BBC Trust review Syndication of BBC on - demand content 9 November 20 1 1 Contents 1. Introduction 2 1.1. Background to the review 2 1.2. The role of the Trust 3 1.3. Summary of the proposed policy 3 1.4. Next steps 6 2. Background to Syndication 7 2.1. Introduction 7 2.2. External context 7 2.3. BBC approach to syndicatio n 9 3. Review Process To Date 10 3.1. Introduction 10 3.2. Appro ach 10 3.3. Summary of stakeholder responses 11 3.4. Sources of evidence 11 4. Revised Approach to Syndication 13 4.1. Introduction 13 4.2. Trust priorities 13 4.3. What challenges does the BBC face? 14 4.4. How can the BBC best address these challenges? 18 4.5. Revised approach to syndication policy 19 4.6. Consideration of stakeholder concerns 23 4.7. Assessment of public value 39 4.8. Competitive and market impact analysis 54 4.9. Assessment of alternative options 62 4.10. Concluding remarks 65 5. The Trust’s Revised View 66 5.1. Duties of the Trust 66 5.2. Summary of proposed policy and the Trust’s view 66 5.3. Syndication guidelines 68 5.4. Transitional arrangements 68 6. Next Steps 69 Annex I. Trust policy on the syndication of BBC on - demand content 72 Annex II. Glossary of terms 79 1. Introduction 1.1. Background to the review 1.1.1. Following its approval of BBC on - demand proposals in 2007, 1 the BBC Trust (hereafter, th e Trust) agreed to adopt and publish a policy on the provision of BBC on - demand content to third parties; this was issued in August 2007. 1.1.2. Developments in technology and audience expectations have changed considerably since the original policy was issued. T he range of devices capable of showing video on - demand has grown rapidly and viewing has moved from early adopters towards mainstream use (whilst still accounting for a small proportion of overall viewing). 1.1.3. The Trust therefore undertook a review of the ori ginal policy; the BBC Executive (hereafter, the Executive) submitted proposals on which the Trust consulted from 25 May until 21 July 2010. Proposals advanced aggregation (via a limited number of standard versions of iPlayer) as a means to exercise control over both content and context, which, the Executive submitted, was essential to safeguard the interests of licence fee payers, and secure brand attribution and due prominence. It argued that a less restrictive policy would not only incur higher costs but also weaken the BBC’s ability to deliver public value. 1.1.4. The consultation received 2085 responses from members of the public and 13 from industry stakeholders. Individuals and organisations alike were generally positive about the continued provision of BBC o n - demand content to third parties. Concerns related mostly to the way in which such content was made available and the risk that the Executive’s proposed approach would limit the wide availability of BBC content. As part of its review, the Trust commission ed a technical report 2 to better understand the issues raised and held a series of stakeholder meetings, to explore their concerns. 1.1.5. In January 2011, the Trust published the provisional conclusions and a new provisional policy. 3 These were underpinned by th ree key principles: 1 The Trust.s decision following the 2007 public value test can be found here: http://www.bbc.co.uk/bbctrust/assets/files/pdf/consult/decisions/on_demand/decision.pdf. 2 From Screen Digest into the proposed technical approach envisaged by the Executive.s proposals. 3 The draft policy was based upon proposals developed and submitted by the Executive, which were considered and reviewed by the Trust. . The ability of the BBC to retain control of the context in which its full - length on - demand content is accessed, via a BBC ‘aggregation product’, currently the iPlayer . The development of a number of standard versions of the iPlayer, b ased on HTML, Flash and MHEG technologies, which could be widely used by manufacturers and platform operators, accessing the content on BBC servers via the internet . The creation, in exceptional cases where a stakeholder was unable to adopt a standard prod uct, of a bespoke solution, taking into account public value, the fulfilment of the BBC’s public purposes and the impact on the wider market. Development and maintenance costs would be borne by the stakeholder 1.1.6. The Trust undertook a four - week consultation, which ran until 9 February 2011. In total, 21 respondents 4 submitted comments on the provisional conclusions and policy. We found consensus on the importance of syndication but far less agreement on how this could be achieved. Whilst drawing some support ( particularly in the areas of accessibility) many respondents (mainly platform operators) were critical of the provisional policy. 1.1.7. We therefore embarked on a series of stakeholder meetings to better understand their concerns; undertook primary research int o the technical issues; conducted a further analysis of costs and considered ways in which the provisional policy may be adjusted to better deliver public value whilst taking due account of all relevant considerations. Our assessment is set out at section four. 4 A range of stakeholders, members of the public and industry respondents. 5 As under the existing policy, the Trust will require the Executive to publish guidelines: see paragraph 37 of the proposed policy in annex I to this paper. 6 For example, „catch-up. material that can be accessed via the BBC iPlayer. 1.2. The role of the Trust 1.2.1. Following its approval of BBC on - demand proposals in 2007, the BBC Trust (hereafter, the Trust) agreed to adopt and publish a policy on the provision of BBC on - demand content to third parties; this was issued in August 2007. 1.2.2. Our aim in reviewing and revising the 2007 policy is to uphold these principles and satisfy additional obligations set out in the Charter and Agreement. Our objects are four - fold, to: . Act in the public interest . Ensure the effective promotion of the public pu rposes and the delivery of public value . Take due account of potential impacts of the policy on the wider market . Have regard to the Trust’s overall duties and regulatory requirements 1.2.3. In the context of this review, the role of the Trust is to adopt a stateme nt of policy on the syndication of BBC on - demand content and to hold the Executive to account for compliance with it. It is for the Executive to consider and enter into syndication arrangements with third parties on a case - by - case basis, in accordance with the policy. 5 1.2.4. This document contains the Trust’s proposed policy on the syndication of on - demand BBC content (at annex 1) and the Trust’s reasoning in formulating it. 1.2.5. This review (and the resulting proposed policy) applies only to the syndication of BBC on - demand public service content. 6 It is limited to UK content and does not apply to material made available through the BBC’s commercial activities. 1.3. Summary of the proposed policy 1.3.1. In developing the proposed policy our aim has been to enhance public value w hilst taking due account of all relevant concerns identified by stakeholders. Above all, our approach is guided by the belief that public value is best served by ensuring that as many people as possible can access BBC on - demand content. This necessarily me ans ensuring its availability on a wide range of platforms and devices. But this is not an absolute principle: other considerations must be factored in, such as value for money 7 and competitive impact. 8 1.3.2. In particular, given the proliferation and rapid deve lopment of platforms and devices, it will not represent value for money for the BBC to make its content available on every platform and device. To do so in any particular case will require a clear and strong justification. The proposed policy therefore set s out what the Trust regards as ‘reasonably practicable’ in terms of syndication arrangements. 1.3.3. The proposed policy, which can be found in full at annex I, covers arrangements for the following: 7 The Charter places on the Trust the obligation to „exercise rigorous stewardship of public money., meaning that this policy takes account of the need for the BBC.s syndication arrangements to deliver value for money. 8 The Charter requires the Trust to „have regard to the competitive impact of the BBC.s activities on the wider market.; and pursuant to that, through its Statement of Policy on Competitive Impact, the Trust „requires the BBC, whilst always ensuring the fulfilment of its Public Purposes and taking into account its other obligations in the Charter and the Agreement, to endeavour to minimise its negative competitive impacts on the wider market. This requirement is known as the “Competitive Impact Principle”.. 9 As part of its wider strategy, the BBC may also syndicate other products that are editorially selected by the BBC that complement its wider offer and sit alongside access to the full range of programmes available on the standard BBC iPlayer product. . Full - length television content, previously broadcast on BBC li near services and intended for viewing in its own right . Full - length on - demand radio content, previously broadcast on BBC linear services . Short - form on - demand content, such as promotional trailers or news clips . Associated features, functionality and metad ata It takes account of stakeholder concerns that were raised in respect of the provisional policy and reflects our further analysis. The Trust is minded to adopt the proposed policy, a summary of which is set out below. Full - length television content, key principles 1.3.4. In order to deliver public value and advance the public purposes, all syndication arrangements should be designed such that licence fee payers: a) Have easy and timely access to the full range of BBC content 9 b) Can quickly and easily discover BBC c ontent on third party platforms and devices, for example, by linking to content or accessing it through third party navigation systems, such as EPG or search . c) Experience a content offer that is subject to editorial control by the BBC, and which allows the BBC to guide them to further content that they might not naturally be drawn to but which they may find informative and enjoyable d) Can easily identify content as originating from the BBC and can distinguish it from content from other sources e) Only experience BBC content in appropriate places and contexts f) Have a high - quality experience (e.g. ease of use, picture and audio quality) g) Can access content free of charge (which in the case of subscription services, means entry - tier level or equivalent), and free from advertising and sponsorship h) Have access to parental controls and accessibility features, such as subtitles and audio description, and those related to the menu and user interface 1.3.5. As guardian of the licence fee, the Trust must exercise rigorous stewardship of public money; all syndication arrangements must therefore be able to demonstrate value for money. In addition to the audience - facing principles, other factors are also relevant when considering any particular syndication arrangement, in particular, the need to ensure: . Adequate scope for the BBC to introduce improvements and innovations, consistent with the terms of the policy and where such improvements and innovations have the potential to deliver clear public value . The prompt removal of on - demand cont ent by the BBC where required for legal or compliance reasons . Accurate and timely user data made available to the BBC (e.g. viewing numbers) 1.3.6. The Trust also requires the Executive to comply with all relevant legal and regulatory requirements, including sta te aid law, the BBC editorial guidelines and the fair trading framework. In particular, the Executive should ensure that it acts on a fair, reasonable and non - discriminatory basis when entering into arrangements to syndicate BBC on - demand content. 1.3.7. The BBC must also make metadata freely available as part of any syndication arrangement. 1.3.8. The proposed policy does not prescribe a single approach to the delivery of content. Nor does it allow any material syndicated by the BBC to include external links to other p roviders, unless this is permitted by the platform. 1.3.9. The proposed policy does not seek to impose a single technical solution, but recognises that the objectives of the Trust will usually be best served by offering would - be partners direct access to the full range of BBC content, via their platform or device, within a BBC environment. This currently means a standard BBC product, such as the iPlayer, delivered over the internet, but the principles set out in the policy apply equally to any future syndication p roducts. 1.3.10. It will be for the Executive to decide how to syndicate its content within the terms of the proposed policy, but in making decisions about such deployments, it must pay full regard to the need to make available to the overwhelming majority of plat forms and devices on the market direct access to a standard iPlayer product or any future syndication product. 1.3.11. Circumstances may occasionally arise, however, that justify special arrangements that depart from this model. In deciding whether to enter into any such arrangement, the Executive should take account of all relevant factors, including the different circumstances facing each party and the presence of limiting factors, which mean it is not technically practicable or economically feasible to adopt a standard BBC product. 1.3.12. The basis for any special arrangement will need to be clear and the Trust does not anticipate that such cases will be common or easy to justify. In cases where proposals for a special arrangement have been considered but not approved, the Executive must set out clearly to the relevant party the basis for its decision. Radio and short - form content, key principles 1.3.13. The policy adopts a different framework to the syndication of radio and short - form content, in that it does not identify a pr eferred or default approach. This takes into account both the purpose of such content and the way in which it is consumed, whilst subjecting all arrangements to the same relevant legal and regulatory requirements, including the BBC editorial guidelines and fair trading framework. 1.3.14. A large amount of radio content is downloaded to a portable device, such as an MP3 player, and may be consumed whilst on the move (walking, exercising or in the car, for example). We do not therefore propose syndication only by wa y of a standard BBC product. 10 But whilst radio is subject to a different framework from television, all syndication arrangements should still be designed to ensure consistency with the governing key principles (set out at paragraph 14 of the proposed policy 11). 1.3.15. The Trust also requires the Executive to comply with all relevant legal and regulatory requirements and to ensure that it acts on a fair, reasonable and non - discriminatory basis when entering into arrangements to syndicate it s on - demand radio content. 1.3.16. Our approach to the syndication of short - form content, 12 which is fundamentally promotional in nature, with the purpose of either generating traffic from third party sites or increasing awareness of BBC programmes, also permits a more flexible framework, but remains subject to the relevant provisions within the proposed policy and in particular a requirement to ensure that the BBC acts on a fair, reasonable and non - discriminatory basis when entering into arrangements to syndicate i ts content. 10 Whilst radio is subject to a different framework from television, and may therefore be syndicated in different ways, there is considerable public value in the inclusion of such content in the standard BBC product. We therefore expect the Executive to also make it available as part of its standard iPlayer product offer. 11 Specifically (b), (d), (e), (f) and (g), refer to the proposed policy, at annex I. 12 Including news clips and trailers. 1.4. Next steps 1.4.1. This document sets out our revised provisional conclusions on the proposed policy under which BBC on - demand content is supplied and syndicated. It is accompanied by the proposed policy, which can be found at annex I. The proposed pol icy will b e subject to consultation from 9 November to 2 1 December 2011, following which the Trust will consider the outcome of the consultation and, accordingly, publish its final policy. The final policy will supersede the 2007 policy and guidelines (sub ject to any necessary transitional period, such as to allow existing arrangements to make the transition to terms consistent with the new policy, where appropriate). 1.4.2. The Executive will be responsible for drafting a new set of syndication guidelines, which will be subject to Trust approval. These guidelines must follow the approach, logic and principles set out in the final policy. They should be developed and, once issued, interpreted, in accordance with the final syndication policy. The Trust has intention ally put a considerable amount of detail into its review so that the Executive and stakeholders can understand its expectations. 1.4.3. Having set out the background to the review, we provide, in the section that follows, the background to syndication and the co ntext within which the Trust’s review is framed. 2. Background to Syndication 2.1. Introduction 2.1.1. Syndication is the means by which broadcast content is made available to audiences. 13 In an analogue world this was a simple matter; for the BBC, there was a single tel evision broadcast network infrastructure, under its control. The task of making content available was simply that of transmitting an analogue signal to a television set; services were ‘consumed’ at the point of broadcast or not at all. 2.1.2. The advent of the in ternet and, in particular, the availability of content on - demand, however, has made the process of syndication more complex. The growing number of platforms and devices 14 has created a considerable challenge for broadcasters seeking to secure the widest pos sible reach for their content. 13 We note that a number of stakeholders queried our definition of the term „syndication., arguing that the provision of the iPlayer was not syndication in the widely accepted sense of individual programmes. 14 Such as PCs, mobile telephones, iPads, integrated television sets, set-top boxes and a plethora of other devices connected to television sets including games consoles, Blu-Ray players and the latest boxes offering internet access through the television. 15 UK consumer e-commerce trends [2011-064], Enders Analysis. 16 Fixed broadband connections, Ofcom Communications Market Report, August 2011. 17 Ofcom Communications Market Report, August 2011. 