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BBC’s Internet-Only TV Is a Threat, Not a Promise

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The BBC is preparing to shut down its traditional television and radio broadcasts and shift everything online, but will only do so if the principal of universal affordable access is maintained.

“Imagine a world that is internet-only, where broadcast TV and radio are being switched off and choice is infinite,” said BBC Director General Tim Davie, mapping out the Corporation’s digital future in a public speech last week. A switch-off of broadcast will and should happen over time, and we should be active in planning for it.”

Such an announcement has been trailed by BBC execs at various points over several years as a necessity for its future. Like other free-to-air and public service broadcasters (PSBs) around the world, it faces stiff pressures from international streaming competition, audiences shifting their viewing habits online, and the ongoing cost of creating (and distributing) relevant programming. Meanwhile, mobile operators are seeking to land-grab further terrestrial TV frequencies.

In the UK the BBC (ITV and Channel 4) face pressures from a government intent on shaking up their public funding, possibly replacing the licence fee all together when it comes for renewal in 2028.

In his speech, Davie said the BBC was committed to live broadcasting is preparing to close many standalone channels and radio stations by the 2030s: “Over time this will mean fewer linear broadcast services and a more tailored joined-up online offer.”

Some channels including BBC Four and children’s channel CBBC are earmarked to go online-only from 2025.

The future will involve “bringing the BBC together in a single offer”, Davie said, possibly in the form of one app combining everything from TV programmes to local news coverage and educational material. 

No-one in the world has created a digitally led public service media company at scale,” he said. “There is an opportunity to put the BBC at the heart of the UK’s media future. There is a plan for how an internet-only version of the BBC would operate, focused around a simple, single brand in the UK and abroad.  

“The BBC has to cut costs, and remain relevant,” Rob Ambrose, Co-founder and MD at Caretta Research told Streaming Media. “From a technology and economy perspective it makes perfect sense to plan towards an OTT-only delivery.

Ambrose said, “The BBC can make a significant reduction in transmission (run by Arqiva) and satellite costs, and all of the encoding, multiplexing and distribution costs to make that work. Of course, there's a cost for delivering via OTT too, but the BBC can (and does) operate its own CDN, and can push a good chunk of those costs onto the ISPs.  In parallel, FTTH will become widespread in the UK.

Also in the UK Comcast-owned Sky is also moving in this direction, gradually ditching the dish for streaming services like NowTV which is the main service for its Sky Glass connected TV.

The BBC differs in having a universal service obligation. According to Ambrose this has led to old technologies remaining in place long after their sell-by date (for example, SD-only channels transmitted on DTT and DTH).

Assuming that its remit remains in place as part of any future funding settlement then the BBC’s plan will only work if it can continue to reach 100 per cent of the UK population via fixed-line or 4/5G internet. It also has an obligation to reach the 1.5 million UK households with no internet connection. 

“Technology can offer solutions to this so that- at some tipping point – it will be more cost effective than operating transmitters,” Ambrose said.

A possible solution, he suggests, is a BBC-branded streaming stick with a SIM card, perhaps delivered in partnership with other UK public service broadcasters (PSBs) and with the same sort of cross-industry collaboration that launched DTT free to air service Freeview back in 2002.  An alternate or complementary solution is 5G multicast technology.

Other UK broadcasters ITV and Channel 4 also share the licence fee and need to adapt in order to justify public funding.

If they don't respond in a radical way, they'll wither away, becoming less and less relevant.  Assuming that a broadcaster can simply remain relevant pumping out a handful of linear TV channels and a catch-up service is far more dangerous than making some more controversial proposals.

ITV recently launched ITVX as a replacement for ITV Hub, integrating advertising and subscription funded services and on which the broadcaster plans to premiere much of its new programming including the drama Litvinenko, prior to releasing on its linear network. It also launched with 20 FAST channels.

ITVX is intended to supercharge ITV’s streaming business, said Carolyn McCall, ITV CEO: “We are fundamentally shifting our focus to think digital first. In doing so we are responding to changing viewing habits, but also the evolving needs from our advertisers.”

Yet ITV Hub and ITVX have only amassed 1.2 million subscribers combined, compared to Netflix which has over 16m UK subs and Amazon’s 12.6m.

The rise of FAST and OTT-only linear channels shows that streaming is just as much about linear channels, so Caretta doesn’t expect the disappearance of the BBC's valuable channel brands.

But the BBC risks becoming irrelevant to an increasing slice of the population if it doesn't adapt,” warns Ambrose. “The success of iPlayer and [digital radio service] BBC Sounds demonstrates how the BBC has been more successful than nearly any other public-service media provider in pivoting to streaming and building a competitor to the US streaming giants.

