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Ofcom: will BBC iPlayer distort the market?
In theory at least, there are millions of well-informed consumers who make selfish choices, demanding the lowest possible price for the best quality goods and services. Ofcom wants to know if the BBC iPlayer will reduce competition...
According to economics, there is a virtual marketplace out there on the internet. In theory at least, there are millions of well-informed consumers who make selfish choices, demanding the lowest possible price for the best quality goods and services.
Much of Ofcom's work revolves around this assumption. According to them, and other enlightened and public-spirited people such a Rupert Murdoch, any organization that provides a collective public-service such as the BBC distorts this market.
Using this internally consistent economic theory - and thanks to New Labour - the BBC now has to ask Ofcom to invite people who feel the BBC has enough on its virtual stall already to make representations.
Ofcom is asking anyone who feels that the BBC iPlayer (due to start in April 2007), that will provide a free internet (plus Homechoice and cable TV) seven day TV catch up service, a podcast of each BBC radio show, plus live versions of the BBC television and radio stations over the internet will effect their revenues and profits to complain to Ofcom before 13 October 2006.
Given the dominance of BSkyB over subscription services in the UK, and the lack of free-market choice that a Sky subscriber is lumbered with - you have to subscribe to packages of channels for long periods, rather than making day-by-day choices of channel. (If Sky ran a supermarket, if you wanted an apple, you would have to pay for every type of fruit and vegetable in the store and promise to pay for them everyday for a year)
It remains to see which organization claim that the BBC, by making the services that the British public have already paid to produce available 'any time, any place, anywhere' are causing problems. The consumption of BBC services is "non zero-sum", which means that no matter how many (or how few) people watch or listen, the cost to the BBC (and hence the licence fee payer) remains the same.
We have not yet seen full online TV, seven-day catch-up from any commercial operator and few radio stations provide their output as podcasts (which are simply MP3 downloads), so it seems unlikely that any other broadcaster will be in a position to complain.
Given that it is very fast to encode TV into DIVX AVI files, simple to set up a BitTorrent tracker site and uses almost no server bandwidth to provide such a service, anyone business complaining should perhaps instead look to the easy success of www.uknova.com (and other such services) and get on with providing the British public with services, instead of moaning about Auntie.