He joined “Auntie” in 2000 after serving as NBC’s European new media head and as managing director for Flextech. Now Ashley Highfield runs all the BBC’s online output from a division that, since a corporation-wide restructure last year, wields more influence at the broadcaster than ever. Kicking off a series of interviews with British digital content leaders to mark the launch of paidContent:UK, Highfield talked to our UK editor Robert Andrews about balancing the books, staying innovative and the difficult decision to take advertising. (Full audio below for streaming or download)

What’s new at BBC Future Media & Technology?

Right now, it feels like pretty much everything’s new. We don’t take our eye off the ball. Keeping the main site up and running and increasing our audience is still our number one priority, and we just had some record numbers for us over the summer. We have about 17.1 million UK users of bbc.co.uk, which makes us now about the third biggest website in the UK behind Google and Microsoft. The first thing we’re trying to do is looking right across our website at how we can refresh the content but also very much the look and feel and navigation; that project - what’s already sounding rather clichéd - the “BBC 2.0” project is well under way and we hope that the first fruits of that will hit the website this side of Christmas.

We beta launched BBC iPlayer and we’re pretty pleased actually because we wanted to keep it quite a gentle ramp-up because we’ve been working quite closely with the ISPs to make sure we don’t swamp their networks. Three weeks after launch, we’ve had 200,000 registrations and I think we’ve got most, if not all, of the gremlins out of the system, it seems to be working very well now and the peer-to-peer network’s kicked in nicely. An so we’re going to be running that for a few more weeks and then choosing the point at which we want to start the marketing for that.

We’re also working on the Mac version and the streaming version for the iPlayer, and more about that when we’ve firmed up launch plans for that.

Do you have any more statistics on that? For example, how many shows have been downloaded so far?

We know that, but we’re obviously not yet… (disclosing it). Because we want to get the trends visible, which takes a few weeks before the load balances out. We see a very high amount of downloads, initially from some of the very keen early adopters. We’re going to give it a few weeks and then we’ll come out with the figures.

The application has taken a lot of stick over lack of platform neutrality. There was a petition with 16,000 signatures aiming to get that platform neutrality, a lot of people have complained that it’s against the spirit of the BBC’s principles; would you like to take the opportunity to clarify the state of play as regards the Mac and Linux versions and so on?

I can absolutely understand people wanting and expecting the BBC to be platform-neutral and it’s something I, personally, am pretty passionate about as well. All our services, wherever possible, we try to make available on all platforms, and that’s not just different IP platforms but that’s all the various flavours of interactive TV, for instance. But we always have to launch somewhere - I don’t think any developer would think that it would be wise to try a simultaneous launch of a new service on multiple platforms. And so the pragmatic approach we take is to launch a service usually on the platform that reaches the largest amount of audience the quickest - a) because that’s our remit, to try and reach the largest number of people, but b) it helps us iron out any bugs and issues as quickly as possible.

So this is absolutely typical for us to launch a service, in this case, to the Windows platform. Lets take our digital radio services - we launched them first on DAB, and then we launched them on DTT on the Freeview platform, and then we launched them over IP. Likewise, interactive TV and likewise our web services. I’m not sure why people think that we’re, you know, in the pocket of Bill Gates, because we’re absolutely not and we will be launching a Mac version and hopefully a more open version that will run on Linux.

You tell me you’re working on the Mac version right now - what’s the timetable on this stuff, because I know the BBC Trust has only committed you to six-monthly progress updates?

Yes, these are non-trivial things; we have spent, I think, a long time, but rightly so, trying to make sure that the peer-to-peer solution works. The peer-to-peer solution has got unique issues with the Mac platform because we can only give our programming away for seven days for free and that’s quite a difficult rule to implement, particularly to devices like the iPod, so we would be looking at a streaming solution for the Mac probably, and we’re just working through the technology at the moment. It’s not going to be long, I don’t think, before we’ll have the answers to those questions; we are working on it, it is our next major priority, and I think we will probably surprise people by how quickly, actually, we get a version out for the Mac and a version that will run on Linux.