2.2. External context 2.2.1. UK broadcasting is undergoing a period of rapid change; convergence is accelerating; whilst broadband penetration and DVRs are transferring choice and control to the user. The transition from analogue to digi tal is nearing completion; 25 million UK households (95%) now have digital reception on one or more television sets. 15 Widespread uptake of broadband, now approaching maturity at 67% of UK households, 16 is driving demand for catch - up services, which is in tu rn creating focus on the devices and platforms used to access them. 2.2.2. Whilst live viewing remains, by some margin, the preferred way of watching television, faster internet speeds and improved performance have broadened the appeal of on - demand offers. Accor ding to Ofcom, 35% of individuals use their broadband connection to access catch - up television services and around 20% of the online population does so on a monthly basis 17 (figure 2.1). Figure 2.1: proportion of adults with home internet who watch online c atch - up television Source: Ofcom research. Reproduced from Ofcom Communications Market Report, August 2011, Figure 2.67 2.2.3. In response, consumer electronics manufacturers have evolved their platforms; many televisions now incorporate broadband connections, allowing viewers to access web - based content and applications 18 (sales of such devices reached nearly one million in 2010 and acquisition is accelerating. 19). Set - top boxes, mobile devices, tablets 20 and games consoles offer similar functionality. 21 2.2.4. This broa d trend is reflected in the range of devices commonly used to access catch - up services. Early offerings focused on PC delivery: but it was the 2008 launch of iPlayer on the Virgin Media platform that confirmed the appeal of a television - based offering. By July 2009, three platforms accounted for 99% of all iPlayer consumption (Virgin Media, computers and mobile devices). 22 But by April 2010, according to Ofcom, 23 the mix was richer, with the Nintendo Wii and the Sony PlayStation 3 accounting for similar level s of viewing as mobile devices (figure 2.2). 18 In 2010 all of the leading manufacturers launched televisions which included internet connectivity (primarily via applications providing access to services such as LoveFilm, YouTube and the BBC iPlayer, as well as manufacturers. own services such as Sony.s Qriocity or Samsung Apps), Ofcom Communications Market Report, August 2011. 19 There were nearly one million internet-enabled TV sales during 2010, Ofcom Communications Market Report, August 2011. 20 Five main tablets are available: iPad, Android, Blackberry, Windows and HP, according to Ofcom.s 2011 Communications Market Report. 21 Ofcom Communications Market Report 2010, p.115. 22 Ofcom Communications Market Report 2010, p.104. 23 Ofcom Communications Market Report 2010, p.104. Figure 2.2: iPlayer share of programme requests by device type untitled Source: BBC iStats. Reproduced from Ofcom Communications Market Report, August 2010, Figure 2.9 2.3. BBC approach to syndication 2.3.1. The BBC engages in a range of syndication activities, designed to ensure that its public service content is made widely available, consistent with its obligations under the Charter and Agreement. Activity can be divided, broadly, into four main areas: . Full asset syndication (p rogramme or clip) . Promotional asset distribution . Embedding . Linking 2.3.2. Initially, the BBC employed two main approaches to the syndication of its content; the iPlayer 24 and content - only agreements, whereby a limited package was provided and accessed via third p arty platforms. 25 2.3.3. Following the launch, in 2007, of the iPlayer, the BBC has refined and further developed the application (figure 2.3). Today it is a primary vehicle for the syndication of on - demand content, available on a range of platforms and around 300 devices, from mobile phones and games consoles to connected televisions and tablets, most of which are based on a similar look and feel, broadly in line with the original PC deployment, and providing access to the full range of BBC on - demand content. 24 BBC built, controlled and maintained on-demand application which allowed any device (largely desktop and laptop PCs) running Windows to access the BBC iPlayer and view BBC PSB content on-demand. 25 Initially on a trial basis prior to 2007 and formally in 2007 and 2008, to (the companies that are now called) TalkTalk TV, BT Vision and Virgin Media. Figu re 2.3: PC version of the iPlayer untitled 2.3.4. It was against this background that the Trust undertook its review of the 2007 policy. The section that follows provides an overview of the review process to date and a summary of issues raised by stakeholders in respect of the Trust’s provisional conclusions and policy published earlier this year. 3. Review Process To Date 3.1. Introduction 3.1.1. The Trust generally considers that there is public value in syndication and that it is in the interests of licence fee payers that they can access BBC on - demand content on as many platforms and devices as possible. Clause 12 of the Agreement places specific obligations upon the BBC in this respect: it must do all that is reasonably practicable to ensure that audiences are able to access its s ervices in a range of convenient and cost - effective ways. 26 3.1.2. The Charter also provides that one of the objects of the BBC is to help deliver to the public the benefit of emerging communication technologies and services. In support of this purpose, as set out in its remit, the BBC has a duty to ‘make engaging digital content and services available on a wide range of digital platforms and devices’. Our objective in reviewing and revising the 2007 policy is to ensure that, through its output, the BBC is able to maintain reach and relevance, in a way that delivers public value, safeguards delivery of the purposes and secures value for money. 26 As per Clause 12 of the Framework Agreement. 27 The Trust.s 2007 decision can be found here: http://www.bbc.co.uk/bbctrust/assets/files/pdf/consult/decisions/on_demand/decision.pdf. 3.2. Approach 3.2.1. Following the on - demand PVT, 27 the Trust agreed to adopt and publish a policy on the provision of BBC on - demand con tent to third parties; this was issued in August 2007. Developments in technology and audience expectations have changed considerably since the original policy was issued. 3.2.2. The Trust therefore commenced a review, consulting on proposals submitted by the Exe cutive from 25 May until 21 July 2010. The proposals advanced aggregation (via a limited number of standard versions of iPlayer) as a means to exercise control over both content and context, which the Executive submitted, was essential to safeguard the int erests of licence fee payers, secure brand attribution and retain due prominence. It argued that a less restrictive policy would not only incur higher costs but also weaken its ability to deliver public value. 3.2.3. The consultation received 2085 responses from members of the public and 13 from industry stakeholders. Individuals and organisations alike were generally positive about the continued provision of BBC on - demand content to third parties. Concerns related mostly to the way in which such content was made available and the risk that a policy of aggregation would limit the wide availability of BBC content. 3.2.4. In December 2010, the Trust approved its provisional conclusions. These were underpinned by three key principles: . The ability of the BBC to retain contro l of the context in which its full - length on - demand content is accessed, via a BBC ‘aggregation product’, currently the iPlayer . The development of a number of standard versions of the iPlayer, based on HTML, Flash and MHEG technologies, which could be wid ely used by manufacturers and platform operators, accessing the content on BBC servers via the internet (over the top, OTT) . The creation, in exceptional cases where a stakeholder was unable to adopt a standard product, of a bespoke solution, taking into ac count public value, the fulfilment of the purposes and the impact on the wider market. Development and maintenance costs would be borne by the stakeholder 3.2.5. The Trust published its provisional conclusions on 12 January 2011, and undertook a four - week consul tation, which ran until 9 February 2011. 3.3. Summary of stakeholder responses 3.3.1. In total, 21 respondents 28 submitted comments on the provisional conclusions and policy. We found consensus on the importance of syndication but less agreement on how this could be ac hieved. Whilst drawing some support (particularly in the areas of accessibility) many respondents (mainly platform operators) were critical of the provisional policy. Concerns clustered around a number of key areas: 28 Sixteen of which were from stakeholders and industry respondents, a further five from members of the public. 29 From the start of our review, to the publication of this document and the proposed policy. . Opposition in principle to aggregation . C hallenge to any presumption that the iPlayer was the only way to secure public value and concern that reach would be compromised by such a restrictive approach . Criticism that the Trust had failed to consider alternative options . Concerns regarding the comp etitive and market impact . Criticism that the provisional policy was overly restrictive in mandating standard versions . Criticism of the approach to exceptions . Fear that the provisional policy would potentially inhibit innovation . Unease about requiring OTT delivery . Calls for the provision of metadata to be mandated . Confusion as to the different treatment of short - form content . Calls for explicit provisions within the policy with regard to accessibility The Trust has taken account of these concerns in its rev iew and in the development of the proposed policy (contained at annex 1) that it is minded to adopt. 3.4. Sources of evidence 3.4.1. In undertaking our review to date, 29 we have drawn on evidence from a variety of sources: i) The Executive As part of our review, we u ndertook a series of meetings with the Executive, both to discuss its position and better understand how the policy may operate, and the ways in which provisions within the guidelines would need to reflect this. The Executive also submitted a response to t he provisional conclusions. The relevant points are considered alongside those made by other stakeholders, in section four. ii) Industry Stakeholders and the General Public We sought representations from industry stakeholders, Audience Councils . and the g eneral public, through both public consultation and stakeholder meetings. A list of stakeholders and the full text of all the non - confidential consultation responses is published alongside this document. iii)Trust Unit Analysis We also relied on a range of secondary evidence, including, inter alia, reports and data from Ofcom, Enders Analysis, Opinion Leader, Essential and the Byron Report and primary research commissioned by the Trust from Screen Digest and also from Decipher, an independent consultancy, into the technical landscape within which iPlayer operates. 3.4.2. Having set out the background to this review and identified the key issues raised by stakeholders during the previous consultation period, we explain, in the section that follows, the revised app roach to syndication that we are minded to adopt. 4. Revised Approach to Syndication 4.1. Introduction 4.1.1. In response to the feedback received from stakeholders and following further work in this area, we have revised our provisional policy to take account of releva nt concerns and better deliver the Trust’s objectives. In this section we set out our priorities and how these have informed our revised approach; we assess the ways in which the proposed policy delivers public value; and how it has been shaped by our cons ideration of stakeholder concerns. We start with an overview of the principles that, through the proposed policy, we hope to secure. 4.2. Trust priorities 4.2.1. The Trust must act in the public interest and ensure the BBC’s activities advance the public purposes. The BBC exists to serve the public interest and our aim in reviewing the 2007 policy is to uphold this principle and satisfy additional obligations set out in the Charter and Agreement. Our objectives are four - fold: . Act in the public interest . Ensure the effe ctive promotion of the public purposes and the delivery of public value . Take due account of potential impacts of the policy on the wider market . Have regard to the Trust’s overall duties and regulatory requirements 4.2.2. The central mission of the BBC, ‘to educat e, inform and entertain’, 30 free from political interference and commercial pressure, underpins every sphere of its activity. This is reflected in the BBC’s public purposes, including those which call upon the BBC to: sustain citizenship and civil society; promote education and learning; and stimulate creativity and cultural excellence. 31 4.2.3. In recognising the need to both satisfy popular tastes and introduce audiences to new content from which they might profit, 32 these aims encompass two main strands: the deliv ery of programmes that people value, and the ability to satisfy wider purposes that maximise public value. 4.2.4. It is generally accepted that BBC output can give rise to positive externalities, such as educational, social and citizenship benefits, that contribu te to delivery of the public purposes. 33 For example, the accurate reporting of news and current affairs can help 30 Article 5, Charter - BBC mission. 31 The first, second and third public purposes, Article 4, Charter. 32 And which accordingly enables delivery of the public purposes. 33 As with formal types of education this can benefit the economy through the creation of a more educated and productive workforce as well as delivering direct benefits to individuals; for example, if information gathered from watching a medical drama or documentary is used by someone to administer first aid. create a well - informed citizenry, and support democratic values . which in turn support the first of the six purposes. 34 4.2.5. But the creation of thes e positive effects and delivery of the public purposes is contingent, to a large extent, on direct engagement with audiences. In other words, to be effective, the BBC not only needs to produce and make available such programmes, it must also induce people to watch them. It cannot simply be presumed that uptake of certain genres (for example, factual, horizon - stretching programmes) will be sufficiently high to satisfy the public purposes, without some measure of encouragement. 34 To sustain citizenship and civil society. 35 These being impacts on individuals, citizens and society as a whole. 36 The BBC has always been an „end-to-end. broadcaster which commissions, produces, schedules and broadcasts content. 37 Whereby horizon-stretching programmes are scheduled between those catering to more popular tastes. 38 Television in a digital age: what role for public service broadcasting? Shaun P. Hargreaves Heap, Economic Policy, January 2005. 39 Ofcom Communications Market Report, August 2011. 40 Ofcom Communications Market Report, August 2011. 41 Platforms, Broadcasters and Time-shifting – some key themes. BBC Audiences 2011. 4.3. What challenges does the BBC fa ce? 4.3.1. It was simpler, in a linear - only world, to secure these objects 35 and, in particular, to guide audiences to content that they may value but would not otherwise find. Historically, the BBC was able to influence viewer behaviour to increase audience numbe rs for less popular programmes. 36 For example, if viewers remain tuned to the same channel, it was possible to encourage viewing of other material by scheduling it between more popular shows. Known within the industry as ‘hammocking’, 37 it was an effective t echnique for safeguarding delivery of the public purposes by guiding people to content that they may value but would not otherwise find or specifically look for. 4.3.2. The value of being able to transmit messages and direct people to new content of value is fur ther reinforced by certain academic literature. Whilst the consumption of horizon - stretching programmes can generate positive external effects, the simple provision of such programmes is, of itself, not sufficient; people need to be induced to watch them. Given evidence that much television viewing is passive, Hargreaves Heap 38 submits that the use of hammocking is a potentially serviceable argument. 4.3.3. But the expansion of digital channels, the advent of on - line catch - up and a growing use of DVRs have put at risk the effectiveness of this strategy. In particular, the rapid evolution of online services has expanded consumer choice, enabled greater control and fostered new viewing habits. Non - linear accounts for a small but growing portion of overall viewing: 35 % of adults with internet access watch catch - up services; 39 among those aged 16 - 24, this rises to 41%. 40 4.3.4. In the face of online expansion, however, live television viewing has remained remarkably resilient and is likely to remain stable in the near to mid - ter m. In 2010, the BBC estimated that 94% of BBC viewing was live and 6% time - shifted. On - demand, meanwhile, accounted for only 1.3% (whether via a PC or set - top box). 41 Research by Enders Analysis, meanwhile, predicts a relatively modest increase in video - on - demand consumption 42 to 9% of total television viewing by 2015, from its current estimate of around 6%. 43 4.3.5. In part, steady growth is due to the factors required to produce a marked shift in consumption. Despite growing sales of connected television sets, for example, uptake of their services is likely to be more gradual, requiring as it does adequate broadband, a well - integrated user experience and a shift in behaviour (the latter, in particular, being more difficult to both effect and predict). 4.3.6. But this rel ative stability belies particular differences between the viewing patterns of demographic groups. Among those aged 16 - 24, BBC research found that the figure for on - demand viewing is much higher than the average at nearly 5% whilst around 10% is time - shift ed. 44 Enders’ forecast, meanwhile, allows for much higher viewing shares (up to 50%) among younger age groups, in particular those aged 16 - 24. 45 Different viewing patterns among younger audiences is further reinforced by BARB data, which show that for Q2 201 1, 93% of people viewed some live television each week, while 34% watched recorded playback. In terms of consumption levels, 46 time - shifting accounted for 4.8% of total viewing, but this was higher, at 6.4%, among 16 - 34s and lower among those aged over 55, at 3.7%. 4.3.7. Younger viewers are also proportionally more likely to use online catch - up services (figure 4.1). Whilst the profile of iPlayer users is more evenly spread across the age groups than for other catch - up services, there is still a younger skew; thos e aged 25 - 34 make up 22% of iPlayer requests, whilst representing 9% of the total BBC linear audience and 14% of the UK population. 42 Which includes, under Enders. definition, all screen devices including television sets, PCs, tablets and smart phones. 43 Enders attributes the rise to the steady growth in penetration, continuing improvements in EPG design and navigability and the increased availability of on-demand television content, UK consumer e-commerce trends [2011-064], Enders Analysis. 44 Platforms, Broadcasters and Time-shifting – some key themes. BBC Audiences 2011. 45 Although Enders notes that younger age groups are significantly lighter viewers on average than those aged over 55. 