The BBC, Channel 4 and ITV have held discussions about joining forces to create a British streaming service to combat the increasing power of Netflix and Amazon in the UK.
The early-stage talks, which are also understood to involve NBC Universal, the US TV and film group that owns the maker of Downton Abbey, are focusing on how the UK’s main broadcasters and makers of top shows can work together to create a streaming rival to the popular and deep-pocketed newcomers that have transformed broadcasting.
“All options are open, they are early conversations and no direction is firm yet,” one source with knowledge of the talks said. “But they know a video-on-demand platform play would be a true defence for the UK creative industries.” A second source described it as a “public service broadcaster domestic competitor to Netflix.”
Netflix has 8.2m subscribers in the UK and 4.3m British households are signed up to Amazon Prime Video, according to figures from the TV ratings body Barb.
The BBC, which has traditionally dominated the UK TV and radio landscape, recently said it risked being overtaken by competitors as viewers move inexorably towards on-demand viewing. The corporation owns the UK’s biggest and most recognisable video service, iPlayer, but has conceded that 16 to 24-year-olds spend more time with Netflix in a week than with all of BBC TV, including iPlayer.
The broadcasters understand the strategic benefits of some form of potential tie-up of their catch-up TV and on-demand services, but history says it will be fraught with difficulty.
It is the third time in just over a decade that the BBC, ITV and Channel 4 have endeavoured to set aside decades of rivalry to join together to secure a digital future for British TV. Previous efforts to balance the commercial and public service remits they follow have proved challenging.
The established British broadcasters held similar talks two years ago but in the end only the BBC and ITV managed to hook up to launch a Netflix-style service in the US called BritBox. It was hoped that partners including Channel 4 would come on board for a UK service, but a British launch did not take place.
ITV and Channel 4 have since had a string of senior management changes, most notably in appointing new chief executives in Carolyn McCall and Alex Mahon respectively, both of whom are looking hard at the best strategic digital options for the future.
It is understood that all options are on the table in the talks, which also included the BBC’s commercial arm, BBC Studios. The corporation has been keen to use the strength of iPlayer as the master brand, which has met resistance from Channel 4 and ITV, which have been driving their services, All 4 and ITV Hub, with increasing success with viewers.
Another option might be to revitalise a workable plan to expand BritBox and a third to launch a whole new brand and subscription video-on-demand service.The discussions bear similarities with the ill-fated Project Kangaroo, a video-on-demand service from the BBC, ITV and Channel 4 that was set for launch in 2007 but became tangled in red tape and was ultimately blocked by the competition regulator two years later.
Following the watchdog’s ruling, the field was open for foreign rivals to take the front foot, as feared by the broadcasters. Netflix arrived in 2012 and Amazon began its push in earnest with the rebranding of LoveFilm as Prime Video in 2014.
Kangaroo, which got as far as briefly appointing the former BBC, Microsoft and Johnston Press boss Ashley Highfield as chief executive, aimed to be an open venture that also allowed TV production companies to join.
The then head of the BBC’s commercial arm, John Smith, said at the time that Kangaroo represented broadcasters taking control of our destiny.
This time, pay-TV providers, many of whom have a mix of free and pay-TV channels and content, could potentially offer some programming to a new service too. The original Kangaroo model looked to use a mix of free, advertisement-funded and paid-for viewing models.
“My understanding is that it is a bit of a dusting off of Kangaroo, which was a good idea that should never have been blocked. Look at where the market is now,” the second source said. “Think of it as Kangaroo-plus. Sort of a public service broadcaster domestic competitor to Netflix, but potentially with the flexibility to be broader than that.”