Sky and Channel 4 are less than pleased about the BBC’s planned improvements to its iPlayer service. They’ve both submitted responses to the proposed plan to Ofcom, which provisionally approved the Beeb’s plans in June.
A consultation is currently underway, and Ofcom will make a final decision in August. If the BBC gets its way, shows will be made available on catch-up for up to a year as standard, instead of 30 days.
Channel 4, however, is arguing that the change is “likely to have a disproportionate negative impact on the other public service broadcasters”.
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In its submission to Ofcom, which was first spotted by The Times, Channel 4 claims that the BBC has “significantly underestimated” the impact that the change will have on the other PSBs’ video-on-demand services, “particularly All 4”.
Subscription video-on-demand services, like Netflix and Amazon Prime, have significantly bigger budgets and revenues than PSBs, Channel 4 argues, therefore they won’t suffer as much.
Frontier Economics, which was commissioned by the BBC to assess the competitive impact of the change, had predicted that All 4 would take a £4.5m a year revenue hit in 2024, rising from £1.1m in 2019. However, Channel 4 says it believes the impact will be bigger.
“We believe All 4 is more likely to be substituted than other [broadcaster video-on-demand] services for two key reasons,” Channel 4 explains. “Firstly, the iPlayer proposals are explicitly designed to appeal more to younger viewers and their choice of content to extend or bring back will likely reflect this. As a youth-skewing services All 4 will be disproportionately affected.
“Secondly, the fact that we are the only BVoD provider already positioning ourselves as a browsing destination, with extended content availability in our archive content offer means that we will be more heavily affected than other services which only offer catch-up.
“The fact that the BBC is advertising-free is likely to further exacerbate the impact on All 4.”
Channel 4 also argues that “whilst we agree that PSB VOD services will increasingly become important gateways for viewers to access our content, we do expect linear viewing to remain important for the foreseeable future”.
Sky has also reported its own concerns to Ofcom. One of these concerns funding.
“It remains unclear exactly how the BBC plans to fund its proposals and what impact this may have on public value, particularly in terms of the direct costs to the BBC of securing the additional rights necessary, and the indirect costs comprising the loss of value to BBC Studios of content that was previously available for licence to third parties but which is no longer available, or the loss in value of those rights as a result of their extended availability on the iPlayer,” Sky’s submission reads.
“Whilst the BBC merely notes that the additional costs of acquiring rights for iPlayer will be met from future cost savings, no attempt is made to quantify those costs, or justify the additional benefit that the proposals provide against spending those cost savings on new programming or in some other way to benefit licence fee payers.
“Furthermore, the BBC has failed to add to those costs the commercial revenues likely to be lost as a result of extended availability of content via the iPlayer.”
Sky also argues that the change could “impact the BBC’s incentives to make its content available outside of its wholly owned iPlayer service”.
Which brings us to this wonderfully catty segment: “Sky has long experienced (and continues to experience) significant difficulties gaining access to iPlayer content and functionality across all of Sky’s platforms… For example, the BBC currently refuses to allow Sky to include its catch-up content in its Sky Go and Sky Q apps, or to distribute UHD versions of the FA Cup final and Wimbledon tennis finals via satellite – preferring instead to restrict access to the BBC iPlayer.
“There is a real risk that the BBC’s proposed expansion of iPlayer exacerbates these pre-existing issues. Accordingly, any Ofcom approval of the BBC’s iPlayer proposals should be conditional on the BBC allowing platforms such as Sky’s access to the expanded catalogue of content and enhanced functionalities and formats.
“The interests of Licence Fee payers are clearly best served by an approach that facilitates widespread access to the content intended and paid for by them, on the platforms and services on which they choose to consume it.”