Hopes that ITV, the BBC and Channel 4 are serious about launching a joint British TV streaming service have been given added impetus by recent news from ITV.
The broadcaster’s chief executive Carolyn McCall said that the company was investing £60m over three years in a streaming service of its own – and seems poised to withdraw its own archive of shows such as Victoria, Broadchurch, Marcella and Prime Suspect from Netflix.
She also confirmed reports that ITV was in talks with the BBC and Channel 4 about collaborating on a new service – widely touted as a ‘British Netflix’ to help meet changing viewer habits which see on-demand viewing rising, while traditional linear TV is steadily shrinking.
“People in this country like British content,” said McCall yesterday, pointing out that 92 out of the top 100 rated shows in the UK are British. And they also have global appeal.
No-one does authentically British shows like Broadchurch, Midsomer Murders, Doctor Who, Sherlock and David Attenborough’s landmark natural history series like we do and people all over the world love them. Moving those programmes from existing streaming services into an exclusive new one could be a huge opportunity for British broadcasters.
But have we Brits got the business and financial muscle to take on Amazon and Netflix on the world stage?
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All the indications are that any UK streaming service or Britflix needs to be launched in conjunction with the other pubic service broadcasters, working together. No one UK player is powerful enough on its own and the scale of Netflix and Amazon is so huge that public service broadcasters in Britain need to put aside their differences and work in unison.
They know this. The regulator Ofcom knows this and all its soundings suggest it will not stand in the way of a collaboration. In fact, Ofcom’s chief executive Sharon White actually called for a British Netflix earlier this month.
This is a far cry from 2007 when the Competition Commission scuppered Project Kangaroo a video-on-demand service from the BBC, ITV and Channel 4, ruling that the project was too much of a threat to competition in the UK video-on-demand market.
Now the landscape has changed radically since Netflix launched in the UK in 2012 and Amazon rebranded video service LoveFilm as Amazon Prime Video in 2014.
The number of UK subscriptions to television streaming services Netflix, Amazon and NOW TV has overtaken traditional pay television for the first time, according to data released by Ofcom last week.
The report found that the total number of UK subscriptions to the three most popular online streaming services – Netflix, Amazon Prime and Sky’s NOW TV – reached 15.4 million in the first three months of this year. This overtakes the number of total pay TV subscriptions to services like Sky, Virgin and BT in the UK over the same period. That figure now stands at 15.1 million.
The Brits do not have a choice– they have to launch some form of streaming competitor to the big beasts from the US.
But because all parties in the new ‘British Netflix’ idea are refusing to reveal any detail, one quite knows what it would look like – whether it would cater just for UK audiences or to the 1.5 billion people in the world who speak English (around 20% of the global population) and beyond.
The BBC know there is a huge market out there and its says it is ready to cooperate with its traditional rivals. But there are many stumbling blocks.
ITV is understood to be nervous about the BBC dominance of any new service and believes its own content – including archive shows – have much to offer.
In fact, all the major UK broadcasters are very different beasts and any collaboration would be hard to work out. Rights issues are a particular sticking point for Channel 4. It does not create its own content – it is a publisher-broadcaster and the rights are controlled by its many suppliers, the leading independent producers who fiercely guard their intellectual property. It is not something their trade body Pact will relinquish easily.
This was evident when BritBox launched two years ago. The online service was aimed at people living in the US who “can’t get enough British content” by showcasing programmes such as EastEnders and Cold Feet. But BritBox is an initiative involving only the BBC and ITV– Channel 4 dropped out in the early stages of negotiations.
But even if Channel 4, ITV and the BBC do manage to agree on something workable, the big problem remains money and scale. On Wednesday, ITV said it was investing £60m over three years in developing its new streaming platform – which is really a pittance when you consider the money sloshing around Netflix and Amazon.
The BBC enjoyed total revenues of £4.9bn in 2016/17 which is also not huge in global terms – Netflix is poised to spend $8bn on content alone this year.
Ah yes, the BBC says, but we deliver value for money. Last year BBC drama produced 85 hours of content for £97m, its annual report boasted, the same amount stumped up by Netflix for the first two series of The Crown.
But if anything, this shows the nature of the problem. Streaming services like Netflix and Amazon have worked because they are prepared to invest big bucks in big TV shows. Will people sign on to another subscription package because they so value Broadchurch or Doctor Who, while Netflix is paying a reported £7.5m for just one episode of Game of Thrones?
The BBC is still in the process of managing costs even with its current licence fee settlement which is pegged at inflation. But cutting costs does not cut much mustard in the huge TV content market, even if the BBC has won its argument with Government about its right to exist (at least until 2027 when the charter runs out).
So with Netflix signing up 125m subscribers over seven years, the British have a lot of catching up to do. This will require some hard thinking – and perhaps some hard cash from alternative investors like venture capital funds.
And that’s even before we ask whether cash-strapped British consumers are prepared to fork out for yet another TV streaming subscription…