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UK Broadcasters Ready to Take on Netflix

UK commercial broadcasters are preparing to join their French and German counterparts in taking on Netflix directly with ad-free SVoD services.

ITV, the UK’s biggest commercial broadcaster funded largely by ads, is furthest advanced on this front having just announced plans to push ahead with an SVoD service. This came after receiving positive feedback that UK consumers are willing to pay for high quality British television that they can watch on their terms and have access anywhere, anytime and without ads.

Such a service could be a revamped version of the ITV Player which serves its content on demand but carrying ads. At the same time further spice has been added by overtures from UK broadcasting and telco regulator Ofcom calling for revival of an 11-year-old plan to develop a common UK-wide OTT platform that could be shared by all broadcasters.

The irony here is that the original proposal in 2007 to construct such a platform, codenamed Kangaroo, was quashed by the regulator on competition grounds because it would be too dominant and not leave enough room for new players to emerge. History tells us that such players did emerge and that one in particular, Netflix, itself became dominant in the UK market, as in many others. Now the UK broadcasting community as a whole wants to reverse that, but it may well be too late. There is a common sense of regret among European broadcasters more widely that a great opportunity was lost around a decade ago to forge a strong local OTT community, out of those misplaced competition fears. BBC director of radio and education James Purnell stated in May 2018 that the Competition Commission’s decision to kill Kangaroo in 2007 had opened the way for Netflix to dominate the SVoD market, adding that the BBC was working hard to reverse that position.

Sharon White is Chief Executive of Ofcom.

Sharon White is Chief Executive of Ofcom.

Ofcom itself had sowed the seeds of a second Kangaroo in March 2018 when its CEO Sharon White stated that “the market dynamics have changed significantly” since the original Kangaroo was proposed, hinting strongly that such a venture would be greeted more favourably today. That was almost tantamount to an admission the regulator was wrong 11 years ago and wanted to remedy that now.

Any common platform would quite likely be modeled on the BBC’s highly successful iPlayer, which is widely considered to be technically superior and more robust than the players of ITV or other UK broadcasters. The main addition would be a billing capability given that the BBC’s content is free to UK consumers as well as being ad-free.

The UK’s renewed interest in a common OTT platform for broadcasters has also been inspired by similar moves in France and Germany for the same motives. In France, commercial broadcasters TF1 and M6 Group have teamed up with public broadcaster France Televisions to launch a joint national OTT TV platform, called Salto. Meanwhile in Germany, ProSiebenSat.1 is partnering with Discovery to launch a new integrated streaming platform that will incorporate the former’s ProSiebenSat.1’s 7TV and Maxdome services alongside the latter’s, Eurosport Player and a range of other content. The partners plan to open this up to RTL, ARD and ZDF.

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