If you needed reminding why Britain’s biggest broadcasters are stacking their eggs in a BritBox-shaped basket, then look no further than ITV’s third-quarter earnings this week. Tucked away in a table was a figure not mentioned elsewhere in the press release: the revelation that ITV’s total viewing hours fell by 700M in the nine months to September — a trend that has got more acute as the year has gone on.
Spiraling viewing is true at all the major British broadcasters, with people watching 50 fewer minutes of traditional TV a day than they did in 2010, according to Ofcom. At the same time, growth in streaming is exploding, and nearly half of UK households are now signed up to at least one service.
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For ITV, the viewing decline will sharpen minds to the task of finding a money tree not grown from TV advertising. It’s what CEO Carolyn McCall calls her “more than TV” strategy, and it’s why the company has taken a 90% stake in BritBox, its joint-venture streaming service with the BBC.
BritBox debuted in the UK last Thursday, boasting more than 1,000 hours of content from the BBC, ITV and Channel 5, with Channel 4 joining the party next year. ITV is planning a huge marketing push over the coming weeks, while the first shows in a pipeline of originals (there are plans for six a year) are close to being unveiled.
Paying £5.99 ($7.70) a month gets you access to an elegantly assembled service, with shows attractively signposted and cleverly curated around actors and genres. Unlike ITV Hub, which has been ridiculed for its glitchy technology in the past, BritBox appears a robust proposition at launch. It is handling scattered complaints on Twitter about certain episodes of shows not appearing, but nothing on the scale of the Disney+ issues this week.
ITV marketing director Amy Townsend told The Drum that BritBox had a “brilliant opening weekend,” suggesting early subscriber numbers have surpassed expectations, although there are no plans to publish hard numbers. BritBox search activity, meanwhile, rocketed to a record high last week amid press coverage of the launch, according to Google Trends.
But streaming experts who spoke to Deadline have some major concerns about BritBox. They acknowledge that the service remains in its infancy, but said three big questions loom over its prospects of success: Will people pay for content they already have access to elsewhere? What is the originals strategy? And where are all of BritBox’s distribution deals?
Will people pay for content they already have?
The first question is striking as soon as you log into BritBox. While some shows, like Broadchurch, are labeled “exclusive,” this tag is conspicuous by its absence on other programs. Take Gavin & Stacy for example: every episode of James Corden’s BBC comedy is on BritBox, but it is also currently streaming on iPlayer and Netflix.
In other cases, big-ticket ITV dramas are just absent. Season four of ITV Studios’ Jeremy Piven drama Mr Selfridge is available on Netflix, but is nowhere to be seen on BritBox. ITV doesn’t expect all of its content to drop off rival services until the end of 2020.
“The problems are obvious,” said Tom Harrington, senior researcher at Enders Analysis. “Major shows are still available on other streaming services. If you want to watch Downton Abbey, it’s on ITV3 and is not hard to find online. Over time this will be ironed out, but at the moment they want people to pay for stuff that’s readily available elsewhere.”
Reemah Sakaan, ITV’s group director of SVOD and the woman in charge of BritBox in the UK, said last week that the service is sitting on an “asset value” of billions of pounds invested into the “highest quality programming in the world” by the BBC and ITV. But where content is not made in-house, BritBox will be negotiating rights on the open market for indie-produced shows like Peaky Blinders, Bodyguard and Call The Midwife — all of which are currently streaming on Netflix.
Nigel Walley, managing director of consultancy Decipher, also thinks there’s an inherent conflict in the BBC’s role in BritBox. The BBC has a 10% stake in the service and its logo comes before ITV’s in the BritBox branding pecking order. But at the same time, it has fought hard to extend the iPlayer catchup window to 12 months, meaning its shows will have been free for a year before they eventually make their way over to BritBox. “The BBC’s half-hearted approach is not helping. It feels like this thing is in direct competition with iPlayer,” Walley said.
Ofcom has said that the iPlayer extension is likely to have an “adverse” impact on BritBox, but ITV reassured the media regulator that its deal with the BBC protects the streamer. This arrangement includes BritBox getting special access to BBC content after 12 months, when BBC contracts usually preserve an 18-month window of exclusivity before shows can be released to other streamers.
