iPlayer could have a “negative effect”

The BBC’s on-demand services, such as the iPlayer, could have “a negative effect” on similar services from commercial operators, according to Ofcom.

The media watchdog delivered the verdict in its first market impact assessment (MIA), part of the Public Value Test regime new BBC services must go through before being implemented.

The BBC Trust, which replaced the corporation’s board of governors in January this year, must rule after taking into account the findings of an MIA, which decides how commercial rivals will be affected, and a public value assessment.

BBC management applied to its governors in August for permission to introduce a “catch-up” TV service over cable and the internet and to simulcast TV and non-music audio downloads, such as shows like The Archers, over the internet.

All of the proposed services, apart from catch-up TV over cable, would be accessed from the internet using the BBC iPlayer software, which rivals have previously denounced as anti-competitive and commercially damaging.

Ofcom says it is important for the BBC to take a proactive and forward-looking approach to reflect likely changes in audience behaviour and expectations.

It continues: “As the internet grows in importance as a medium, the public will therefore rightly expect BBC television and radio content to be made available on demand.”

But it adds that the BBC’s power needs to be checked in developing markets to allow the “competition necessary to ensure quality content for the long-term.”

Ofcom also believes that the BBC’s plans to “series stack” on-demand content on cable and the internet potentially offers viewers so many hours of choice that it would impact on commercial rivals.

It says: “In many cases it would make the service a more direct substitute for commercial services”.