Published:
23-Dec-09
The BBC Trust has provisionally approved the BBC's involvement in Project Canvas, the joint venture (JV) aiming to develop an internet-connected DTT platform. The decision comes after a second consultation period, during which the Trust assessed Canvas' potential public value and market impact. According to the BBC's governing body, the likely benefits to license fee payers justify the possible negative effects on the market. However, the Trust has imposed several conditions on the BBC's participation in the venture, intended to lessen negative market impact, as well as to maximise public value. These include:
- Core spec and industry engagement: That Canvas' core technical specification be published eight months ahead of the planned launch date, giving consumer electronics manufacturers sufficient time to incorporate it. The BBC is also required to report back to the Trust at regular intervals on Canvas' industry engagement, with the first such review due within 12 months of the venture's final approval or within three months of launch, whichever is sooner.
- Content syndication: That safeguards be implemented to prevent competing members of the JV sharing their strategies on content syndication. In addition, the Trust has indicated it will conduct a review 12 months after launch in response to fears by stakeholder that Canvas could create a disincentive for JV members to license their content to other platforms.
- Platform costs: That the BBC obtain the Trust's approval for additional expenditure if its investment in Canvas exceeds (or is expected to exceed) current estimates by more than 20% in any one year.
The Trust is to consult with members of the public and industry stakeholders on its provisional conclusions from 22 December 2009 through 2 February 2010, with its final decision scheduled for Spring 2010.
Our take...
The Trust's provisional approval is significant for the JV, which has been lead by the BBC from the beginning and comes one week after the announcement that Channel Four and TalkTalk had signed up as partners for the venture (see link below), joining ITV, Five and BT. Besides a handful of conditions, the Trust has essentially only asked that the BBC fulfil the promises it has already made in earlier submissions. In fact, the Trust is offering the broadcaster some extra leeway on spending to account for the additional variables involved in predicting the cost of developing a new technology – the BBC is usually required to get approval for spending beyond 10% of the initial budget but this will be increased to 20% for Canvas.
The Trust may have been reassured by the increase in the number of venture partners, which has reduced the financial burden on the BBC. The total cost for the whole project, from the period to launch to the end of year four inclusive, is estimated at £115.6m, with each of the six partners required to invest £16.4m each over this period.
However, Project Canvas could yet face further scrutiny amid industry concern around its potential to distort competition in the UK. Not surprisingly, given the threat that over-the-top distribution could represent to established platform operators, Canvas has attracted particularly strong criticism from incumbent pay-TV provider BSkyB. Sky has suggested that the JV qualifies for review by Ofcom and the Office of Fair Trading and that it falls outside the remit of public service broadcasters involved.
UK,
Channel 4 and Talk Talk join Project Canvas
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