The BBC-backed video-on-demand service YouView is strangling investment in rival internet TV services, according to a report by the corporate finance firm Avista Partners.
YouView, which aims to offer on-demand TV services to more than 10m Freeview and Freesat households, is a partnership between the BBC,ITV, Channel 4, TalkTalk, BT, Channel 5 and Arqiva, with a funding commitment of £126m.
Avista Partners argued that YouView, which is scheduled to launch in
the first half of next year, is "putting existing and future
investment in the UK IPTV industry at risk".
The company said its research showed that investment in the UK online
TV sector has plummeted since 2008, when plans for YouView – then
called Project Canvas – were first announced, with the decline not
accounted for solely by the general downturn in the economy.
Avista estimates that in the 12 months before plans for YouView were
first unveiled, internet protocol television (IPTV) investment in the
UK was about $35m (£22m), some 15.4% of global investment in the
sector. However, investment has plummeted since, with just $400,000
ploughed into the UK sector, outside of the YouView partners, in the
past 12 months.
"The UK has witnessed a dramatic fall in private investment for
IPTV-based businesses since Project Canvas [YouView] was first
announced," said the Avista Partners managing director, Paul Heydon.
"It is difficult to lay the blame on the economic crisis for this,
especially when comparing the extreme buoyancy of US investments in
this sector for the same period. It is clear the collective power of
the companies behind Project Canvas is a major cause for concern for
investors looking at private IPTV businesses in the UK."
Avista's figures for the US show that in the 12 months before plans
for YouView were unveiled, TV investment stood at $91m and the
following year it surged to $274m – while the UK slumped 94% over the
same period to $2.1m. US online TV investment was still a healthy
$176m in the past 12 months.
Undercurrents is an award winning alternative news service producing videos of people taking inspiring actions http://www.undercurrents.org