The British Broadcasting Corporation (BBC) is going to launch an online streaming video service of their own to challenge the current rulers in the space, Netflix, Inc. and Amazon Prime. The BBC’s online streaming video service would be delivered via the their own media iPlayer. The UK provides an enormous market opportunity for the BBC and it looks like content producers are already lining up at their door.
Britflix Would Launch Own Original Series
The new subscription streaming service – named Britflix— has been approved by the British government. It would be jointly built by the BBC and its main commercial rival ITV. The project also involves a number of production companies, including NBC Universal, the parent company of Downton Abbey maker Carnival Films, The Telegraph reported, citing unnamed sources familiar with the matter.
On May 12, the BBC unveiled a White Paper on the future of the corporation, including plans for a new paid-for subscription service. The White Paper said that the government “welcomes the BBC’s commitment to develop and test some form of additional subscription services.” Under the new charter renewal, the BBC, for the first time, would be able to charge a fee to viewers watching its programs on iPlayer.
“We’re moving into a different world where more and more content is going to be made available on demand. Collaboration with other broadcasters and other production companies we think is important,” Culture Secretary John Whittingdale told The Telegraph.
Britflix, which is believed to still be in the early stages of development, would provide British broadcasters’ archive content, as well as launch its own original series much like Netflix, Inc. and Amazon Prime.
“If they want to explore that kind of thing, we’d encourage them. There may come a moment in the future where all television is delivered online, and if you do that it becomes a more realistic practical possibility if you wanted to move towards an element of voluntary subscription, which is why the BBC, who see the way the world is changing, have said, ‘Yeah we will just see for the online provision, whether or not there might be a case for additional new content being delivered on a subscription service, via the iPlayer,” Whittingdale said.
The BBC has yet to release an official announcement about Britflix.
United Kingdom: Netflix Second Biggest Market
Netflix, Inc. was launched by in 1997 by Reed Hastings and Marc Randolph in California. The company now has over 81 million subscribers in more than 190 countries. The United Kingdom is the company’s second biggest market after the U.S., where it has more than 46 million subscribers. Recently, members of the European Union agreed on a deal to allow Netflix roaming on subscription services. The deal allows subscribers to Netflix and other streaming services to see content they have purchased when they are traveling abroad temporarily. The deal is expected to become law by 2017.
Shares of Netflix rose 1.41% in today’s trading to $89.12. The stock has lost 23.64% year-to-date. Netflix’s stock dropped by 11.9% in April, mainly due to a weak subscriber growth guidance for the second quarter. The online streaming giant expects to add 2.5 million subscribers during the second quarter, versus 3.28 million added during the same quarter last year.
Hedge funds are betting big on Netflix. Gabe Plotkin’s Melvin Capital and Hoplite Capital opened new positions in Netflix, buying 950,000 shares and 236,456 shares, respectively, according to the latest SEC filings.