Blog Post

BBC Trust: BBC Must Drop $100 Million Local Video Plan; Would Hurt Commercial Rivals

The BBC has been blocked from beginning a £68 million ($101 million), four-year program to add video bulletins to its 65 local UK websites – a proposal that had been vigorously contested by concerned commercial publishers. After a five-month inquiry, the BBC Trust regulator said on Friday the plan would hurt the nascent online video efforts of struggling local newspaper publishers, many of which were forced to answer falling profits and the classified ads downturn with layoffs this week.

The BBC wanted to add just three daily news, three sport and three weather videos to each of its region-specific sites, while the project would also have added UGC, mobile video and up to 10 live streams per year from local events. It would have cost £23 million ($34 million) per year between 2009/10 and 2013/14, or an average £350,000 ($520,000) per site, and planned to attract 11 percent of UK households.

But the proposal was met with fierce lobbying, most notably by the UK’s largest newspaper group Trinity Mirror (LSE: TNI) and the Newspaper Society industry umbrella, which argued against public funding for services they said they had already invested in. The BBC Trust agreed, saying the plan would have cost commercial media four percent of revenue and, more seriously, would haveimpacted their future ability to innovate online. Regardless of competition, the trust even said the proposal would not have built local audiences as the BBC claimed. The BBC said it will consider its options. BBC Worldwide’s Hulu-like VOD JV, Kangaroo, is also currently with antitrust investigators over fears it could distort the marketplace. Full story and industry reaction on paidContent:UK.