BBC Three Goes Non-Linear with Simulcasting on the Internet

| Jan 25, 2008 | Consumer Broadband Service - Europe | Competitive Update

| Analyst: Ben Tudor

Current Perspective: Positive
Vendor Importance: High
Market Impact: High

Event Summary

January 22, 2008 – BBC Three is set to become the first non-news BBC channel to transform from a linear service to a fully joined-up, multi-platform venture. Programmes will be simulcast across television and the web, and user generated content will be integrated into peak time schedules.

Analytical Summary

• Current Perspective: Positive on the BBC’s announcement that it will simulcast BBC Three over both the Internet and Freeview, as the channel is well-placed to do so, and its audience is likely to be receptive to the idea of viewing the channel over the Web. The channel’s demographics, target audience and programming are centered around a young, technologically-literate audience, and much content is generated within the BBC, removing content licensing issues that have dogged other simulcasts.

• Vendor Importance: High to the BBC, as it is experimenting with a variety of ways of getting its content to license fee payers. Simulcast is one way to do this, and the BBC is exercising its remit by trying a variety of ways to bring content to consumers using the Internet.

• Market Impact: High on the Internet service provider market, as this is a sign of things to come. The likes of YouTube have already shown how video can be a compelling application over the Internet, but live streaming of TV content by a major broadcaster could prove to be a QoS and bandwidth nightmare to service providers. It is likely that a number of broadcasters will follow suit over the next year or so, increasing the amount of streamed data over service providers’ networks. While not as bandwidth-hungry as P2P traffic, video does require a certain level of QoS that even ADSL2+ service providers will be hard pressed to provide.

Recommended Competitor Actions

• Service providers such as BT, Carphone Warehouse, Virgin Media and Tiscali should consider offering Slingbox-like streaming devices and services as a premium broadband service. While streaming video over the Internet now works well, network-supported applications can do better, and service providers should both supply those applications and charge a premium for them.

• Broadband providers should use simulcasts as an excuse to bring the net neutrality debate to the surface. Tiscali recently had to pull bandwidth-throttling software from its network after users complained it interfered with the operation of streaming viewers and iTunes. The BBC Three launch and other simulcasts should be used to return the advantage to service providers who offer tiered QoS services.

• Rivals should ask whether this move is the best use of license payer’s money. This argument is wheeled out on a regular basis, and there’s no reason it shouldn’t be used to score a few points again now.

• Sky should step up its efforts to offer simulcast and on demand viewing, the latter already being on offer to subscribers and Vodafone customers. A ‘web only’ subscription for its broadband customers could also lead into any future IPTV offering from Sky.

• All firms offering on demand programming should publicise their offerings more heavily – viewers like to cherrypick content anyway, rather than view one channel only. It is important that users can get access to programming with a minimum of fuss or registration.

CLIENTS ONLY

Competitive Positives and Concerns

Recommended Vendor Actions

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