Collaborate to compete with Netflix, broadcasting body tells UK networks

Key Points
  • Sharon White, CEO of British broadcasting regulator Ofcom, gave a speech Wednesday addressing the rise of streaming services.
  • White said traditional U.K. networks should pool their streaming resources to compete with U.S. internet TV services.
  • The U.K.’s core broadcasters have a history of successful content produced with Netflix and Amazon Prime.
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Britain's broadcasting regulator wants the U.K.'s traditional networks to come together to create a streaming service that could rival Netflix, its CEO said Wednesday.

Sharon White, chief executive of Ofcom, called on U.K. broadcasters to collaborate so that they could compete with the "unprecedented technological change" brought about by online streaming giants.

"Change brings opportunity," White said during a speech in London. "This year Ofcom has been encouraging U.K. broadcasters to collaborate to compete — pulling together to increase their collective strength."

According to Ofcom, the four core U.K. networks' streaming services, such as the BBC's iPlayer, have tens of millions of users between them. White suggested pooling the content into one streaming platform — which she dubbed a "Brit Player."

"It would make it easier for viewers to access content across a range of devices, with a single login," she said. "Sharing data could provide unprecedented insights for investors, commissioners and advertisers. It could place them at the forefront of the technological revolution that is transforming TV."

Working with Netflix

Alongside innovating to compete with the likes of Amazon Prime and Netflix, White said U.K. broadcasters should continue to collaborate with them.

"Global players recognize the value of localizing their content," she said. "But if they want to commission programs that are authentically British, these U.S. firms will need to draw on the public-service traditions, regional bases and world-class talent that drive the content U.K. viewers demand."

Ofcom's statistics show that in 2017, subscriptions to streaming services overtook traditional pay TV like Sky for the first time ever in the U.K.

"Far from fearing the FAANGs (Facebook, Apple, Amazon, Netflix and Google), now is the opportunity to embrace them," White said. "Already, Netflix and Amazon are major investment partners for U.K. television... And the studio arms of our broadcasters stand to benefit from this investment."

However, she noted that there were "trade-offs" involved with the process, with broadcasters facing ultimatums such as sacrificing primary rights — the right to show a program before the streaming service — in return for funding.

The streaming giants have a history of working with U.K. broadcasters to produce content for their platforms. Netflix is currently working with the BBC on a new production of Dracula, while Amazon has produced programs such as Vanity Fair with ITV and King Lear with the BBC. "Good Omens," Amazon Prime's next original British show, is being produced by BBC Studios.

A BBC spokesperson told CNBC via email: "We have long been advocates for collaboration, as you can see from the past, and clearly there are a range of things we are looking at for the future — while there is nothing to announce today, a positive regulatory environment is essential for the future."

Earlier this month, British politicians called on the U.K. government to protect traditional television stations from being "swept away" by the power of online streaming services.

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