journey, a different way of navigating and searching. And the trend that we are seeing with the launch of xBox Kinect, where we see a user interface that requires no remote control…That’s the beginning of a journey where natural language, voice commands and motion commands are going to be huge.
Future of News interview
Highfield talks to Future Medialab about the future of news, responding to the question: In five years’ time, how do you expect news to have changed?
In some way, news will be the same, people will still want to know what’s going on around them, particularly local and regional news news. The want to know things that matter in their community. What will change profoundly is the medium through they get their news. Increasingly on mobile people want utility information: traffic, travel, weather, breaking headlines, sports results. And in the newspaper they want more in-depth, investigative journalism. Things they can pore over for longer.
‘Worst is over’ for local papers
Highfields says, contrary to the predictions of media pundits, that Johnston Press will still be printing newspapers in five years. The decline in Johnston Press revenues has slowed from 4.3pc in the first half of the year to 3.1pc in the third quarter. The company cited 40pc year-on-year growth in the audience for its websites, to 27 million users in September, as the main force behind the improvement.
We’re increasingly confident in saying the worst is over for the regional press. We might not be completely out of the woods but the growth in digital audiences, and in fact the performance of print, tells us we’ll get there.
MediaPlay 2014 interview
Highfield is interviewed by Douglas at Media Playground 2014 conference. They talk about the death of print, going mobile-first, the long-running spat between the regional press and the BBC and the future of local journalism.
You need to get digital growing pretty rapidly to make up for print decline. We are getting to that digital tipping point.
Journalists job losses warning
While speaking at the Digital Media Strategies conference, a gathering of more than 400 CEOs and senior leaders from the media industry, Highfield warns that the number of full-time journalists working across the group’s local titles will fall from its current figure of about 1,000. He says Johnston Press is aiming to increase the proportion of its revenue from digital advertising to about 23% in 2015, up from 17% in the current financial year, and that the group is headed towards a point at which digital ad revenue is growing four times faster than print declines.
The economics of this business means we will end up with fewer full-time journalists on our books. What you end up with is a much more fluid model with contributors producing a larger percentage of the newspaper. That’s not something we can duck. The economics of the digital world are going to mean our businesses can grow, not just survive but grow, but we need to go about things in a different way. It doesn’t mean the front of the book or the quality of editorial oversight will be diminished.
Media Briefing interview
Highfield is interviewed by MediaBriefing’s Thackray about how Johnston Press has been addressing the structural challenges facing the business, how it is adapting to digital, and how it plans to tackle mobile. Highfield:
People do not buy a local paper to turn to the small ads and sell a push bike. With that having migrated… you can argue it was a major missed opportunity for the regional press not to make more of those verticals like motoring or property… but that’s the past, and now we have a much more stable environment, and our audience numbers… have never been bigger.
Issues profit warning as advertisers cut spending
Johnston Press reports that full-year profits would be down by around 5.5% and half year profits by around 5% after it saw a fall in advertising revenues and circulation sales in the 26 weeks to 4 July 2015. The company said advertisers chose to hold off and slash spending across print and online amid the uncertainty caused by the election. The share price falls by more than 16%. CEO Highfield:
Trading conditions in the first half of 2015 have undoubtedly been challenging, especially in the period around the general election – a time when there was also a high degree of uncertainty in the wider market.
Rejects BBC local journalists plan
Highfield responds to the BBC’s suggestion that it would fund 100 local reporters to provide public service material for regional papers.
[It’s not an olive branch], More like an olive leaf. It looked to us like BBC imperialism through the back door. The whole idea was flawed. Essentially, by hiring more journalists, it meant the BBC putting another workforce into the regions who could well end up competing with us. We are worried about the BBC’s plans to get more local, as per their charter announcements, and worried also about their false belief that there is a market failure [by us] which gives them the right to fill the vacuum.
Rejecting the 100 reporters idea, the publishers prefer a quota system in which 25% of the BBC budget spent on regional news would be made available for publishers to fund their own journalists to provide content for newspapers and the BBC.
