This morning, the BBC’s Director General Mark Thompson launched a new strategy document outlining the future direction of the BBC. Beneath the headlines about the cuts to its digital radio and online activities, what does the BBC’s positioning tell us about not just the corporation’s own priorities, but about the digital content landscape for broadcasters? And why is this important for the wider media industry?

When the BBC sneezes, much of the rest of the world’s media catches a cold.

This is not just a UK story. In every country I have visited as an analyst, clients want to talk to me about what the BBC is doing. In the UK, the BBC is the market leader in TV and radio, while online, it is the only UK-sourced web site in the top 10 destination for UK internet users. Internationally the BBC retains an impressive international footprint.

Under pressure, it has cut back on new platforms to prop up established services.

Facing ever-increasing demands for its services, the BBC has been under financial pressure, ratcheted up by commercial rivals and politicians from both main parties. But given a) the BBC’s legacy of creating new platforms for digital content, b) the long-term shift towards multi-platform and on-demand digital content, and c) the growth in time spent online, its decision to re-focus £600m on high end TV content seems a retrograde step.

Successful digital services still cost a fraction of core TV channels

The proportion of the BBC’s budget income on its online activities (see this graphic) remains a fraction of what it spends on TV, which is, relatively speaking, hugely expensive to create and manage. But with ‘just’ £122m (about the same as is spent on one digital TV channel, BBC3) it creates a world-leading internet presence. With such a spectacular return on investment, why cut that back? By shoring up TV budgets, the message seems to be: the BBC is primarily a TV broadcaster – everything else is secondary

The BBC has never been just a TV broadcaster

The BBC didn’t start out as a TV broadcaster – the medium had yet to be invented in the 1920s – and only shifted its focus in the 1950s once television consumption became mainstream. Now that half of the UK’s internet users regularly visit the BBC’s web sites, and with its radio services still dominating the UK airwaves, the BBC seems reluctant to see itself as a genuinely multi-platform content provider.

Digital remains the best route to target underserved audiences

The decision to focus on the big established channels is also a volte face from the BBC’s original strategy of using digital broadcast – such as DAB – as a means of targeting smaller, underserved audiences. The BBC’s vision recognized the key ability of digital technology to segment audiences to a degree previously unthinkable.  Online remains a key means of addressing these audiences of course, but taking stations such as 6 Music, 1 Xtra and Asian Network off DAB and slashing their programming budgets leaves any effort to reach these stations’ audiences as little more than tokenism

The BBC has an unrivalled legacy in terms of technology-led innovation

Retrenchment from its digital remit is a missed opportunity for the BBC, especially given its striking legacy across different platforms. Just as it delivered the world’s first TV broadcast from Alexandra Palacein 1936 (just a mile or so from where I sit writing this) so the BBC has remained at the forefront of media technology. The BBC’s online news has been a pioneer of best practice and is trusted and valued around the world. The UK is the world’s largest DAB market thanks to the role of the BBC. And the UK has led the European market, at least, in online delivery of long-form video content thanks to its iPlayer, which had 120 million programme requests in January.

The BBC has lost confidence in its own vision.

The BBC has been able to innovate and experiment because of its unique funding and remit. At a time of great uncertainty in the media industry, people look to the BBC to take a lead, and it continues to do this with initiatives such as Project Canvas. But ironically it seems that Mark Thompson does not ‘get’ digital in the way that even his much-maligned predecessor John Birt did. And while consumption of media continues to evolve with the rise of on-demand content across different platforms (as we shall see in upcoming Forrester reports) the BBC’s response seems lacking in conviction. Where the BBC once led fearlessly, it now seems fearful and curiously out of step.