Ofcom has directed the BBC to conduct a public interest test by the end of the year on its plans for the BBC iPlayer, including the addition of a substantial number of ‘box sets’ or entire series available on demand. The regulator says this amounts to a material change to the nature of the online video service, originally promoted as a ‘catch up’ proposition.

The BBC has proposed a number of changes to the BBC iPlayer, including a substantial number of additional box sets, which would be available for an extended time period. The BBC is also planning to increase personalisation and marketing spend to try and boost its share of online viewing.

The BBC board determined that this was not a material change to the service and therefore did not warrant a public interest test.

Ofcom disagrees. It says there is a risk that the expected increase in viewing to the BBC iPlayer may come at the expense of its competitors, particularly the online video services of other broadcasters, with the BBC offering substantial amounts of material, free of charge and free of advertising.

The regulator says this may harm competition by reducing competitors’ incentives to invest in and develop their services. It cites as an example new subscription proposals ITV announced for its Hub service. It suggests that competitors might be less able to add exclusive content, or improve features on their own on-demand platforms, resulting in a less varied, vibrant video-on-demand market. In that scenario, audiences could lose out.

Ofcom has directed the BBC to conduct a public interest test by the end of 2018. It is also inviting the BBC to consider whether to incorporate any longer term plans for the iPlayer to avoid the risk of future intervention by Ofcom.

This does not mean that the BBC will be prevented from making changes to the iPlayer but Ofcom notes that the corporations needs to consider more transparently the public value benefits and likely effect it may have on competition. It considers that there are significant benefits to engaging openly with UK stakeholders, to provide insights that would enable the BBC to adapt its proposals, if necessary, while it considers its longer-term strategy.

BBC iPlayer logo.

Normally, Ofcom says it would ask the BBC to stop any changes to the iPlayer until the completion of the public interest test and once it had given final approval.

However, it will permit the BBC to make limited changes, including maintaining any existing ‘box sets’ and series for which it has previously acquired the rights to add them to iPlayer. Ofcom says it will monitor the situation and has given the BBC just two weeks to respond to the interim directions.

The intervention reflects industry concerns that the BBC is extending the purpose of the iPlayer beyond the original conception of a ‘catch-up’ service. It also indicates the apparent desire of the regulator for the public service broadcasters to co-operate more closely. The regulator has previously set out its expectations that forging new partnerships would help national players respond to increasing global competition.

Ironically, ten years ago, when public service broadcasters were planning to create a joint venture platform the Competition Commission blocked the initiative, known as Project Kangaroo, on the grounds that it would restrict competition.

Usage of the BBC iPlayer is ahead of that of the online services of other British broadcasters, which have not benefited from a similar level of investment.

In July there were 281 million TV programme requests across all platforms, up 19% compared to the same month the previous year. But that should be seen against a background of over 5.3 billion hours of television viewed that month. Traditional television still dominates viewing.

BBC iPlayer usage by time - June 2018. Source: Source: BBC iPlayer Performance Pack July 2018 / BBC / BARB / Neilsen / informitv

BARB figures show that in September less than 3% of viewing of the top 10 television programmes in the United Kingdom was on computers, tablets or phones, although it rose to nearly 6% of the audience for the finale of Bodyguard, the most popular drama series of recent years.

The BBC has been trying to boost usage of its iPlayer by providing the option to watch entire series online, and adding programmes from its archive, including 300 extra programmes for a month at Christmas.

The “re-invention” of the BBC iPlayer was outlined as a strategic priority in the latest Annual Plan from the BBC. The board of the BBC agreed in June agreed that “the roll-out of the iPlayer strategy needed to be more ambitious given its strategic priority”.

Tony Hall, the director general of the BBC told the Royal Television Society conference in September: “We are transforming iPlayer from a catch-up service to a destination, for long form, short form and live.” He said there was a need to move faster on plans for iPlayer, its BBC Sounds audio offering, and young audiences, saying “I have challenged the organisation to find £100 million a year from our current budgets to invest in these priorities from next April.”

The BBC responded to the Ofcom direction in a statement, saying “BBC iPlayer is vital to our audiences, particularly younger ones — it’s the way they increasingly consume content. Our approach is simply about making the iPlayer a better experience for users with the great British content they love, such as Bodyguard, Killing Eve and Blue Planet II.”

“The reality is that we are operating in a UK market which has changed fundamentally with the advent of global tech giants who have deep pockets but do not reflect Britain and all its diversity. Ultimately, we need to ensure that regulation acts in the interest of the wider public and supports the healthy future of Britain’s creative industries. We are sure Ofcom will recognise that.”