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June 01, 2011
Broadcasting infrastructure company Arqiva will wind down online video service SeeSaw by the end of June 2011, less than a year and a half since the service had its public launch.
SeeSaw was based on the platform developed for Project Kangaroo that Arqiva had acquired in July 2009, after the joint venture from BBC Worldwide, ITV and Channel 4 that was blocked by the Competition Commission. SeeSaw offered a selection of archive content (from BBC Worldwide and Digital Rights Group among others) and catch-up from Channel 4 and Channel Five, licensed on a non-exclusive basis. In addition to free-to-view ad-funded content the service also offered pay per view access to "premium" content including series from NBC Universal.
When it was acquired, IHS Screen Digest anticipated that the main value of the Kangaroo asset acquisition for Arqiva lay in the potential to develop it into a VoD platform service tier to supplement its infrastructure services suite. These complementary services never materialised, and in January 2011 the service was reportedly put up for sale - the subsequent closure of the service suggests that a buyer was not forthcoming. As a consumer-only service SeeSaw always faced an uphill struggle: with neither content exclusivity or the sort of broadcaster backing that has benefited the iPlayer, the site struggled to gain traction with both consumers and advertisers. Screen Digest estimates that in 2010 the site generated less than a third of video views delivered by Demand 5, the smallest of the UK online broadcaster video services. It is interesting to compare SeeSaw with MSN Player, which offers a similar set of non-exclusive archive content. In 2010 Microsoft's service in the UK generated nearly twice as many views, aided by its ability to leverage the existing MSN audience, rather than trying to launch a brand from scratch; moreover, with MSN having a well-established ad sales business and being able to leverage economies of scale that come with Micrsoft's large, multi-national service, IHS Screen Digest believes that MSN Player has a more secure position in the middle tier of the ad-funded online video market than SeeSaw ever enjoyed.
The closure of SeeSaw raises questions about Arqiva's future involvement in YouView, the online TV platform that hopes to establish itself as the next major platform for TV distribution in the UK (other JV partners include the BBC, ITV, Channel 4, Channel Five, BT and TalkTalk). Being involved 'at the ground floor' with YouView has an obvious strategic role for Arqiva and is far closer to the company's core business. However, if the closure of SeeSaw signals a change in heart about the near term value of an OTT offer, then it is possible that involvement in YouView may be subject to a similar calculation.
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