The BBC is under enormous pressure to cut costs as its budget is in large part received from a mandatory licence fee payment from anyone who owns a television set, regardless of whether they actually watch BBC channels.
Other networks, such as ITV, are funded via advertising revenues.
BBC Three officially launched in 2003, although its origins can be tracked back to 1998 and a channel known as BBC Choice, which was the first BBC channel to air exclusively on the digital spectrum. Five years later it was rebranded as BBC 3 with a remit to deliver:
the best in new entertainment, comedy, contemporary drama and music to this young adult audience…a rich, mixed, contemporary schedule.
Up until now it’s been one of the BBC’s crown jewels, often used to create and broadcast content for a niche audience, but also spawning some mainstream hits of its own, most notably comedies such as Little Britain and Gavin & Stacey as well as international successes such as Torchwood, the Doctor Who spin-off for a more ‘mature’ audience.
Other content - such as Sun, Sex and Suspicious Parents - was, shall we say, less culturally and intellectually rigorous.
The news of BBC3's ‘closure’ led to some high-profile protests from some of the channel’s stars.
But in the search for cost savings, the BBC’s current management faced a choice of canning either BBC3 or its arts-focused BBC4 channels. With the youth demographic of BBC3, the decision was made to drop BBC3 as a TV channel and move it entirely to a digital platform via the iPlayer service.
The BBC says the move - which will kick in in 2015 if approved by the governing BBC Trust - will:
- Save over £50 million a year.
- Allow a boost of £30 million to be spend on drama on BBC One.
- Release much needed broadcast spectrum to provide a BBC One +1 service.
It will also emphatically cement iPlayer as a BBC broadcast medium for the future.
In an email to BBC staff, BBC Director-General Tony Hall said:
“For this generation - I believe the iPlayer is a key part of the future for public service broadcasting. It's the gateway for people who increasingly want to watch and listen to what they want, when they want it - on tablets, on mobiles as well as other screens. I am sure that this is going to be increasingly important for our younger audiences. And reaching those audiences is vital for the BBC.
“I believe it’s the right thing to do: young audiences – the BBC Three audience – are the most mobile and ready to move to an online world. 25% of viewing by 16-24 year olds is to catch-up or other screens and over the next few years we expect that to reach 40%.”
The iPlayer revolution
iPlayer is one of the BBC’s greatest assets - an on-demand video and radio catch-up service accessible via PCs, laptops, SmartTVs, phones and tablets.
It’s been an astonishing success: in January the service received 315 million TV and radio requests, the first time it’s topped the 300 million mark. January also saw a record average of 10.2 million daily requests, with the first episode of the latest run of Sherlock accounting for 3.6 million of those.
Mobiles and tablets accounted for 40% of requests - 127 million overall. That was another record high indicating again that the direction of travel for the BBC is away from the traditional ‘TV set in the corner’ to digital delivery to mobile devices.
While to date iPlayer has been essentially a catch-up service, the BBC has been experimenting with it a vehicle to deliver original content on an exclusive basis. While it’s yet to replicate the success of Netflix with House of Cards, it has, for example, commissioned a number of short dramas that are a result of a co-production between uPlayer, BBC3 and BBC Drama Production.
What the latest moves will throw further scrutiny on whether the TV licence needs to be extended to iPlayer. Currently if a programme is watched or listened to on a time-shifted basis, there is no charge.
Only if it is used to watch live streaming of BBC channels would the licence fee be technically required to be paid, but enforcement of this is a nightmare.
At the moment only around 2% of households are believed to use iPlayer as a total replacement for a traditional TV set, but this percentage will inevitably shoot up over the coming years, so the BBC wants to tackle the question of payment now.
Last week Hall argued:
“One of the advantages of the licence fee is that it's flexible and has adapted over the years. It started as a radio licence. Then TV. Then colour TV.
“And then the relatively simple change to the regulations in 2004 to cover the consumption of live TV on new devices such as computers.
“Our view is that there is room for modernisation so that the fee applies to the consumption of BBC TV programmes, whether live on BBC One or on-demand via the iPlayer.”
At a time when rival broadcasters - most notably the pay-to-view Sky - argue that the licence fee is an anachronism, this is a case that the BBC will find itself having to pursue most vigorously to convince the UK government - seldom a fan of the BBC no matter which party is in power - to put in place the necessary legislation.
This BBC3 iPlayer gambit will be scrutinised very carefully.
A bold move by the BBC. It would have been easier perhaps to have closed BBC4 and moved its arts content across to BBC2, which also has a culture remit.
But the recognition of the iPlayer as a digital delivery platform is pragmatic and positions the UK state broadcaster well for the future.
Anyone in the UK who’s struggled to watch the online catch-up services from ITV or Channel4 will recognise that the BBC system is the benchmark for such offerings.
This latest decision sets a new standard for other broadcasters to aspire to.