46 Rather than reach. Figure 4.1: 2010 average monthly online catch - up television requests, by age group Source: UKOM/ Nielsen. Reproduced from Ofcom Communications Market Report, August 2011, Figure 2.13 4.3.8. A second, related, challenge, therefore, is the ability of the BBC to sustain reach to certain, hard - to - reach groups. Whilst total television viewing has remained broadly constant (the average n umber of hours watched per day rose from 3.7 in 2005 to 4 in 2010) with a modest uplift driven largely by the over - 55s, younger viewers are typically under - represented. 47 Consumption tends to increase with age – children watch the least on average, at 2.5 h ours per day, whilst those aged over 65 watch 5.7. 48 Those aged 12 - 15, meanwhile, spend 15.6 hours per week online, compared with the 17.2 hours they spend watching television. 49 4.3.9. The viewing of younger audiences is also more varied; under - 34s, for example, a re more likely to watch a higher proportion of non - PSB channels. 50 This was underlined in a 2008 Ofcom report, which found that the five main public service television channels experienced a 14 - percentage point reduction in viewing share between 2003 and 20 07: the decline was much greater among 16 - 24 year olds and people from ethnic minority groups. The pressure to reach certain audiences was further highlighted in later research, which found relatively large decreases in viewing to PSB channels among those aged 16 - 24 and 25 - 34, who watched on average 13% and 10% less, respectively, in 2010 than they did in 2006. 51 4.3.10. It could be that, for this group, internet availability reduces television viewing, 52 but the evidence is mixed; some studies suggest that different media are often used concurrently, debunking any ‘substitution’ hypothesis. This is reinforced by quantitative research undertaken by Ofcom in 2010, 53 which found that people spend around seven hours a day consuming different media, but fit more into this time by using different media concurrently. 54 The amount of actual time that 16 - 24s spend consuming media, meanwhile, is lower, at 6 hours 35 minutes, than for older age groups, but 29% of their time with media is concurrent resulting in using more media an d communications than any other group, fitting 9 hours 32 minutes of activity into this time. 4.3.11. Others 55 believe that the sharp decline in viewing among young adults and children over this period is due mainly to online growth. 4.3.12. Certainly, as audiences fragme nt and new viewing patterns emerge, and younger viewers are drawn to non - PSB content, the BBC needs to employ new techniques for maintaining reach and relevance. In an online environment, as elsewhere, these rest largely on the ability to exercise control over both the organisation and presentation of content. The launch of the iPlayer in 2007 provides one such example; consistent with provisions within the Charter to help deliver to the public the benefit of emerging communication technologies, it also dem onstrated the value to the BBC of maintaining a direct relationship with audiences and establishing control over its content. 4.3.13. Successive governments have recognised the value in permitting a measure of discrimination in favour of public service broadcaste rs, such that their services are easy to 47 Ofcom Communications Market Report, August 2011, p.135. 48 Ofcom Communications Market Report, August 2011, p.135. 49 Ofcom, Adult Media Literacy Report, 19 April 2011. 50 Share of viewing to the non PSB channels is higher among the younger audience. In Q2 2011 viewing to the five main PSB channels accounted for 54% of all viewing among all individuals, but a much lower 43% among 16-34s and a greater 66% among over 55s, Source BARB Q2 2011. 51 Public Service Broadcasting Annual Report, 2011, Ofcom, section C, slide 3. 52 Just as younger people watch less television, they spend more time online. Ofcom Communications Market Report, August 2011, p.210. 53 The Digital Day: an in-depth quantitative study on UK adults. total media and communication activities, Ofcom 2010. 54 Ofcom found that one-fifth of the seven hours five minutes is spent using more than one form of media at the same time. 55 Among them, Enders Analysis which believes the sharp decline in viewing among young adults and children in 2006-07 was mainly due to online growth. UK consumer e-commerce trends [2011-064]. find by members of their intended audiences. 56 Unlike linear services, however, the prominence of BBC on - demand content is unregulated, and access may therefore be influenced by commercial incentives. The ability to secure prominence and guide audiences depends instead on co - operation between platform operators or aggregators and content providers. But the motivations of the different parties may put at risk these objects; the former largely committed to maximizing th e range and depth of new services, the interests of the latter being rooted in retaining due prominence and editorial control. 4.3.14. Whilst the characteristics of aggregators and platform operators vary widely, 57 third parties to whom the BBC may syndicate may ha ve the capability and the incentive to alter the fundamental characteristics of a BBC service and the selection and arrangement of its content. By way of example, visitors to Hulu, a US online video service, 58 search for content by genre, thus decoupling th e brand from the programme. A similar approach to search and browse is employed on Virgin Media’s new TiVo platform, 59 which uses recommendations and allows viewers to browse by theme or genre, alongside traditional menus and television guides. 4.3.15. Aggregators such as YouTube, meanwhile, tend to target a younger demographic, many of whom may come to associate the aggregator rather than the originator with the programmes they watch (a search for Monty Python clips uncovers over 13,100 clips, but few of these attr ibute the BBC). As a result, there is no obvious path for viewers towards other types of BBC content. 4.3.16. This last point is particularly important when considering the way in which young people engage in different media activities. Whilst older consumers are more likely to apply a functional approach to the internet, younger people are much more likely to also use it for entertainment and relaxation and to seek out video clips and programmes on aggregator websites. 60 BBC research suggests that audiences tend to gravitate to sites where the broadest range of content is available. Over time, syndication to third parties may therefore become the primary route of reaching this group. Without adequate controls and safeguards, this will potentially sever the direct re lationship the BBC has developed with its audience, essential for fulfilment of the public purposes. 4.3.17. It is not clear whether different behavioural patterns represent a generational shift or whether younger audiences are simply experimenting with new media and that the level and nature of their activity will adjust as they enter their thirties and forties and beyond. They nonetheless present an additional challenge to the ability of the BBC to deliver its public purposes and maintain reach of the full range of its content to younger audiences and have therefore been factored into our analysis. 56 In particular, section 310(2) of the 2003 Communications Act, which requires that Ofcom.s EPG code oblige EPG providers to give the degree of prominence that Ofcom considers appropriate to the listing and promotion of public service channels, for members of the intended audience. 57 Some distinguish themselves by functionality, others offer breadth and depth whilst others use ad-funded models. 58 Hulu is a US online video service that offers a selection of programmes, clips and films at Hulu.com, numerous destination sites online, and through its ad-supported subscription service, Hulu Plus. Its selection of premium programming is provided by more than 260 content companies. As a US service, it is included in this paper for illustrative purposes only. 59 Although BBC content is always appropriately branded. 60 Ofcom Communications Market Report, August 2011, p.209 and p.224. 4.4. How can the BBC best address these challenges? 4.4.1. We found agreement on the importance of maintaining a direct connection with the audience, and evidence that other stake holders (operators, aggregators and content owners alike) were pursuing similar strategies, but little consensus on how differences could be reconciled. 61 4.4.2. As one respondent to our consultation noted, ‘the Trust and the BBC are not alone in their desire for their content to be distributed by third parties in a way which promotes their direct audience - facing relationship and maximizes the visibility of their brand. In fact, this is a benefit that is sought by almost all broadcasters,’ 62 arguing that the perceiv ed benefits could be achieved via other less restrictive means. 4.4.3. We take a different view. As choice abounds and audiences fragment, it becomes more, and not less, important to ensure that the BBC is able to guide audiences to content of value and ensure th at they have access to the full range of programmes that they have, as licence fee payers, funded. But our objects go further; the delivery of the public purposes also rests upon the ability of the BBC to deliver a high - quality viewing experience; one that is subject to editorial control, with clear brand attribution and access to parental controls and assistive technologies (we consider these points further below). 4.4.4. To do so requires control, best delivered, in our view, via a standard BBC product, such as iPlayer, whose launch, in 2007, demonstrated the value to the BBC of maintaining a direct relationship with audiences and establishing control over its content. The effectiveness of this approach is reflected in the viewing figures; iPlayer accounts for a higher proportion of niche content and a wider range of viewing than mainstream output. The BBC’s top 100 broadcast programmes in 2010 were all scheduled on BBC One and comprised seven titles in total. There was more diversity, however, in genres consumed online; the top 100 programmes on iPlayer came from four channels (BBC One, Two, Three and CBBC) and 21 titles. 4.4.5. Whilst catch - up is the primary motivation, room clearly exists, therefore, for exploration. A BBC survey found that 28% of users said that they ‘often’ visited iPlayer for a particular programme, but ended up playing something different; whilst 31% ‘often’ tried a television programme they had never heard of before seeing it on the website. 63 The importance of content discovery was underlined in 20 08 research by Thinkbox, which identified it as one of two main drivers of web - television usage (the other being catch - up). 61 In discussions with stakeholders, desk-based research and responses to our consultation. 62 [redacted]. 63 Source: BBC Online Pulse „Quality Survey. Quarter 3 2010. 64 Source: Me-TV: the future of on-demand, Thinkbox, 2008. … Discoverers tend to take the experience further by experimenting with new content, sharing programmes they love, watching extended content or snippets and delving into a long - tail of content available online. 64 4.4.6. In many ways, the concept of ‘discovery’ is an extension of the linear practice of hammocking, and a potentially effective way of guiding audiences to content in a digital envi ronment. 4.4.7. The value derived from iPlayer more generally was reinforced by a 2010 Trust review of the performance of on - demand services, which found that it was an important and highly appreciated offer, which performed well, effectively promoted ‘niche’ con tent, appealed to its target younger audiences and represented good value for money. This was reflected in a later survey, which found that iPlayer was both ‘enormously valued’ and symbolic of the BBC adapting its services to meet the evolving needs of aud iences. 65 Audience perceptions of value also extend to trust, iPlayer scores particularly highly in this area, with an appreciation score, in a BBC Pulse survey from 2010, of 87%. 66 4.4.8. The importance of providing on - demand content within a BBC environment was r ecognised by the Audience Council for Northern Ireland, which saw a number of benefits flowing from this approach: ‘[we agree] with the principle of providing BBC content in a way which ensures that the BBC can guarantee standards, including editorial comp liance and a high - quality user experience. It is also important that the best value is provided to licence fee payers, for instance by providing signposts and links to other BBC content. The BBC brand and context are therefore key.’ 67 4.4.9. Much of this success r ests, of course, on the ability of the BBC to deliver a product that is easy to use. By exercising control over both presentation and navigation, the BBC can embed best practice: consistency fosters familiarity, which aids usability and drives usage, deliv ering benefits not only to those less confident with new technology, but also to audiences generally. 4.4.10. Its approach, so far, has been well received by viewers; according to 2010 research by Webcredible, iPlayer represents the most usable on - demand catch - up service of the UK’s major broadcasters. 68 The report analysed the catch - up services against 10 best practice usability guidelines, focused on site and homepage priorities, key user tasks, engagement, and help and support. While most of the sites fulfilled the basic criteria, many lost marks for presenting key tasks in unintuitive ways and for failing to ‘engage’ users effectively. By contrast, the iPlayer performed well across all areas, receiving a total of 88 points against an average of 69.7. 4.4.11. Having con sidered how the BBC can best address the challenges brought about by a rapid evolution of online services and an expansion of consumer choice, we set out in the section that follows our revised approach to the syndication of on - demand content. 65 BBC Strategy Review: Stage Two Research, conducted on behalf of the BBC Trust, December 2010. 66 The BBC tracks audience perceptions of its services regularly. The iPlayer website achieves an overall appreciation score of 76% on the Pulse survey. It scores most highly for „trust. with an appreciation score of 87% in Q4 2010. Source: BBC Online Pulse. Quarter 4 2010. 67 Audience Council Northern Ireland submission to the BBC Trust consultation on on-demand syndication, July 2010. 68 The report analysed the VOD/catch up TV services of six of the UK's major broadcasters against 10 best practice usability guidelines. The guidelines focused on site and homepage priorities, supporting key user tasks, engagement, and help and support. While most of the sites fulfilled the basic criteria required for a VOD website, many lost marks for presenting key user tasks in unintuitive ways and for failing to 'engage' users effectively. BBC iPlayer performed well across all guidelines. BBC iPlayer received a total of 88 points against an average of 69.7. BBC iPlayer: best catch-up TV service in the UK, The Telegraph, 1 October 2010. 4.5. Revised appr oach to syndication policy 4.5.1. This section outlines our proposed revised approach to the syndication policy, which can be found, in full, at annex I. Our approach differs somewhat from the provisional conclusions, which were underpinned by three key principle s: the ability of the BBC to retain control of the context in which its full - length on - demand content was accessed; the development of a number of standard versions of the iPlayer; and the creation, in exceptional cases where a stakeholder was unable to ad opt a standard product, of a bespoke solution. We are inviting comments on our proposed revised approach. 4.5.2. In revising the provisional policy our aim has been to uphold and (where possible) extend public value whilst taking due account of all relevant conce rns identified by stakeholders. Above all, our proposed approach to syndication is guided by the belief that it is generally of benefit to licence fee payers that as many platforms and devices as possible can access BBC catch - up content. Our approach is to serve, as far as possible, the licence fee payer’s choice of platform or device. But this is not an absolute principle: other considerations must be factored in, such as value for money, 69 and competitive impact. 70 4.5.3. Whilst the revised approach applies to the syndication of all forms of on - demand content, this section gives particular focus to long - form television programmes, reflecting responses to our previous consultation, which were largely centred on the proposed approach to this type of content. 4.5.4. As th e internet grows in importance, licence fee payers will expect BBC content to be made available online in a range of convenient and cost - effective ways. We can see clear and considerable benefits to be gained by the BBC using new technology to extend and e nhance its services. However, we accept, in formulating our approach, that there is a balance to be struck, such that the involvement of the BBC does not restrict competition, innovation or choice. 4.5.5. In formulating our approach, we are therefore mindful that this is more than a technical exercise; the market for connected devices is evolving rapidly, and the landscape may look very different in two or three years’ time. The Trust’s policy must not only safeguard the strategic and policy aims of the BBC but al so have regard to the impact on the wider market, and in particular on existing and nascent business models. We have therefore been guided by four broad aims: 69 The Charter places on the Trust the obligation to „exercise rigorous stewardship of public money., meaning that this policy takes account of the need for the BBC.s syndication arrangements to deliver value for money. 70 The Charter requires the Trust to „have regard to the competitive impact of the BBC.s activities on the wider market.; and pursuant to that, through its Statement of Policy on Competitive Impact, the Trust „requires the BBC, whilst always ensuring the fulfilment of its Public Purposes and taking into account its other obligations in the Charter and the Agreement, to endeavour to minimise its negative competitive impacts on the wider market. This requirement is known as the “Competitive Impact Principle”.. . To maximise the reach and relevance of BBC output . By ensuring it is available on a wide range of platforms and devices . In a way that retains a direct connection with audiences and secures value for money . Whilst taking due account of the impact of BBC activity in this area on the wider market 4.5.6. In order to maximise the reach and relevance of BBC output, we must take full account of audiences, their changing needs and expectations, and the challenges facing the BBC outlined at section 4.3 above. We have therefore used audience - facing priorities to shape the principles on which our proposed policy rests. 