Future of BBC’s iPlayer in doubt

Better the devil you know than the devil you don't. Traditional rivalries are one thing, but when you find yourself trekking into an indeterminate future in which you will face competitors unknown in scope and scale, sometimes it's better to forget old differences, circle your wagons and stand back to back against the howling of the storm.

Britain's terrestrial broadcasters have got the message. Finally putting an end to months of rumour and speculation, Tuesday's announcement that the BBC, ITV and Channel 4 are to launch a joint on-demand service in 2008 offering viewers access to a welter of current programming and archive material represented a key landmark in the quest to master internet TV.

Details about the service - codenamed Kangaroo - are thin on the ground, but it will be launched next year with thousands of hours of programming made available for free download, rental, streaming or purchase via the internet. Plans are already in place to extend the service direct to viewers' sets, and according to the BBC this is just the beginning of a project that will maintain the big three's pre-eminence in the British broadcast market.

"In addition to making a huge array of programmes available to the public, this is a historic partnership that will have huge benefits to all concerned. Internet TV is a rapidly changing market where new entrants appear every month, and by joining forces we can cut development costs, share expertise and work together on a common distribution system that will keep us ahead of the curve," said Esther Brown of BBC Worldwide's digital media and strategy unit.

"There is no point in working alone if partnership will deliver a stronger and more flexible solution."

The announcement is sure to awake fresh speculation over the fate of the controversial BBC's iPlayer project, which to date has cost the corporation a reported £4.5 million. Much lampooned as a four-year quest to build a virtual video recorder that self-destructs after a week, the interface for the broadcaster's seven-day playback service has been roundly criticised by commentators who condemn the logic of building a standalone, restricted platform as directly contradictory to the ubiquitous spirit of the web.

The BBC rejects suggestions that the arrival of Kangaroo leaves a huge question mark over the iPlayer project, confirming that it will be formally launched early in the new year and stating that both services will run concurrently as part of a multi-layered approach to digital distribution. However, many analysts believe that in reality, the corporation's new approach is based heavily on the realisation that in the new media world, it's a case of collaborate or die.

Alexksandra Bosnjak, lead analyst at digital media specialists Strategy Eye, says: "The broadband video space is crowded with so many new and potentially disruptive entrants that only a consolidated approach can provide something with the scale required to meet the challenge. For the broadcasters the ultimate aim of Project Kangaroo' is to embrace broadband content delivery and push their content direct to TVs, so it's no surprise to see traditional media repositioning in light of emerging web TV entrants such as Joost and Babelgum.

"This is certainly a step forward for broadcasters, and is a potential tool to outgrow the scheduled' broadcasting business."

For the collaborators, Kangaroo offers a safe haven from which to experiment. It enables broadcasters not only to deliver content via broadband, but also to link broadband traffic with new digital audiences and deploy targeted advertising.

It remains to be seen if a mixed business model of free, pay-per-view and rental downloads will succeed, especially when it comes to "tracking" income or sharing them with various stakeholders involved, and it will also be tricky to monitor the performance of these models.

Then there is the capacity problem. We don't even know whether the current web infrastructure is even capable of sustaining the expected level of traffic generated by internet TV. According to the latest research from Cisco, traffic will nearly double every two years through 2011, with high definition video forcing the amount of data traversing the net to nearly quintuple between 2006 and 2011.

But yet it is in the technical realm that the broadcasters hope to reap the greatest immediate benefits. Whether it admits it or not the BBC has had its fingers badly burned by the iPlayer project - which at one point encompassed 400 staff and since 2003 has only succeeded in building a reputation for incompetence - and it does not want to make the same mistakes again.

Neither do ITV or Channel 4, and by working together the broadcasters hope to avoid such errors. They might get it wrong, but if they do then they will get it wrong together, safe in the knowledge that their traditional major competitors are not stealing the lead.

While the relatively low quality of the Joost or Babelgum TV services means that many commentators believe they are still not a threat, Britain's broadcasters have recognised the need for a defensive approach and have arranged their wagons appropriately. There are some major challenges ahead, and in Kangaroo, they might just have come up with a vehicle to ride right through them.

"As the volume of available programming multiplies, the channel brand will become more important as viewers look for something they trust to provide the best, most accurate content," said Steven Hess of digital and interactive TV agency Weapon7.

"In many cases, users are just too tired to bother surfing a labyrinth of content and they just want someone to help take their minds off the daily routine. Who will provide the guiding hand they need? Will they make it easy? If they do then they will own the interface, and this is where the real commercial value of Kangaroo lies."

Hess's argument underlines the fact that, while it all may seem pretty space age to some, internet television is actually at a very early stage in its evolution. In principle the industry has got the basic technology worked out, but taking it from the current state of play to a point where we're all watching whatever we want, whenever we want is not going to be a walk in the park.

As Paul Hague of the British internet Broadcasting Company (BiBC), says: "The talk has been talked and now it is time to walk the walk. Consumers want on-demand entertainment and they want high quality internet-enabled viewing. The industry can deliver and the industry will deliver. It just needs bold companies to take the lead."

This article was first published in The Sunday Herald