Colin Grimshaw, Media Week, 29 April 2008, 07:30am

Kangaroo points the way towards a commercial BBC

Five months on from the unveiling of Project Kangaroo and maybe only three months from its launch, there are more questions being asked than answered.

Colin Grimshaw, deputy editor of Media Week

First up, and one hopes this is at the top of the agenda for the BBC Trust, which has yet to give its consent to the BBC's participation on the platform, is the commercial exploitation of content funded through the licence fee only seven days after first airing on TV an acceptable practice for the BBC?

The fact that it is the BBC's commercial arm, BBC Worldwide, which will manage its involvement in Kangaroo is irrelevant. It is true that there is already much BBC content available through commercial channels - UKTV, BBC Videos - but their commercial release comes at least six months after airing on TV. With Kangaroo, that there is even a seven-day delay is only due to restrictions imposed by Pact, which looks after independent producers' rights.

It means that BBC programmes that have aired only days earlier on TV will now be available for download as with the BBC's iPlayer, but with the inclusion of ad breaks and/or pay-to-view charges. For advertisers, the chance of an on-demand association with a programme such as EastEnders will be too good to miss.

Of course, the tiny audiences for these early TV-on-demand services make concerns over inappropriate BBC practices and market distortions inconsequential, but what happens if and when on-demand accounts for a significant proportion of TV viewing? At that point, another consideration would be the validity of the current method of collecting the licence fee, when viewing is via a computer or a mobile phone, and not though a TV set.

And it won't just be those on-demand, licence fee-avoiding viewers in the UK enjoying BBC content without paying anything for the privilege, but also potentially millions of overseas web viewers.

All this suggests that the current licence fee settlement, which runs until 2012, will be the last in its current form. A new tax could be invented to fund the BBC thereafter - a tax on broadband ISPs has been mooted.

But, Kangaroo, if successful, may become the de facto blueprint for a future fully commercial BBC - funded by advertising, subscription, or pay-to-view. Does the BBC Trust recognise the implications of its Kangaroo deliberations?