71 I n order to deliver public value and advance the public purposes, our view is that all syndication arrangements should be designed such that licence fee payers: 72 a) Have easy and timely access to the full range of BBC content 73 b) Can quickly and easily discover B BC content on third party platforms and devices, for example, by linking to content or accessing it through third party navigation systems, such as EPG or search c) Experience a content offer that is subject to editorial control by the BBC, and which allows t he BBC to guide them to further content that they might not naturally be drawn to but which they may find informative and enjoyable d) Can easily identify content as originating from the BBC and can distinguish it from content from other sources e) Only experien ce BBC content in appropriate places and contexts f) Have a high - quality experience (e.g. ease of use, picture and audio quality) g) Can access content free of charge (which in the case of subscription services, means entry - tier level or equivalent), and free fr om advertising and sponsorship h) Have access to parental controls and accessibility features, such as subtitles and audio description, and those related to the menu and user interface 4.5.7. We recognise the value in leaving adequate scope for the BBC to introduce improvements to its syndication offer, as audience expectations evolve and technology progresses. Our revised approach takes account of other considerations that also allow for the prompt removal of on - demand content by the BBC where required for legal or compliance reasons, and the provision of accurate and timely usage data. 4.5.8. The delivery of these principles or policy objectives is, to varying degrees, dependent on the extent to which the BBC is able to influence the way in which its content is discovered , displayed 74 and delivered. In many ways, ‘aggregation’ 75 is a proxy for the extent to which the BBC is able to control the way that audiences find and consume on - demand content; the context in which it is presented; and the overall user experience it deliv ers. 4.5.9. The ability to exercise greater control in a way that is manageable rests to a large degree on standardisation; that is, the development of a standard BBC product (currently, the iPlayer) based on commonly used technologies. Whilst the provisional con clusions envisaged three standard technologies only, our proposed policy does not impose a 71 Based on research highlighted elsewhere in this document, including, inter alia, stakeholder submissions to the provisional conclusions; the BBC Online Pulse „Quality Survey. Quarter 3 2010; 2010 research by Webcredible; Audience Council Northern Ireland submission to the BBC Trust consultation on on-demand syndication, July 2010; BBC Strategy Review: Stage Two Research, conducted on behalf of the BBC Trust, December 2010; VOD State of Play; a consumer research report by Essential, September; Technical Review of The iPlayer Television Landscape, Decipher Media Consultants, November 2011; Safer Children in a Digital World, a report of the Byron Review, March 2008. 72 As noted above and expanded on in section 4.6, a slightly different framework applies to the syndication of on-demand radio and short-form content. Also refer to the proposed policy, annex I. 73 As part of its wider strategy, the BBC may also syndicate other products that are editorially selected by the BBC that complement its wider offer and sit alongside access to the full range of programmes available on the standard BBC product. 74 Known otherwise as „play back.. 75 As envisaged by the provisional policy. specific technical solution, which many stakeholders argued was restrictive and unworkable. 4.5.10. However, we believe that our principles will usually be best served by of fering would - be partners direct access to the full range of BBC content and a BBC environment within which to view it. This currently means a standard iPlayer product, delivered over the internet, but the principles we set out in the policy (which can be f ound at annex I) will apply equally to any future syndication product. 4.5.11. We believe that a more refined, but less prescriptive, approach to syndication than that set out in the provisional conclusions is likely to deliver a better outcome; one that ensures t hat syndication operates in the overall interests of licence fee payers without stifling commercial activity. 4.5.12. This does not mean that the BBC must make its content available on every platform and device in any form: that would be impracticable (not least b ecause it would not represent the best use of licence fee funds). Rather, the BBC’s overall approach to syndication should always be guided by the belief that arrangements should aim to serve licence fee payers, by enabling convenient access to the full ra nge of recently transmitted BBC linear content, whatever their choice of platform or device. Other factors must also be considered, such as value for money 76 and competitive impact (we consider both of these areas further in section 4.7 and 4.8). 77 In partic ular, given the proliferation and rapid development of platforms and devices, it will not represent value for money for the BBC to make its content available on every platform and device. To do so in any particular case will require a clear and strong just ification. 4.5.13. The revised proposed policy therefore sets out what the Trust might regard as ‘reasonably practicable’ in terms of syndication arrangements, having regard to delivery of the public purposes and the Trust’s obligations and objectives. The propos ed policy that the Trust is minded to adopt can be found, in full, at annex I. 4.5.14. It will be for the Executive to decide how to syndicate its content within the terms of the Trust’s policy, but in making decisions about such deployments, it must pay full reg ard to the need to make available to the overwhelming majority of platforms and devices on the market direct access to a standard iPlayer product or any future syndication product. 4.5.15. The Trust recognises that circumstances may occasionally arise, however, t hat justify special arrangements that depart from this model (syndication by way of a standard iPlayer product). In deciding whether to enter into any such arrangement, the Executive should take account of all relevant factors, including the different circ umstances facing each party and the presence of limiting factors, which mean it is not technically practicable or economically feasible to adopt a standard BBC product. 4.5.16. Our position marks a departure from the provisional conclusions, whereby exceptions we re granted only when a third party was unable to adopt a standard product. (This area 76 The Charter places on the Trust the obligation to „exercise rigorous stewardship of public money., meaning that this policy takes account of the need for the BBC.s syndication arrangements to deliver value for money. 77 The Charter requires the Trust to „have regard to the competitive impact of the BBC.s activities on the wider market.; and pursuant to that, through its Statement of Policy on Competitive Impact, the Trust „requires the BBC, whilst always ensuring the fulfilment of its Public Purposes and taking into account its other obligations in the Charter and the Agreement, to endeavour to minimise its negative competitive impacts on the wider market. This requirement is known as the “Competitive Impact Principle”.. was a particular focus for stakeholders, whose concerns are set out below, at section 4.6.) Whilst the basis for any such special arrangement will need to be clear and we do not anticipate that such cases will be common or easy to justify, we do recognise the need to take account of all relevant factors and believe that public value is better served by such an approach. 4.5.17. The section that follows identifies and considers key stakeholder concerns raised in respect of the provisional policy, which have been taken into account in developing our revised approach. It also provides further analysis on how syndication by way of the standard iPlayer product delivers public value, as well as market impact assessment and further consideration of alternative approaches. 4.6. Consideration of stakeholder concerns 4.6.1. In reviewing the 2007 policy and developing the revised policy our aim has been to uphold and enhance public value and take account of all relevant concerns identified by stakeholders. In total, 21 stakeholders 78 responded to the consultation on the provisional conclusions. We found broad agreement on the importance of syndication and some consensus on the manner in which the BBC should make its content available. Whilst drawing support from certain quarters (particularly in the areas of accessibility) many (a great number of them platform operators) were critical of the provisional policy and, in particular, of the approach to aggregati on. 4.6.2. Respondents fell into four broad categories: industry stakeholders, audience groups, trade associations and BBC management. Of the industry stakeholders, most focused on the syndication of long - form television content and many were opposed to the prin ciple of aggregation (much of our analysis has therefore been focused on this area). A smaller number drew attention to the different treatment of short - form content, and the lack of justification for any departure from the framework for long - form programm ing. Concerns clustered around a number of key areas. 78 Sixteen of which were from stakeholders and industry respondents, a further five from members of the public. . Opposition in principle to aggregation . Challenge to any presumption that the iPlayer was the only way to secure public value and concern that reach would be compromised by such a restrictive approach . Cr iticism that the Trust had failed to consider alternative options . Concerns regarding the competitive and market impact . Criticism that the provisional policy was overly restrictive in mandating standard versions . Criticism of the approach to exceptions . Fear that the provisional policy would potentially inhibit innovation . Unease about requiring OTT delivery . Calls for the provision of metadata to be mandated . Confusion as to the different treatment of short - form content . Calls for explicit provisions within the policy with regard to accessibility 4.6.3. We set out below an overview of the key issues and our consideration of these concerns. Stakeholder responses have also informed the public value and market impact analysis, set out at sections 4.7 and 4.8 and accordin gly our revised policy, which can be found at annex 1. Opposition in principle to an aggregation - only approach A large number of stakeholders were critical of the position reached by the Trust on aggregation, arguing that the provisional policy would fail to deliver reach and secure value for money. The provisional policy envisaged syndication by way of three standard iPlayer products, 79 whereby exceptions were limited to instances where a stakeholder was unable to adopt a standard product. 79 Based on HTML, Flash and MHEG technologies, which could be widely used by manufacturers and platform operators, accessing the content on BBC servers via the internet. 80 Sky submission, p.8, section 1.18. Sky questioned w hether adequate consideration had been given to all relevant options and argued that the dismissal of a hybrid approach was not justified, ‘as [it] could deliver some of the key benefits of an aggregation - only policy’ whilst also leading to greater reach a nd fewer negative impacts. 80 In particular, it criticised the ‘potential distortive effect of [BBC] public service content not being available to licence fee payers using certain television platforms, including Sky’s population of over 3.5 million connectab le set top boxes’. IP Vision was highly critical of the provisional policy, arguing that aggregation - only syndication was a contradiction: ‘corralling on - demand content within iPlayer is an alternative to syndication. The arguments in favour of on - demand s yndication in the widely accepted sense (i.e. of…individual programmes) are overwhelming’. A similar point was made by informitv, which argued that the proposed policy was not ‘one of syndication in the generally accepted sense of the term within the media industry. Syndication implies making material available to third parties for distribution through their own channels. On the contrary, the BBC interpretation of syndication is making its public service programmes available on demand only within a BBC serv ice’. Another submitted that the Trust had ‘defined disaggregation and aggregation in an unnecessarily narrow way’, and called for a more flexible approach that could better deliver public value. ‘It is hardly surprising that the Trust would favour an aggr egated approach over a disaggregated policy if disaggregation is interpreted as meaning that there is “no supporting context around the offering” and “no audience - facing proposition would exist”.’ This general view was echoed by an industry respondent whic h cautioned against any approach that would ‘limit reach across devices and platforms’ during a period of rapid innovation. Of those opposed to the provisional policy, several argued that the ability of the BBC to retain a direct relationship with audience s would not be hampered by a less prescriptive approach, such as self - build or licensing. Others submitted that appropriate safeguards and contractual arrangements would enable the BBC to control the presentation of its content, manage editorial compliance and provide effective parental controls. Sky was critical, in particular, of claims that disaggregation undermined the role of the BBC as a broadcaster and limited its ability to guide audiences to content they may value but would not otherwise find. Any analogy with linear broadcasting, it argued, was ‘flawed as it ignores the role played by third party distributors and platform operators in making the BBC public service channels available to licence fee payers…and the fundamental distinction between sup plying an indivisible linear channel and a range of separable on - demand programmes’. Instead Sky argued for a dual strategy, in which the BBC made its content available in both aggregated and disaggregated format in order to ‘ fulfil its public purposes to a greater degree than in the current proposals, whilst at the same time endeavouring to minimise its negative competitive impacts’. A policy of mixed distribution, would, it argued, ‘maximise reach of the full range of BBC content’. We accept that the deli very of on - demand content is not directly analogous to the provision of BBC public service channels on satellite, cable and DTT. However, we note that, in the latter case, EPG prominence is secured, via provisions in the Communications Act 2003 (section 31 0). 81 Regulation on prominence does not, however, extend to on - demand content, which has informed much of our thinking in this area. 81 The practices required by the code must include the giving, in the manner provided for in the code, of such degree of prominence as Ofcom consider appropriate to: (a) the listing or promotion, or both the listing and promotion, for members of its intended audience, of the programmes included in each public service channel; and (b) the facilities, in the case of each such channel, for members of its intended audience to select or access the programmes included in it. IP Vision advanced a similar approach, in which the BBC could ‘retain control over content encoding, protection and delivery , exposing these centralised functions as web services to third parties through a series of application programming interfaces. Third parties would be free to build user interfaces within the constraints of guidelines and associated terms and conditions, p assing control to the BBC infrastructure for play - out using the APIs. On this basis, the BBC’s ability to control delivery windows, revoke content and so on would be unaffected.’ Virgin Media was among those arguing for a different approach, in this case, a hybrid model whereby users of its TiVo set - top boxes would have access to the cable BBC video - on - demand service for the most popular BBC content as well as an integrated standard iPlayer, for ‘long tail’ or niche content. But others took a different view ; the RNIB submitted that control, via a standard BBC product, ‘would allow the BBC to ensure accessibility through the provision of support for access services such as audio description and subtitles’. Sense also welcomed the move towards aggregation, not ing that ‘for blind, deaf and deaf blind people, the quality of the service is reliant on its accessibility and an aggregated route allows the BBC greater control...’ It cautioned, however, that platform operators and manufacturers must not ‘be able to low er that accessibility when incorporating the BBC’s product into their own platforms’. YouView acknowledged the value to the BBC and to licence fee payers of delivering ‘BBC content within the context of an aggregation product such as the iPlayer’, whilst e mphasising the need for a measure of flexibility over how and when ‘such context is provided’. One respondent, a member of the public, argued that ‘the needs of the public must take precedence over those of private companies, not vice - versa. Public interes t will be best served if the BBC is free to make the best use of its resources. Private companies must compete as best they can and devise ways to prosper despite the competition.’ Elsewhere, stakeholders issued a cautious welcome to attempts at standardis ation. Among them, a consumer electronics manufacturer, which was broadly supportive of the underlying principles whilst calling for further elaboration ‘in order to achieve the stated aims of serving licence fee payers and ensuring a consistent approach b y the BBC to platform operators and manufacturers’. YouView also considered that the provision of content within iPlayer had ‘the potential to deliver significant commercial value’, but expressed concern over the level of flexibility afforded to third part ies seeking to combine the best of linear, on - demand and IP delivery. Whilst recognising the concerns of stakeholders, we remain of the view that the ability to exercise control over the provision of BBC content is integral to the delivery of the public pu rposes, and, in particular, to the BBC’s ability to retain a direct connection with the audience and maximise the reach and impact of BBC content. ‘Control’ was a key underlying principle of the provisional conclusions. In many ways, ‘aggregation’, as envi saged by the provisional policy, is a proxy for control, and the extent to which the BBC is able to influence the way in which audiences find and consume on - demand content; the context in which it is presented; and the overall user experience it delivers. Such control is likely, in our view, to be best achieved through syndication by way of a standard BBC product. 