Bumbling BBC gives away millions to Microsoft with exclusive 2 year viewer lock-in! (Updated)

Yes, it’s true, the Executive of the BBC is giving Microsoft the equivalent of millions in revenue. For free. On an exclusive basis. They don’t seem to have even realised the commercial implications of what they are doing. But this blogger does.

The BBC wants to begin offering a BBC on-demand TV over the internet service. It’s a very laudable aim – giving viewers 7 days to freely download a program they missed, and then a further 30 days to watch it before it disappears in a puff of smoke. OK, electrons, but let’s not get pedantic.

The problem is, they are planning to use a Microsoft-based DRM strategy. Not only will the strategy be based only on the Microsoft platform, but it will also need Windows XP or above and Media Player 10 to work. If you have a computer that uses Windows 3.1, 95, 98, ME, NT4, 2000, or any Linux or Apple Macintosh computer the BBC will thus exclude you – even if you have paid your licence fee.

Before everything is finalised though, it has to go through a Public Value Test or PVT, and the Conclusions of the BBCTrust [pdf download, 167 kb] which now sits above the governors and the Executive are now available for public scrutiny.

I’ll save you reading through the entire document (it’s pretty yawn inducing overall) but I recommend you read just two bits.

On Page 10, near the bottom it says:

The BBC Executive proposes a digital rights management solution which would require consumers to be using Windows XP (or above) and Windows Media Player 10 (or above) to be able to access seven-day TV catch-up over the internet.

You have to hand it to the Microsoft sales guys, don’t you? They really got into the BBC’s britches! No wonder the BBC is gently pushing Vista – it’s fundamental to their ideas for DRM, so of course they are looking favourably on any press release from Microsoft and even gave Bill Gates an easy time of it when Huw Edwards interviewed him this week.

Then, at the top of Page 11 they go on to say:

Our understanding is that the BBC Executive aspires to offer an alternative DRM framework, which would enable Apple and Linux users to access the service, but has yet to identify a satisfactory solution. In either case, we will expect this to have been addressed within 24 months.

This is the most dangerous point. It basically gives free rein to Microsoft to build a dominating presence in the nascent TV over internet market in the UK. Not only that, but it allows Microsoft free access to BBC television for at least 2 years, as the BBC Trust only require a proposed solution, not an implemented one, within 2 years!

By that time, Microsoft will have used the advantage thus gained to deal a mortal blow to Apple in the home environment for entertainment, or will at least have dramatically clipped Apple’s wings so expansion into that space will have been made only by Microsoft, and not by Apple. First mover advantage would then give yet another monopoly market share to Microsoft. In the UK, the BBC is clearly the dominant player.

The BBC may argue that they had to pick one technology, and don’t have the resources to develop solutions for two. Since their revenue comes mostly from the UK TV Licence Fee – which has just been increased – I can understand their resources are limited to their £4 billion per year income. Which is why it is all the stranger that they haven’t asked Microsoft to pay millions for this exclusive arrangement. Well, not to the BBC anyway. It’ll certainly be worth that and more to Microsoft who get to lock consumers out of Apple and Linux, just at a time when the pendulum is beginning to move in that direction and away from Microsoft.

It isn’t as if there are not already some well-tested alternative solutions in place. Apple has very successful Movies and TV Shows sections with DRM in it’s iTunes store which serves both Microsoft and Apple computers. Linux I know less about, but there must be some alternatives out there for Linux too.

The provisional conclusions are open to consultation for a period of eight weeks, following which a final decision whether or not to approve the proposals will be made by the Trust by 2 May 2007.

If you use an Apple Mac or a Linux box, you need to ask why as a licence payer you are being penalised for choosing a more secure computer; if you use Windows you should ask why Microsoft has not been asked to pay for this vastly commercially advantageous deal that will guarantee them a protected market share for at least two years.

You can send in your complaints to pvtconsultation.ondemand@bbc.co.uk or by snail mail (always gets the BBCs attention) to this address:

On-Demand Consultation
BBC Trust
35 Marylebone High Street
London W1U 4AA

The Minister with responsibility for TV in the UK is Tessa Jowell, who must be looking for a good platform on which to rebuild her reputation right now after the Mills-Berlusconi affair. You can e-mail Tessa Jowell at tessa.jowell@culture.gsi.gov.uk

Update
Ofcom first raised the issue of competition, so are also involved. You can reach them here:
Ofcom Board members and their email addresses

As the Ofcom website is very difficult to navigate to a point from which you can actually do something I’ve also copied the names and emails of their main movers for you:

Chief Executive Officer
Ed.Richards@ofcom.org.uk

Chief Technology Officer
peter.ingram@ofcom.org.uk

Partner, Competition
sean.williams@ofcom.org.uk

Peter Ingram you may remember was involved with the EU’s legal case regarding Microsoft’s alleged abuse of monopoly power which Microsoft have so far lost every round of, but have still to change their attitude regarding lockins of users and lock outs of competitors of their software.

I’ve had a look at the EU website too. The EU’s Competition Commissioner, Neelie Kroes, is clearly going to need to look into this matter. Here’s a relevant excerpt from her website:

“As European Commissioner for Competition, my aim is to promote a fair and free environment for business in Europe.

The job involves both setting EU-wide rules to guarantee fair competition, and enforcing them fairly and with vigour, to prevent and punish any breaches. That means making sure that:

• companies do not carve up markets or fix prices amongst themselves;

• taxpayers money is used to pursue socially desirable objectives without disproportionately distorting competition or wasted when public authorities grant subsidies to business“.

(The italics are mine, just to highlight the areas which this BBC action is moving into.)

Clearly, the BBC-Microsoft deal will carve up markets; the two year timescale will significantly distort competition; and the lack of a fee being charged to Microsoft is in effect a subsidy. It’s a subsidy because a canny commercial broadcaster would have wrung a high price for giving such a hugely advantageous arrangement to a software company that is just beginning to lose market share in both the internet and desktop computer markets.

In effect, the BBC are giving Microsoft a two year season ticket for free.

To contact Neelie Kroes:

Neelie Kroes
European Commissioner for Competition
Neelie.Kroes@ec.europa.eu

Further info:
The Guardian on the BBC iPlayer

University of Auckland Computer Science Department Paper by Peter Gutmann
A Cost Analysis of Windows Vista Content Protection