BBC Trust Rejects £68 Million Online Local Video Proposal
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—BBC: The original proposal (pdf)
—BBC Trust: Provisional conclusions (pdf)
—BBC Trust: Public value assessment (pdf)
—Ofcom: Market impact assessment (pdf)
—paidContent:UK: BBC Local Reax: BBC ‘Will Consider Options’
—Comment: Ruling Won’t Save Local Press, Will Constrain BBC
SEE ALSO: Comment: BBC Local Ruling Won’t Save Local Press, Will Constrain BBC
The BBC Trust has rejected the BBC’s proposal to add video bulletins to its network of 65 existing BBC Local websites, arguing “it would not improve services for the public enough to justify either the investment of licence fee funds or the negative impact on commercial media” (release). Today’s was a provisional ruling, with the full conclusion due February, but puts a certain nail in the plan’s coffin.
Trust chairman Sir Michael Lyons (pictured) (release): “It is clear from the evidence that, although licence fee payers want better regional and local services from the BBC, this proposal is unlikely to achieve what they want. We also recognise the negative impact that the local video proposition could have on commercial media services which are valued by the public and are already under pressure. We believe the BBC’s priority should be improving the quality of existing services. The public wants better quality regional television news programmes and more programmes of all kinds produced in and reflecting their areas. We would expect BBC management to consider carefully the conclusions of this public value test before returning to us with new proposals.
“Our decision today to refuse permission for local video means that local newspapers and other commercial media can invest in their online services in the knowledge that the BBC does not intend to make this new intervention in the market.” The trust has now ordered the proposed £68 million allocation that would have filtered through to its nations and regions unit be returned to the BBC’s central budget.
The trust considered two reports...
—Public value assessment: The trust’s own PVA ruled the proposal would not create significant new audience reach or impact. This is an embarrassment for the BBC, which believed the plan would do exactly that - help drill down its reach to local audiences.
—Market impact assessment: carried out by Ofcom, the MIA found “the overall market impact ... is expected to be negative, with newspaper publishers among those most affected”. Ofcom said the proposal would cost commercial media only up to four percent of their annual revenue - but its main concern was the negative impact on rivals’ future ambitions to innovate online: “The current cyclical downturn in the economy means that the damaging effects of this proposal on commercial providers’ (news sites) would be particularly acute if launched at this point in time.” Ofcom said the BBC could defer the plan until the market recovers or add outbound links to the sites, but said these measures would be insufficient to offset the negative impact.
It’s a victory for the rival local and commercial newspapers and radio stations who argued the plans would somehow kill off their nascent video efforts or even their core products. Led by Trinity Mirror (LSE: TNI) CEO Sly Bailey, opponents have included the Newspaper Society, Guardian Media Group, Radio Centre, Northcliffe, Scottish Daily Newspaper Society, Bauer Radio and the Conservative Party. To placate the worries, the BBC proposed an £800,000 commissioning fund to buy local newspapers’ web video.
—The original proposal (pdf): The BBC proposed adding three daily news, three sport and three weather videos to each of its 65 region-specific sites - each lasting 45 to 90 seconds for a maximum 26 minutes. For each site, it also wanted to produce up to 10 live streams per year from “key local events”, while viewers could submit their own videos and clips would appear on mobile. Costs: The project would have started in 2009/10 and cost £23 million annually until 2012/13 - a total £68 million total, or an average £350,000 per site. The target was for 3.2 million weekly hits (11 percent of UK households) by 2013/14.
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