The BBC, ITV and Channel 4 are in talks to create a new streaming service - but how would it work? And can it still compete with Netflix and co?
The UK’s leading broadcasters are in early discussion about a new streaming service to help combat the might of Amazon and Netflix. But is it ten years too late wonders Ben Dowell
For anyone who has covered broadcasting issues over the past couple of decades, the news that the BBC, ITV and Channel 4 are in the early stages of talks about creating a British streaming service may smack a little of déjà vu.
The current plan, to combat the increasing power of Netflix and Amazon in the UK, is highly reminiscent of a scheme devised more than a decade ago called Project Kangaroo. Like the new plan, Kangaroo was a video-on-demand service from the BBC, ITV and Channel 4 but was strangled at birth in 2007. After two years of wrangling, the Competition Commission ruled that the project was too much of a threat to competition in the UK video-on-demand market and it was scuppered.
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The general consensus in the industry is that this ruling left the way open for US rivals to seize the initiative. Netflix launched in the UK in 2012 and Amazon rebranded its video service LoveFilm as Amazon Prime Video in 2014. We don’t need to tell you that they have both now become big players.
So will the Brits be able to fight back? What exactly is happening and what will it mean? And are we more than a decade too late for the British players to compete?
Here’s our guide to the whole story.
What is the new initiative?
Sources from all parties – the BBC, ITV and Channel 4 – insist that these are “early conversations” about a possible new streaming service. The talks are also thought to involve NBC Universal, the US TV and film group that made Downton Abbey.
All options are on the table according to sources. One thing that is likely to be considered is expanding the existing BritBox service (which streams in the US and shows ITV and BBC shows) into the UK market and turning it in to a subscription on-demand service. Or they could create a whole new service. UKflix, anyone? The new service could contain archive material– stacking box sets of classic UK shows– or it could just feature more contemporary content with a window of, say, 30 days. It's all to play for.
Why is it happening now?
In a word: streaming.
All the UK broadcasters are very nervous about the market power of Amazon and Netflix. Netflix has 8.2m subscribers in the UK and 4.3m British households are signed up to Amazon Prime Video. The BBC iPlayer is a jewel in the Corporation’s crown, and remains highly innovative and popular. But in March the Corporation admitted in its annual plan that young people (those aged 16 to 24) were spending more time watching Netflix in an average week than using all of its services (including iPlayer). Media savvy young people seem to be turning off the BBC (and other UK broadcasters) and they know it. And with Disney thinking about entering the streaming game, the competition is only going to get fiercer.
Also, ITV and Channel 4 have new chief executives (Carolyn McCall and Alex Mahon) and the feeling is that they are both receptive to the idea of finding a fresh strategic direction for their organisations.
Could there be problems?
Yes. Kangaroo is not the first time the BBC, C4 and ITV have discussed this streaming route. The broadcasters held similar talks two years ago to thrash out a viable alternative to the big on-demand players. It did lead to the creation of BritBox – an online service 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 which dropped out of discussions, was either incapable of, or nervous about, taking part.
Why is C4 a big sticking point?
Rights issues are a big deal 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 whose dynamism is due in large measure to the fact that they can strike such lucrative deals and retain control over their intellectual property. It is not something they will relinquish easily. The BBC does make its content via BBC Studios, as does ITV with ITV Studios. But the fact is that all the broadcasters are very different beasts.
Also, Channel 4 and ITV will be resistant to the BBC if it takes the position that its iPlayer will be the initiative's so-called "master brand” or template for the new service. C4 has its own catch up service (All4) as does ITV (the ITV Hub).
What are the other obstacles?
The BBC is already looking into ways of making its archive available – but this could be expensive and there are a lot of issues to solve. The BBC doesn’t own the rights to all its back catalogue and could run into difficulties with Pact, the independent producers' trade body.
“People are reasonable and they want to get their work shown,” says leading drama producer Jane Featherstone, which sounds great. But she adds: “The producers own their own content and it’s why we are so successful this country and why we’re such a growing sector.”
The indies will not want to sign away their programmes, especially when they can already cut great deals with players like Netflix and Amazon.
Any concrete proposal involving the broadcasters will also have to be assessed once again by the Competition Commission. But given the strength of US players, the Commission is very unlikely to overturn Kangaroo mark II as it is being called. But you never know...
Will it succeed?
In many ways it has to work as far as the UK broadcasters are concerned. As media commentator Kate Bulkley, an expert in this field, tells RadioTimes.com: “A joint streaming site is a good idea that should have happened many years ago when Netflix was only a gleam in the consumer’s eye. Now the UK players will have a more difficult time differentiating from Netflix and Amazon Prime Video. But my view is that the clear competition from Netflix et al will focus minds so whatever consortium gets together of the broadcasters– ITV, BBC, C4– they will spend less time arguing amongst themselves and more time creating an easy to use platform for their content that can give the big tech players from California a run for their money!
"The key will be getting the right content in the right time frame so the new Kangaroo service stands out. It needs to punch above its weight to make a go of it given the head start of Netflix and Amazon Prime Video.”
Another issue is whether there is room for another player. As Featherstone also warns: “We won’t all want to pay £8 a month for different services, will we? At the moment, I can see us getting to that place in 18 months’ time where we are all doing that and eventually there will be some consolidation. But I don’t know.”
In fact, nobody does. So let battle commence…