BBC is hitting road blocks

Tuesday, 17 November

The BBC is currently up against something of an avalanche of critical press. The newspapers have made hay on the publication of some senior executives’ salaries and perks, while seemingly every BBC plan to expand online activity (Kangaroo, and now Canvas) is being stymied, and the current Tory opposition political party promising further mayhem should it be elected next summer.

However, it has just won a small victory in that the British government, due to outline its planned legislation for the remaining 6 months or so of this administration on Wednesday, has modified plans to use some of the BBC licence fee to improve local TV news coverage. A measure will be introduced in the parliamentary Queen’s Speech to fund local news, but a decision will not be made until 2012, thereby seemingly kicking the idea into the very long grass.

On Sunday, the London ‘Sunday Times’ published a long-form interview with Jeremy Hunt, the shadow (opposition) culture secretary, who would be managing the broadcasting and media portfolio in a new Conservative government, and it could not have made good reading at the BBC.

The BBC is already having to face the problems of having 37 senior managers earning more (and frequently much more) than the Prime Minister. Hunt told the newspaper that the BBC’s bureaucratic waste had become an absolute nightmare, and that it was “obscene” for the BBC to be demanding an uplift to its mandatory licence fee.

The BBC’s licence fee is up for re-examination in 2012. The broadcaster received a £68m rise this year, despite inflation being zero. “If we win the next election we will have to have discussions with the BBC about the appropriate level,” he told the newspaper. “We think in the current climate it would be very hard to argue for any increase in the licence fee.”

The likelihood that the BBC’s wings will be clipped is a possibility. The same might apply to its Project Canvas, which the BBC has said is a ‘game changer’ as regards online activity. Canvas would also have other UK network broadcasters involved as well as British Telecom, but is hitting major objections from pay-TV operators. There’s no guarantee that the BBC’s governors (the BBC Trust) will approve the scheme.

Last Friday BBC future media boss Erik Huggers demonstrated Canvas, showcasing how users would have the ability to watch highlights instantly, send clips to friends, monitor what is being said on Twitter, access archives at the touch of a button and use commercial third-party applications and services.

Huggers said: “Unless we succeed in getting Canvas through, that whole market will be fragmented - you would have multiple ways of achieving the same thing.” If Canvas fails, he stated, broadcasters would shoulder additional costs of reformatting new devices: “There could be a horizontal level playing field for everyone and I think that’s worth fighting for.”

However, the appeal of a Canvas-type proposition – at least in the UK – is summed up by Screen Digest in a recent report on the topic, which said that 3.5m UK homes could be tapping into such a system by 2014.

Dan Cryan, Senior Analyst at Screen Digest says: “The BBC’s track record of building markets with Freeview and the iPlayer has been a well-documented success. There is every reason to think that if a Canvas-type proposition is approved, with the full promotional impetus of the BBC behind it, it will reach at least 3.5m homes by 2014.

“Such a platform is both a threat and an opportunity to pay-TV operators. On the one hand giving them wider distribution potential for their content bouquets, and on the other hand giving content owners a potential route to bypass the operators and go direct to the consumer.”

“A Canvas-type proposition will offer an alternative, neutrally-branded distribution platform offering linear TV channels, video on demand and web-based applications. Ultimately, it will rival IPTV, cable and satellite and will be separate from the existing Freeview, Freesat and BT Vision offerings,” says Screen Digest.

“Despite the support of powerful partners, a Canvas-type proposition has a number of obstacles to address; set top boxes will be expensive and the timing may coincide uncomfortably for consumers with the launch of HD Freeview. Potential bandwidth bottlenecks should be tackled by BT’s 21st Century Network and with the backing of the BBC, consumer take-up should be strong.”