LONDON If you can’t beat ’em, join ’em. This is the mantra increasingly being chanted by Blighty’s battling terrestrial broadcasters as they look into the online abyss.
As broadband take-up reaches critical mass, the webs are tooling up to face the likes of MySpace.com by launching their own online video services.
In the space of 24 hours last week, the BBC and its main competitor, U.K. private terrestrial web ITV, greenlit their on-demand offerings.
The pubcaster’s iPlayer, providing a 30-day catchup service for feted shows like “Doctor Who,” “Bleak House” and “Strictly Come Dancing,” is to bow this fall.
The beefed up ITV.com will make its debut within weeks.
Officially, it is costing cash-strapped ITV £20 million ($40 million) although rivals claim the real expense could be as much as $60 million.
ITV.com, a free service funded by advertising, claims to offer a unique online experience.
Nonetheless the initiative looks dependent on tried-and-trusted traditional fare. It will include shows like seasoned Brit soap “Coronation Street,” launched more than 40 years ago in the age of the long-playing vinyl record.
Both services are initially available only to Windows users.
“We are combining the best of TV with the best of the Web to create a service unrivaled by any other commercial broadcaster, anywhere in the world,” says ITV executive chairman Michael Grade. “Some (broadcasters) are already streaming their channels, some are providing catchup and some are building their archive, but ITV.com will provide all three.”
BBC new media topper Ashley Highfield described the iPlayer as a milestone in the Beeb’s long evolution.
“This is a critical part of the BBC’s strategy to maintain impact and relevance in a world where viewing and listening habits are shifting from linear to nonlinear,” he says.
Highfield needs no reminding that for the Beeb to remain relevant in an on-demand world, it must continue to embrace new media vigorously.
If not, the BBC’s claim on the public purse via the license fee levied on all U.K. homes with a TV set will become tenuous — and quickly so. By 2012, 10% of TV viewing will occur online, predicts the BBC, a view supported by most industry think tanks.
British webheads, reeling from a tough advertising market and audience fragmentation, have witnessed what has happened to the music industry and the shift of ad revenue from print to the Web, and are determined to be up to the challenge.
Says Matthew Horsman, co-founder of London consultancy Mediatique: “Broadcasters have no choice but to launch these services. In the U.S., platforms are driving this, but in the U.K., it is content providers. Print is having its lunch eaten by online, but broadcasting isn’t.”
While Horsman says a timetable of profitability for such services is hard to predict, he maintains that broadcasters can’t afford to sit on their laurels.
“There’s an opportunity cost if they ignore this market, because others are doing it already, but the money will follow the eyeballs,” Horsman says.
Grade expects ITV.com to break even by about 2009.
In the U.K., other broadcasters are already testing the on-demand waters.
Five, owned by pan-European media giant RTL, launched Five Download last year, as did Channel 4 whose 4OD, a mix of pay and free content, is a most ambitious venture by virtue of the range of content available.
In fact, Channel 4 claims to be the first broadcaster in the world to put its entire schedule online — but certain fare, like Hollywood movies and some acquired shows, are still missing from the service due to rights issues.
C4 CEO Andy Duncan claims 4OD has had 20 million unique users since it bowed in December. He is, however, realistic about the service’s long-term uptake.
“People watch an average of 27 hours of TV a week,” Duncan says. “I don’t think the emergence of on-demand services will mean people will watch more TV. “It’s about how they access it. I expect 4OD will make money over time as more and more people watch on-demand.”