NPO and its digital struggle
The term naivety has several meanings and can be seen as positive as well as negative. Naivety can mean an unprejudiced view, but can also refer to foolishness, lack of sophistication and culpable ignorance. In my area of work, often in the world of sports, media and entertainment, I often encounter digital naivety. Furthermore, it is causing the digital struggle of Netherlands Public Broadcasting (Dutch abbreviation NPO).
Digital naivety
I have been closely involved with the advent of the digital world and have seen first-hand how the internet and social media have changed the game. When this technology first landed organisations were not aware of how to proceed with this new digital world. That is why I started reconsidering the context within the digital world in mid-2000.
I was searching for answers to the following questions: how is the relationship between units and their interfaces? Are networks actually provided with the right content? Are the connections with fans and clients used in the correct way? How do I manage the digital business model? Is an ego-system or an ecosystem mentality desirable? By searching for an answer to these questions, my understanding of the digital world gradually increased. My digital naivety vanished. Why should today’s content creators and networks address their digital naivety? And to what extent does such naivety exist in public broadcasting?
Public broadcasting
Public broadcasting transmits on various radio stations and has three television channels (previously Nederland 1, 2 and 3). To make public broadcasting more recognisable in a world that is rapidly becoming digital, these channels were renamed NPO (short for Netherlands Public Broadcasting) across the board (NPO 1, 2 and 3) in August 2014.
The administrative structure of the entire Dutch public broadcasting determines the strategy and programming in collaboration with the national broadcasters. The mission of the NPO was always: “Netherlands Public Broadcasting belongs to, and is for, everyone. We make programmes for radio, television and the internet. These programmes connect you with the world around you.”
Ideal digital world
The Concession Policy Plan 2016–2020 (published in 2015) states: “Netherlands Public Broadcasting is a connecting factor in our cosmopolitan society. Belonging to, for — and increasingly also — with viewers and listeners. Our output reflects the sights and sounds of the multitude and diversity of Dutch society.” (NPO, 2015).
The plan goes on to state the following: “A society in which there is space for everyone and where people feel mutually connected, despite differences. We make recognisable programmes for all these people; accessible, independent and high quality. Programmes that our viewers and listeners do not want to miss. Programmes which offer a solid foundation in a hectic existence, in an increasingly changing world. Because they keep our public informed, because they get inspired by them and — last but not least — because they are made for them.”
Upon reading the above, you might think that NPO has been created for the internet. An organisation is described that creates and distributes significant and impactful content, wants to connect with society and is fully immersed in the digital world. Here it actually concerns an own ecosystem within the entire digital ecosystem. But why does this ecosystem struggle to operate?
One single domain
The portfolio of Shula Rijxman, member of the NPO Board of Directors in this two-person Board, includes the innovation plan. In her role, she is involved with digital innovations, such as video streaming service ‘NL ziet’, a collaboration between RTL and SBS. She is also responsible for the, according to some, controversial new brand strategy of public broadcasting, where TV channels Nederland 1, 2 and 3 were replaced by NPO 1, 2 and 3. The thought that conceived the new NPO Start (‘the NPO homepage’), was: a single domain for all content.
NPO Start is crucially important for the public service channel. The viewer wants to see programmes where and when it suits them. Moreover, the viewer expects the same flawless technology, attractive interface and the same wide range as Netflix, YouTube, Amazon, Facebook, Disney or Ziggo.
One million Dutch people use NPO Start daily, the digital video service of the public service channel. “A great success”, states chairwomen of the board Rijxman at the start of this year. According to Multiscope, Dutch people now spend half of their video-on-demand viewing time watching Netflix. They spend 18 percent of their viewing time on YouTube, and in third place NPO Start with 10 percent.
The new services — still called Uitzending Gemist by many — and the paid variant NPO Start Plus did not get off to a good start. Since the relaunch in July 2017, the video service of Netherlands Public Broadcasting (NPO) encountered many disruptive errors. However, both services are essential for the digital future of public service channels in the Netherlands.