The BBC Trust acknowledged that, in aiming for platform neutrality, you were hamstrung by third parties. Isn’t that the real issue - that the Kontiki download software, now owned by Verisign, runs Windows DRM? Was that a bad software choice or was it the best software choice to do the job you wanted to at the time, which was to launch an on-demand, online TV service? (Ed. note: Kontiki can also use other DRM standards)

I think you’re right - I think it was the right decision, I think it is still a very good decision; we’re very happy with the Kontiki solution. Indeed, we’re not the only ones - we were the first people to sign up with them but, subsequently, Sky and Channel 4 have also used pretty much exactly the same combination of technologies. I’m pretty happy with the way it works, and it’s important for us because the BBC commissions now about a third of its content from independent producers who, when we started on this journey three years ago, were of a view to not let us have any rights for online and it took a long time to convince the rightsholding bodies to allow us to offer television programmes for download over the net; they were very worried about this. The deal that we brokered with them was that we would make sure the content, as far as is humanly possible, was protected and therefore was only available free for a week so that we didn’t ruin their secondary exploitation window - and also BBC Worldwide as a secondary window of DVD sales and programming through channels like UK Gold. We really needed to show that this was a very robust solution that would allow us a very robust solution that would allow us to at least break the logjam of having no programmes available free in the UK, to a situation now where not just us but, having brokered that deal on behalf of the industry, all broadcasters are now able to offer a free window of programming, which makes the UK pretty much unique in the world in having almost all of its programming - certainly, by consumption, 80 percent plus of programming from us and ITV and Channel 4 and Sky - available free over the internet. There are obviously downsides of DRM; it can be cumbersome and I agree with the Open Source Consortium that, in an ideal world, we wouldn’t have to have DRM - but we don’t live in an ideal world. And, particularly for us as well, the BBC earns a great deal of revenue, £500 million, from BBC Worldwide - a lot of that comes from the international exploitation of the content, so it’s very important for us to be able to protect the content through DRM and through geographic IP techniques from a company called Quova to ensure that the free content stays within the UK.

You have to lock down the programming and ensure it doesn’t get out there in the wild or you risk losing the support of the independent content creators. Can you explain the rates package that you struck with independent producers’ groups that convinced them to come on board?

The rights window is that we have a free window, from the moment of transmission, for seven days so that you can download any programme from the BBC website for up to seven days after transmission. You’ve then got a further 30 days for the file to be on your computer for you to get around to viewing it. When you start watching the programme, you’ve then got up to seven days to finish watching the programme and then the file is deleted from your PC - or Mac in future.

A couple of other tweaks to that model - one is series stacking, where, on some of our series of programmes (for example, Doctor Who), we would make the whole series available so, if you only get to hear about Doctor Who at episode five, you can come along and download episodes one, two, three, four so the series will be there for you to catch up and then be able to carry on from where you left off.

And do independent producers of BBC TV programmes now get any extra money because their content is on another distribution platform?

This is part of the overall rights framework that we’ve negotiated through PACT, the industry body for the independent TV producers; it’s part of a bigger, longer-term renegotiation of the overall rights framework. There’s no specific uplift for this window.

Some ISPs complained about the bandwidth issue. Is there a problem here? How are you going to allay their fears that iPlayer - or frankly, Channel 4 or Sky’s equivalent - is going to swamp their networks? They seem to suggest the BBC or other any other broadcaster should pay them a little something to cope with the additional traffic.

This is obviously a big issue; the whole issue of net neutrality is, I think, an issue that everyone ought to be quite concerned with. At home, I pay my internet service provider £15 a month for a service, and that service is an 8Mbit broadband connection - I expect to be able to download whatever I want within that subscription package, I don’t really expect my internet service provider to turn around to me and say ‘ah yes, but we didn’t actually expect you to use that capacity and we didn’t really want you to download video’. I think that’s a bit disingenuous if any internet service providers start to turn around and say that to their customers. Indeed, the vast majority aren’t - I think this storm, as far as I can make out from reading the papers, was a concern particularly of Tiscali and (Tiscali UK CEO) Mary Turner; the press mentioned BT and Carphone Warehouse. Well BT came out the very next day and distanced themselves from it and actually said they were delighted with services like iPlayer that actually help drive take-up of broadband and help drive take-up of bigger packages on broadband. That message is, to be honest, the message we’re getting from most of our partners, through Virgin, who we’ve got a very good working relationship with, and we had this conversation yesterday with Sky and Easynet. So I think this may only be an issue to certain service providers who maybe buy wholesale from BT and possibly are selling a package that, if everyone actually used that package, they might find it hard to fulfill.

