In his Huw Wheldon Memorial Lecture at the Royal Television Society's Cambridge Convention (Thursday 13 September), Lilley accused the TV industry of failing to escape a linear channel mindset that the audience is increasingly leaving behind.
He said the industry misguidedly believed that TV was more important than the web, seeing the internet as an opportunity merely to provide 'TV with clicks'.
Lilley said: 'The broadcasting system as a whole has failed to understand the shift in the way that TV is viewed now that it's part of a wider world of media and now that the people formerly known as the audience think of themselves not as grateful recipients of TV's wonders, but as paying consumers of the service it provides.'
Less is more
Lilley urged the industry to make 'less and better TV' by focusing more on content than on technology and to move beyond outdated notions that interactivity means simply the red button or websites tied to TV programmes.
'Broadcasters have under-invested in the creative potential of social media,' he said. 'They have, by and large - and I include the BBC in this - taken some short-sighted decisions to use technologies defensively, to protect TV income or to provide new means of distribution.
'The combination of these, and changes in audience behaviour, mean that many broadcasters are looking in the wrong place in the future.'
TV's reliance on thinking in channels is seriously outmoded, he argued.
'If you think, as many broadcasters do, that the name of the game is battling other broadcasters for audience share and advertising, and that channels are the best tools to use to do this, then you're fighting the last war.'
Straining and failing
Lilley used clips from children's programmes down the ages, such as Multi-Coloured Swap Shopand Take Hart, to illustrate his point that TV has strained, and in his belief failed, to get at social networks for years.
To reach a generation growing up with communications tools at their control, broadcasters must focus on their strengths as content creators, he concluded.
'The creation of mass cultural events like new TV shows, sport, news coverage and even the good old-fashioned soap, will sit side-by-side with social media. If anything, these shared reference points have the potential to become more important than ever as much of our culture fragments.
'In the future, broadcasters need to build on the real, deep source of their uniqueness: not the broadcasting bit, but the telling stories bit.'