82 82 Currently, the iPlayer. BBC research suggests that audiences tend to gravitate to sites where the broadest range of content is available. Over time, syndication may the refore become the primary route of reaching certain groups. Without adequate controls and safeguards, this will potentially sever the direct relationship the BBC has developed with its audience. We accept that there are other ways to maintain a connection with audiences, albeit of a more limited nature, (for example, by entering into agreements with partners that provide for adequate branding and data sharing). We have considered these alternatives below at section 4.9. However, we are not persuaded that th ese alternatives will justify a significant departure in our approach. We do, however, consider that a more refined, but less prescriptive, approach to syndication, one which takes account of all relevant factors, including the different circumstances faci ng each stakeholder and the presence of limiting factors which may justify a departure from a standard product, 83 may deliver a better outcome; one that ensures that syndication operates in the overall interests of audiences, by enabling the BBC to fulfil i ts public purposes, without stifling commercial activity. 83 Which mean it is not technically practicable or economically feasible for them to adopt a standard BBC product. Challenge to any presumption that iPlayer was the only way to secure public value A number of stakeholders argued that the existing 2007 policy offered sufficient protection and that objectives coul d be achieved in less interventionist ways. Many claimed that the ability of the BBC to exercise certain controls over content revocation, editorial strategy and licensing windows was not dependent on a fully aggregated approach. Others suggested that the mitigation of risk was illusory and that, regardless, global manufacturers were unlikely to modify their devices to accommodate a national (UK - only) standard. Many were critical of suggestions that the iPlayer was the only way in which to secure public va lue and advance the purposes. We believe, however, that greater control, via a standard BBC product, such as the iPlayer, will undoubtedly help to preserve the prominence of BBC services, and retain a direct connection with the audiences, and this may in t urn safeguard delivery of the public purposes. But whilst the ability to influence the user journey, and guide audiences to content of value, remains key to the delivery of public value, stakeholders argued that there may be other, less restrictive ways to secure the intended benefits. We have considered these, in further detail; drawing on secondary research and discussions with stakeholders, to better understand areas of concern. Having taken account of the points raised during the consultation, we remai n of the view that adopting, across the board, an alternative approach to syndication of long - form television on - demand content, such as licensing or self - build, would not fulfil the public purposes or achieve the BBC’s policy objectives (including adequat e control over BBC content) to the same extent as the standard iPlayer approach (our further thinking on this area is set out at section 4.9). Concern that the policy would fail to deliver value for money and that reach would be compromised Stakeholders g enerally support the wide distribution of BBC content and many were critical of any approach which they considered sought to restrict this. In particular, a number of respondents were concerned that an aggregation policy based on three standard technologie s would limit the number of platforms and devices on which content was available. Reflecting a widely held view, one, informitv, noted that the remit of the BBC was to provide programming to the widest possible audience: Yet over half the television licenc e paying homes in the United Kingdom now subscribe to a pay - television service and this proportion is likely to increase…These paying television customers, which account for around half the television homes in the country, still watch more BBC television p rogramming than that of any other broadcaster or channel. They will be denied the opportunity to view BBC programmes on demand in the same environment as the rest of the programming to which they subscribe, although they will of course still be able to acc ess the BBC iPlayer directly over broadband. It is difficult to understand how this represents an optimum user experience. Others argued that by mandating OTT delivery, the Trust had selected an expensive distribution technology where cost - effective altern atives existed. One, Sky, noted, ‘at a time when the BBC is taking steps to reduce its costs by 20% and recently announced cuts in BBC Online’s budget of £34 million, it is strange that the Trust has proposed the more costly option for syndication of BBC o n - demand content’. The issue of cost was not confined to delivery. In meetings with the Trust Unit, a number of stakeholders drew attention to the cost to the BBC of designing, developing and supporting multiple versions of its standard product, which, the y submitted, was more expensive than other approaches, such as self - build or licensing. Certainly, a policy that advocates a high level of control carries with it attendant costs, although these are relative and must be set against the consideration of an y alternatives. The benefits of greater control must therefore be considered against greater costs. In assessing value for money, however, whilst we are guided by cost, it is not the sole determinant; other factors, such as delivery of the public purposes and the value placed upon it by licence fee payers, are also important. As part of our duty to secure value for money, we undertook a review of all relevant cost areas (which can be found, alongside our assessment of reach, at section 4.7). Criticism that the policy was overly prescriptive and uncertainty as to how it would be implemented There was widespread opposition to what many perceived as an overly prescriptive approach to syndication and a number of respondents underlined the importance of a policy that was ‘future proof’. Others pressed for opportunities to participate in the development and evolution of technical specifications for the iPlayer. Some raised more specific concerns regarding the way in which the Trust defined its platform policy, whi lst others were troubled by what they saw as a paucity of detail in such key areas as audio and video coding, and content protection. Many stakeholders sought assurances on device approval procedures and product support regimes; given the average life of a set - top box is 3 - 6 years, respondents argued persuasively for a commitment by the BBC to provide reasonable support for legacy versions. One stakeholder noted: Licence fee payers have already bought many retail products supporting BBC iPlayer, in many ca ses carrying the iPlayer logo and having the iPlayer functionality prominently featured in their marketing material. These products, sold to licence fee payers with a promise of the iPlayer service and with the BBC’s knowledge and approval, should continue to be supported by the BBC for a reasonable length of time. There was general confusion as to the distinction between ‘standard’ and ‘bespoke’ implementations. A number of stakeholders suggested that the Trust had oversimplified the concept of three stand ard technologies, when in fact every implementation would require some degree of customisation. In its response, one stakeholder noted, ‘in fact, HTML as a technology is quite diverse. In our understanding, the BBC today develops a “standard” version of iP layer using HTML, and undertakes some minor modifications to adapt it to different platforms and products.’ Along with other stakeholders, it called for greater transparency and collaboration with industry groups, such as the DTG, to develop the technical specification. Building on this general theme, Virgin Media submitted, ‘it is true today…that there is not a single version of Flash (for example) in the marketplace from which the BBC could base its “standard” iPlayer development. To the contrary, differe nt devices use different versions of Flash and it cannot be said that a particular version…represents the prevailing market standard’. A similar point was made by BT in its submission: ‘the danger in restricting the technical standards in the Proposals to those of HTML, Flash and MHEG is that they are too high level and fail to provide the flexibility which will be required for different user types and devices, including legacy applications.’ In particular, stakeholders pressed for clarity in the policy on the extent to which minor adjustments were permitted before an implementation was considered bespoke. In response to concerns, we have undertaken further meetings with stakeholders, BBC management and industry groups, in addition to commissioning primary research, to better understand the relevant issues. On the issue of oversimplification, we accept that the three formats (MHEG, HTML and Flash) envisaged in the provisional policy are more akin to a family of implementations, in that there are multiple, v aried versions of each format and that most implementations of a standard BBC product will require a degree of integration work and ongoing support. Our thinking in this area has been informed by the work of Decipher, 84 which we commissioned to better under stand the technical landscape within which iPlayer 84 Technical Review of the iPlayer Television Landscape, Decipher Media Consultants, November 2011. operates. The report underlined the distinction between formats and families, and the different versions of HTML iPlayers: When evaluating the potential for the BBC to settle on three standard formats for iPlayer, what becomes clear is that the three formats, MHEG, HTML and Flash are themselves undergoing a process of continual evolution. The variations possible mean that the formats must be classed more as ‘families’ rather than fixed formats. Within each format family, it is likely that the BBC will be required to maintain support for various versions for the foreseeable life of the devices that use them. It must also be stated that while HTML is a single software standard or language, it doesn’t represent a single iPlayer version. The ‘versions’ refer to the functionality upgrades that the iPlayer team make periodically for all iPlayers, (there are currently PC HTML versions of iPlayer V1, 2 and 3 supported in the market). The BBC is currently rolling out television versions of iPlayer 3 onto connected television devices. This means that, apart from the three software ‘format’ families supported in the television space, there will also be two ‘versions’ of television iPlayer live and supported for televisi o n devices. Whilst we remain of the view that a standard BBC product will usually best deliver the public purposes, relative to the alternatives, the imposition of a single technical solution may not be in the best interests of licence fee payers if it disp roportionately limits the platforms and devices on which content is available. Further, we acknowledge the value to industry stakeholders of ensuring that the BBC both commits to supporting legacy deployments and provides practical information to platform operators and device manufacturers in respect of, among other things, development timetables, launch windows and supporting and testing regimes. In response to concerns raised by stakeholders, the proposed policy is both more flexible (in that it does not impose a single technical solution) and, in respect of implementation, it clarifies the key principles with which the Executive must comply for each syndication arrangement. We also recognise the importance of transparency, and have therefore directed the Executive to publish, as part of the guidelines, sufficient information on the technical operation of the standard iPlayer (and any future syndication products) specifically designed for practical use by manufacturers, platform operators and other would - b e partners. This should contain sufficient information to enable third parties to plan and manage their development roadmaps and should include, but not be limited to, a set of objective criteria used to define standard products, development roadmaps, and technical support (both the extent and duration) for standard versions. 85 85 Refer to the proposed policy, set out at annex one, and in particular the section on syndication guidelines. Criticism of the approach to exceptions Many stakeholders opposed the approach to exceptions envisaged by the provisional policy, 86 arguing it was overly restrictive and did not take due account of commercial circumstances (being limited to instances where a platform operator or device manufacturer was technically unable to integrate a standard product). 86 Through a standard BBC product, currently the iPlayer. Sky in particular was critical that, under proposals, it was not viewed as an ‘exc eptional case’, despite having an install base of over 3.5 million broadband - enabled set - top boxes which could not, without modification, support any of the standard versions. The policy could, it submitted, ‘lead to millions of licence fee payers being de nied access to BBC public service content on an on - demand basis on their chosen television platform’. It also criticised the Trust for failing to engage with it directly on this point, ‘the Trust has at no time enquired of Sky whether such modifications ar e technically possible or practicable…that the Trust could design a policy that explicitly excludes such a large proportion of licence fee payers raises serious questions about its evaluation and judgment.’ Virgin Media argued that it was not in accordance with the Trust’s obligations to treat stakeholders in a fair, reasonable and non - discriminatory manner and that it represented ‘a significant departure from the Trust’s position under the existing syndication policy’, concluding that the Trust had failed to establish how its revised approach would ‘result in a better experience for licence fee payers.’ It called for a ‘more flexible approach that allows the BBC to consider a stakeholder’s particular circumstances…failure by the Trust to reappraise its appr oach will result in an outcome that is entirely contrary to what is expected from a publicly funded broadcaster’. More generally, stakeholders were concerned that the provisional policy prohibited them from even making the case for a bespoke implementation , even where this could offer a better outcome. This point was underlined by Ofcom which noted that the approach to exceptions ‘appears not to allow for the possibility that there might be instances where a better consumer proposition and greater public va lue could be delivered through bespoke development’. As part of our assessment, we have engaged further with stakeholders on this point and in recognition of their concerns, have adopted a more flexible approach in the revised policy; one that allows the E xecutive to take account of a stakeholder’s particular circumstances. It will be for the Executive to decide how to syndicate its content within the terms of the proposed policy, but in making decisions about such deployments, it must pay full regard to th e need to ensure that the overwhelming majority of platforms and devices on the market can access a standard iPlayer product. We recognise, however, that circumstances may occasionally arise that justify special arrangements that depart from this model. In deciding whether to enter into any such arrangement, the Executive should take account of all relevant factors, including the different circumstances facing each party and the presence of limiting factors which prevent the adoption of a standard BBC produ ct. Concern that the policy would potentially inhibit innovation The importance of leaving adequate scope for innovation was made by a number of respondents, amid concerns that control of, or interference with, a platform’s user experience may jeopardise seamless viewing and inhibit future development. As the amount of content available multiplies, consumers need an increasing array of tools to help them find and choose what to watch, from web - supported search to browse and recommend features. According t o a 2011 report by Decipher, ‘the [Virgin Media] TiVo platform represents the first leap forward, offering new innovations around search, browse and recommendations…enabled to a great extent by the commercial availability of metadata on which to build [the se] systems.’ 87 87 Technical Review of the iPlayer Television Landscape, Decipher Media Consultants, November 2011. In its submission, Ofcom also foresaw ‘potential for significant consumer benefit arising from platform operators being able to offer innovative ways of integrating on - demand content with their platforms, for instance through search or navig ational tools.’ This general point was echoed by another respondent, which submitted that the question of innovation was being ‘overlooked and ignored’. We see considerable value in facilitating the discovery of BBC on - demand content, whether via a ‘backwa rds EPG’, ‘recommended viewing’ or other means and have therefore mandated the inclusion of metadata in the revised policy, as part of any syndication arrangement, which will enable third parties to integrate on - demand content with their navigation systems . This specific point is also picked up below, on the provision of metadata. It is worth noting that we also recognise the value in leaving adequate scope for the BBC to introduce improvements to its syndication offer, as audience expectations evolve and t echnology progresses. Our further thoughts on this area are set out in our assessment of public value, at section 4.7. Unease about requiring OTT delivery There was general unease from certain quarters regarding OTT delivery, envisaged by the provisional p olicy. Many argued this would lead to poorer picture quality, loading delays, buffering and higher costs for platform operators (which may have to upgrade their infrastructure); the BBC (which would incur higher distribution costs) and consumers (who may h ave to upgrade their broadband packages). Rather than inhibit the method of delivery, respondents argued for sufficient flexibility within the policy to use their own infrastructure, especially where it represented a more efficient and effective alternativ e to the open internet. This point was made by several stakeholders, one of whom commented that audiences would be intolerant of delays of any kind. Others drew attention to the variable performance of broadband networks and the difficulty in preserving q uality of service. Virgin Media was among those calling for a less prescriptive approach, arguing that its cable platform was distinctly different from all other current delivery technologies, providing ‘an unparalleled broadcast television quality for vid eo - on - demand content, regardless of which generation of set - top box the consumer has in their home, and is materially superior to that available over a standardised OTT internet delivery infrastructure’. In its response, BT submitted: ‘when considering the quality of the iPlayer service to the viewer it is undeniable that there is a quality standard that the viewer expects when watching content. A poor quality iPlayer experience will drive user complaints to the ISP and could lead to customer churn. In such a competitive market as Broadband provision, these are serious issues.’ The Trust is not persuaded that OTT delivery will necessarily result in a lower quality offering than delivery of BBC content via other methods (particularly as broadband speeds incre ase and web software for managing video improves 88). We recognise, however, that there may be some potential for reliable delivery to be achieved via other means. Our revised approach does not therefore prescribe a single approach to the delivery of content , but we require that all syndication arrangements comply with the principles and requirements set out in the proposed policy and fall within its terms. We also expect the majority of arrangements to be by way of the standard BBC product, delivered over th e internet. 88 Broadband delivery speeds for video are expected to increase over time, because of the underlying innovations happening around compressions and decompression systems for video, network infrastructure improvements, and innovation around network optimisation, Technical Review of the iPlayer Television Landscape, Decipher Media Consultants, November 2011. 89 Metadata is the „descriptive. content around BBC programmes which allows a platform or manufacturer to link from their menu system or a „backwards. EPG to the iPlayer. The provision of such data was not set out expressly in the draft policy. Calls for the provision of metadata to be mandated There was concord among industry stakeholders on the importance of metadata, 89 and calls for its inclusion in the policy. In meetings with the Trust Unit, many expressed the importance of access to such data, submitting that it was critical for integration, with clear benefits for consumers. Absent any such provision, they argued, BBC on - demand content would exist as a standalone island, with no way of integrating with a third party menu system. Ofcom was among those pressing for greater clarity in this area: Access to this metadata is critical for stakeholders to be able to integrate iPlayer content more closely with other services on their platforms. It seems from the discussion document that th e Trust agrees with the Executive’s suggestion to treat ‘linking and metadata’ separately from syndication. However, the reasons for doing so are unclear; the issues of syndication and metadata appear sufficiently closely related that it would be construct ive to include some level of commentary on metadata in the draft policy, even if this issue is to be addressed more fully elsewhere. Virgin Media submitted that, without proper integration of the iPlayer with a host platform or device, ‘BBC content will no t be included within the relevant [device or platform’s] central menus and, therefore, may remain undiscovered by licence fee payers’, arguing that the proposed model would only facilitate wide reach to devices but not to licence fee payers. Several stake holders queried the navigational ‘vision’ set out in the draft policy and pressed for greater flexibility, in order to deliver a seamless user experience with fewer ‘clicks’. Others saw potential for significant consumer benefit arising from operators bein g able to offer innovative ways of integrating on - demand content with their platforms. We can see clear value in enabling users to quickly and easily discover BBC content on third party platforms and devices, and recognise the broader benefits that may ob tain from the inclusion of metadata (as one stakeholder noted, ‘the provision of such information…is in accordance with media literacy principles developed by Ofcom’ 90). We have therefore made specific provisions within the proposed policy for the inclusion of metadata. This has also informed our assessment of quality; more detailed considerations can be found at section 4.7, below. 90 [redacted] Confusion as to the treatment of different types of content A number of stakeholders expressed uncertainty as to why different types of content were treated separately. The provisional policy distinguished between different types of content and permitted a more flexible, disaggregated approach to the syndication of certain material, including radio programmes, news clips and trail ers. One stakeholder, Sky, argued that the Trust had not adequately explained its rationale, contending that its explanation was ‘an inadequate statement of reasoning in the context of the proposals to take the opposite course of action in relation to ful l length TV programmes. Having claimed that a particular approach “would jeopardise the fulfilment of the Public Purposes to too great an extent”, it is incumbent on the Trust to provide a fully reasoned explanation as to why the diametrically opposed appr oach “maximises public value” in relation to other public service content’. We remain of the view that a different approach to different types of content is justified. For long - form television content, we believe our principles (defined at section 4.5) an d requirements to secure value for money and other regulatory requirements are usually best served by offering would - be partners direct access to the full range of BBC content, via their platform or device, within a BBC environment. This currently means a standard BBC product, such as the iPlayer, delivered over the internet. We have applied a slightly different framework to radio content; whilst mandating its inclusion within a standard BBC product, we also permit a degree of flexibility in respect of radi o - only arrangements, which takes account of the different ways in which such content is consumed and reflects different usage patterns. By way of example, podcast downloads represent 55% of all BBC on - demand radio consumption; once downloaded, content may be consumed whilst people are ‘on the move’, whether in a car, on public transport, walking or exercising. The importance of portability is reflected in findings from RAJAR’s MIDAS survey, which found that 50% of podcast users listen to programmes in the c ar or on public transport. 91 If we were to prescribe the way in which people could access such radio content, therefore, it may have an attendant negative impact on reach; podcast downloads have steadily increased, and in June 2011, reached around 15 millio n, an increase of 24% on December 2010. 91 RAJAR.s Measurement of Internet Delivered Audio Services (MIDAS) survey, December 2010. 92 BBC Strategy Review: Stage Two Research, conducted on behalf of the BBC Trust, December 2010. Research conducted on behalf of the Trust in 2010 92 found the availability of live radio services on the move (especially in - car and for those working outdoors) was of continued importance. People expect radio to stay portable. This can equally be applied to on - demand radio services, and is broadly reflected in the type of content to which people listen. This tends to be comedy, drama and talk shows, which are ideally suited to mobile devices. Given one of our objectiv es is to maximise reach in order to fulfil the public purposes, we have opted for a more flexible approach that takes account of the different usage patterns of different media. We accept, however, that these are constantly evolving and will instruct the E xecutive to keep this area under review, should the environment materially change. It is also worth noting that, when syndicating radio content (in common with full length television content), the Executive must still satisfy the principles set out in th e policy and comply with all relevant legal and regulatory requirements. Further, whilst radio is subject to a different framework from television, and may therefore be syndicated in different ways, there is considerable public value in the inclusion of su ch content in the standard iPlayer product. We therefore expect the Executive to also make it available as part of its standard iPlayer product offer. Short - form content is also treated differently under the revised policy; fundamentally promotional in na ture, with the purpose of either generating traffic from third party sites or increasing awareness of BBC programmes, it merits a different, more flexible approach. Calls for access provisions to be included Several sight and hearing disability groups par ticipated in the consultation on the provisional conclusions and policy. Whilst welcoming the inclusion of accessibility issues, many were concerned by a failure to make specific provision for access features and pressed for further detail and explicit req uirements within the policy. One, the RNIB, recognised that standardisation of the iPlayer would ‘allow the BBC to control the context in which its programmes are presented [and]… allow the BBC to ensure accessibility through the provision of support for a ccess services such as audio description and subtitles’. It sought reassurance, however, that the standard product would include audio description in its specification, irrespective of the device or platform and drew attention to short falls in current dep loyments: Currently both Virgin Media and BT Vision's bespoke on demand products, agreed under the previous BBC syndication policy, do not deliver an accessible service because they omit the delivery of audio description. This is detrimental to the blind a nd partially sighted people we represent. RNIB feels that alternative options to the BBC iPlayer are not best optimised for the people we represent. For example the current Sky Player and Virgin Media Player on - demand system is not optimised for accessibil ity. In its response, the RNID also recognised the value in a standardised BBC product which ‘should ensure the accessibility of output, with subtitles, signing and audio description available on all BBC on - demand content, regardless of which platform they are shown through’. 93 93 RNID consultation response to BBC Trust provisional conclusions, 8 February 2011. 94 Refer to annex I, proposed Trust policy on the syndication of on-demand content, paragraph 14 (h). We see considerable value in ensuring that licence fee payers have access to assistive technologies. A growing demographic of older and disabled users is disenfranchised by technological advances and would benefit from the inclusion in the standard BBC product of specific features. We therefore propose to make specific provisions within the policy. All syndication arrangements should be designed such that licence fee payers have access to accessibility features, such as subtitles and audio description, and those related to the menu and user interface. 94 Our approach is consistent with the Charter and Framework Agreement, which require the BBC to ‘do all that is reasonably practicable’ to ensure that audiences can access output in ‘a ran ge of convenient and cost effective ways’. Particular requirements in respect of accessibility are placed on the BBC elsewhere. The Agreement makes analogous provisions to the code maintained by Ofcom under section 303 of the Communications Act 2003, relat ing to provision for the deaf and visually impaired. The AVMS Directive also contains a duty on member states to take steps to encourage access to on - demand services. Our further thinking in this area is set out at section 4.7, below. Additional issues Sta keholders raised a number of additional issues, such as concerns relating to the reliability of underlying evidence (notably, the Screen Digest report); assertions that there was a paucity of information on how the policy would operate; a decision by the T rust not to conduct a PVT; the role of the Trust in respect of ongoing syndication arrangements; external linking and transitional arrangements. Underlying evidence On the reliability of underlying evidence, we consider that, while the Trust’s terms of ref erence to Screen Digest, and hence its report, were somewhat limited in scope, Screen Digest produced a robust piece of work. Building on this, we have commissioned additional research in this area to better understand a broader range of relevant concerns and have engaged further with stakeholders on these issues. Technical research, undertaken by Decipher, 95 has informed the Trust’s analysis in the following areas: 95 Technical Review of the iPlayer Television Landscape, Decipher Media Consultants, November 2011. 96 Ofcom Communications Market Report 2010, p115. 97 BBC Strategy Review: Stage Two Research, conducted on behalf of the BBC Trust, December 2010. . The three iPlayer formats or families, envisaged by the provisional policy . The technical land scape within which the iPlayer operates Operational viability With regard to the operation of the policy, there was general agreement among industry stakeholders on the need for the BBC to publish further detail in respect of product specifications, releas e windows and support regimes (as set out above). Consumer electronics manufacturers in particular were keen to secure assurances from the BBC on the level and extent of support for legacy devices. Whilst the replacement cycle of television sets lags behin d that of PCs (which consumers tend to upgrade on a more frequent basis), as sets incorporate more advanced features and prices fall, consumers are upgrading at a faster rate. According to Ofcom nearly 10 million sets were sold in 2009, compared with four million in 1995. 96 Over time, it is possible that, for certain sections of the market, the replacement cycle for television sets will more closely resemble that of PCs, creating legacy issues in terms of the services they carry. The need to provide guarante es in the area of product support is likely to grow in importance, to both licence fee payers and consumer electronics manufacturers. The importance of support for legacy systems was further underlined by research undertaken for the Trust in 2010, 97 in whic h most respondents acknowledged that it was inevitable that, as technology moves on, consumers have to spend money on upgrading equipment to be able to benefit from new or enhanced services. Such upgrades were considered to be optional, as long as those wh o chose not to upgrade did not have important services taken away from them. We can see considerable, practical value in publishing full information on product specifications, release windows and support regimes and, as part of the proposed policy, we wil l direct the Executive to make available within the guidelines all relevant material. We additionally expect the Executive to engage with stakeholders, as it considers appropriate, in formulating the syndication guidelines (which will contain detailed ope rational information) and to ensure their concerns are appropriately reflected. Procedural issues With regard to stakeholder submissions asserting that the Trust should have undertaken a PVT in respect of its policy review, the Trust is satisfied that, in relation to this review, it has taken proper account of all its duties. It did not consider that a PVT was called for, but nevertheless took account of its functions under the Charter including its duties to represent the interests of licence fee payers, t o assess carefully and appropriately the views of licence fee payers and to exercise rigorous stewardship of public money. Ongoing role of the Trust On the role of the Trust more generally, in respect of ongoing syndication arrangements, we will continue t o monitor this area and we have directed the Executive in the proposed policy to: . Notify any new syndication arrangement which it considers to be significant either in itself or through its cumulative effect, to the Trust for consideration . Provide the Tru st with six - monthly updates of all syndication arrangements considered (deals concluded or rejected) . Within 12 months of the new policy coming into force, report to the Trust on operational arrangements, at an aggregate level, in the following areas: . Key p erformance indicators for development, support, testing, monitoring and compliance . Costs, including those related to distribution The Trust may require the Executive to suspend or cancel any syndication arrangements (or a collection of such arrangements), which it considers constitute a significant change to the UK public services and for which prior Trust approval has not been obtained. Any syndication arrangements which the Executive considers to be significant will be considered by the Trust which will review the arrangements in order to determine whether to apply a PVT. External linking arrangements A number of industry stakeholders raised concerns regarding the inclusion, in a standard BBC product, of external links to third party content and applicat ions. One submitted that linking arrangements were a form of syndication and should be governed under the same policy. We can see that, for pay models in particular, the provision of external links may disrupt existing commercial agreements, without necess arily delivering greater value to licence fee payers. The revised policy therefore provides that any material syndicated by the BBC should only include external links to other providers where this is permitted by the platform. Transitional arrangements We expect the Executive to make appropriate transitional arrangements, consistent with the new policy once published by the Trust, with affected stakeholders. Such arrangements should allow a reasonable time for any such transition, but are not expected to ex ceed 12 months from the time that the new policy comes into force. 98 98 Longer transitional arrangements will only be acceptable in exceptional circumstances. 99 As per Clause 12 of the Framework Agreement. 4.6.4. Having set out our consideration of stakeholder responses, we provide further analysis in the section that follows on the ways in which the proposed policy delivers public value. 4.7. Assessmen t of public value 4.7.1. The Trust generally considers that there is public value in syndication and that it is in the interests of licence fee payers that they can access BBC on - demand content on as many platforms and devices as possible. Clause 12 of the Agreem ent places specific obligations upon the BBC in this respect: it must do all that is reasonably practicable to ensure that audiences are able to access its services in a range of convenient and cost - effective ways. 99 4.7.2. The Charter also provides that one of th e objects of the BBC is to help deliver to the public the benefit of emerging communication technologies and services. In support of this purpose, as set out in its remit, the BBC has a duty to ‘make engaging digital content and services available on a wid e range of digital platforms and devices’. 4.7.3. Our overall aim is to ensure that, through its output, the BBC is able to maintain reach and relevance, in a way that safeguards delivery of the public purposes. Public value is not an abstract concept, but one t hat is grounded in both delivery of the purposes and the ability of the policy to embed reach, quality, impact and value for money in BBC activities. Taking account of stakeholder comments and further analysis in this area, we deal with each in turn, below , with a particular focus on the value of proposed arrangements for long - form content. Figure 4.2: the BBC’s public purposes Reach and impact 4.7.4. The development of the revised policy has been informed by an analysis of how syndication maintains or increase s BBC reach, both to audiences generally and to under - served groups. The proposed policy embeds the principle that BBC on - demand content should be available on a wide range of platforms and devices. This is particularly important given the way in which dif ferent groups use different media. Whilst take up and usage of different technologies is advancing, the experience of users is far from uniform, as recognised by Ofcom in its 2011 Communications Market Report. Our policy must therefore ensure, to the exten t possible, parity of access to on - demand services by ensuring their availability on a range of platforms and devices. 