Broadcasting in 2013: BBC must get back on track in a fully digital TV world

It's likely to be a tricky year for linear channels as catch-up TV surges ahead

One thing is for sure. Well, probably. The BBC will have fewer director generals in 2013 than it did in 2012.

Lord (Tony) Hall, the former BBC News chief turned chief executive of the Royal Opera House, will take up the role in March. His task is nothing less than to piece together the corporation's shattered reputation – and restore morale – in the wake of the Jimmy Savile scandal and Newsnight's catastrophic report libelling Lord McAlpine.

Top of his in-tray will be appointing directors of BBC Vision (TV channels and production) and Audio and Music (radio stations and production), and completing the £700m of cost-cutting begun by Mark Thompson – but Hall must also begin to prepare for the all-important task of charter renewal, due in 2016.

"Tony's challenge will be to get the fallout, whatever it is, from Pollard and the other inquiries [about the Savile scandal] out of the way as soon as possible and get it back to business as usual," says former BBC1 controller Lorraine Heggessey, now the chair of independent production company, Boom Pictures. "The corporation is longing for the kind of steady hand that Tony will bring."

No sooner was digital TV switchover completed (on 24 October), with the implicit erosion of the audience share of the mainstream channels that went with it, than broadcasters faced a new challenge.

Video-on-demand is nothing new but is expected to come of age in 2013 with catch-up services, such as the BBC's iPlayer and the ITV Player, now available on Sky and Virgin Media, with 4oD, already available on Virgin, due to join the Sky platform early next year. Sky has launched its Now TV VoD service, available to non-subscribers and competing with the likes of Netflix and LoveFilm; while the YouView venture to bring broadband-connected TV to Freeview and FreeSat viewers has also finally arrived and will be looking for healthy set-top box sales over Christmas.

"We are also seeing a lot more connected televisions, so rather than having to go on to a tablet or a PC or laptop to watch these catch-up TV services, you can watch them on an increasing number of TV sets. It's a big deal," says Mathew Horsman, a director of media consultancy Mediatique.

The ease and availability of VoD will put further pressure on linear TV audiences and traditional forms of advertising revenue. In the US, a slump in network audiences this autumn – attributed to the growth of viewing on digital video recorders such as TiVo – has seen calls for a switch to a new ratings currency incorporating seven days of timeshifted viewing.

"There is a lot of life in the old beast yet," adds Horsman. "But for the first time a majority of viewers are being offered the choice, catch-up and linear, side by side on their TV screens."

Boosted by the Olympics, BBC1 was the only one of the five main channels to grow its audience share in the first 11 months of 2012, with a peaktime average of 5.64 million (23.5%).

Both ITV1 and Channel 4 slipped back, from 5.51m (22.6%) to 5.16m (21.3%), and 1.5m (7.4%) to 1.4m (6.9%) respectively.If ITV1's The X Factor is showing its age, then the need for so-called "creative renewal" at Channel 4 is even greater. The success of its Paralympics coverage could not halt the further ratings decline of its main channel which, two years on, is still struggling to fill the void left by Big Brother. Hotel GB, featuring all of Channel 4's biggest names in one show, was patently not the answer.

It will be another difficult year for the UK TV advertising market, with ZenithOptimedia predicting a 1% revenue fall in 2013, followed by a 1% gain in 2014. Some forecasts said the decline for ITV would be more than double that.

ITV will have its licence renewed for another 10 years, as will Richard Desmond's Channel 5, which has a returnable hit in Big Brother but the excitement around the return of its US acquisition Dallas quickly faded. C5 is entering a new phase without Jeff Ford, the director of programmes with nearly 30 years of network TV experience who quit last month, severing one of the last ties with the broadcaster's pre-Desmond era.

For BSkyB, where the aim for so long was to hit the 10 million subscriber mark (mission accomplished), the challenge now is how to milk that customer base. Average revenue per user, the key metric followed by analysts, rose to a new high of £550 in this year's third quarter, marginally (£2) up on the previous quarter.

But its much-heralded commitment to homegrown content – doubling to £600m by 2014 – may be squeezed by cost creep elsewhere. It had to spend more on live Premier League football than it intended, up £1bn to £2.3bn, because of competition from BT, and the price of film rights is on the rise.

Audiences for Sky1, home to much of its UK-made comedy and drama, tumbled 10% this year, but Sky executives always have their answer ready: never mind the overnights, feel the subscriber numbers.

In radio, the biggest commercial player, Global Radio, will get bigger with the purchase of Smooth Radio parent GMG Radio. The competition authorities are due to rule on the sale in March.

The BBC remains by some distance the biggest voice in radio, with all eyes on its new Radio 1 breakfast DJ Nick Grimshaw, tasked with attracting a new generation of younger listeners. His first audience figures are published at the end of January.

The BBC's radio iPlayer app proved a hit, with more than 1m downloads in less than two months, but you will have to wait until November to find out if the government is committed to digital radio switchover.

But for the first half of 2013, as was the case for the second half of 2012, all eyes will be on the BBC. Lord Hall, it's over to you.

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Guardian