I did see, in one of the iPlayer video presentations, talk of embedding links on third-party publisher sites like Telegraph.co.uk and Bebo that would come through to download a complete show on iPlayer. Is that something that’s in place, do you have those relationships with what might be regarded as rival publishers, or is it something you’ve yet to negotiate?

No, we are well down the line with that. Probably the first, most significant deal in that regard was with YouTube, where we provide a range of short-form content clips to YouTube through a couple of channels, through a BBC Worldwide channel and a BBC public service channel. Those clips are doing really well, clips like from Top Gear, clips from Doctor Who, clips from our comedy shows; when you’ve watched a clip, next to the video is - and will be - context-sensitive links from that back to iPlayer to download the full-length version of those relevant short clips. That’s the kind of relationship we look to be rolling out more widely across our syndication partners.

How is the relationship going with YouTube so far?

It’s going pretty well actually. We’ve been very pleased with the downloads of some of our programming. Top downloads get well over 100,000 plus downloads, we’ve got quite a good engine now of getting those clips up on to YouTube. I think once we start the main marketing of iPlayer, we’ll be putting a lot more content on to YouTube - it’s a good service to offer, people within YouTube seem to really appreciate these short-form BBC clips, and for the people who want to watch the full-length programme, it’s a one-stop through to BBC iPlayer. These are early days and we’ll see how the relationship goes, Robert, but, at the moment, so far so good.

I read you had wanted to spend £1.2 billion over the next seven years on digital services, but the BBC didn’t manage to convince the government to raise the license fee by as much as it wanted. Some cutbacks are likely in TV, manifested as more reruns, we’re reading in the press. How does this impact on your new media plans, presumably you’re going to have to scale some things back online as a result as well?

This is under review at the moment; we are in the final stages of the presentations to the BBC Trust, they will then approve or suggest changes to our plans, so we’re not far away now from being able to share that detail more widely. My firm understanding and belief is that we do need to put new investment in to our website, our Web 2.0 plans for overhauling bbc.co.uk and for launching new services around news and sport and knowledge-building. These are really central planks to the BBC’s future strategy and I don’t think that we will be beggaring the future. However, as you say, we did not get the license fee settlement that we needed to be able to fully fund all of these plans and we’re looking at how we can drive efficiency savings out of the business. My personal view is that we will find those savings by squeezing assets within the BBC, I’m looking for savings within our overall technology spend - one of the last things I would want to do is to not keep the foot on the loud pedal with the development of new services on the web. We’re looking at how we can do things internally ever more efficiently to make the overall technology budget of the BBC go further.

Seems like quite a tricky balance to continue pressing on and innovating whilst, at the same time, living within your means.

You hit the nail on the head. It is a really careful balance. We need to spend technology on refreshing some of the local radio studios that are working on equipment that’s on a depreciated lifespan. Those are the decisions we’re having to make - do we invest in new and try and sweat the assets of existing longer or do we refresh existing and have to rein back something on the new services? I think we can have our cake and eat it, I think we need to find ever-cleverer ways of cutting costs and things like using peer-to-peer distribution is one of them. I think that working more closely with partners - whether that’s syndication partners like YouTube and AOL or technology partners like IBM, Sony, Microsoft - these are a number of different ways. One of the most interesting ways for us is to look at more open standards and open-sourcing of our code, I think that we have a tremendous support from the wider developer community. Certain initiatives that we’ve done recently like the Hack Day with Yahoo show that, where we do release our APIs, we can get the developer community to help build new services. So that’s something I do want to put more focus and investment behind, to see if we can gear off a wider developer community to actually help build our services of the future.

The BBC Trust is a new regulatory regime brought in in January. So far this year, it’s ordered that BBC Jam be closed with 200 job redeployments, it’s ordered some of the iPlayer proposal be scaled back, now it’s ordered another review in to all of bbc.co.uk’s output, due to complete early next year. Is it ever tough working under this new regulator, working within the constraints? Is it limiting or frustrating?