4.7.5. The use of smart phones provides one example of how audiences use the same technologies differently and how a younger audience in particu lar may be served. According to 2011 Ofcom research, over one in four adults and almost half of all teenagers (aged 12 - 15) own a smart phone. 100 There are marked differences, however, in the way in which devices are used by different age groups. 4.7.6. Among adults , the top three activities ever performed on a smart phone (beyond making and receiving calls and texts) are internet surfing (69%), taking photos and videos (68%), and sending and receiving email (67%). By contrast, the top three activities ever performed on a smart phone by teenagers are listening to music (82%), taking photos and videos (81%) and playing games (78%). Those aged 12 - 15 are also far more likely to use their smart phone to watch audio - visual content; 51% have tried this on their phone at lea st once, compared with 38% of adults; whilst 19% have watched television programmes or films on at least one occasion, compared with 16% of adults. 4.7.7. Of equal importance is the way in which the use of smart phones impacts upon other leisure activities. Accor ding to Ofcom, 55% of adult users claim to spend less time on other activities; among teenagers, this rises to 68%, of whom 23% claim to spend less time watching television than previously. The provision of on - demand services to smart phones may, over time , therefore be one way of maintaining reach to, and relevance with, this group. 4.7.8. The importance of reaching a younger audience was recognised by the Audience Council for Northern Ireland, which emphasised ‘the need to make content available in ways that mat ch evolving media consumption patterns and make the most of emerging technologies. It is especially mindful of the needs of younger audiences in this regard.’ 101 4.7.9. But whilst younger people are more readily drawn to mobile devices, tablets and consoles, for ma ny others there remains a significant barrier to using this technology. Research by Essential found ‘overwhelming consumer demand, across all levels of technical confidence, for long - form on - demand content delivered via television.’ 102 For many (particularly older groups), the television represents a more natural viewing environment than a PC or a laptop, one which may also reinforce the values of the living room. 103 4.7.10. For these consumers, the ability to access BBC on - demand content on a television set (whether v ia a connected device or a pay subscription) is likely to be of particular value. It may also broaden the profile of iPlayer users, which currently has a slightly younger skew. 104 In this regard, some evidence can be drawn from the profile of Virgin Media cu stomers who watch iPlayer on their television sets. This group tends to be slightly older than the average PC iPlayer user: 67% is aged 35 or older, compared with 58% for the PC 100 The Apple iPhone is the most popular brand overall, but BlackBerry handsets are the most popular choice among younger consumers, Ofcom Communications Market Report 2011, pg47. 101 Audience Council Northern Ireland submission to the BBC Trust consultation on on-demand syndication, July 2010. 102 VOD State of Play; a consumer research report by Essential, September 2008. 103 Opinion Leader research undertaken for the BBC Trust, November 2009. Another stakeholder also noted the importance of the BBC improving access to its on-demand and online video content. 104 Excluding the Virgin platform, the adult user profile is 57% male, 42% aged 16-34, 43% aged 35-54 and 15% aged 55 and over. This compares with a television viewer profile, according to BARB, which is 48% male, 29% aged 16-34, 35% aged 35-54 and 35% aged 55 and over, BBC iPlayer Monthly Performance Pack. March 2011. BBC iStats. iPlayer, whilst 26% is aged 55 or older and more closely resembles the profile for television viewers, at 36%. 105 4.7.11. A further useful measure of reach is the impact of the policy on consumption of BBC content generally. This area is generally challenging, as impact (defined here as the impact on consumers and citizens) can be difficult b oth to measure and predict. Nonetheless, qualitative research by Thinkbox, which examined the impact of connected televisions on viewing behaviour, 106 established a hierarchy in terms of how different screens were used, and found that overall viewing increas ed as a result of greater choice: 105 Demographic profile of BBC iPlayer users, BBC research, 2011. 106 Five households were „telly-ported. into potential future behaviour i.e. given technology which allowed them to watch VOD on their televisions, and then interviewed after six weeks. 107 Source: Tellyporting: travelling to TV.s near future, Thinkbox, 2010. The television screen was always the preferred way in which to watch television content and web television was very much used as a secondary option. In fact, most of the telly - ported families’ VOD viewing jumped from the c omputer to the television once they realised they could watch on - demand content via their television sets. Interestingly, despite the novelty of all the technologically advanced television equipment they had in their possession for more than six weeks, we found that their viewing to live television changed very little. In fact, for the majority they felt their overall viewing increased as a result due to the greater opportunity to watch the television they want when they want via their television sets. 107 4.7.12. Cer tainly, as audiences fragment and new viewing patterns emerge, and younger viewers are drawn to non - PSB content, the BBC needs to employ new techniques for maintaining reach and relevance. In an online environment, as elsewhere, these rest largely on the a bility to exercise control over both the organisation and presentation of content. The launch of the iPlayer in 2007 provides one such example; consistent with provisions within the Charter to help deliver to the public the benefit of emerging communicatio n technologies, it also demonstrated the value to the BBC of maintaining a direct relationship with audiences and establishing control over its content. 4.7.13. Greater choice, both in terms of the content and the platform or device on which it is available, is l ikely to deliver increased satisfaction; iPlayer already scores highly in this area: a 2010 Trust review of on - demand services found that it was an important and highly appreciated offer, which performed well, effectively promoted ‘niche’ content, appealed to its target younger audiences and represented good value for money. In broadening access to on - demand services, our approach may also deepen appreciation of BBC services by increasing demand for niche content and horizon - stretching programmes. 4.7.14. For this type of content in particular, promotion on the home page can draw larger and more varied audiences. By way of example, both the Scheme, an observational documentary series for BBC Scotland, and Stephen Fry’s documentary on Wagner for BBC Four, attracted a high share of viewing on iPlayer, relative to its linear audience. The Scheme had an average linear audience of 465,000 viewers, and an average iPlayer audience of 110,390 which represented 19% of total viewing. Stephen Fry on Wagner drew a linear audienc e of 150,000, whilst iPlayer contributed a further 129,128, or 46% of the total audience. 4.7.15. The ability to promote content in this way is an extension of the linear technique of hammocking and an effective way of advancing the public purposes by guiding peop le to valuable content that they may not otherwise find, thereby delivering benefits to citizens and society as a whole. 4.7.16. In our view, a policy that aims to serve a wide range of devices will cater to a broader range of tastes and ages, whilst the release o f metadata, as mandated by the revised policy, will enable an informed viewing experience and ensure on - demand programmes are discoverable from a range of different search methods. The ability to guide audiences to content in a digital environment, meanwhi le, is of particular value as on - demand viewing moves towards mainstream use, whilst the facility to exercise control (discussed below) will allow the BBC to respond to and interact with audiences more effectively. 4.7.17. It is reasonable to assume that these fa ctors will, over time, preserve (and possibly even extend) reach, particularly to certain hard - to - reach groups. We accept, however, that in the near - term, they may not necessarily increase reach relative to any alternative approach but we believe the abili ty of alternatives to deliver value is hampered by the loss of overall control (our analysis is set out at section 4.9, below). 4.7.18. Near - term gains in reach can be difficult to assess, however. In many ways, the value of iPlayer 108 is based on the maxim that co nsistency breeds familiarity, which in turn, drives usage. A possible indicator of the likely impact on usage in this respect is BT Vision, which in June 2011 upgraded its service from a legacy arrangement providing 50 hours of disaggregated BBC content to a standard version of the iPlayer. Early indications show an uplift in usage with daily requests almost doubling. A combination of factors may have contributed to the rise: 108 Or of any future equivalent standard BBC product. 109 Outlined in section 4.3. . An increased range of content, which has also contributed to greater viewing of ni che content . Better branding and awareness . Improved navigation, through better technical integration with the BT Vision platform 4.7.19. Over time therefore, it is reasonable to believe that our approach will increase the consumption (usage), reach and relevance o f the UK public services. Such an increase in consumption and reach, coupled with the broader citizenship benefits of encouraging viewing of content (particularly niche programmes) through control of the BBC environment, 109 is likely to also generate impact. Having examined reach and impact, we now consider whether the proposed policy is likely to result in a high - quality offer. Quality 4.7.20. By placing audience needs and expectations at the heart of the revised policy, we aim to embed a high - quality user experienc e. We recognise, however, the multifarious nature of quality, and have therefore focused our assessment on the following areas: . Editorial control . Content delivery . User interface and navigation . Parental controls and assistive technologies Editorial control The ability to exercise editorial control is central to the delivery of the public purposes; to be effective, the BBC must not only produce programmes that advance the purposes, it must also encourage people to watch them. By maintaining a level of contro l, the BBC can effectively respond to and interact with audiences, form deeper relationships and understand their habits and preferences. It can also measure the audience appreciation and usage more effectively and use this to improve its offer. The abilit y to exercise control in this way is particularly valued by audiences, many of whom look to the BBC to guide them to new and interesting content. According to qualitative research undertaken on behalf of the BBC in 2011, audiences feel that there is a weal th of BBC content to which they would like to be guided and trust the BBC to do this in a way that works for them. 110 Editorial control engenders trust and iPlayer scores highly, with an appreciation score, of 87%. 111 It allows licence fee payers to enjoy the full range and breadth of content, across all genres and national and regional programmes, and benefit from recommendations to niche content. Further, in a BBC managed environment, users can be confident about the origin of the content, which further engen ders trust and drives usage. 110 Project conducted by Discovery Research for the BBC, August/September 2011. 111 BBC Pulse survey, 2010, the BBC tracks audience perceptions of its services regularly. The BBC iPlayer website achieves an overall appreciation score of 76% on the Pulse survey. It scores most highly for „trust. with an appreciation score of 87% in Q4 2010. Source: BBC Online Pulse. Quarter 4 2010. 112 Representing one quarter of all comments. The ability to deliver the full range of BBC on - demand content is of particular value to audiences. The largest category of comments on iPlayer received by BBC Audience Services 112 related to the unavailability of content on tho se platforms which did not carry the full complement of programmes. The recent BT Vision upgrade meanwhile (set out above) provides another indicator of the value placed by audiences on access to the full range of content. Content delivery The provisional conclusions advanced ‘over the top’ as the default delivery mechanism. As set out above (at section 4.6) a number of stakeholders were critical of what they saw as an overly restrictive approach. Some suggested audiences would be intolerant of delays of a ny kind that may be encountered in an OTT delivery mechanism, particularly when viewing on a television. Others drew attention to the variable performance of broadband networks and the need, wherever possible, to preserve quality of service and enable a de gree of flexibility in the delivery of content. We have further developed our thinking in this area and, as a result of conversations with stakeholders and the Executive, have revised our approach in a way that, we believe, better serves both licence fee p ayers and industry stakeholders. We recognise that picture quality and reliability is very important and understand that expectations and tolerance are informed by context; viewers are, generally, more tolerant of lower quality when viewing catch - up on a P C as opposed to a television set. 113 We also note that increasing the availability and uptake of super - fast broadband is an important aim of Government, and that broadband speeds and web software for managing video will continue to improve. 114 113 2009 BBC commissioned research into user expectations of video quality for on-demand content compared with linear content. 114 In particular, we expect broadband delivery speeds for video to increase over time, because of the underlying innovations happening around compressions and decompression systems for video (CODECS), network infrastructure improvements, and innovation around network optimisation, Technical Review of the iPlayer Television Landscape, Decipher Media Consultants, November 2011. 115 Particularly as a series of technological innovations, including CDNs, progressive download and adaptive bit rate capability have brought the web nearer in terms of performance. Technical Review of the iPlayer Television Landscape, November 2011, Decipher. 116 VOD State of Play; a consumer research report by Essential, September 2008. 117 UK adults are most likely to watch scheduled television on its own, whereas mobile phone and computer activities attract the most simultaneous use. Activities on a mobile phone and a computer are the most likely to be undertaken at the same time as other media activities (55% of mobile phone use takes place concurrently with other media activity, as does 62% of computer use). The Digital Day: an in-depth quantitative study on UK adults. total media and communication activities, Ofcom 2010. 118 Technical Review of The iPlayer Television Landscape, Decipher Media Consultants, November 2011. Whilst we are no t persuaded that OTT delivery will necessarily result in poorer quality than other delivery mechanisms, 115 we acknowledge that there are different ways of distributing and delivering content, and that there may be some potential, in certain cases, for reliab le delivery to be achieved via other means. Our revised approach does not therefore prescribe a single approach to the delivery of content, but we require all syndication arrangements to comply with the principles and requirements set out in the proposed p olicy and expect the majority of arrangements to be by way of the standard BBC product, delivered over the internet. User interface and navigation A core principle underpinning the proposed policy is the delivery of content within a standard BBC product. A central benefit of our approach, therefore, is the opportunity to deliver a familiar, consistent and easy - to - use interface that embeds best practice and provides safeguards for vulnerable groups. Further, as audience expectations evolve, and consumers co me to expect the versatility and functionality of the PC on their television set (or any other device) it is important that the BBC is able to respond to this and develop its offer accordingly. This last point is underscored by research by Essential in 200 8, which found that audiences are ‘becoming conditioned to [expect] a degree of control and indeed, often [attach] huge value to innovations that [make] it more convenient to watch their favourite programmes’. 116 Such innovations may take account of the way in which different media are used concurrently and exploit opportunities for audience engagement and interaction, or relate to improvements made by the BBC in the area of recommendations. 117 The importance of ‘discovery innovation’ was underlined by Decipher in its 2011 report, which noted, ‘the growing influence of…personal recommendations within a household’. Decipher also recognised the potential for interactivity which ‘in the emerging connected world is likely to be significant’. 118 In the course of our re view, we found consensus on the need for a well - designed, innovative interface but far less agreement on how this could be achieved and by whom. We recognise the work of others in this area but believe our approach is likely to deliver a better outcome for audiences – iPlayer was found to represent the most usable on - demand catch - up service of the UK’s major broadcasters. 119 119 According to research by Webcredible, 2010. 120 Letter from Stuart McIntosh, Ofcom, to Nicholas Kroll, BBC Trust, as part of Ofcom.s response to the provisional conclusions, 8 February 2011. 121 By, among others, Ofcom, refer to „Review of Ofcom.s Media Literacy Programme., 2004-2008, http://stakeholders.ofcom.org.uk/market-data-research/media-literacy/medlitpub/review0408/#5. 