UK TV Looks Inward for Brexit BritBox
Heavily trailed, UK public service broadcasters ITV and BBC are to join forces and launch a new homegrown streaming service to staunch the flow of viewers to Netflix.
BritBox will launch later this year with content from the broadcaster's extensive archive and new commissions and is expected to pull much of its inventory from Netflix.
"This is a long overdue move is a step in the right direction," said Paolo Pescatore, analyst at PP Foresight. "However, it might be a bit late. Pulling content off the established SVOD providers will help differentiate its own offering. But it doesn't guarantee success."
Other broadcasters expected to join the service later. Channel 4 and Viacom-owned 5 are part of discussions. Carriage of the direct to consumer offer may be boosted by carriage on pay TV platforms Sky and Virgin.
The announcement—timed to provide a fig leaf for ITV's Brexit-affected low annual earnings—is that the pubcasters are uniting in strategic partnership. There's no formal agreement, and the venture would have to pass the regulator although it is due to launch this year.
Nine years ago, the local competition commission nixed the similar Project Kangaroo before it could jump.
This time around, watchdog Ofcom has been making very public encouragement for the broadcasters to get their act together and launch a service dedicated to the support of locally sourced British programming.
"The landscape has changed massively," ITV chief executive, Carolyn McCall told BBC Radio 4, "We think [people] in Britain really do want to see a home for British content. It will mean there is one home where anyone in Britain can get all library content in one place including current programming when it comes off [catch-up services] ITV Hub and iPlayer."
She insisted, "It's pro-choice [for the consumer] and for us it's a window of opportunity we need to take now."
She characterised BritBox as "permanent, comprehensive and very distinctive."
No pricing was revealed but reports suggest a sub of around £5 a month. ITV said it would be "competitive."
The service will build on the SVOD service of the same name that already exists in the U.S. and Canada. BritBox was set up in 2017 by BBC Worldwide and ITV's international sales division in partnership with AMC Networks and has amassed over 500,000 subs.
ITV is pumping £65 million ($86 million) into the new venture over two years, some of which will be used to fund original content, produced through ITV Studios. "ITV will originate content not using license payer money," McCall said.
The broadcaster's relationship with Netflix will be handled with care. For one thing, the partners are pitching BritBox as complementary to Netflix-streaming households.
"We have never said that this is the British equivalent of Netflix. Netflix is global, it commissions globally," McCall said. "We are not a substitute for Netflix."
More than 12 million households in the UK have at least one SVOD service, with 4 million homes paying for multiple subscriptions.
BBC and ITV also say they will continue to produce for, and coproduce with, Netflix and other SVODs.
For example, acclaimed series Bodyguardis produced by ITV Studios' World Productions, but airs on the BBC in Britain and Netflix in the rest of the world.
Nonetheless they will both stop licencing content once existing agreements expire. For example, Love Island, ITV's smash reality show, will no longer be distributed on Netflix.
The SVOD market continues to fragment and may exhaust consumers. It's not clear if consumers already paying for Netflix will also want to pay for box sets of UK programming, particularly if they can access the shows for free on catch-up. UK citizens may also baulk at having to stump up more cash on top of the £150 ($200) annual licence fee.
ITV provided research suggesting that 43% of all online homes in the UK were interested in a Made in Britain TV subscription. "This increases to over 50 percent in homes with a Netflix subscription," ITV said.
Pescatore said the biggest challenge would be to get consumers to part with their hard-earned cash for another service.
"These providers should partner with telcos and focus on what they do best—creating the next biggest show," he said.
It's hard not to draw parallels with Britain's impending departure from the EU. Is BritBox about ringfencing British culture from the rest of the world or to be used as a rallying call to produce distinctive British world-beating programming?
Terry Washington, Director of UK broadcast kit trade show BVE, said, "In an age of digital and political disruption, it's now time for the UK creative industry to come together. BritBox … promises to bring a transformational SVOD service that celebrates the best of British content and plays to the demands of audiences in a market where streaming subscribers are growing at a rapid rate. The industry should continue to future-proof, protect and drive forward Britain's unique TV and film ecology which contributes so much to our economy and culture."
ITV warned that its total advertising revenue would be down 3% to 4% in the first four months of 2019 due to uncertain economic and political environment around Brexit.
The "Best of British" SVOD launches domestically soon with content pulled from rivals including Netflix. But with BBC keeping content on iPlayer for 12 months, will it offer enough to get people to pay?
In a marked shift from almost a decade ago, a consolidated UK broadcaster VOD service is on the cards after the UK media regulator appeared to greenlight such a development.
ITV, BBC, and Channel 4 plan to launch a joint live and on-demand app via Freeview Play this year in an effort to compete with Netflix and Amazon