Last month it was reported that the British broadcasters were working on launching a single streaming CTV app, in order to compete with the streaming giants.
The report, which first appeared in The Telegraph, was scant on details except that the new service would fall under the Freeview banner.
This leaves many questions unanswered about what a new service from the BBC, ITV, Channel 4 and Channel 5 would look like.
A New VOD Service or Something Simpler?
One of the biggest questions is whether this new service is likely to be a standalone CTV app with all of the broadcasters’ content in one place, or whether it will simply be a gateway portal that links to the existing services.
A gateway service would be easier for the broadcasters to build, says Bhavini Gohil, senior analyst at Ampere Analysis.
“The two options are likely to be either an entirely new VOD platform or something more akin to a discovery service,” she said. “Obviously, each has its own challenges, but a discovery service would be a lot more straightforward to build. But there are quite a few discovery mechanisms in place in the market already. And given that the scope of this one will be limited to PSBs. I think it’s difficult to see how that would compete in this market.”
Jamie Caras, senior regional director and head of commercial strategy, UK & Ireland at FreeWheel says that a new service could look similar to broadcasters’ existing services in their user interface.
“Viewers could expect a proper joined-up user experience, rather than a portal redirecting them to the individual participants’ streaming services. Potentially, it might mirror the BBC iPlayer interface with a single sign-in to improve content discoverability,” Caras said.
However, he predicts it will not mean the broadcasters will do away with their current VOD offerings.
“It’s fair to expect the service will not replace each broadcaster’s individual offering but it will run alongside them,” he added.
Tom Harrington, head of television at Enders Analysis reckons that the broadcasters are more likely to opt for a discovery service.
“This is really more around making the Freeview app a little more intuitive i.e. maybe one single log-in but when you select a programme (as now) it opens up the programme in the broadcaster’s app,” he said.
Competing but Allied
The TV ecosystem has changed dramatically over the last ten years with global streaming players like Netflix posing a major threat to the broadcasters. However, the broadcasters do still compete with each other, and so a shared VOD service has major obstacles.
“There is a general objection amongst the broadcasters that they don’t want to be marginalised versus the streaming apps by having the whole of TV clumped into a single app, and as such, there continues to be a push for the individual apps to have primacy,” said Tom Harrington.
On any joint app from the broadcasters, whether it’s a gateway platform or more of an integrated service, there will be questions over how content from each broadcaster is displayed.
“It will be really interesting to see how they solve the issue of prominence between the different services,” said Ampere Analysis’s Gohil. “There are lots of examples on the market of how that has been done. For example, we’ve seen Disney+ have a different page for its different brands and franchises. My5 has done something similar quite successfully. So they may do something like that, where they have a page for each service.”
“But even in that kind of environment, some services do end up in the forefront more than others,” Gohil added. “I think the BBC more than anyone will be able to argue the case that it’s within consumer expectations that the BBC will be the first service they see.”
With a more fully integrated approach, there are also questions over how revenue would be generated and split between the broadcasters. Currently, ITV, Channel 4 and Channel 5 all operate ad-funded streaming services, but BBC iPlayer is free from ads and funded through the licence fee.
If the joint effort were to be an AVOD service, then the broadcasters would have to work out how to split the ad revenue generated.
“In regards to how the revenue might be distributed, each broadcaster may be funded directly as, with today’s technology, it’s easy to link viewer impressions to each broadcaster’s content,” FreeWheel’s Jamie Caras said.
Back in 2009, a proposed joint VOD venture between BBC Worldwide, ITV and Channel 4 was blocked by the Competition Commission. Project Kangaroo was blocked on the grounds that a joint VOD venture between the broadcasters would dominate the market. Now, with international companies like Netflix and Disney+ dominating the VOD space, the broadcasters are really playing catch up.
Bhavini Gohil says that even the consideration of this new service is a sign of how far the market has evolved.
“The idea of aggregation, in general, is an acknowledgement from the broadcasters that they’re not competing with themselves quite so much anymore. They are competing with these big global players,” she said.
Becoming a bigger fish in the VOD pond
The obvious benefit of a joint streaming service for consumers would be having all of the broadcasters’ content in the same place. As individual VOD platforms, the broadcasters’ services have far fewer hours of content compared to the global streaming service.
According to a recent Ofcom report, as of April 2021, Amazon Prime Video had the largest catalogue out of the UK VOD services at 41,000 hours. Netflix had around 38,000 hours. The combined catalogues of BBC iPlayer, ITV Hub, All 4 and My5 would come to 37,000 hours.
Combining the catalogues of all of the broadcasters’ VOD services would make them much more able to compete with the breadth of content that the multinational players offer. But committing to a joint app could cannibalise each broadcaster’s existing CTV offering.
What might be more appealing and easier to achieve is the sharing of data from a joint venture between the broadcasters.
“If the broadcasters want it to be successful, they should be open to sharing first-party data as much as possible. In a CTV market dominated by big global players, you need scale, and you need control of the digital environment,” said Bhavini Gohil.
“Having first-party data, registration data, and a wealth of viewing data, puts you in quite a good position in terms of digital control, because it allows you to do things like personalization, and recommendations. And the more that service is able to do that, the more users are likely to stay in the environment and return to the environment, which is how you build that scale,” she added.
However, Bill Swanson, EMEA strategy lead at IRIS.TV, warns that the sharing of first-party data may not be straightforward.
“On paper, this streaming app is appealing to both viewers, with its promise of easy navigation across channels, and also to TV advertisers, who should have a more straightforward way of buying aggregated centralised inventory. However, there are a number of privacy issues and technical challenges that broadcasters will need to think through before this app is brought to market. Combining audience data from different UK broadcasters is likely to cause problems under GDPR,” Swanson said.