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VOD – Demanding audiences

It's hard to believe it has been less than a year since the BBC launched its much-awaited iPlayer, so deeply is it now entrenched in British viewing habits. More than 3.5 million programs were streamed or downloaded in the two weeks following its Christmas Day launch last year, and the growth has been equally impressive ever since, with UK-based viewers making more than 100 million program requests in the first six months. Whilst Channel 4's launch of a similar catch-up service has been less spectacular in take up, it's fair to say that video on demand is here to stay and is greatly changing British viewing habits. Now all four terrestrial broadcasters have launched catch-up services, whilst at the same time trying to come up to speed in the new world of VOD.
September 1, 2008

It’s hard to believe it has been less than a year since the BBC launched its much-awaited iPlayer, so deeply is it now entrenched in British viewing habits. More than 3.5 million programs were streamed or downloaded in the two weeks following its Christmas Day launch last year, and the growth has been equally impressive ever since, with UK-based viewers making more than 100 million program requests in the first six months. Whilst Channel 4′s launch of a similar catch-up service has been less spectacular in take up, it’s fair to say that video on demand is here to stay and is greatly changing British viewing habits. Now all four terrestrial broadcasters have launched catch-up services, whilst at the same time trying to come up to speed in the new world of VOD.

During August’s Edinburgh International Television Festival, major players discussed the jockeying now taking place in the new world of VOD. Having been caught on the back foot of the technology’s potential to dramatically change our leisure hours, with companies like Virgin Media and Tiscali beating them to the punch in offering VOD, Channel 4, itv and BBC Worldwide have formed a partnership entitled Kangaroo to create a ‘one-stop shop’ for British television. The venture anticipates having 10,000 hours available at launch, much of it free and ad-driven.

Ashley Highfield moved from steering the launch of the iPlayer at the BBC to head up Kangaroo this summer, taking the reins at the same time the venture found itself the subject of a Competition Commission inquiry. With results due out early in the new year, many in the industry are waiting to see if Kangaroo will be allowed to be the big kid on the block.

Head of Pact, the lobby for UK indies, John McVay is amongst those who welcomed the investigation.

‘Why are we trying to create an oligopoly on VOD in the same way we used to have an oligopoly in broadcasting?’ asks McVay. ‘It seems to me a Victorian view of where we are in a digital world. And the thinking behind that, and what it betrays, is this old broadcast view, which is ‘Let’s kill it or control it.’ Those days have gone.’

McVay argues that controlling content online is not the way forward in an age where piracy is rampant. ‘It’s not an exclusive world,’ he says. ‘If [consumers] don’t get it from somewhere where they think it is cool, then they’ll rip it off. The penny has not dropped yet that the world is now in the hands of the consumer and the audience, and you can’t force them to back one horse.’

But Highfield maintained in an Edinburgh session on the rise of VOD that Kangaroo would help stem piracy by providing a ‘good legal route to go down.

‘In a market dominated by global players, we will be an independent British start-up, run by people who understand and love British television and British content,’ he said.

McVay says public service considerations should override commercial ones in broadcasters’ VOD strategies. ‘I would go so far as to argue that public service broadcasters like the BBC and Channel 4 should be looking at a world where they make the content they financed for the public available everywhere, so the public could find it anywhere.’

BBC Vision’s controller of portfolio and multimedia, Simon Nelson, said in the Edinburgh session that the BBC’s VOD strategy was to maximize accessibility of its programs, both catch-up and longer-tail archive programming, as well as keep an eye on commercial opportunities. ‘The key challenge we’ve got is how much of that should be available free as a public service on bbc.co.uk – to what extent we should be syndicating some of that, if at all – and then where do commercial boundaries come in,’ he said. ‘It’s pretty complex what we’re working through and Kangaroo is one of the options that BBC Worldwide is exploring to open up some of that deeper archive.’ The BBC announced in Edinburgh that it would be providing series stacking via its iPlayer, allowing viewers to watch the entire run of current series, rather than just the latest program.

Those in the VOD frontline recognize that the changing technology calls for entirely new approaches to carving out program offerings for viewers – strategies which should be borne at the creative end of the industry. ‘I personally think there has been an abdication on the part of broadcast channels in terms of setting strategy with regard to how on-demand is incorporated into the full TV mix,’ said Nigel Walley, managing director, Decipher Consultancy. ‘It’s a bit like 1995 when the it department runs the website…. The rallying cry for Edinburgh is for the creative parties – channel, scheduling – to grasp back strategic control as to the way this stuff gets built and distributed.’

Whilst the way forward might still be in dispute, it’s recognized that VOD technology is still in its infancy, and will have a huge impact on broadcasting and related businesses. Chief under threat are channels lower down on the EPG which depend largely on archive. Such channels would need to keep on their toes in the quickly evolving VOD landscape, Edinburgh panelists warned. ‘Anyone not charting that evolution could face a very challenging future,’ said Nelson.

Walley put it more bluntly: ‘We are now at the end of the multi-channel era. We no longer need that number of channels to be able to deliver choice…. What we are going to see is a culling of middle-tier channels. We could lose 200 channels off the Sky EPG and consumers would not be any worse off.’

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