After prolonged negotiations, Channel 4 was also welcomed to BritBox last week, and will bring with it 1,100 hours of content including a curated Film4 library of iconic British films. But again, Channel 4’s shows are readily available on All 4 along with a comprehensive archive. You can even pay a subscription of £3.99 a month to go ad-free. Channel 4’s deal is unlikely to diminish All 4, and there is no guarantee that BritBox will get its hands on the broadcaster’s crown jewel, The Great British Bake Off, with rights being controlled by producer Love Productions.
“They need to clarify the journey of how programs flow through the system,” Walley said, adding that the same goes for BritBox’s originals strategy. “They need to explain what kinds of shows will go straight to BritBox or on ITV first.”
What is the originals strategy?
BritBox has dipped a tiny toe in the water by premiering two episodes from season 20 of Midsomer Murders before they air on ITV. The episodes were the only truly exclusive pieces of content available on BritBox at launch. “Netflix must be shitting themselves,” was the snarky observation TV presenter Richard Bacon tweeted last week.
Sakaan told Deadline during a press briefing last week that originals “aren’t everything” when you have a library as large as BritBox does. She contrasted BritBox’s strategy with the “very different approach” of Apple TV+, which has a handful of original shows and no library. “There is no silver bullet model. It’s a really fast-growing and interesting sector where there are lots of ways to succeed,” said Sakaan.
But there’s a reason tens of billions of dollars are flowing into originals, in a content arms race that exploded when House Of Cards became the main reason to subscribe to Netflix. BritBox will be entering the fray from autumn 2020, but it has given little away about what it will commission, other than to say that high-end scripted is the focus.
“We think they do have to have a different sensibility to what you might imagine you’d find on ITV or on BBC One. We’re looking at casting British actors that are of an international scale,” Sakaan said last week. Names like Kate Winslet and Damian Lewis have been mooted as the caliber of actor that BritBox is aiming to attract.
BritBox will be limited, however, by its budget, which is being kept under wraps. ITV is investing £65M up until 2020, but that is not its total spending power. Sakaan added that it is open to “equity partnerships” with other organizations, which would likely unlock further funding. Even with these caveats, BritBox looks some way off established players — Netflix spent £500M in the UK alone this year.
Enders Analysis’ Harrington thinks a low-key originals strategy is smart as BritBox finds its place in the market. “It’s modest, which is a good thing. If you spend a lot of money, you risk losing a lot of money,” he said. Guy Bisson, a research director at Ampere Analysis, added: “The headlines that BritBox is going to be a Netflix killer are patently ridiculous, but within the confines of it being a niche streaming services, it has a strong opportunity.”
Where are all of BritBox’s distribution deals?
BritBox’s best shot at success could be with older viewers. Ampere research in the third quarter of 2019 showed that the biggest growth in uptake of subscription streaming services is among people aged 45-64. This is where BritBox’s library of classic drama and comedy could prove to be a real advantage.
But Decipher consultant Walley said BritBox needs to quickly and dramatically scale its distribution to tap into this area of growth. BritBox launched on web browser, iOS and Android devices, Samsung smart TVs and Apple TV. Freeview and YouView support is coming, but Walley was surprised this was not in place at launch. “These are the easy deals and I thought they would have been done earlier,” he said, pointing out that ITV and the BBC are both shareholders in Freeview and YouView.
Distribution on Sky and Virgin, which both host a Netflix app, seems further away. Sky is in 8.5M UK homes, according to BARB, while Virgin makes up the vast majority of the 3.9M cable TV subscriptions in Britain. “Until they have distribution on Sky, they are out of sight, out of mind,” argued Harrington. Sakaan said BritBox is “talking to everyone” when asked about a deal with Sky, and acknowledged that the service has to get to “scale distribution” before it can launch originals.
BritBox may be Britain’s new hope in the streaming wars, but it is far from the finished article. With the market moving so rapidly, and with a ceiling on the number of subscriptions people are likely to buy, ITV felt compelled to jump on the bandwaggon as soon as possible. “Establishing the brand and our own direct consumer relationships as a first port of call is pretty important,” Sakaan said. “Quite frankly, we felt if we waited another year, the window is closing and we really need to be present and out there.”
Summing up the challenge BritBox is attempting to address, Richard Davidson-Houston, the recently-departed head of All 4 at Channel 4, told Deadline: “As the ocean reddens, broadcasters cannot afford to sit on the sidelines. Participation is key because in this business, who learns wins.”