Another huge streaming partnership has been announced and this time it involves the BBC.
This week, the company announced a huge deal with YouTube which will allow the BBC to produce entertainment content ‘aimed at YouTube’s digitally native younger audience’, according to the TV giant. As early as February, the BBC will start showing content on YouTube spanning entertainment, news and sport, starting with the upcoming Winter Olympics.
While the BBC ensures that some of this new content will still be available to watch on iPlayer and Sounds, it raises a lot of questions about the company’s ongoing business plan debate. As it stands, the BBC currently relies on the £175 TV license for its programming, but this deal with YouTube will see a major shift in its model.
Why is the BBC doing this?
As mentioned, the BBC has felt the need to rethink the way it connects with younger audiences, many of whom have swapped traditional TV viewing for the likes of top streaming services. Paolo Pescatore, founder and analyst at PP Foresight, agrees, sharing, “The BBC needs to reconnect, especially with younger audiences.”
Looks like the BBC is giving up public service broadcasting, doesn’t it? Well, Abi Watson, head of publishing at Enders Analysis, thinks otherwise, telling us: “It has a commitment to producing creative, distinctive, high-quality content – and it’s not platform-specific, which involves the BBC experimenting with new formats, not just repurposing linear TV for digital spaces.”
That aside, the other deciding factor in the BBC’s decision to put him on digital rests on changing viewing habits, which Watson also touched on. “Secondly, it has a duty to reach audiences where they actually are. Viewing habits have changed significantly: around 10% of TV viewing in the UK now goes to YouTube, and for under-35s it’s closer to a quarter,” she added.
What does this mean for the TV licence?
In short, it doesn’t change anything for now – while you don’t need a TV license to watch BBC YouTube content in the UK, you still need one to watch or record live TV or use BBC iPlayer. And that’s the case even if you’re only looking at a phone.
Until now, the BBC has relied solely on the TV license for funding, but now that its funding model is being considered, it is going down the advertising-supported programming route. As mentioned, ads won’t appear when viewing content in the UK, but the idea of that raises a few points.
On the one hand, it gives the BBC another source of funding, and as Watson puts it, “content distributed on YouTube can generate modest incremental revenue overseas through advertising. That revenue sits within the BBC’s commercial arm, and any profits are returned to the public service side and reinvested.” On the other hand, the value is at risk.
“A growing overlap between public service broadcasting and commercial platform access risks complicating how its value is perceived by audiences. This could intensify over time if YouTube and other third-party services become the primary way people discover and consume BBC content,” said Peter Ingram, head of research at Ampere Analysis.
For Pescatore, it will fuel scrutiny of both value and funding, who told us, “all eyes will be on the BBC as it continues to reinvent itself in uncertain, challenging times, even as consumer patterns change, and it uses YouTube as a funnel to increase engagement on its own platforms without undermining them.”
What can viewers expect?
For starters, the BBC/YouTube deal will see a big boost in the BBC’s presence in digital broadcasting. The company has previously used YouTube to promote snippets of its shows on its YouTube channel, but this is the first time the BBC will be able to produce new and original content for the platform. For Ingram, visibility is the most important bottom line.
“The most immediate impact will be increased visibility of BBC content on YouTube, including a mix of new releases and catalog titles across 50 different content channels. Importantly, content created for YouTube is still expected to be made available across BBC iPlayer and BBC Sounds, meaning existing audiences do not lose access,” said Ingram.
That aside, the other big change you can expect is the significant shift that will come with the BBC’s funding process, as well as content designed for YouTube but still essentially BBC.
“The BBC’s first YouTube first commissioning pitch is for a new factual channel run by BBC Three, with around £2m of spend across two producers. That tells you a lot: this is a test-and-learn exercise, not a wholesale reallocation of budgets. Beyond that, our understanding is that the initial content focus will be children and sport, where the BBC units can be expected to work well on YouTube, genres and genres that should already work well on YouTube. BBC content, but designed for YouTube formats and viewing habits from the start,” Watson told us.
As we’ve said, these changes are coming very soon, starting with the Winter Olympics in February. The BBC seems to have a very clear vision of the direction it wants to take with its YouTube-centric content, but it will be interesting to see what this does to its funding model, given its current considerations.
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