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BBC Canvas Could Be Controlled By Commercial Players, Costs £115 Million

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The BBC is abandoning its stipulation that public service broadcasters (PSBs) should control a majority of shares in its proposed Canvas open IPTV VOD platform.

The initial July proposal to the BBC Trust had said Canvas would be a private company whose shares would be split in two categories – 66.7 percent ringfenced for PSBs (only BBC, *ITV* and Five signed up so far), 33.3 percent for ISPs.

That would have given ISPs less and less say the more of them joined, and would have given the PSBs a veto over their concerns. Some had complained in the consultation.

So the BBC is now instead proposing just a single class of shares, and the company will operate by majority voting. But all shareholders must now fund the project equally, for a minimum four-year term.

The BBC is concerned about its new proposal. To safeguard the public service values under which Canvas was devised, its principles will be written in to the company’s articles of association, to which all partners must sign up. And, it warns, “without class shares, the number of potential new entrants could be vast, rendering the board unable to operate effectively”.

The new shareholder agreement, drawn up by law firm Field Fisher Waterhouse, makes no mention of “PSBs” or “ISPs”. Does that pave the way for commercial broadcasters also to become equity partners? The agreement says the board would assess whether new applicants “would make a positive contribution to the venture as a whole” – ie. whether they would help market the service, adhere to its principles and would fund it.

In a separate letter to the BBC Trust, the BBC says the likely increase in the number of partners means costs to it will fall from the originally forecast £16.6 million over five years to £16.4 million. But that’s based on six partners joining Canvas – if the venture stays at the current four partners (BBC, ITV (LSE: ITV), Five, BT), it will cost the BBC £24.7 million.

Total cost for the whole project is estimated at £115.6 million.

The trust is still deliberating over the whole Canvas proposal.