Market Impact Assessment of proposed changes to BBC Three, BBC iPlayer, BBC One and CBBC

30 June 2015

The BBC’s Royal Charter and Agreement requires the BBC Trust (the Trust) to undertake a Public Value Test (PVT) before a decision is taken to make a significant change to the BBC’s UK Public Services.

In January 2015 the Trust launched a PVT in response to the BBC Executive’s application to proceed with the following proposed changes:

  • the closure of BBC Three as a broadcast channel;
  • the reinvention of BBC Three as an online only service;
  • the launch of a BBC One+1 channel;
  • the extension of CBBC by two further hours to broadcast from 7am until 9pm;
  • the development of BBC iPlayer beyond existing catch-up services to include an increased number of premieres and selected content commissioned by third party partners; and
  • increased investment in first run drama for BBC One (though in isolation this does not require formal approval).

In preparing a PVT, the Trust takes account of two separate reviews:

  • a Public Value Assessment (PVA), carried out by the Trust, which assesses the likely value of any proposed changes to the licence fee payer, particularly in terms of its contribution to the BBC’s public purposes; and
  • a Market Impact Assessment (MIA), carried out by Ofcom, which assesses the effect of the proposed service changes on other services in the market. It considers both the direct impact on consumers and producers of other services, for example in terms of price and choice, and the likely impact on competition and market development, which will affect consumer and citizen interests in the longer term.

We have identified the following product and service providers as being most relevant to this MIA: commercial broadcasting channels; video on demand (VOD) providers and subscription VOD providers; pay TV retailers and independent production companies.

In assessing the potential impacts of the BBC's service proposals we have considered:

  • The static impacts in relation to affected products and services – these are the direct effects of the BBC's service proposals on affected services without taking account of how other service providers might respond. Where possible, we have sought to quantify these impacts in this MIA over the period 2015 to 2018.
  • The dynamic impacts in relation to affected products and services – these are the effects that result from changes in competitor behaviour as a result of the BBC's service proposals and potentially broader market trends. We have not quantified these effects, which are inherently more uncertain.

In developing our findings we have received written responses from 13 stakeholders, commissioned our own qualitative consumer market research and sought additional data from various media tracking agencies including BARB and 3 Reasons.

Our assessment is based on the proposed set of changes set out in the Trust’s service description for this PVT. We understand that the BBC has continued to develop its proposals beyond the service description, which may merit further assessment before being taken forward.

Full Reports

Proposed changes to BBC Three, BBC iPlayer, BBC One and CBBC : Market Impact Assessment (PDF, 1.4 MB)

BBC Market Impact Assessment: Proposed changes to BBC iPlayer and BBC Three – Qualitative research report (PDF, 3.9 MB)

Provisional conclusions on proposed changes to BBC television and online services