Insights and News /

07 March 2019

Streaming, UK-style - The BBC and ITV join forces to tackle the US giants (Part One)

Tom Evans

Tom Evans

The BBC and ITV have just announced the UK launch of a new joint venture, Britbox. BritBox is a subscription video on demand (SVOD) service that actually already exists in the US and Canada with over 500,000 subscribers, priced at $6.99. With strong initial growth in North America, the idea is promising, but the BBC and ITV already provide video platforms to UK audiences, so will BritBox be a box office success or another flop?

Pitched as an add-on to existing streaming services such as Netflix and Amazon Prime, BritBox will not face its larger US competitors head-on. Instead, the platform promises something different, providing a permanent home for an extensive back catalogue of British-made content, and a showcase for new and exclusively-commissioned material. But will British consumers be willing to part with yet more cash for an additional subscription service, particularly when The BBC’s iPlayer and ITV’s Hub are already available, paid for by the UK Licence Fee and advertising respectively? A key question the UK public will answer is how much added value does BritBox truly bring compared to existing platforms such as Netflix, BBC iPlayer, ITV Hub, Now TV and Sky Go?

BritBox is likely to be priced at around £5 per month, although this has not yet been confirmed. ITV Chief Executive Carolyn McCall has instead indicated that the service will be ‘competitive’ in its pricing. BritBox represents another move by ITV to push revenue beyond its original advertisement driven model and complements their acquisition of a number of independent content producers, under the umbrella of ITV Studios. As their advertising revenues come under pressure, and with The BBC’s license fee funded model under greater scrutiny, the two broadcasters certainly face significant commercial challenges. And with younger audiences increasingly turning away from traditional broadcasters, it is inevitable that the BBC and ITV will have to look elsewhere for future funding. A decade ago, the failed Project Kangaroo was an early step in this direction: a similar cross-competitor streaming service, it was blocked by the competition commission in 2009, a move that with hindsight has put the BBC and ITV on the back foot following the dramatic rise of Netflix.

BritBox is penned to launch this summer, reflecting the recent trend for content owners to launch their own Video on Demand platforms. HBO and CBS already operate SVOD platforms in the US, whilst a number of others – for example ProSieben / Discovery, Disney and Comcast – have recently announced plans to launch competitors later this year. The US market however, is a different beast to the UK, with expensive cable prices and a high-penetration of pay-TV, the market lends itself to ‘cord-cutting’. Whether an increasing variety of SVODs have the same impact in the UK where these forces are weaker remains to be seen. More on this tomorrow, when we will also consider some of the commissioning questions raised by the platform’s launch.

Read part two of this blog series here.


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