UK broadcast regulator Ofcom has directed the BBC to conduct a ‘public interest test’ (PIT) to assess properly the value and potential impact on other broadcasters of a number of changes to the BBC iPlayer the Corporation wishes to make, having provided its plans to Ofcom for consideration.
In order to protect fair and effective competition in the TV sector, Ofcom examines whether changes which the BBC wishes to make to its licence fee-funded TV, radio and online services are significant enough to merit detailed scrutiny.
Ofcom has decided the BBC’s proposed iPlayer changes are material and suggests the PIT process will ensure that any legitimate competition concerns and potential market impacts are fully considered by the BBC, alongside the public value benefits.
The BBC has proposed a number of changes to the BBC iPlayer for implementation in 2018/19. These include:
- A substantial number of additional Box Sets, which would be available on the iPlayer for an extended time period;
- changes to features, such as enhancements to the user experience and personalisation; and
- increased marketing spend.
The BBC estimates that its proposals could increase iPlayer’s share of video-on-demand viewing. As a result of its proposals, the BBC forecasts that total minutes of iPlayer viewing could increase substantially in 2018/19 relative to 2017/18 levels.
The BBC Board’s assessment concluded that the proposed changes to iPlayer did not constitute a material change, and did not therefore warrant a PIT. The BBC submitted its materiality assessment on its proposals to Ofcom for consideration on June 8th 2018.
Having carefully assessed the BBC’s plans, Ofcom disagreed with the BBC Board’s conclusions. “We consider its proposed changes to iPlayer do represent a material change. In reaching our decision, we have considered the relevant factors set out in Ofcom’s guidance on proposed changes to the BBC’s public service activities,” it said.
According to Ofcom, the process will ensure that any legitimate competition concerns and potential market impacts are fully considered by the BBC, alongside the public value benefits. “We understand the BBC is considering how the iPlayer should further develop after 2018/19. We therefore require the BBC to also consider whether to incorporate those plans into the PIT by 31 December 2018. By undertaking a PIT on its longer-term plans, there is the potential for the BBC to reduce the risk of future intervention by Ofcom,” it suggested.
Under normal circumstances, given Ofcom’s materiality finding, itt would expect to direct the BBC to cease making changes to the iPlayer until after the completion of the PIT, and only once Ofcom’s final approval had been given.
However, in this case, Ofcom believes it is appropriate to allow the BBC to make limited changes to the iPlayer. “We understand the need for the iPlayer to continue to develop, and for the BBC to retain audiences. We also consider it appropriate to allow the BBC to use the programme rights it has already acquired, to enable licence-fee payers to benefit from the BBC’s investment,” it said. Ofcom’s draft directions will therefore permit the BBC to proceed with parts of its proposals in 2018/19. The BBC would be able to:
- retain any series it has already added to the iPlayer since the start of 2018/19 under its proposals; and
- add to the iPlayer any series to which it acquired rights before November 1st, and to make them available on the iPlayer until those rights expire.
For subsequent years, and in line with its proposals on number of series, the BBC could make available a limited number of new or latest Box Set series, and a limited number of archive series. However, these may only be made available for a shorter time period than the BBC outlined in its proposals. Ofcom considers permitting the BBC to provide some additional Box Set content for longer than the standard 30-day catch-up window would strike a balance between enabling audiences to benefit from more content availability and minimising the risks of any adverse impacts on competition arising.
Ofcom also plans to monitor performance of the BBC iPlayer to determine whether the interim measures remain appropriate, or whether changes are required. It will keep the content of these measures under review and require the BBC to provide it with monthly information on the series it has made available on the iPlayer.
Ofcom has given the BBC an opportunity to raise any practical concerns regarding its interim directions, which it must submit to Ofcom by November 16th 2018.
A spokesman for the BBC said: “BBC iPlayer is vital to our audiences, particularly younger ones – it’s the way they increasingly consume content. Our approach is simply about making the iPlayer a better experience for users with the great British content they love – such as the Bodyguard, Killing Eve, and Blue Planet II.”
“The reality is that we are operating in a UK market which has changed fundamentally with the advent of global tech giants who have deep pockets but do not reflect Britain and all its diversity. That’s what we do and why the public love our content.”
“The BBC is the largest investor in British programming and talent. The priorities of Netflix and Amazon are different. That’s why our success is crucial for the future of our world-beating creative sector. Ultimately, we need to ensure that regulation acts in the interest of the wider public and supports the healthy future of Britain’s creative industries. We are sure Ofcom will recognise that.” – Advanced Television