James Murdoch, the chief executive of BSkyB, has criticised the BBC iPlayer for crowding out competition. He said the way in which the BBC is regulated, which had allowed the online video service to be launched, was an “abrogation of accountability” and that it had “squashed other competitors”.
Now also head of News Corporation in Europe and Asia, James Murdoch was answering questions after delivering the Marketing Society annual lecture in London.
“I’m not saying it’s a bad product, but I am saying that it does crowd out competition and innovation,” he said, describing the iPlayer as “a big step, a pre-emptive intervention in a marketplace otherwise hugely competitive and moving very fast.”
BSkyB, the leading pay television provider in Britain, has its own online video service, known as Sky Anytime, which launched before the BBC iPlayer. Sky is also planning to allow programmes to be downloaded and transferred to Sony PSP handheld players.
The BBC Trust responded by saying that the iPlayer project, for which the BBC has allocated a budget of £130 million over five years, had been subjected to “a rigorous public value test that included a market impact assessment carried out by Ofcom”.
“The trust imposed a number of conditions on the iPlayer to take account of market impact issues, consultation responses from the industry, and responses from over 10,000 licence fee payers before final approval was given,” said a representative of the BBC Trust.
The BBC has also come under criticism from some broadband service providers, notably Tiscali, for causing an increase in traffic on their networks. So far the increase is marginal, around 5% by some estimates, but it threatens the already precarious business model of reselling “unlimited” broadband access.
At a hearing before a parliamentary select committee earlier this week, Ed Richards, the head of the communications regulator Ofcom told politicians that requiring the BBC to pay for network upgrades was unworkable. He said: “I am not convinced myself that the right answer to that is to get the BBC to pay for the iPlayer”.
He said he would not rule out “content-led tariff models” whereby service providers do deals with content providers. Asked whether Ofcom has the power to levy the BBC for investment in next-generation access networks he said: “I am very sure we don’t have that power… and I’m pretty disinclined to go down that route”.