Ofcom publishes Market Impact Assessment examining the BBC's proposal to develop new on-demand video services
January 23, 2007
LONDON -- Ofcom today published its first Market Impact Assessment (MIA) which examines the BBC's proposal to develop and bring to market new on-demand services.
The proposed services represent an important opportunity for audiences to access BBC content in new and different ways. The services also have the potential to expand growth in UK-based new media industries.
However, there is evidence that certain aspects of the proposals may have a negative effect on investment in similar commercial services which would not be in the long-term public interest.
THE MIA PROCESS
The BBC Royal Charter and Agreement, which came into effect on 1 January 2007, requires the BBC Trust to subject all new BBC services to a Public Value Test (PVT) to assess whether they would be in the wider public interest. This comprises a Public Value Assessment - to be carried out by the Trust - and a separate, independent Market Impact Assessment, conducted by Ofcom.
Ofcom MIAs assess the likely impact of new and altered services proposed by the BBC on similar and related markets, examining in particular the extent to which the services might discourage innovation and investment in the commercial sector.
The BBC's proposed on-demand services consist of:
CATCH-UP TV - offering viewers the chance to watch any BBC programme from the last seven days over NTL:Telewest, Homechoice and the internet at a time of their choosing. This would also allow series stacking - the ability to store and view an entire series of programmes; SIMULCAST TV - BBC channels that are broadcast on television would be made available at the same time over the internet; and AUDIO DOWNLOADS - BBC radio programmes (excluding full-track commercial music) would be available to download from the internet.
OFCOM CONCLUSIONS
The new services could account for almost 4 billion viewer and listener hours by 2011. A significant proportion of these hours - over half in the case of simulcast and audio download services - could represent additional viewer and listener activity over and above current levels.
The proposed services are therefore likely to stimulate considerable interest in other new media services to the benefit of all UK consumers and businesses. They offer significant potential value to licence fee payers.
However, the MIA has raised the following concerns:
Series stacking, described earlier, could discourage investment in commercial on-demand services and is likely to have an adverse effect on related markets such as DVD rentals and sales. Ofcom believes the scale of series stacking should therefore be substantially reduced or excluded altogether;
in the case of catch-up TV on the internet, the ability to store programmes for up to 13 weeks could have negative effects on competition and therefore investment in consumer choice. Ofcom believes this storage window should be reduced or removed. In the event of removal, viewers would still have up to 14 days to download and view the content;
the ability to download free BBC audio content might have a serious adverse impact on specific markets; notably commercial classical music recordings and audio books. Ofcom believes the latter should be excluded from the proposed services and the availability of classical music recordings should either be constrained or removed; and
the cost of providing extra broadband capacity to deliver the BBC's proposed services to consumers is likely to be high, though any additional capacity would also be available for use by a wide range of other services including commercial on-demand services.
Ofcom
You May Also Like