Yes. However, it doesn’t mean it’s not right. We get our funding from the license fee and I need to be pragmatic and fully cognisent of the fact that that is a privilege, that method of funding, and that we need to make sure that any major new services maximise the public value of what we’re doing and minimise any potential negative market impact. So I have absolutely no problem with the Trust wanting to go through a rigorous approval process - for example, with iPlayer. The issue is the time it takes. If I just take the iPlayer as an example - when we came up with the idea three years ago, in order to launch the service, we had to launch a technical trial and a consumer trial in order to amass the information to make the case to the Trust. Well that trial took six months; we then had to take the trial down, bring all the information together, make the case to the Trust, and then the Trust took nine months before making its decision. So the total elapsed time from coming up with the idea, to creating the user trial environment, running the trial, taking it down, submitting and then the Trust’s nine-month process - and during that time there was a cap on how much we could spend on the service so, after approval, we had to ramp up to the soft launch we did on July 27 - that’s a terribly long process, in that case of over two years. And we end up being criticised for being “late to market” or “slow to market” with services - that does bother me because I think it’s important the BBC is an innovator, and an innovator on behalf of the industry. My ideal would be to have the same level of rigour but to do it in a much shorter timeframe.

You took a little bit of criticism in May in newspaper articles - some of it singled you out - for no longer being innovative. Were they right? If so, is that your fault, someone else’s fault or the fault of this regulator that it takes a lot of time getting things past?

I think that’s not for me to judge. Perhaps others may judge us as innovative or not. I think that, across bbc.co.uk, we continue to innovate in a number of areas. Work that we’ve done with third parties like Second Life, like Flickr, syndicating our content on to YouTube, really nice pieces of work like a mashup of iPlayer on Facebook, the Backstage initiatives, our main news websites - right across the BBC website, some of the games that we offer around Doctor Who and Robin Hood - the depth and the breadth and the innovation, if you go looking for it, is all there. Yeah, we could always do more, but we are offering something of value, I hope to everyone, and we’ve got that responsibility of running what is now the UK’s third largest website. That’s, in some ways, how I’d like us to be judged - that we started out at the turn of this millennium as the UK’s tenth biggest website and are now the third; something like two thirds of all people online use our website. I think that’s really important to me - that we are a universally used and, I hope, loved, service. If we need to turn the wick up more on innovation, then, yeah, absolutely, and, if people want to criticise either me personally or the BBC in order to keep us on our toes, then no bad thing.

In that context, you’ve lost some really influential staff of late. Tom Loosemore and Ben Lavender - two people who seemed to have been instrumental in iPlayer and the BBC 2.0 project - developers like Tom Coates, Gavin Bell, Paul Hammond, Ben Metcalfe, Matt Biddulph. Although, at the same time, you seem to have poached in some quite senior appointments from BSkyB, Microsoft and Virgin Radio. There’s not anything like a “brain drain”, is there?

I think what we’re seeing is a brain refresh. This is something I’m acutely aware of keeping an eye on. Our churn - our turnover of staff - is lower than the industry average by quite a long way. I think that keeping people is very important, but sometimes letting people move on to pastures new. Some of those names you suggested, like Tom Loosemore moving on to Ofcom, I think he would obviously say he felt he was leaving on a high and really wanted a new challenge; I think that’s great. A lot of the people who go come back. Some of the people we have brought in recently like James Cridland from Virgin Radio and Erik Huggers from Microsoft and Richard Titus… These are good appointments and I’m not so worried that there is a brain drain, no.

The BBC was encouraged to be a bit more financially independent by taking online ads overseas. Could you explain what the current state of play with that proposal is?

The advertising on BBC is going to be on bbc.com, so this is internationally, there’s not going to be any advertising on bbc.co.uk; that’s pretty much the stated position and that’s where we are. They haven’t been added yet, they are due to be added; we’re also looking at carrying advertising within BBC Worldwide’s commercial channel on YouTube. (Ed. note: The decision is awaiting BBC Trust ratification, with BBC Worldwide expecting a decision in the autum).

