Market Impact Assessment: BBC new on-demand proposals

23 July 2010

Executive summary

The new BBC Royal Charter and Agreement, which came into effect on 1 January 2007, included the setting up of a new Public Value Test (PVT) regime to assess whether the BBC's proposals to launch new services in future – or to amend existing services – would be in the wider public interest.

The decision on whether to authorise the proposed services sits with the BBC Trust. In reaching its conclusions, the Trust must take into account the findings of two separate research projects. The first – the Public Value Assessment (PVA) – is commissioned by the Trust directly and seeks to assess the broader public value of the proposed service to UK citizens and consumers. The second – conducted by Ofcom – is a Market Impact Assessment (MIA).

The purpose of an Ofcom MIA is to assess the likely impact of the proposed services on markets in which these would be provided as well as on other related markets. In carrying out an MIA, we are particularly concerned with assessing the extent to which the BBC’s proposed services might deter innovation and investment by relevant alternative providers in the commercial sector. Were those providers to be deterred from seeking to offer competing services this would ultimately have the effect of reducing choice for listeners and viewers, to the detriment of the public interest as a whole. Although the MIA on the BBC's on-demand services started before the new PVT regime came into force, it has been conducted in accordance with the new provisions.

In August 2006, BBC management applied to the BBC Governors for permission to introduce the following services:

  • catch-up TV over cable – a 7-day catch-up TV service available to customers of ntl:Telewest and Homechoice. This would include what is known as series stacking; - the ability to store and view an entire series of programmes within seven days of the broadcast of the last programme in that series. So for example, if a drama is broadcast in six parts over six consecutive weeks, it would be possible to view all six episodes up to a week after the broadcast of the last episode.
  • catch-up TV over the internet – a 7-day catch up service covering a large proportion of the BBC’s scheduled programming, and including series stacking (as above) as well as the opportunity to store downloaded programmes for up to 13 weeks before viewing;
  • simulcast TV over the internet – simulcasting is making a programme available on more than one channel or medium at the same time. The BBC's proposals include making the BBC channels which are broadcast on TV available simultaneously over the internet; and
  • non-DRM audio downloads – DRM or Digital Rights Management is the technology intended to protect the copyright associated with any creative work (such as a programme or musical performance) which is distributed digitally, for example by means of downloading from the internet. The BBC's proposals include making BBC radio programmes, excluding full-track commercial music, available to download from the internet without DRM systems in place. Those programmes could then be stored indefinitely and listened to on multiple devices, including iPods and MP3 players.

All of the proposed services, except for catch-up TV over cable, would be accessed from the internet using the proposed new BBC iPlayer software. This software is described in Section 2 and Annex 2.

The BBC Governors announced in August 2006 that they were initiating a PVT to evaluate the BBC's proposals for the new on-demand services. On September 15 2006 the Joint Steering Group (JSG) set up by Ofcom and the BBC Governors agreed the terms of reference for the Ofcom MIA. The original 3-month timetable for the MIA would have led to completion in December 2006. We subsequently agreed with the BBC Trust to extend this by five weeks to give stakeholders more time to prepare written submissions following the publication of additional information on the BBC proposals.

Full report

BBC new on-demand proposals - Market Impact Assessment (PDF, 2.2 MB)

BBC iPlayer Market Impact Assessment: Consumer Survey