Dilemma and data
To play a significant role in society and the media landscape, NPO wants to increase its impact for, and by, the public even further. It wants to further build its own, online, public domain of mutually connected (broadcasting) portals, websites and apps. In addition, NPO will also be present on the platforms of third parties in order to improve the findability and attractiveness of the own range and expand the interaction with the public. Here, NPO makes use of the technological innovations that must support the ambition and meet the needs of the public.
The major dilemma the NPO faces is this: how can you compete with the tech giants, if you have to work within the Dutch Media Act and with reduced revenues? From all statements of recent years, where the digital strategy of the public service channels is increasingly being debated, it appears that those involved do not consider the digital ecosystem to be a business ecosystem, despite that being exactly where the opportunities lie for the NPO.
Despite the non-profit nature of the public service channels, it does still have to finance content, relationships are commenced with viewers and information is being developed. This is the value proposition of the NPO. ‘Content = relationship = information’ or ‘rights = data’. That means that a business ecosystem is created, where unfortunately a genuine digital transformation is missing. That is also the digital naivety of the public service channels. A data-driven system is missing, while data is actually the means that can help the NPO further: it is the oil of the business ecosystem.
The new services of the NPO collect data once you have registered as a user. This leads to a number of individual recommendations. However, you can avoid this by not registering for NPO Start. Registration is (obviously) essential with the paid service NPO Start Plus.
With regards to data, NPO also has a strategy that must be pre-eminently ‘public’, and not necessarily commercial. Mezen Dannawi, the on-demand manager of the NPO, stated in NRC next: “We want to keep away from the ‘data sludge’ of many commercial parties. We want to make recommendations to viewers where we can surprise them and broaden their horizon. That is a public task.” (Olsthoorn, 2017). A clever data strategy seems to be missing. The public service channels do not seem to be concerned by managing an organisation based on a framework. This also becomes apparent from their plans?
Optimisation by framework
The NPO’s most recent plan refers to efficiency. “Which requires a change in the level and manner in which we register and share information. To ensure that the information sharing and collaboration will run more optimal, we will organise a number of processes and activities in another way.”
The financing of the digital ecosystem is under pressure. By now, the public service channels must gradually become self-sufficient. Rijxman requested another 50 million euros in assets for the digital activities of the public service channels, but this request was rejected. The NPO must commence with using a sound framework, that assists managing on brand equity, brand reputation performance, marketing efficiency, business acceleration and business activation.
The NPO decided to offer NPO Plus as a public payment service. With this, the point of departure for the payment service is explicitly focussed on cost orientation and not on profit maximisation. The NPO wants to finance the extra costs for NPO Plus via a monthly subscription to distribute this online service. A reimbursement is requested from the public that wish to make use of the service. The NPO estimates to be able to finance the service with a rate between 2 and 3.5 euros a month, including VAT.
The other revenue models in the plan of the NPO can also be managed using the framework. “Proper rights management is a prerequisite to achieve an optimal mix in the total portfolio of possible sources of revenue. In addition, proper rights management is also essential for the NPO to keep reaching the public via all possible major platforms in a time in which the amount of playing devices and dissemination methods is increasing. The NPO is planning to exploit the rights via an entity, resulting in the joint organisation and professionalisation of the rights management.” This is the entity which should use the framework, which should also lead to the digital assets being secured.
Another challenge
From May 2018, companies and organisations are required to handle consumer data with more care. According to the General Data Protection Act they are no longer permitted to use data if they have not stated what they will use it for in advance. Data cannot simply be stored for an unspecified period.
The effects of this legislation are exceptionally drastic for the NPO. Thanks to this legislation, they will first have to delve into which data they have and which data they use. For that matter, the NPO stated last year in NRC Next to be “working hard” to comply with the new legislation as of 25 May, when the stricter privacy law would come into effect. It would be advisable for the public service channels to link such legislation to the framework immediately, to secure the digital assets.
