BBC On-Demand Proposals Could Impact Commercial Services
Ofcom’s first Market Impact Assessment on the BBC’s on-demand services says that the corporation’s proposals “could have a negative effect on investment in similar commercial services”.
Ofcom said that although it is important that the BBC should be able to participate actively and fully in emerging markets, it is also important that the corporation’s involvement in the market for on-demand services should contribute positively to its development as a whole.
In its key findings and recommendations, Ofcom said that the three video services proposed by the BBC could account for around three billion viewer hours by 2011, or about 3% of total viewing hours, with the regulator saying that its research indicates that this is likely to represent an increase in overall hours as audiences listen to and watch more content outside the home.
It adds that the BBC’s proposed services are likely to have a considerable effect in expanding this new market, bringing substantial public benefits as a consequence.
However, Ofcom is concerned about the proposed inclusion of ‘series stacking’, where viewers are able to download entire series of programmes.
It says that the service could discourage investment in commercial on-demand services and is likely to have an adverse effect on markets such as DVD rentals and sales.
In the case of catch-up TV over the internet, Ofcom says that the proposal for a facility to store programmes for up to 13 weeks should be reduced or removed.
Ofcom also says that recordings of book readings should be excluded from the proposed service, along with classical music recordings, as this could impact commercial sectors.
Speaking on behalf of the BBC Trust, Diane Coyle, trustee and chair of the Public Value Test Steering Group, said: “Ofcom’s MIA provides us with a thorough analysis of the market implications of the proposed new services, and highlights important factors for the Trust to consider.
“The MIA forms only one part of the PVT process. In reaching our eventual decision, we must also consider the potential public value created by the on-demand proposals. This will be published in the Public Value Assessment (PVA) of the on-demand proposals, carried out by the Trust with the support and assistance of the Trust Unit.
“It is the Trust’s responsibility to examine both the MIA and PVA, and our decision will be based on an informed judgement of all the evidence, in the best interests of licence fee payers.
“Once this process is completed the Trust will publish its interim decision for consultation, along with the evidence on which it is based. We will ensure all stakeholders have adequate time to respond before reaching our final judgement.”
Ofcom: 020 7981 3040 www.ofcom.org.uk