The BBC is reportedly working on its own digital distribution system that will allow users to download their favorite TV shows from the British broadcasting giant. This would be a radical move, as there is virtually no precedent for a broadcaster to offer its content through its own proprietary download-to-own infrastructure. It would be a direct competitor to services like iTunes and Amazon Video on Demand.
The company already has an incredible worldwide distribution network. Its BBC Worldwide division makes content available through other third-party online platforms as well as to cable and satellite providers in other countries, like BBC America in the US. Despite its scope, though, BBC Worldwide only manages to offer around 7% of the extensive repertoire of original programming.
To encourage the shift to a proprietary platform, the BBC is reportedly ready to offer producers and content creators as much as 50 cents for each $2 TV show that's purchased. By comparison, when someone buys a $2 show on iTunes, the company responsible for that content only gets around 30 cents. So that is a substantial difference in margin. The BBC believes if it's successful, it can drum up nearly $20 million in revenue over the next five years for independent producers. There are a lot of regulatory hoops to go through, since the BBC has a lot of handlers, but it is an interesting and dramatic effort.