There’s been some opposition from several quarters on the BBC taking advertising - it looks like something the BBC shouldn’t do - and yet, this is BBC Worldwide, the commercial arm. But there’s been a little campaign against it from BBC staff themselves. Can you get the idea through the door? Can you win support for it within the BBC?

The decision has been taken so adverts will run on bbc.com on the international site. Adverts are already run on the international commercial BBC World channel, and I think the precedent is there. I do absolutely understand people who feel that the adverts could have a potential negative impact on the BBC brand and it’s been a very difficult and careful decision for the BBC to make. I think, on balance, the revenues that BBC Worldwide bring the BBC are sufficiently important, particularly with the license fee settlement, that the alternatives to that - ie. of having to cut back on further services - are more unpalatable than the idea of carrying adverts would be to some people.

How much revenue are you expecting to generate from those online overseas ads?

That’s confidential. BBC Worldwide’s revenues all get ploughed back in to creating more programmes from the BBC; their shareholder is the BBC. That’s a very important point, that all of the money made by BBC Worldwide is actually put back in to programming. Much of our programming, like Blue Planet, just simply couldn’t get made unless we had co-production agreements and revenues from Worldwide.

Something that’s affected not just the BBC of late but pretty much every British broadcaster is the participation TV scandals. A number of shows have been found to have not given participants a chance to win competitions despite having taken their money. One of the implications of that was that you suspended competitions across broadcast and online; is that suspension still there and have you taken any further measures?

That suspension is still there and we’re reviewing it and, at some point, we’ll start feeding back some of the competitions, back online. Have we taken any further measures? Yes, we’ve looked at our message boards across the BBC just to make sure that things are somewhat tightened up, and we’ve had a look right across all of the content on bbc.co.uk, again, just to give it another check against editorial guidelines.

How would you characterise the BBC’s mission vis-a-vis online media, and what have you accomplished as regards that mission in that seven years you’ve been there?

Big picture - the BBC is there to inform, educate and entertain. We’ve got to do that to all audiences. In the seven years from 2000 to 2007, we have seen, particularly in certain audiences like 16-to-24-year-olds, a big decline in the amount of television they watch, but particularly in the reach to BBC One for instance. The reach has dropped from 93 percent to 73 percent. Our role, then, is to keep the BBC relevant in the digital age, and try and provide the kind of services that people want. As they’re leaving traditional, scheduled television, we want to provide them information, education and entertainment, but more on their terms - wherever, whenever, however they want to consume it. And so I think that our web offering, having increased its audience from 3.5 million to 17 million in the UK over that same period of time, is testament to the fact that the BBC is, I think, shifting but still remaining relevant and, hopefully, still engaging. The “engagement” word is probably the critical word here - we recognise that we need to move from a model of broadcasting at to engaging with, to being much more part of people’s daily lives and experience on the internet. That, for us, has been the shift - borne out, hopefully, by the figures of how many people still use us and get something of value out of us.

And how different do you think the BBC’s online output will be over your next seven years?

I think that we are on the cusp of some quite significant changes. The site is still largely of a Web 1.0 world and I think that the plans we have now, particularly rolling out over the next 12 months - for example, embedded video across the website, increased personalisation, the ability to drag content away from bbc.co.uk to your own website, whether that’s MySpace or Facebook - I think that shift will create quite a different looking BBC. We had Richard Titus (head of user experience) in looking at the overall design of our website with a view to really taking us a step forward with the look and feel and simplicity and ease of use of our offering. The next two years is going to be pretty seismic. The next seven years - anyone’s guess. A couple of things we’re quite interested in is in the rise of mobile and WiFi-enabled devices and how does the BBC shift to being something that’s much more localised and something that’s wrapped around you and where you are, rather than one-size-fits-all? That, for me, is probably going to be the most dramatic shift over the next several years.

You mentioned embedded video. Does that suggest you will be moving away from dependence on the Real Media and Windows Media formats? I know the BBC News technology section has trialled embedded Flash videos on a web page.

It’s definitely something we’re definitely looking at.

You can download the interview here (36 mins, 14.5 MB), or stream it below: