Sharon White, CEO of UK media regulator Ofcom, is speaking at a London conference today (November 28th), using her keynote speech on ‘How British TV can be Stronger Together’ to call for UK public service broadcasters (PSBs) to form a combined catch-up platform in order to be more like Netflix.
According to White, years of low interest rates have allowed tech firms to grow and invest through debt finance. “Netflix, which now has $5 billion of net debt, was able to spend almost $8 billion on content last year – more than twice the combined spending by PSBs on UK shows,” she advised delegates.
White said that in 2018, Ofcom has been encouraging UK broadcasters to collaborate to compete. “Pulling together to increase their collective strength. Harnessing the power of technology to capture the audiences who have moved online. I remain convinced that collaboration is vital to the success of our industry,” she declared.
As the national broadcaster, White said that Ofcom would expect the BBC to take the lead on forming such partnerships as it has done successfully to date. “And for our part, Ofcom has to be a forward-looking regulator that supports the future success of UK TV, firmly rooted in the online world.”
White says that: “If the growth of Netflix and Amazon tells us one thing, it is that viewers will flock to single destinations that offer a wide variety of quality content […] It would make it easier for viewers to access content across a range of devices, with a single login.”
White says that it will advise the government on the issue of ‘prominence’, accepting that legislation will be needed.
According to analysts from investment bank Exane/BNPP, an article in the Financial Times previewing the speech “conflates” areas such as Advertising-supported VoD, and conventional SVoD. “We are supportive of a combined PSB AVoD product. In our view this will create a single catch-up platform for UK PSBs content bringing increased audience and ad inventory liquidity, likely boosting the scale of the market and the competitive proposition vs other advertising focused digital video offerings (YouTube, Sky, Facebook). We are more cautious on the prospects of SVoD cooperation as we believe the marketing firepower and content depth of the incumbents Netflix, Amazon and Sky is simply too great relative to the PSB incumbents, even if they cooperate, as under their PSB obligations their content must be freely available on catch-up and much of the historic inventory is already sold to the incumbent SVoDs. We see risk of further investments at ITV in 2019 on a potential SVoD product.”
The bank adds: “However the CEO of Ofcom directly calling for greater cooperation and specifically pressuring BBC (who Ofcom now regulate) may create added emphasis to cooperation which has lost momentum in recent months after an initial glut of news stories which is a small positive. We note ITV’s recent investor day did not focus on AVoD cooperation.”