How the BBC's on-demand platform is set to evolve - and how it will shake up the broadcasting industry when it does...
What does the future hold for the BBC's venture into on-demand broadcasting? Tim Ferguson argues it's only just getting started…
When it was first introduced in the summer of 2007, the BBC's iPlayer was a new - and arguably risky - venture into the online world for the broadcaster.
Two years on and iPlayer is a firmly established fixture in the UK media scene: the latest BBC stats show programme requests average 100 million per month while in September around a million users accessed the service every day.
While it may be the best known on-demand service in the UK, iPlayer is by no means short of competition: Channel 4 recently signed a deal with YouTube to bring selected content from its 4oD catch-up service to the video sharing site for free, with a full service planned for 2010.
Rivals such as Five and potentially US service Hulu are also looking to steal a march on iPlayer, offering embeddable versions of their services which can be easily added to other sites - giving them an easy way of increasing their audience reach and one that is as yet unavailable to iPlayer.
Unembeddable it may be but iPlayer hasn't been slack when it comes to broadening its own audience, appearing on new platforms from a still-expanding list of mobile devices to Freesat.
Ovum analyst Adrian Drury attributes much of this progress to the influence of Erik Huggers, who joined the corporation as director of BBC's Future Media and Technology division in July 2008, and believes it was Huggers who pushed the emphasis of iPlayer away from downloads towards streaming.
And Huggers appears to have more developments for the service already up his sleeve: earlier this year he told silicon.com he would like to see iPlayer become a more web 2.0, interactive proposition through the integration of social networks and emerging microblogging services like Twitter.
Huggers also mooted the idea of an iPlayer that could automatically update your Twitter account to tell your followers what programme you've just watched or recommend shows you like. The ability to bookmark a particular part of a show so users can share their favourite moments with friends is another option Huggers is keen to explore.
In his vision of iPlayer's future, viewers could also potentially tag their favourite programmes, recommend series to their friends or simply personalise their iPlayer page to suit the way they consume and use content. Users could move the various sections around the page - much like the BBC homepage - so the most relevant sections are at the top, for example.
In addition, improved video and audio quality including HD will become available as the BBC develops its streaming technology with improved codecs and greater server capacity.
As a result, in the future iPlayer could automatically work out what quality of playback people's broadband connections can cope with and tailor the content it pushes out accordingly.
Improvements to the programme guide and search functionality are also likely to make it onto the Beeb's iPlayer to-do list. While such areas may seem of low importance, usability is a key battleground among the on-demand services.
"The whole [electronic programme guide] navigation is going to be absolutely critical to future development," analyst with Enders Analysis, Toby Syfret, told silicon.com.
According to Syfret, the evolution of iPlayer's functionality may come at a somewhat slower pace than previously.
After iPlayer's initial launch, its functionality and the number of devices it was compatible with was quickly ramped up due to the need to get the service out to as many people as possible. Now it's a more established service, there's less pressure to develop at such a rate.
While development of new functionality is a key focus for the iPlayer, a more intriguing prospect is...
...the possibility of the BBC sharing the technology which underpins iPlayer, a project referred to variously as Project Marquee, Open iPlayer or public service iPlayer.
By sharing the tech with other public service broadcasters, the BBC could help other TV companies save money by no longer having to support their own online content distribution technology. They also stand to derive economies of scale with the BBC when developing the technology - handy in a media environment that has seen reduced advertising revenues and a fragmenting audience.
The BBC's initial ideas around how Open iPlayer could work included each UK public service broadcaster using the iPlayer platform to distribute content they hold the rights for - meaning they're editorially independent from the BBC but can take advantage of technology funded by the TV licence payers.
The BBC's independent regulator, the BBC Trust, recently put a hold on the plans in the form proposed by the BBC due to concerns about them being overly complicated and therefore not providing the best possible value for the licence payer.
The Trust did say however that it believes the idea of sharing the iPlayer technology is good in principle so it's still likely to happen in some form, and the BBC has already mooted an alternative whereby public service broadcaster could have individual on-demand sections on their websites underpinned by iPlayer tech.
Should it go ahead, Open iPlayer could prove a significant development for the BBC, seeing Auntie once again become one of the major technology players in the UK - a position it has held in the past when leading the development of technology such as Ceefax or helping to kick-start the use of PCs in schools.
It's not just public service broadcasters that have been linked with an iPlayer that goes beyond the BBC's traditional borders: this summer, rumours surfaced that the BBC and Google were in talks about bringing iPlayer content to YouTube through an international version of the service showing long-form BBC programming.
There are obvious barriers to such a tie-up, including rights issues: the cable networks that license programming from the BBC are unlikely to look favourably on any agreement that would make such content available to any internet user anywhere in the world for free.
