The BBC is trouncing its commercial rivals in the nascent on-demand TV market, with its iPlayer service recording up to 500,000 programme downloads each day.
A heavyweight marketing campaign featuring Jeremy Clarkson, David Attenborough and Jo Whiley convinced BBC viewers to stream or download 11m TV shows in January alone. This compares with a relatively paltry 2m for ITV during the same period and 2.7m (PC only) for 4oD, the on-demand service from Channel 4.
Apart from a strong programming line-up, including Doctor Who, Ashes to Ashes and Top Gear, the early dominance of iPlayer is due in no small part to the millions of pounds of licence fee-payer's money the BBC is throwing at it.
More than £130m has been earmarked to develop iPlayer over the next five years. This could affect commercial broadcasters keen to establish an on-demand audience for their programmes in one of two ways. Either the success of BBC iPlayer will benefit everyone by igniting the fledgling on-demand TV sector, encouraging viewers to go online to catch shows they've missed, or BBC iPlayer will dominate the field, taking viewers away from commercial services that rely on ads.
'By promoting iPlayer so heavily, the BBC is undoubtedly helping to encourage viewers to watch their favourite TV programmes on demand,' says Ian Maude, analyst at Enders Analysis. 'However, it is also establishing such a lead that its commercial rivals will find it almost impossible to catch up.'
The knock-on effect of BBC iPlayer's Christmas launch has already been felt by ITV: traffic for its broadband TV service has remained flat over the past few months. The simulcast and catch-up offering peaked in November on the back of The X Factor and I'm a Celebrity. However, traffic has dipped by about 200,000 video views since then.
ITV has invested only about 10% of the amount earmarked by the BBC to develop its on-demand service. Despite this, the network hopes its ITV.com media player will help deliver £150m in annual digital revenues by 2010. Speaking at last week's ISBA Annual Conference, Rupert Howell, managing director of brand and communications at ITV, said it was 'prepared to invest in following audiences wherever they go'.
Perhaps more worrying for the broad-caster is the fact that full-length TV shows such as Coronation Street and Emmerdale accounted for only 40% of the player's 2m video views in January. ITV is working hard to offset falling TV revenues by tapping into online advertising, but it will have to deliver bigger audiences to make a cross-platform sell attractive to brand owners.
On a more positive note, figures from comScore show that the number of unique users watching video streams on all ITV's sites increased from 1m in November to 1.7m in December. This will boost its commercial offering, which centres on pre-roll spots running before streamed content is viewed, bespoke advertising around non-live clips and clickable video ads directing viewers to branded websites.
The number of unique users accessing video clips via Channel 4's 4oD halved to 770,000 from January to December 2007. This coincided with it becoming ad-funded, and in spite of a series of on-air campaigns promoting the service. However, the broadcaster remains bullish, claiming that there have been more than 100m streams or downloads of shows including Hollyoaks, Skins and Shameless since 4oD was unveiled in December 2006.
'The launch of the BBC's iPlayer has undoubtedly boosted our service,' says Sarah Rose, head of video-on-demand and channel development at Channel 4. 'Our numbers are small in comparison with linear TV, but great for the fledgling on-demand market.'
High-profile brands including Ford, Canon and Reckitt Benckiser have signed up to 4oD's commercial offering, which comprises pre-roll video ads, centre-break spots and interactive TV commercials allowing consumers to visit branded websites. 'Personalised ads are the next step for us,' says Rose.
Sky is also trying to tap into the on-demand market with its Sky Anytime service, which spans PCs, TVs and mobile, while Five is relaunching its Five Download service, a mixed paid-for and free ad-supported offering.
Additionally, in an effort to see off competition from web-only TV services Joost and Babelgum, UK broadcasters are teaming up to launch Kangaroo, a video-on-demand joint venture from BBC Worldwide, ITV and Channel 4. The service, which will carry advertising, is due for a summer launch, but analysts fear the proliferation of platforms could confuse consumers. 'Viewers will soon be faced with an almost infinite choice of on-demand content,' warns Maud.
The UK's commercial broadcasters appear willing to throw their weight behind on-demand TV, eager to safeguard their advertising income. However, the huge resources available to the BBC means iPlayer may have won the battle before it has even begun.
Data file: VOD services
- The BBC claims that 17m programmes have been downloaded or streamed on demand via BBC iPlayer since launch; up to 500,000 a day. In January, more than 2.2m people watched a programme on iPlayer, with about 11m programmes streamed or downloaded on demand.
- Channel 4 claims its video-on-demand service, 4oD, has served more than 100m programme streams and down-loads since its launch in December 2006. According to the broadcaster, the total number of 4oD users is now 3.3m - 1m watching via PCs and 2.3m accessing through cable-TV platforms Virgin Media, BT Vision and Tiscali.
- The most popular shows on ITV.com include Coronation Street, Emmer-dale and Secret Diary of a Call Girl.