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How the BBC plans to save your ISP

Auntie's next big iPlayer gamble

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The BBC iPlayer is now an undeniable success with consumers. The technological mistakes and management waste of its lengthy gestation are almost forgotten in the flush of popular excitement surrounding the fact that now - at last - quality television is available on demand on the web.

A hostage to this success, the Corporation now faces its next big internet gamble. The price for a bad bet this time could be much higher, threatening the unique way the BBC is funded.

The restructured team behind iPlayer's resurgence is understandably upbeat about the spluttering revolution it's kickstarted. "In ten years it would be surprising if television wasn't all over IP," iPlayer boss Anthony Rose told The Register last month.

But to the ISP execs we've been speaking to recently, such predictions don't sound like a utopian vision of television that'll stand or fall on its quality, free from the schedulers' whims. Rather, it's a doomsday scenario for the broadband business in its current form. Backward as it may sound to TV execs, the way the bandwidth market is structured means people using the internet more is a bad thing for ISPs.

The BBC hierarchy knows that it must address this problem to preserve public service media in the IP world. The iPlayer project is already facing accusations from open source advocates that it has illegally interfered with the operating system market. More criticisms from business are sure to follow as BBC Worldwide ramps up efforts to compete in commercial media markets.

The Weakest Link

Web users got the first independent indication of how big a problem the iPlayer could be for their ISP a few weeks ago. Figures released by PlusNet showed that in the month following its Christmas marketing launch, the Flash-based version of BBC TV catch-up sent streaming costs rocketing 200 per cent.

Since streaming represents about five per cent of all the traffic PlusNet has to pay for, that's an overall costs increase of ten per cent in one month.

Such a big, instant costs hit would be tough for any market to take. For ISPs, who are already operating a fiercely competitive volume business on tiny margins, it's a thundering right hook.

And ISP execs know that iPlayer's impact will only increase as the BBC ramps up its rollout of the service away from the desktop and onto mobile devices and set-top boxes - including games consoles - over coming months. In this context, the headily slick experience of iPlayer on iPhone is a gateway drug.

Right from the point when ISPs first publicly voiced their fears over BBC on demand in August last year, the BBC has been ready to coo soothing words. Ashley Highfield, the BBC's director of future media technology told us in February that his new friends in the broadband business say iPlayer's impact on ISPs has been "negligible" so far.

The technological strategy the BBC is considering to soften the blow says different.

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