There are issues around impartiality, but our guys can write impartial copy. It is solvable. And it would be an attractive proposition for our staff to have the chance to appear on camera. It will make working for the local media more attractive. I believe we can find a symbiotic win-win relationship. The BBC can take our content and pay for it. And we can take BBC content and extend our audiences. What’s not to like?
He also addresses the conflict addresses the conflicts arising from his role as a member of the advisory panel created by the government to review the BBC.
I’ve been absolutely transparent about it. John [Whittingdale] knows I have views on how the BBC should work with regional publishers. But that is being dealt with through a clear and separate channel, so no one can be in any doubt about the situation. I’m extremely proud of having worked there…I’m a big fan of the BBC. It’s simply about finding the right ecosystem.
Local newspaper closures ‘blown out of proportion’
Speaking to the House of Commons culture select committee, Highfield says the number of local newspapers closed over the last decade has been “blown out of all proportion”, with most of the 300 being shut not “papers of record” that are vital to most UK communities.
This is something that is often blown out of all proportion. The papers that have been closed were often the freesheets that were opened in the 1990s to mop up low-yielding advertising revenues when the times were good… I think you’ll find the numbers of papers of record that have closed over the last decade is incredibly low. That is something that needs to be understood.
City AM interview
Highfield says of the £24.4m acquisition of the i newspaper from Evgeny Lebedev. He intends to build the brand’s digital presence, increase the distribution of the print edition, targeting small- and medium-sized retailers like post offices and newsagents, and expand to all areas of the UK, including Northern Ireland, where the paper is not currently sold. He will improve editorial by taking 17 existing members of staff and hiring others to form a team of 50. The paper will also draw content from Lebedev’s The Independent’s website and the Evening Standard for £850,000 a year, as well as from Johnston Group’s regional papers. Highfield says that the purchase is about building scale for Johnston Press and attracting bigger advertising. He says scaling by acquiring small regional media groups would have taken a long time and been very expensive.
We are in one quarter of the country and we want to be in all of it, not least because this is a scale game and we wanted to go after more national advertising revenue and have a bigger train set across which to offer our digital services. I’ve always had a fundamental belief that video didn’t kill the radio star. New technology comes along, but it rarely wipes out what came before it. I think people will still want print for many years to come.
Profits rise by more than a fifth but further cuts loom
Johnston Press reports total revenue for 2015 was down by 6.8% from £260m in 2014 to £242.3m last year. However, profits increased by 22.6% to £31.5m by reducing costs to £191.7m from £205.3m in 2014. CEO Highfield says the group hopes to sell some brands and some of its key assets. However, he said he “could not rule out” closing some titles. Debt is down by £14.8m to £179.4m from £194.2m in 2014, with interest payments reduced by almost £10m to £19.1m. The number of people reached through Johnston’s digital titles was up by 40.7% to 22.6 million, with digital advertising revenue rising by 12.4% to £30.6m.
We are a plc and our primary objective is to keep the business moving forward … we have to make profits. We are all on the same side here, which is try to get the business back to growth and get the long-standing debt off our shoulders. The tough trading conditions have already been highlighted by DMGT and Trinity Mirror. We are being prudent in not anticipating it getting better and we are going to make sure we are cutting our cloth appropriately.
Highfield also says Johnston has filled all but two of 50 roles for i for when it takes control of the title on 10 April, filling the roles from The Independent within two weeks.
Says BBC should pay for regional reporters
Highfield says the BBC should pay for regional papers’ journalists to cover courts and council meetings. Regional papers are seeking £14m a year from the BBC’s licence fee income to cover public service reporting. The proposed new deal would fund 364 public service journalists.
[The BBC] would be setting aside an amount to fund council reporting. But instead of the 100 journalists being employed by the BBC, and effectively being tanks on our lawns, the idea we are working through with them is that this could be an even bigger initiative with several hundred journalists. But they would be employed by us, and that is the difference, and commissioned to provide council and other quango reporting to the BBC.
Calls for better industry metrics
Speaking at a “fireside chat” Guardian Media Changing Summit 2016, Highfield calls for better industry metrics.
We’ve created two metrics – newspaper sales and unique users – and never the two shall meet. We need to create a new, single, de-duped, audience-led metric – a total readership-like number that ad agencies and advertisers will buy into.