Ofcom announced today that it will not open an investigation into ‘Project Canvas’ under the Competition Act, following complaints made by Virgin Media and IPVision. Now we’re not saying that this is a complete stitch up, but the fact that Ofcom’s budget is under scrutiny like any other Quango right now, and that the Government clearly wants the BCC not to have wasted a £100 million developing Canvas (now called YouView) may have something to do with this decision.
Project Canvas is a partnership between the BBC, ITV, Channel 4, Five, BT, TalkTalk and Arqiva which will offer digital terrestrial channels and internet-delivered TV services via a set top box connected to a TV set.
The issue that Virgin, Sky and others have raised is that this is all done to a set of rules set by broadcasters, with no flexibility, to the detriment of Pay TV services, and it means that pay TV has to go and fund their own set tops to do much the same thing. If a really open technology had been used then this would not have been the case. Virgin has already signed a deal with TiVo, the US inventor of Digital Video Recorders, and will launch a hybrid cable-internet service before Christmas which will have far more advanced offerings than Canvas/YouView.
YouView was once expected to launch this year, but it will now be put off until 2011, by which time both Sky and Virgin and perhaps a number of start-ups, will muddy the waters with offers of their own.
Virgin Media and IP Vision submitted complaints to Ofcom saying that Canvas was a breach of the Competition Act. Ofcom also received submissions from 11 other parties, including BSkyB. The complainants raised a number of concerns, including that Project Canvas partners are incentivized to withhold content from competing platforms; Technical standards produced by Project Canvas had not been developed openly and were not made available for use by those outside the joint venture; Use of the Project Canvas brand (YouView) is tied to a single specific user interface and EPG (Electronic Program Guide) .
We think we have to remember that this is a broadcaster club getting together to build its own platform. This will then masquerade to the public as THE IPTV platform, when it is just one of many. It has huge market presence and is subsidized by a Government Act which collects $5 billion a year for the BBC from a license fee.
Ofcom has now said that it will not investigate Canvas because it won’t harm the interests of viewers and consumers. It clearly will, though not immediately, and if everyone goes out and buys a YouView box, then the online search and recommendation systems that will come out of TiVo and others in the coming year, risk becoming marginalized, because YouView will be seen as the ‘official’ Government backed choice, given that its darling, the BCC, came up with the idea.
Ofcom said that at the current stage of YouView’s development it would be premature to open an investigation, because IPTV is still an emerging sector, and the impact of YouView on the market will not be known with any confidence for some time.
If it is sold like Freeview was, which was as the ONLY alternative to analog TV, with the appearance of the government’s blessing, then it will set back genuine internet delivered TV innovation in the UK. The rival HbbTV in Europe allows a variety of business models and formats, and does not enforce a common look and feel on the services, so that channels can compete, but Canvas does and will even push YouView as a master brand in its own right, above the TV channels. People won’t say I’ve got ITV, they will say I’ve got YouView, when in fact it is supposed to be a bunch of competing services and with the exception of the BCC they do all compete for a dwindling amount of TV advertising.
Of course YouView will bring benefits to viewers and consumers. But it will harm, as yet unborn competition, so if we want the BBC, ITV and its partners to continue to dominate TV, despite the fact that they have shown themselves to be moribund, out of ideas, and in advertising revenue terms, on the verge of collective bankruptcy, then go ahead.
Faultline believes that YouView will kill internet TV stone dead, and the UK will watch as the rest of the world benefits from it. But yes it will bring catch up TV to the TV in the home and take it off the PC, which is good. Will it bring YouTube with it? No, not YouTube or any other internet video service although there are said to be 40 start-ups ready and waiting to jump on the service, and it will be interesting to see if they are actually allowed to. We suspect not, in any meaningful way.
Ofcom said it will keep its eye on whether or not YouView partners restrict the supply of video on demand content to rival firms, but says there is little evidence of this so far. Well go and ask the BBC if you can license Doctor Who for an IPTV service in the UK, and see how far you get. It will be limited entirely to YouView and FreeView and only when the BBC has established YouView as the default player, will anyone be able to complain about it. Ofcom at that point may shrug its shoulders and say, ‘Well it’s too late now.’
Ofcom admits that there is a risk that YouView may result in a more limited choice of user interfaces and user experiences for viewers. But says there is no choice in the market yet, so it’s best not to block the first internet video UI. Quotes in the press that YouView will ‘stimulate’ competition, when in actual fact it’s a way of stopping all internet video from getting to your TV, is little short of laughable.
Both Apple TV and Google TV will also be launched this year, and will gradually find their way over to the UK, and if Google TV was integrated into YouView, it would go a long way towards opening up home TVs to ALL online video content, instead of just content from established broadcasters. However the idea that all content available on YouView will need to come from companies which pay an ‘Access’ fee for the service, makes new content providers hugely unlikely, as would the idea that most online content will be called from within a broadcast.