BBC Trust calls for review into YouView investment

BT’s YouView box

The BBC’s governing body, the BBC Trust, has called on the broadcaster to “carefully review its investments” in YouView, Freeview and Freesat as part of its obligation to promote services that are “free at the point of delivery.”

In a report into the BBC’s distribution arrangements for its UK public services, published yesterday, the BBC Trust said that the BBC’s support of IP-enabled TV platform YouView was “predicated on the platform’s availability at no ongoing subscription cost”.

However, it said that in practise, nearly all YouView ‘sales’ have provided under subsidy by either BT or TalkTalk, in exchange for a subscription to the telcos’ pay-TV services.

“This may have implications for the BBC’s strategy of promoting ‘free’ access to its services, and is likely to form an element of a platform review by the BBC which is currently under way,” said the Trust.

The news comes a day after the Guardian reported that the BBC and other UK broadcasters are planning to “slash their investment” in YouView, with funding talks for the next period of investment in YouView among stakeholders to be concluded at the end of March.

The Trust said in its report that the BBC currently does not pay any fees to be carried on the non-linear interface of YouView. While it acknowledged that it has been subject to “some criticism” from certain YouView shareholders for this, it said this was a key part of its efforts to “contain distribution costs” in exchange for supplying content.

As a joint stakeholder in YouView, the BBC contributed £6 million (€7.2 million) towards the operating costs of the service in 2012/13 alone. Over the past three years, YouView’s stakeholders – the BBC, ITV, Channel 4 and Channel 5, BT, TalkTalk, and infrastructure firm Arqiva – have paid a total of £105 million to fund the service.

Elsewhere, the Trust’s distribution report predicted that on-demand consumption of TV programmes will more than double between now and 2017 and that the like-for-like direct costs for the BBC’s online distribution will rise to roughly £40m by 2016/17 from £24m in the current year.

The Trust said that online distribution of the iPlayer delivers just over 2% of the BBC’s TV viewing, while the costs associated with delivery of the on-demand service is just under 12% of the BBC’s total distribution bill – but said that it was cost effective when compared to commercial benchmarks.

Overall, the Trust said that the BBC’s overall distribution arrangements for its UK programmes and services are “fit for purpose and offer good value for money for licence fee payers.”