Still opportunities
Naturally, viewers and listeners benefit from this changing legislation. You personally gain insight into the place where your data is stored. The control over the data remains with the consumer and ultimately you will need to give consent at a central point whether certain data can be accessed or not. For instance, consider a dashboard, in which you can indicate for each site, app or company whether they can make use of your data.
We have already described the solution for NPO. My colleague Edwin Witvoet´s company Jibe is involved in a European project, that wishes to facilitate this dashboard via blockchain. The blockchain is a ‘digital ledger’, in which data is determined in a decentralised way. “Thanks to its decentralised nature, you can automatically trace which parties you wish to share data with and with which ones you do not.”
He continues: “This makes it compliant with the new data legislation. In addition, it hands the consumer the control over which parties can have access to their data. Once we have achieved this, you will only have to tick whether you wish to share your data with Facebook, Mysteryland or Google, or not. Then it is up to companies to convince you to let them use your data, which in turn means they will have to be even more relevant to you. Challenging times for companies who wish to improve existing business models or develop new ones.”
Ecosystem thinking
However, the NPO appears to keep struggling with its digital rollout. De Volkskrant wrote the following at the end of last year: “Despite the NPO writing in its plan to wish to make more use of ‘social media such as Facebook, YouTube, Twitter, WhatsApp, Instagram and Snapchat’ it currently appears to stick to its own npo.nl as the distribution channel. And this while broadcasters such as AVRO-TROS, KRO-NCRV, VPRO and BNN-VARA want to ‘broadcast where the public is watching’.” Ecosystem thinking seems to still have the upper hand at the NPO.
NPO management believes that the public service channels must compete with Netflix, YouTube and Facebook by creating one single strong online brand: npo.nl. They are against distributing NPO programmes on YouTube and social media, because it makes the competition even stronger. Digital innovation is important, but NPO is not a tech company. That is why the available budget is primarily allocated to programmes. And that is also the pitfall. The public service channels must now start to act as a tech company, as an organisation which operates in a digital ecosystem.
The ecosystem thinking originates from just about all broadcasters. They feel restricted by the strict rules of the NPO. They believe that the NPO should invest more in digital innovation and that programmes must be where the viewers are — whether they are watching television, YouTube, Facebook or Snapchat. The most radical among the broadcasters want all NPO programmes to be made available on YouTube for free and in high quality. After all, the tax payer has already paid for them, they argue.
The struggle continues for the public service channels. “Today’s government policy and legislation are based on the media landscape of a few years back”, is the opinion of the Council for Culture. “This will lead to responding too slowly and inadequately to the current transformation of the media sector, with public values coming under pressure.” Adjust the Dutch Media Act, is the advice from a concerned Council in a report that was recently presented.
Conclusion
It is a matter of minutes to midnight, concludes the most important advisory body of the Dutch government in the area of art, culture and media. The own films, series and programmes are losing more and more ground to the foreign tech giants. It appears that primarily the younger generation are walking away. The traditional broadcasters and channels appear unable to adequately respond to this.
The NPO benefits from maximising revenue. The NPO states that in a number of cases there is tension between increasing the revenue and ensuring a sustainable supply of strong, independent and attractive public service channels. That is why the NPO has established a framework for the above-stated entity and the way in which revenue is being earned. There has to be space for the entrepreneurship of the entity, without disproportionally compromising the objectives of the NPO. To achieve this, the egosystem thinking must be replaced by ecosystem thinking.
Meanwhile, even more networks (such as Talpa Network) have commenced a data-driven approach. A similar approach for the public service channels is essential. If the NPO succeeds, with the new entity, to shake off its digital naivety and by gaining control of its digital ecosystem, it has a chance of survival.
The result of this approach is that data is transformed from being an expense to a source of revenue. There is control of the business ecosystem. In this way the digital transformation and data-driven approach of the NPO contributes to the digital assets and can therefore meet its objectives. This will ultimately bring an end to the NPO’s digital struggle.
- This post is a pre-read of Part 2— Chapter 3 of my new book ‘Digital Assets’ the translation of the Dutch publication ‘Digitaal Vermogen’.
- Also read the publication ‘EDM and the Digital Domain’
