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ITV & BBC join forces to resist Netflix/SVOD* threat

britbox logo

It’s a brave new world! As the battle for viewers rages on, long held and much cherished lines of demarcation between the UK’s top broadcast rivals are about to be blurred.

ITV has confirmed that it and the BBC have now signed an agreement to launch their joint online streaming service, BritBox, in the UK during the fourth quarter of this year.

A rival to the likes of Netflix and Amazon, BritBox – which has already launched in the US with 500,000 subscribers – will provide both recently broadcast shows and British box-sets. Shows including Gavin & Stacey and The Office are to be among those on the service, either at launch or once their licenses with other SVODs end.

The ad-free service will cost viewers £5.99 per month. In comparison, Netflix recently hiked its own prices by as much as 20%, and its most popular standard plan is now priced at £8.99 a month.

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As ITV and the BBC’s traditional revenue sources come under increasing fire, this move will be more than welcome in several quarters.

Short term issues

What will the take up of BritBox be?

What effect will BritBox have on linear TV viewing figures?

What lies ahead for the leading TV-players?

Long term outlook

While SVOD continues to build on a subscription revenues alone, linear TV’s Ad delivery model will remain unchanged. That is for as long as its audience – the bedrock of the Ad delivery model – remains reachable at scale.

Going forward, coverage of live events will become ever more important in the commercial equation concerning linear TV. That is until the SVOD giants begin to buy exclusive rights to these events and convert large audiences to the pay-per-view option.

BARB data shows that more households are taking multiple subscriptions – while the annual growth in homes with any SVOD service is 20%, the growth in homes with multiple services is 32% with 4 million homes now having more than one subscription.

BritBox expects to commission its first original show “soon” and for this to be available to viewers from 2020.

ITV currently holds a 90% stake in the streaming service, while the BBC holds 10%. The BBC has the option to acquire shares of up to 25% over time, and ITV will be able to bring additional investors on board.

However, despite having shown public interest in joining BritBox and taking part in past discussions, Channel 4 has yet to confirm its involvement.

QUOTES – KEY PLAYERS

Carolyn McCall, CEO of ITV, called the agreement to launch BritBox “a milestone moment… subscription video on demand is increasingly popular with consumers who love being able to watch what they want when they want to watch it. They are also happy to pay for this ease of access to quality content and so BritBox is tapping into this, and a new revenue stream for UK public service broadcasters.”

BBC Director General Tony Hall commented: “We have a world beating TV industry with outstanding content. The BBC and ITV are at the centre of that. Together, we have been responsible for delivering the majority of “must see” moments on British TV over the last decade. That “must see” content will now be on BritBox. But this service isn’t just about the past. I am really excited about the new shows it will commission. With a remit to be daring and different, many future classics will be commissioned and live on BritBox for the future. These are exciting times for people who love quality TV. Importantly, these shows will be truly British, showcasing our culture and telling distinctive stories. It’s what makes real British TV so special.”

*SVOD = Subscription Video on Demand

Richard Huglin

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