At the time of the rumours, the BBC said there were "no firm plans" for an international iPlayer, but would not confirm or deny whether it was in talks with Google over the development of such a service.
While the broadcaster remains coy on the subject of an international version of iPlayer, it's easy to see the attraction: going global could provide the BBC with additional revenue from licensing the technology or content, or provide the BBC's commercial arm, BBC Worldwide, with additional advertising revenue options - an area where a partnership with advertising juggernaut Google would clearly make sense.
Another potentially significant development for the future of iPlayer is the Canvas IPTV joint venture between the BBC, BT, ITV and Five which plans to...
...bring on-demand TV to UK homes via a broadband-enabled set-top box.
The BBC is gearing up iPlayer to work on Canvas - a move that would open up a whole new audience for the service: instead of being accessed largely on home computers, iPlayer could be watched on the average television too.
iPlayer has already made inroads into the traditional TV world, where it's available through Virgin Media, with the ISP's 3.5 million customers requesting 15 million programmes per month.
Although it's unlikely Canvas will become the main way people in the UK consume television any time soon - assuming it's approved by the regulators - it's predicted that it could be used by 3.5 million homes by 2014 - adding millions more users to iPlayer.
But what would such growth mean? Should iPlayer on Canvas prove popular, will broadband networks be able to cope with the spike in demand for on-demand programming around key events, such as the General Election or the Olympics?
How iPlayer could look on Canvas
(Image credit: BBC)
It's an issue that's been of concern to ISPs for some time - various ISPs voiced their concerns on several occasions when iPlayer was first launched.
Although online video on demand is currently a very small proportion of online content consumed - iPlayer is certainly one of the best-known online on-demand services in the UK but it is still a mere 0.27 per cent of all internet minutes per year - it is nevertheless a huge amount of extra data for broadband networks to cope with: iPlayer alone accounts for 12Gb of data per second.
This data burden is set to only grow if Canvas gets the go-ahead and when HD begins to proliferate: networking giant Cisco predicting 90 per cent of all internet traffic will be video by 2013, with traffic as a whole set to increase tenfold over the next four years.
The growth of on-demand is already having an impact with BT recently admitting it has throttled speeds on iPlayer and other video-streaming content during certain periods.
The telco has in the past suggested that content providers such as the BBC should share the burden of cost for high-bandwidth connections with the ISPs and that it wants to work with content providers to find a solution to the problem that doesn't pass extra costs onto customers.
"Industry needs to work together to put in place an efficient, long-term solution. The cost efficiency of content delivery has to improve," a BT statement said.
For its part, the BBC appears to not…
…consider an increase in the licence fee as a viable way of funding any investment into distributing its iPlayer content.
"Despite its popularity, the BBC iPlayer is just one of the many video services on the open internet and only makes up a small percentage of total internet traffic in the UK. The cost of BBC iPlayer is covered by the licence fee so users have already paid for this service," the broadcaster said in a statement.
Other methods that have been mooted to fund the extra costs associated with growing video content include charging people for extra bandwidth if they are heavy users of streaming services - a proposal which may make sense due to a low proportion of users being responsible for the majority of traffic.
A more likely scenario according to Forrester principal analyst Ian Fogg is that ISPs may inform customers that they will need to purchase certain packages depending on their predicted use of emerging services.
Heavy users of on-demand content would therefore be encouraged to take out a higher-bandwidth package.
Consumers will soon start to realise the value of next-generation broadband for accessing these services and will end up paying to move onto the new networks, Fogg said.
"ISPs need applications and content that consumers understand and encourages consumers to value their connection, spend more on that connection and upgrade to a higher speed. iPlayer is one of those services that I think has got the potential to help the ISPs in converting consumers from current broadband to superfast broadband," he told silicon.com.
The government is also keen to see the BBC assume the role of broadband champion: in its Digital Britain report - the blueprint for the country's technological future - published earlier this year, it called for the BBC to help drive the UK's level of digital participation across all sections of society.
"The relative growth in the scale and importance of the BBC in the overall digital content ecology give it a commensurate public responsibility," it said.
A laudable aim but as more TV viewing switches to online channels the government's own commitment to ensuring a minimum broadband speed for all UK citizens of just 2Mbps looks painfully inadequate.
"If you look at the current picture quality on iPlayer, particularly the high definition version, it won't work on a 2Mbps connection. 2Mbps isn't enough to experience all of the services currently available on the internet to consumers and it certainly won't be enough in two or three years' time," Fogg said.
A simple video-on-demand service it may be - but iPlayer is also an important bellwether not just of the BBC's transformation from old-school analogue broadcaster to converged content provider but of the UK's own digital progress in the years to come.