BritBox Launch Will Pile More Pressure on Netflix

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BritBox, the "Best of British" SVOD from ITV and the BBC, will launch in the UK by the end of 2019 as a last-ditch attempt for the broadcasters to mine their extensive back catalogue—but it could be too little too late.

With more than 10 million UK subs Netflix has a massive head start. Nonetheless, with popular content likely to be withdrawn from the service, it's possible that Netflix has the most to fear from the arrival of another competitor.

"The long-overdue move is too little too late," says independent analyst Paolo Pescatore. "However, Netflix has the most to lose. New providers will all want to pull their own programming off Netflix to differentiate their own offerings."

ITV will be the driving force behind the direct-to-consumer joint venture after taking a 90% stake.

BritBox will cost UK users £5.99 ($4.70) a month, undercutting the basic Netflix fee in the UK by £3. The streaming platform is already available in North America for $6.99 a month (with a different content catalogue).

Content will comprise titles such as popular reality show Love Island and acclaimed BBC drama Gentleman Jack with original programming promised.

"Pricing is punchy and the content offering looks attractive," says Pescatore. "It represents a great channel for British-produced content."

It is likely to include content currently on Netflix, including series such as the original The Office and the Emmy-nominated drama Killing Eve and comedy Fleabag.

ITV is expected to transfer content from catch-up service ITV Hub to BritBox after 30 days, while the BBC is likely to do so after shows have been available on iPlayer for 12 months.

This strategy risks being undermined if the BBC makes all its programming available for free for at least a year on iPlayer—a decision which was given a provisional greenlight by regulator Ofcom.

Claire Enders of Enders Analysis says, "The fact that shows will be on iPlayer for 12 months, plus the transition to a much longer licence period [for showing programmes for free] on ITV Hub and 4oD, poses the question how many people will have missed these shows first time around to want to pay to watch them again."

It's being pitched as a supplement to Netflix as video service stacking takes off.

"Key to success will be differentiation against their existing broadcaster VOD/catch-up TV services (ITV also has its ad-free service, ITV Hub+) and how it educates potential subscribers of these differences," says David Sidebottom, principal analyst at FutureSource. An obvious differentiator is the vast content libraries both broadcasters can make available. But with BBC's decision to extend content availability on iPlayer for up to 12 months after original broadcast, it will mean it can't rely on newer BBC content to bolster BritBox's proposition."

UK broadcasters have been seeking to stem the tide to SVODs for a decade, ever since the UK regulator denied them the chance to launch their own platform.

For commercial public service broadcaster ITV, such a move is more pressing, with TV ad revenue under threat from stagnant TV viewing audiences.

BBC iPlayer's share of the domestic market has declined from 40% to 15% over the last five years.

Futuresource estimates that there are currently around 21 million SVOD subscriptions in the UK. BritBox would need fewer than than 1 million subscribers to become the number four player behind market leaders Netflix, Amazon Prime Video and Now TV.

Imperative, though, will be a compelling content slate—the first exclusive commission won't drop until next year. The budget of £65 million ($51 million) over two years is peanuts compared to the multi-billion dollars of rivals. 

"BritBox is expected to eventually lead to the dilution of BBC and ITV title availability on leading SVOD platforms," says Sidebottom. "This further justifies these leading SVOD services' increased investment in original programming.

The service will also need wide distribution and partnerships with cable, pay TV, and telco providers. Talks with broadcasters Channel 4 and Channel 5 are ongoing, alongside those with potential distribution partners such as Sky Virgin and Talk Talk.

"To be truly successful BritBox will need more content from other UK broadcasters," says Pescatore. "[If it gets that] it will fare much better and generate far greater appeal among consumers.

"The bottom line is that Netflix has a huge lead in the UK. Users will think twice about signing up to another TV service. So, it needs more content, support from other broadcasters, pull programming off Netflix and partner with telcos for distribution. The latter has been key to Netflix's global success with an inferior local catalogue."

There are those wondering whether this be the thin end of the wedge for the BBC's wholesale move to a subscription model. The answer to that is that the BBC already has a subscription dynamic called the licence fee.

Says Sidebottom, "Both ITV and BBC will be mindful of the fine balance between providing added value to this subscription service and the performance of existing offerings, whilst appeasing license fee payers."

Says Enders, "The concept of [public service broadcast or PSB] is different to SVOD since it gives people more choice in terms of news and current affairs, radio services, and the BBC website. It creates culture across the UK.

"The UK has the highest viewing numbers for drama in the world," she adds. "BritBox will only compete with drama-driven services like Amazon Prime, Netflix, and Sky Now. It will never replace the PSB."

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