BBC Looks to Reboot OTT Ambitions outside the UK

– To Launch OTT Service in the States in 2016
– ‘Looking at How Younger Audiences Are Behaving’
This first appeared in Faultline.

In 2004, The Online Reporter‘s sister publication Faultline suggested to one of the BBC’s directors that it should sell content direct to consumers outside of the US, using something like the iPlayer. Faultline was told to mind its own business.

Now, after losing eleven years of thinking about it, the BBC has announced its intentions to relaunch in overseas OTT markets in more or less this fashion. The BBC’s commercial arm, BBC Worldwide, is looking to “review” its position in OTT, once it has built out support for registered sign-ins, according to BBC director of audiences Nick North, speaking at Mipcom in Cannes this month.

It was explained, all those years ago, that the BBC “could not” launch such an overseas service because it would make money, and if it did that the government might decide it did not need to increase the BBC license fee, which provides it with more than $5 billion of funding a year. And this is how the BBC thinks.



The BBC: lured by filthy lucre overseas


The BBC’s total income for 2014 was around $7.75 billion which can be broken down as follows: $5.7 billion in license fees collected from British householders; $1.57 billion from the BBC’s commercial businesses; $374.6 million from government grants ($365.2 million of which is from the Foreign and Commonwealth Office for the BBC World Service); and $110.4 million from other income, such as rental collections and royalties from overseas broadcasts.

Of the BBC’s total revenue from last year, $1.19 billion was from outside of the UK, and in comparison in the US, CBS saw 2014 revenues of $13.81 billion, of which only $1.79 billion was sourced from outside the States.

The BBC’s ambitions could see it surpass CBS’ international revenues, saying the newly formed plans will increase revenues from its commercial arm to the BBC to $1.84 billion over the next five years – more than 15% higher than the returns of the previous five years. Without BBC Worldwide, the license fee would be $15 higher.

The UK is in a period where government cuts loom over every area of the public sector, with culture secretary John Whittingdale’s axe firmly directed towards the BBC – having previously spoken publicly of his frustration at BBC Worldwide’s lack of direction. “One key task is to assess whether the idea of universality still holds water. With so much more choice, we must at least question whether the BBC should try to be all things to all people,” said Whittingdale in July, when launching the UK government’s strategic review.

Last year US network AMC revealed it was taking a 49.9% stake in BBC America in a $200 million deal, which is available in 80 million American homes through pay TV services. The deal seemed like an attempt by the BBC to offload some of the overhead involved in running the service – to a business that has an established and productive relationship with the BBC and will take over most of the legwork. AMC also knows the US market inside out.

The BBC made several statements earlier this year, namely Director General Tony Hall revealing that the BBC will launch a new OTT subscription service in the US in 2016. The British broadcaster has introduced international versions of its iPlayer OTT service in the past, but has yet to formally launch a streaming service in the US. The BBC also declared it will give BBC Online in the UK a makeover through the myBBC scheme – designed to link up content and add new features.

The BBC Global iPlayer officially met its demise this year after the BBC said it would gradually phase out the subscription service back in 2013 – part of its plan to “increase investment in content, establish new global brands, and focus on digital innovation”.

Speaking on a panel last week, North said that while the traditional pay TV model is “very much alive and well,” the BBC is investing in “looking at how younger audiences are behaving and what are their changing expectations towards: effortless discoverability of content; towards some connection through some social participation with content; and that control where they want to have everything, anytime, anywhere.”

The new OTT service is not expected to replace the BBC’s popular iPlayer on-demand service. “While every major global player is creating a more integrated system, it would make no sense for us to go the other way and break up a system that is delivering returns that are essential to support public-service programs,” added Hall.

Following on from its AMC partnership in the US, the BBC has just signed a new joint venture with Sony Multi-Screen-Media to launch a BBC Earth channel to India.

The BBC’s biggest export, Top Gear, is hoping that the revamped show hosted by Chris Evans will retain its popularity amongst BBC Worldwide viewers, as it prepares to launch. The host trio of Clarkson, Hammond, and May will be fronting the Amazon Prime version – tipped to be called ‘Gear Knobs’ – will launch sometime next year, and filming officially commenced last week.

Ironically if the legislation to decriminalize non-payment of the license fee goes forward, and Whittingdale refuses to …

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