Equally, the BBC and politicians have an obligation to sustain a public-service content provision to deliver content that isn't provided by the market of commercial streaming services.

Davie made this point, making the case that the government “actively invest in the BBC” while being open minded about future funding mechanics.

“We are clear that it is critical we have a universal solution that fuels UK public service growth--not stifles it--while offering audiences outstanding value for money,” Davie said.

He also criticized the failure of UK’s legal and regulatory environment to keep pace with the market.

We need rules for the prominence, availability and inclusion of PSB content in new platforms, in video and audio,” Davie argued. “Plus, a regulatory framework that is proactive, agile, and responds to obvious harm when it occurs--allowing innovation and growth across the industry, alongside the necessary and appropriate safeguards.

Davie’s words are intended to galvanize positive debate around the future of the BBC by framing the argument for more investment as preserving the BBC’s programming prowess.

“Do we want a US-style media market or do we want to fight to grow something different based on our vision?” he said. “I sometimes read that the BBC needs to clock that the world has changed. I can assure you that we do not need any convincing.”   

Ambrose commented; “Of course a big speech like this doesn't mean the BBC will do all of it - but it's good signalling to test the public's and politicians' appetite for change, and to make clear that the status quo is not a viable option.

Digital Divide challenges UK

A major challenge for the BBC is how to reach the millions of Britons--often older, poorer, or in rural areas--who do not have a strong internet connection and could be cut off from an online-only BBC.

Elon Musk’s Starlink has been contracted by the UK government to pilot broadband coverage in certain extremely rural areas of the country. The government’s media department reported that in many locations, Starlink satellites can deliver internet speeds of up to 200 megabits per second – four times faster than the current UK average broadband speed of just over 50Mbps.

The initiative is part of Project Gigabit, a $5.7 billion national broadband network roll-out which also includes a $120 million contract to build gigabit-capable broadband connections for up to 60,000 rural homes and businesses in the North of the UKIt also plans to cut broadband bills for millions of low-income households by encouraging ‘social tariffs’.

UK PSBs are also concerned about any loss or co-allocation of wireless spectrum which is being debated in 2023 at the next ITU World Radiocommunications Conference in Dubai.

Davie told UK media regulator Ofcom that the BBC wanted to maintain the status quoe whereby frequencies between 470 and 694 MHz remain allocated to terrestrial TV and for Programme Making and Special Events (PMSE).

In a statement to Ofcom, reported at RXTV, the BBC said: “A ‘No Change’ position at WRC is the only way for the UK to retain control of its TV ecosystem and distribution approach, which will allow us to carefully time and manage the DTT to IP (Internet Protocol) switchover process for the benefit of audiences, including some of the most disadvantaged or vulnerable groups, for the creative sector, and ultimately the UK as a whole. We believe that a decision to allocate this spectrum should be deferred to a future WRC.”

Telcos took a different view. BT, owner of the EE network, told Ofcom:

“Now is… absolutely the right time to take international regulatory decisions that would give the UK the greatest possible flexibility to facilitate future changes and would support development of a mobile ecosystem at 600 MHz that the UK could take advantage of at the appropriate time.”

Other telcos including Vodafone, Nokia, cable and mobile operator Virgin Media O2 and Three are also broadly in favor of ‘co-primary’ allocation. The Digital TV Group (DTG) explained to Ofcom why this is a problem:

“In supporting “no-change” DTG notes that there are claims that it is possible to sustain DTT and PMSE services in the UK if adjacent countries chose to use co-primary allocation to launch mobile services, however in practice history demonstrates that this would be very challenging; previous co-primary allocations have resulted in a harmonized removal of PMSE and DTT from that spectrum. It follows that a co-primary allocation at WRC23 could unintentionally force the UK to move to clear PMSE and DTT from some or all of 470-694 MHz.”

RXTV’s take is that no change is likely until 2027 by which time the UK should be further along with moving towards an internet-only TV environment. Notably by then there might be some plans for a feasible universal internet-based free TV service to replace current services.

That the UK is a long way from such a service is evident in Sky’s decision to charge customers $6.50 per month from December if they fast forward through adverts on Sky Go and Sky Stream unless they opt out of the scheme.

Those who opt out will be unable to skip commercial breaks on live channels, and will also have to watch all sponsored videos when using catch-up apps like ITVX, as well as when watching via the Playlists menu.

Users of UK internet TV services, “once chained in to a contract and mandatory equipment then face charges for extras, such as the ability to fast forward ads,” finds RCTX’s Iain Hatton. “They are also bound by contractual inflation-busting price rises. As a result, the current services are a long way off from providing truly universal and affordable access.”

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