Blog: Where next for BBC content online?
- Published: 23 June 2008 13:32
- Last Updated: 24 June 2008 11:38
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Udi Regev, creative director at etv media group, considers whether the BBC is heading towards a two-tier system with its online video content.
When the BBC recently announced plans to simulcast its flagship channel on the web, the press went wild.
"This is the beginning of the end of the licence fee without a shadow of a doubt", announced the Daily Mail, quoting MP Phillip Davies (Culture Media and Sport Select Committee) who went on to say: "This could also be the beginning of the end of the conventional TV set."
Unarguably, this is a milestone. Migration of content from the TV to the PC is a natural progression that is on the cards for all TV channels (in fact, BBC3 as well as the entire ITV group of channels are already streamed live online).
However, migrating TV content the other way around, from the PC to the good old living-room telly warrants a closer look.
Only a few months ago, the BBC announced its less controversial yet as significant plan to launch its highly successful IPTV catch-up service, the BBC iPlayer, on TV.
"We have always envisaged BBC iPlayer on a TV platform and in the living room" said Ashley Highfield, the BBC's outgoing director of future media and technology, and future CEO of Project Kangaroo.
The chosen partner - Virgin Media TV, whose subscribers are now able to access over 350 hours of BBC content at TV quality through a video-on-demand portal at a push of a (red) button.
Although details of the deal between the BBC and Virgin Media TV are sketchy, both BBC initiatives take us a step closer to a transformation of the way broadcasters distribute TV content and the way audiences watch it.
By offering a free online service alongside an exclusive VoD service available on a TV platform for paying subscribers, the BBC is already indicating a possible future move towards a two-tier system similar to the one used by many online companies.
With growing pressure from the government, the BBC would be wise to rethink the way it funds its operations. A two-tier business model, in which a premium service subsidises a free service, will offer broadcasters across the board a new revenue stream which may liberate them from their dependency on advertising revenues and the licence fee.
Last April, Highfield was already talking about HD on the iPlayer. It is easy to imagine how his new project, Kangaroo, would allow broadcasters to offer high quality content, on-demand, uninterrupted by ads, streamed or downloaded for unlimited use at a premium price. All this while providing the same content, at lower resolution, for limited use, supported by ads and possibly linear for free.
After all, the music industry has been using that same business model for decades.
In fact, offering free music at FM or even DAB quality with DJ and ad interruptions has proven to be a winning formula for music labels. It helps promote artists, achieve critical mass and drive sales of CDs which offer listeners the same music, at a higher quality to use 'on-demand' and own forever.
Offering a premium rate service alongside a free service has also emerged as a winning formula for online. It has proven it can be both financially viable and well perceived by consumers.
In a fragmented market and with many consumers already using the internet to watch a large amount of TV content, broadcasters need to come up with new ways of getting their content to viewers without relying on old business models such as the licence fee.
The power of 'free' is undeniable. The latest announcement that the BBC is to open up its massive archive of programming will no doubt fuel the demand for free TV content online.
Broadcasters and media companies searching for new revenue streams will come to realise that a two-tier distribution model may be a viable solution both for them and for their audiences.
Udi Regev is creative director at etv media group
