James Murdoch is wrong about the iPlayer

Photo by http://www.flickr.com/photos/dantaylor/

At the Marketing Society annual lecture, James Murdoch accused the BBC iPlayer of squashing competition.

I completely disagree with this. The iPlayer is dominant, but it is taking a large slice of an inflated pie. Without the iPlayer, the market would be a lot smaller. No-one was complaining of the other video services using 3-5% of the UK’s Internet traffic beforehand.

The BBC is able to devote greater resources to promoting the iPlayer (£131m over 5 years) than its commercial rivals. Since online video is a game-changing technology, I believe that the BBC is justified in doing this. They have used their money to:

• Fail. All the coverage of the flash iPlayer overlooks the fact that the p2p service floundered throughout 2007
• Promote. Barely a trail or continuity goes by without the iPlayer being mentioned – commercial broadcasters have a multitude of commitments battling for space and could not give their online video the same level of coverage
• Populate. As well as in-house productions, the BBC has been paying for ad-hoc deals to bring in third party content (such as Damages)
• Reassure. Despite everything that has gone one in the past few years (from Hutton to RDF to Socks), people will still look to the BBC rather than a commercial rival

As for James Murdoch’s assertion that it is crowding out competition, I have had a look at Comscore data and that tells a different picture.

Admittedly, the iPlayer only appeared for the first time in March data, and so currently there is only one month of data to compare to. But over the year so far

• ITV.com total visits and unique users have held constant
• 4OD total visits and unique users have risen
• Sky Anytime unique users has fallen but total visits have risen
• In March, the iPlayer had the most total visits, though fewer unique users than ITV.com (which is admittedly, the whole website and not just the catch-up area)

Now Comscore stats will never be completely accurate, but it paints an interesting picture and one that is at odds with James Murdoch.

And of course, Project Kangaroo will launch later this year. That will completely alter the shape of the competition. In theory, the iPlayer could back down into a secondary role and allow Kangaroo to dominate the market. But how Kangaroo will sit alongside the BBC, ITV and Channel 4 is unclear, and the lure of the ad-free iPlayer may be too great. Personally, I see Kangaroo – attempting to be the iTunes of online video – becoming the first port of call but Interesting times are certainly ahead.

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