Market Insight

BBC Store (Digital Retail) to close in November

May 26, 2017

Dan Cryan Dan Cryan Executive Director – Research and Analysis, IHS Markit

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BBC will close its digital retail store on the 1st of November 2017 (launched November 2015, covered by IHS here), citing growing demand for subscription services and demand for the retail store not being as strong as BBC had hoped for.

Customers will be issued with a refund to their purchases, or Amazon vouchers with a slight markup, to repurchase their content. The BBC has commented that they are committed to helping consumers to find content via other services and platforms.

The store went live on the 31st of November and offered a range of options to purchase including season passes to currently airing content and integration to the main iPlayer. From the launch the store had a few quirks in both pricing differences from BBC Shop (physical retail) and a lack of support for modern DMAs and STBs, therefore missing support for the main screen in households. Additionally the digital retail model itself is better suited for new release movies, rather than mainly classic TV shows, with a scattering of recent titles.

The BBC is renowned for producing quality content which is internationally successful and now supports a number of BBC branded OTT services in Europe and in America. Additionally, deals with platforms such as Netflix and Amazon will go some way to meeting consumers’ On Demand needs for BBC content, meaning that although there may be strong demand for BBC content, so to some extent consumers will be expecting to fulfil their needs for free via iPlayer, via a subscription service they already subscribe to, or via a digital platform, such as iTunes or Amazon, where they already have digital library commitments.

A sunny lining:-

The way in which BBC has chosen to deal with consumers’ digital ownership rights should be commended, and indeed many in the industry will no doubt be grateful for BBC’s carefully managed approach. As is normal for ‘digital ownership’, BBC Store consumers have a right to the content for as long as the platform is able to provide it. In the case of the store closing, or losing rights to content it is normal for consumers to receive little, or no compensation. In this case the BBC has offered a generous settlement (full refund +10%), in addition the BBC is providing support and guidance to other stores and even offering vouchers to enable consumers to re-purchase their content on Amazon.

To some extent the early closure of the BBC store was abetted by its relatively late launch late in 2015, which led it into the same space as major international and well established VoD services while lacking the wide device support and sophisticated features added over many years of operation. Additionally, the UK VoD market has changed drastically since 2015, EST services provided by pay TV operators are performing strongly, while SVoD services soak up more viewing than ever before. The BBC itself has extended programming catchup to 30 days, reducing consumers’ need to purchase recent content.

In today’s UK VoD market it makes sense for new players to use existing content platforms, with existing eyeballs. While iPlayer was to some extent a way to supply those eyeballs, the free nature of the platform did not mesh well with a purchase environment, whereas a platform such as Amazon, which already holds consumers’ credit card details, offers a smoother transition. The timing of Amazon Channels launch in the UK also mean that with this closure the BBC now have a number of options to monetise their content, with Amazon Channels service offering the most control of their own brand of any third party platform.

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