Greg Dyke On Broadcasting

First they killed the radio stars, now it's the video stores, next it's DVDs
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Maybe the time has finally come for Trevor Horn and Geoff Downes to get together again to explain what is happening in broadcasting, assuming they are both still alive.

Now, those who have been involved in broadcasting over the past 40 years might well ask who the hell are Horn and Downes, and I have to admit that before this week I'd never heard of either. But, while they were not exactly Lennon and McCartney, as songwriters and performers of the Seventies and Eighties they have two claims to fame in the story of broadcasting.

Downes and Horn were two sessions musicians from the north of England who were, for a couple of years, a musical duo called The Buggles. In 1979 they created the band's only hit single which, two years later, made broadcasting history.

The Buggles (how could a band ever be successful with a name like that?) were one of the first musical acts ever to make a pop video which, in 1981, became legendary in the world of broadcasting (and pub quizzes) when it was chosen to launch a fledgling television station in New Jersey called MTV. The rest is history, although those fascinated by trivia ought to know that Trevor Horn went on to produce Frankie Goes to Hollywood and Geoff Downes joined the group Asia.

Now as interesting as the MTV story is, it's the words of the Buggles' only ever hit that are particularly relevant to this column. Horn and Downes wrote one of the most remembered lines in pop music, which just happened to be about broadcasting. It was, of course, the line "video killed the radio star".

The reason it's time for the Buggles to re-form is that it's now time to change that famous line, to bring it up to date to reflect what is happening in today's broadcasting world. The line should now read, "digital killed the video store" or, to be entirely accurate, "digital is about to kill the video store".

The video store took off in the early Eighties when large numbers in Britain and the US bought their first video players. For those too young to remember, buying a movie on video in those days was very expensive so video rental shops took off everywhere. I was talking recently to someone whose company had, at the height of the video rental boom, 11 rental shops in Tottenham Court Road in London alone.

Today in the United States the biggest video rental business, Blockbuster, is in trouble and the business is dying. The same will happen here. The US film studios and cheap DVDs are effectively killing off the trade.

The studios worked out that they could make much more money selling DVDs than they could ever make by renting them. Today 70 per cent of the profit of Fox Television comes from selling DVDs. But the decline of video rental was inevitable once digital technology came along. Who wants to go to the shop, rent a video and have to return it the next day, then get fined if you forget, when you can buy films on DVD for a fiver each or even get one free with your newspaper?

So the video rental shop has increasingly been replaced by stores where people can buy cheap DVDs. But the life of these would also appear to be numbered as digital technology changes all our lives again.

As I've written in this column before, the time is not far away when all new television sets will have the world's top 500 movies embedded in a chip inside the set. The consumer will then be able to choose the movie they want and there will be an easy means of paying for it.

But the real threat to the DVD shop will be the coming of proper pay-per-view television delivered through cable or the broadband systems that the telephony companies are currently setting up around the world. BT will launch its service in Britain later this year. Why go out and buy a DVD when you can go home and download any movie you want, then pay for it on your telephone bill?

Of course, this latest technological development won't be the end of people buying DVDs, just as downloading music hasn't destroyed the CD business - CDs and DVDs will always make wonderful gifts - but it has made it a lot less profitable. The same thing will happen to the sale of movies and television shows on DVD.

Of course the Buggles famous song was only partially right. Video didn't kill off the radio star - look at the success of Terry Wogan or Jonathan Ross on radio - but it did push radio down the consumer's pecking order and that's what will inevitably happen to the DVD. What is really interesting in today's world is the speed at which whole new businesses come and go as technology changes.

Will 'Ariel' get whitewash?

Sometimes Ariel, the BBC's in-house newspaper, gets brave and challenges what the director general, the BBC Executive and even the BBC governors are doing. With a strike threatened by BBC Radio staff, who object to three existing jobs being merged into one, Ariel was at its most courageous last week when it reported on its front page a conversation that had gone on between a senior broadcast journalist, Jennifer Clark, and DG Mark Thompson.

According to the story, Clark told Thompson at the recent BBC News festival that 85 per cent of budgets in radio went on people and that cutting large numbers of staff must damage the quality of programmes.

Given that the BBC press office spent most of last week denying an accurate story I wrote here, one wonders if they do the same to Ariel stories?