Ofcom begins BBC on-demand service probe

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Media regulator Ofcom has begun to assess what impact the BBC's on-demand proposals, including the online video download application iPlayer, might have on commercial rivals. This is Ofcom's first market impact assessment (MIA), a procedure introduced under the BBC's new Charter, which forces the corporation to subject all new or substantially changed BBC services to a public value test (PVT), overseen by the BBC Trust, the new body replacing the BBC's governors.

Ofcom's MIA will be weighed against the public value which would be created by the on-demand services. That public value assessment (PVA) is being conducted by the governors' own advisors in the BBC Governance Unit. Ofcom said it aimed to complete its MIA by mid-December. The results of the MIA are expected to be published alongside the BBC Trust's PVA in early 2007, giving the new governing body its first major decision. Ofcom's terms of reference for the MIA have been drawn up by a joint BBC governors and Ofcom steering group.

The four on-demand services are:

  • Seven-day TV catch-up over the internet
  • Simulcast TV over the internet
  • Non-time limited audio downloads over the internet
  • Seven-day TV catch-up over cable.

The first three services would be combined within the first version of the BBC iPlayer, which would incorporate the existing BBC players (such as the popular News Player, Sport Player, and Radio Player), with a consistent user interface and brand.

The terms of reference—published yesterday—state that the MIA will "provide an assessment and, where possible and relevant, a quantifiable evaluation of the impact on the relevant primary and other markets identified. This includes an assessment of the impact on producers and other participants in relevant markets and ultimately consumers".

The assessment of some effects "is likely to remain purely qualitative, for example those related to investment incentives in other markets", but Ofcom said it would also seek "some information as to the likely impact on existing (and perhaps future) producers' plans".

BBC future media and technology chief Ashley Highfield unveiled the findings of a four-month consumer trial of the iPlayer's prototype forerunner, the integrated media player (iMP), in April. The total number of TV downloads during the trial was 150,000, and the total number of viewings and radio listenings was 70,000. The most popular reason for using the iMP was when a favourite programme had been missed and to watch a programme at a more convenient time.

IMP incorporated Microsoft's Windows Media digital rights management (DRM) software to delete programmes seven days after programmes aired on TV, and prevented users from e-mailing files to other computer users or sharing it via disc.

The decision to go with Windows DRM angered Mac users, as several postings to the iMP site's message board—which is still accessible—testify.

Earlier this month BSkyB was forced to suspend its movie download service, Sky by broadband, amid concerns that Microsoft's DRM had been hacked.

Lovelace Consulting  |  19.09.2006

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