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Let's all binge on Blake’s 7 and help save the BBC ... from itself

Auntie shakes off pay TV shackles. Careful, someone might see

Analysis BBC please take note: Sky’s decision to play Netflix at its own game seems to be paying off.

Sky decided to “unbundle” itself two years ago, offering access to its content to anyone with an internet connection and a credit card via NOW TV, an OTT (over-the-top) offering.

It previously bundled content with access and wholesaled it to cable operators such as Liberty’s Virgin Media. Some feared the cannibalisation would imperil Sky; in fact, it’s making more money than ever.

The same fears paralyse strategy at the BBC, whenever it has the chance to raise revenue and respond to commercial demand. A chorus of BBC luvvies and establishment grandees swoops down to tell us anything that imperils the license fee destroys the BBC forever. But the opposite might be true.

There’s a vast pot of discretionary TV spending out there but the BBC enjoys none of it. This is partly because it’s inhibited by regulation dating back from the era when it was a monopoly – and partly through fear.

Sky doesn’t break out the numbers of NOW TV subscribers from customers who get Sky via dish or cable, so the OTT numbers need to be inferred. But since the total number of subscribers has risen 45 per cent in the past year, and average revenue per user has only risen by one per cent after price increases, we can deduce the newcomers have arrived via NOW TV.

The numbers confirm the scale of the boom in discretionary spending. The mandatory telly tax prevents the BBC from benefiting from it. It’s also feared that if it’s too successful commercially, politicians will slash the tax. So the BBC is only belatedly and tentatively dipping its toe in the waters, with the launch of a "BBC Store" opening up the corporation’s archives for paid-for OTT viewing from this autumn.

About 10,000 hours will be made available via the Store at launch in the autumn, with much of the archive to follow. The BBC (perhaps unnecessarily) described the Store as offering “digital DVDs”, only you’ll be able to binge on Blake’s 7.

Many TV shows that wouldn’t otherwise get a release will be accessible, thanks to the lower cost of digital distribution.

So, far from being the death of the BBC, OTT subscriptions assure its future. As I wrote recently (here, so I wouldn’t bore regulars with repetition) change usually invigorates the BBC but only after it's fought it for years with blitzkrieg lobbying, and emotive and sentimental appeals to the public.

Overall, Sky has increased its revenue 34 per cent year on the year. Why wouldn’t BBC revenue go up by a similar amount, or even more?

The implicit offer that the UK government has put on the table (in the DCMS Charter Review green paper) is: “Do you simply want exclusive use of a TV tax forever? Or are you actually able to save yourselves?”

You could almost be forgiven for concluding that the British TV industry is a conspiracy against the public. Sky doesn't want to see a commercially successful BBC, and the BBC management doesn't want to be commercially successful. So the status quo endures. By the way, for the full Sky results, read them here (PDF). ®

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