Why does Virgin Media get the iPlayer?

a.k.a Does Berkett shell out some green to get the BBC’s on-demand flagship on his on-demand cable platform?

On Twitter late yesterday I posed a question asking if Virgin Media pay the BBC anything (& if so, what) to have the iPlayer service on their cable TV service.  (I’ve been looking into video on demand (VOD) more & more lately, for a project I’ll post about here in a few days.)

Update - 13 May - Tim Renowden has a great post summarising some of the technical slanted  reasons why non-Virgin providers aren’t currently syndicating the iPlayer. Definitely worth a read. Find it here.

The background to my question:

Now, even though I’m Australian, I realise the BBC is a public service funded entirely by the license fee, and has a remit to provide its content to as wide an audience as possible. I also realise that - with the exception of the BBC Worldwide - there isn’t really any “content sales” in the way other broadcasters like ITV and C4 make commercial deals for the distribution of their content beyond their own broadcasts and sites.

But I still wasn’t entirely convinced that Virgin Media was getting the iPlayer service for no cost at all. After all, with no other provider syndicating the iPlayer content as widely, surely that gives Virgin Media an advantage in the consumer marketplace, and that could amount to some form of state aid couldn’t it?  To be clear, I was not necessarily thinking the supply to Virgin had to be a profit-generating exercise for the BBC (for surely that would be in violation of their public wide-access purpose). But can’t the BBC claim some payment is needed, for cost recovery? After all, the BBC can - from consumers - recoup costs of voting mechanisms via premium SMS numbers, and the proposals for Project Canvas which the BBC will hold a 25% stake suggest cost recovery from enterprise is absolutely a possibility when it comes to the EPG.

So I did some reading.

What I found:

• Both NTL & Telewest were part of the original technical and consumer trials for catchup TV in late 2005 (one source - this annex PDF). Those two organisations of course merged and became what is now Virgin Media. (Homechoice - since purchased by Tiscali UK - was another trial participant.)
• It was those cable services providing catchup TV specifically  that were the subject of the public value test, and this public value test  contributed to the overall on-demand decision of approval taken by the BBC Trust (along with the internet-based catchup services of course - namely on BBC sites).  (Section 3.6.6 of this annex.)
• The BBC Exec stated then it had no objection in principle to making the content available to other providers for syndication, as long as they were reasonable. As a result a policy for syndication of on-demand content, and guidelines for syndication of on-demand content were created. These policies cover the type of thing one would expect: to be approved a syndication deal could not adversely affect the competitive landscape; it must be available to all subscribers of the service; it cannot hamper the BBC fulfilling its overall public purposes; it must be available only to UK audiences.
• The most pertinent considerations and principles are as follows: value for money, and platform neutrality as far as technology and value for money allows. In other words, the iPlayer is to be made available on as many platforms at no cost (including syndication platforms) as possible, as long the audience reached outweighs the cost of having BBC developers create the technology and the syndication.  It’s why the Nintendo Wii has the iPlayer service officially while other consoles do not (i.e. a combination of the Wii being in more homes (audience), and already having a browser so adaptation is less intensive than what would be required for the browser-less Xbox (technology)). By inference, if the value for money measure is not upheld, the syndication option does not go ahead (and since NTL/Telewest were already part of the tech trials, this value for money test was more than satisified).
• Conclusion: While I found nothing to categorically exclude it, it seems highly unlikely that Virgin Media is paying anything - including cost recovery - to the BBC for the provision of iPlayer on Virgin’s cable TV platform.
• Furthermore, it seems that the guidelines around value for money and technology are broad/vague enough to give the BBC coverage to follow up, or deny, any syndication options they like, with enough ammo to outwardly justify why they choose not to adopt any particular syndication option.
• Finally, as part of the syndication guidelines from the BBC Executive, every 6 months the Exec is required to outline for the BBC Trust all new syndication deals consideration,  both those approved and those rejected. I haven’t managed to find the actual reports of these yet, beyond it being noted in Exec & Trust meetings that they were in fact presented, and doubt they’re publicly published.

Further reading:

Finally, if you are interested in them, you can find the full on-demand syndication policy here, and the guidelines for syndication are here (both links are to PDFs). There’s also the original on-demand decision, the public value test/assessment that makes up part of the decision,  and the market impact assessment from Ofcom that made up part of the PVT (again, all PDFs).

Update - 13 May - Tim Renowden has a great post summarising some of the technical slanted  reasons why non-Virgin providers aren’t currently syndicating the iPlayer. Definitely worth a read. Find it here.