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21|11|08

BBC Local Video services would have negative market impact

BBC proposals to launch a local online video service would have a significant negative impact on commercial providers, an independent Ofcom Market Impact Assessment (MIA) concludes today.

The BBC proposes to launch an enhanced version of the “BBC Local” websites (part of bbc.co.uk) to be available on any internet-enabled device. The service would provide local news, sports and weather in 60 areas across the UK, with an additional five Welsh language sites.

Commercial providers

The MIA considered the impact that the service would have on a range of commercial providers including:

• local and regional newspapers and their associated web services;
• local radio stations and their associated web services;
• local and regional TV services and their associated web services;
• mobile TV services; and
• other services including third party content providers, journalistic services, and Welsh language news services.

Impact on competition

The MIA reveals that if the BBC Local Video services were launched then annual revenues from existing commercial providers would fall by up to 4%.

More significantly, the launch of BBC Local Video services would have significant negative impact on future innovation in online local news, sports, and weather services by the commercial sector, particularly newspapers.

Commercial providers have strong ambitions to develop these parts of their businesses, despite commercial uncertainties. There is already a prevalence of local news sites across the country.

Ofcom also considered potential modifications to the BBC’s proposals that might reduce their negative market impact.

However, the MIA concludes that the modifications would not offset the negative impacts that the BBC Local Video services would have on other providers.

Public Value Test

The MIA is carried out by Ofcom, fully independently of the BBC Trust, as part of the BBC Trust’s Public Value Test for a new BBC service. It looks at the likely impact of the proposal on commercial providers.

The full MIA can be found at: http://www.ofcom.org.uk/research/tv/bbcmias/mia_localvideo/

ENDS.

NOTES FOR EDITORS

1. The BBC Trust carries out its own Public Value Assessment (PVA) which considers the broader value that a proposed service might bring to UK consumers and citizens.

2. Both the MIA and the PVA are then considered together by the by the BBC Trust in a Public Value Test to determine whether the proposed service can be launched or whether it requires any amendments.

3. The previous MIA covered: BBC on demand services, BBC high definition television (HDTV) services; and BBC Gaelic Digital Service.

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