122 Audio Visual content information, good practice principles, 18 February 2008, http://www.audiovisualcontent.org/audiovisualcontent.pdf. The value in being able to deliver a high - quality experience and safeguard public service broadcasting activities was recognised by Ofc om in its response to our provisional conclusions: 120 Our primary concern in this area is to ensure that consumers have access to a wide range of quality services and enjoy a positive user experience of on - demand content. Supporting this, we consider it appr opriate for broadcasters to continue to take a strong interest in ensuring that they are comfortable with the way their content is presented; which in this case could include the BBC seeking ways to safeguard its public service broadcasting activities. Ofc om also recognised significant consumer benefit arising from platform operators being able to offer innovative ways of integrating on - demand content with their platforms. We agree that the value of a standard BBC product can only be fully realised if the discovery of on - demand content within that product is unrestricted. We can see considerable value in facilitating discovery, by ensuring it can be accessed via the navigation systems of third party platforms, whether via a ‘backwards EPG’, ‘recommended vie wing’ or other means. In order to secure the best outcome for licence fee payers, therefore, the standard BBC product must be properly integrated with third party navigation, to allow users to find content quickly and easily. We have therefore mandated th e inclusion of metadata in the revised policy, which will enable third parties to integrate on - demand content with their navigation systems. Better integration will not only deliver a higher quality experience it will also bring a range of additional benef its to consumers. The importance of ensuring viewers can access adequate information about content, so that they can determine whether it is appropriate for them, or for those in their care, has been widely recognised 121 and was underlined by one respondent to our consultation, who noted that the provision of such information was in accordance with media literacy principles developed by Ofcom. It is also underpinned by research which has demonstrated that consumers want clear information about the content the y and their children access. The provision of such information empowers users and enables them to make informed choices about the content that they consume. 122 Our approach has therefore been informed by the way in which audiences currently access content an d the information they require in order to make informed decisions, and in recognition of third party innovations in this area, to which we do not want to frustrate access. Parental controls and assistive technologies We see considerable value in ensuring licence fee payers have access to assistive technologies and parental controls. A growing demographic of older and disabled users would benefit from the inclusion in the standard BBC product of specific features. According to qualitative research by Ofcom, 67% of those with hearing loss agreed that television was important to them; among those with severe or profound hearing loss this rose to 74%. 123 Given that average daily viewing also tends to be higher for this group, the provision of assistive technologi es is crucial. Previous research by the Trust into this area has also revealed a clear preference for such safeguards and provisions. 124 We therefore consider their inclusion in the policy as central to the delivery of quality. 123 Television Access Services: Review of the Code and Guidance, 2006, Ofcom 124 Opinion Leader research undertaken for the BBC Trust as part of its assessment of Canvas proposals, November 2009. 125 Ofcom, Adult Media Literacy Report, 19 April 2011. 126 Safer Children in a Digital World, a report of the Byron Review, March 2008. Our approach is consistent wit h the Charter and Framework Agreement, which require the BBC to ‘do all that is reasonably practicable’ to ensure that audiences can access output in ‘a range of convenient and cost effective ways’. Particular requirements in respect of accessibility are p laced on the BBC elsewhere. The Agreement makes analogous provisions to the code maintained by Ofcom under section 303 of the Communications Act 2003, relating to provision for the deaf and visually impaired. The AVMS Directive also contains a duty on memb er states to take steps to encourage access to on - demand services. With increased online activity among children meanwhile, the importance of parental controls has grown. Sixteen per cent of 5 - 15 year olds go online via a games console; among 12 - 15 year ol ds, this rises to 23%. Forty - one per cent of this age group now accesses the internet in their bedroom, up from 31% in 2009, according to a recent Ofcom report. 125 The value of parental controls, when properly understood and applied, in helping parents to ma nage their children’s access to the internet was recognised in the 2008 Byron Review. 126 Their inclusion in the standard BBC product is central, therefore, to our assessment of quality. We recognise, however, that in order to be effective, they must be well understood and widely used and we encourage the Executive to consider ways in which to prompt awareness and increase usage among parents. Value for money 4.7.21. A key component of the proposed policy is the ability to ensure that it delivers value for money to l icence fee payers. As part of our review, therefore, we have considered whether syndication in the form envisaged represents an appropriate use of licence fee funds, taking account of alternatives. 4.7.22. Given that the Executive is responsible for implementing the policy, our analysis is based on certain reasonable assumptions and also, in part, on cost information provided by the Executive to the Trust. 4.7.23. As set out in the proposed policy and explained in this document, it will be for the Executive to enter into syndication arrangements on a case - by - case basis in compliance with the new policy, once finalised and published. It is accordingly, difficult for the Trust to predict with absolute precision the likely costs associated with syndication. In addition to un dertaking the analysis below and in order to ensure value for money, the Trust has therefore placed a requirement on the Executive in the proposed policy, that all syndication arrangements must be able to demonstrate value for money for licence fee payers. Further, the Executive must comply with its broader responsibility to conduct the BBC’s operational financial affairs in a manner best designed to ensure value for money. 127 127 As per provisions in the Agreement. 128 Including platforms. Our approach to this assessment 4.7.24. Of the 300 or so connected devices 128 that currently have the iPlayer, over 99% use a standard BBC product. Whilst our policy relates to syndication arrangements going forward, we are mindful that any significant departure in approach (for example, a policy that promoted self - build as the only option) may w ell involve initial start - up costs, or result in significant sunk costs, compared with syndication by way of a standard product. 4.7.25. Whilst noting proposals advanced by stakeholders as regards a ‘hybrid’ or ‘mixed’ approach to syndication, we also recognise that a degree of standardisation in the way in which the BBC syndicates its content is necessary in order to maintain sufficient control over costs. Each syndication arrangement will likely involve various costs specific to that arrangement, including for example, legal, compliance and development - related items. 4.7.26. The Trust would expect that the use of similar arrangements would lead to some economies of scale in terms of the associated costs (for example, the introduction of new functionalities designed to enhance the user experience). Ensuring or otherwise promoting some level of standardisation is therefore necessary in order to seek to limit the individual costs associated with each arrangement. 4.7.27. We also recognise that it is only by considering the costs alongside the anticipated benefits that we can reach a view on value for money. In undertaking our assessment, we have therefore considered the following key questions: . What is the cost of syndication through provision of a standard BBC product? . How are th e costs affected by variations in delivery costs? . Is syndication by way of a standard BBC product likely to represent value for money? What is the cost of syndication through provision of a standard BBC product (currently, the iPlayer)? 4.7.28. As a starting point , we identified the relevant cost areas associated with syndication under the proposed policy. Costs fall into three broad areas, which break down into 11 further cost categories, as per table 4.1, below. 4.7.29. We requested information from the Executive on the anticipated annual cost of the proposed policy; that is syndication by way of a standard BBC product, delivered over the internet. The exact figure will depend upon the implementation of the final policy and individual syndication agreements going forward . However, as a reasonable indication of the costs of syndication, envisaged by the proposed policy, the Executive advised us that the current cost per annum of developing, maintaining and distributing both the iPlayer on bbc.co.uk and syndication web prod ucts is £ [redacted] million. Of this figure, maintenance and development of the iPlayer accounts for £5.2m. 129 The bulk of the remaining spend relates to distribution. 4.7.30. These do not necessarily represent incremental costs, but are based on current operating pr ocedures, whereby around 99% of all syndication arrangements is by way of a standard BBC product. Further, the annual distribution cost of £ [redacted] million represents the cost of distributing all BBC online content. Of this, £ [redacted] million, or 72%, r elates to the delivery of iPlayer content from the BBC website; on - demand syndication accounts for, on average, around £ [redacted] or 6% of the total, while 2 2% relates to other web traffic. 130 129 As published in BBC Online Service Licence May 2010 p10 130 The total estimated cost of the proposed policy, including the cost of developing, maintaining and delivering the iPlayer on the BBC website, would therefore be lower than the £[redacted]million set out here but, for the purpose of our assessment, we have adopted a conservative approach. 131 Including upkeep costs, related data centre, network and other IT infrastructure costs. Table 4.1: cost areas and categories COST AREA COST CATEGORY Development and Maintenance * Development – web product ** Development – other products *** Maintenance and support – web product Maintenance and support – other products Legal, Compliance and Distribution Encoding **** Legal, compliance and busines s development ***** Content Delivery Networks Infrastructure ****** Network, to host physical network infrastructure and comprising cables, servers and other IT infrastructure Data centre Maintenance and other third party services 131 Support, relatin g to the allocation of IT distribution headcount * Development costs relate to building new features into the iPlayer product on the web and third party platforms. Maintenance costs relate to engineering and testing support to maintain current versions of the iPlayer on the web and third party platforms ** Web product includes all browser-based services, across PC and Mac and the so-called „big-screen. and mobile versions of the HTML site optimised for television, tablets and mobile devices *** Other products include implementations of the Flash-based product on Wii and Virgin TiVo and mobile applications, such as those developed for Android and iPad **** Encoding costs refer to the process by which broadcast-formatted content is translated into other formats required for other play-out systems (e.g. via IP). The BBC would still need to undertake encoding activity for the standard BBC product under all three scenarios, although these vary by scenario ***** Certification is included in this category, and refers to the process of handling requests, managing devices submitted for testing, assessment of the correct standard product for the device ****** Network costs are the costs to host physical network infrastructure (comprising cables, servers and other IT infrastructure). Data centre costs relate to BBC enterprise servers and technology storage facilities, as well as related IT equipment (racks, cabling, servers, storage, management systems and network gear). Maintenance and other third party services are those costs relating to the data centre, network and other IT infrastructure. Support services are costs related to allocation of IT distribution headcount. 4.7.31. We then considered which cost categories, under our proposed approach, were most vulnerable to exter nal forces, and more susceptible to fluctuations which would test our assumptions. How are the costs affected by variations in distribution costs? 4.7.32. Of all the cost areas, we understand that distribution is perhaps the most uncertain and may well be subject to significant fluctuations (the level of costs attached to OTT delivery was mentioned by a number of stakeholders). The iPlayer is delivered to most platforms 132 over the internet (or OTT). The vast majority of OTT costs accruing to the BBC is due to PC us age (that is, people accessing the iPlayer from the BBC website) with the remainder driven by games consoles, mobile devices, set top boxes and connected televisions. 4.7.33. Unlike analogue and DTT transmission, however, where costs are fixed, regardless of the size of the audience, 133 the cost of online delivery is variable, and subject to variations in demand and market forces. The corollary of increased demand, therefore, is increased cost. Whilst representing £ [redacted] million at present, 134 CDN costs have the p otential to rise dramatically as usage increases, devices proliferate and HD viewing accelerates. 135 4.7.34. We have therefore modelled possible future distribution costs for the proposed policy over a five - year period, using low, medium and high scenarios, to ensu re that any increase in this area is appropriately factored into our thinking. We then tested our assumptions with a CDN operator and verified our findings with the Executive. For the purpose of this exercise, we have based our modelling on the figure of £ [redacted] million, that is, the total cost of distributing all BBC online content (our proposed approach adds only incrementally to this and we have factored that into our analysis). 4.7.35. It is worth noting that BBC costs in this area are likely to rise to some extent over the next five years irrespective of its approach to syndication, as IP distribution undergoes rapid growth in line with media trends. 4.7.36. Whilst the revised policy does not prescribe a single delivery approach, for the purpose of this assessment, within each of the low, medium and high scenarios, we have allowed for two possible outcomes; one assumes that the majority of on - demand content is delivered 132 PCs, mobile phones, games consoles, set-top-boxes and connected televisions 133 It is not strictly true that linear broadcast costs are fixed regardless of size of the audience. For both DTT and DAB, the networks were built out to a certain scale. The success of those networks and consequent strategic importance resulted in further investment to increase the number of people covered. Linear broadcast costs increase by percentage of population covered, while online costs increase by consumption. 134 The distribution figure is based upon the CDN cost to the BBC in FY 2009/10, it is not limited to the distribution of on-demand radio and television content but also covers live, on and off-schedule, plus images and other objects contained within BBC Online pages that are served through a CDN. 135 As set out above, this figure represents the cost of distributing all BBC online content, of which on-demand syndication accounts for, on average, around 6%, although this is subject to fluctuation over the top (with the remainder subject to separate delivery arrangements with a small number of third parties). The second allows for the incremental costs of syndicating all BBC on - demand content OTT. 4.7.37. CDN costs vary with the amount of data; the BBC pays a cost that is based upon the number of GB of data x the cost per GB. The number of GB varies wi th: . The device used (mobile, for example, requires less data than PC) . The resolution (HD requires approximately three times the data of standard definition) . The number of programme views (two people watching an EastEnders episode on separate devices requir es double the data of one person) 4.7.38. In 2009/10, total CDN costs were £ [redacted] million. 136 The low cost scenario in table 4.2 assumes similar increases in both data usage per device and the number of devices in use and a parallel reduction in CDN unit costs g oing forward. The medium scenario assumes a similar growth rate in device penetration and usage and a lower reduction in CDN unit costs, whilst the high scenario assumes viewing increases by 20% each year and CDN costs remain static. As above, and by way o f example only, we have also modelled the impact of allowing separate delivery arrangements with a small number of third parties (thus signalling a reduction of BBC costs in this area). 4.7.39. By 2014/15, annual CDN costs are set to rise by between £ [redacted] mi llion, in the low cost, ‘majority aggregation’ scenario, and £ [redacted] million in the high cost, ‘aggregation - only’ scenario (whereby all delivery is over the top). The most likely outcome is, we believe, the medium cost scenario, under which annual costs reach between £ [redacted] and £ [redacted] million in 2014/2015, depending on delivery arrangements with third parties. 4.7.40. Without underplaying the significance of the rise in real terms, this represents between [redacted] % and [redacted] % of the total budget for distribution. 137 Further, the uplift of £ [redacted] million between the two different delivery choices in the medium cost scenario represents only [redacted] % of the total budget for distribution. 136 The distribution figure is based upon the CDN cost to the BBC in FY 2009/10, it is not limited to the distribution of on-demand radio and television content but also covers live, on and off-schedule, plus images and other objects contained within BBC Online pages that are served through a CDN. 137 BBC distribution budget - annual report FY 2010/11 of £202 million. Table 4.2: CDN cost scenarios, to 2014/15 (all outputs are in GBP millions) LOW COST SCENARIO 2009/10 A ctual 2010/11 A ctual 2011/12 F orecast 2012/13 Forecast 2013/14 Estimate 2014/15 Estimate Cost of OTT delivery for all BBC online content, including the majority of syndication arrangements [redacted] [redacted] [redacted] [redacted] [redacted] [redacted] Incremental cost of OTT delivery for remainder of syndication arrangements [redacted] [redacted] [redacted] [redacted] [redacted] [redacted] Total CDN cost - aggregation only [redacted] [redacted] [redacted] [redacted] [redacted] [redacted] MEDIUM COST SCENARIO 2009/10 Actual 2010/11 Actual 2011/12 Forecast 2012/13 Forecast 2013/14 Estimate 2014/15 Estimate Cost of OTT delivery for all BBC online content, including the majority of syndi cation arrangements [redacted] [redacted] [redacted] [redacted] [redacted] [redacted] Incremental cost of OTT delivery for remainder of syndication arrangements [redacted] [redacted] [redacted] [redacted] [redacted] [redacted] Total CDN cost - aggregation only [redacted] [redacted] [redacted] [redacted] [redacted] [redacted] HIGH COST SCENARIO 2009/10 Actual 2010/11 Actual 2011/12 Forecast 2012/13 Forecast 2013/14 Estimate 2014/15 Estimate Cost of OTT delivery for all BBC online c ontent, including the majority of syndication arrangements [redacted] [redacted] [redacted] [redacted] [redacted] [redacted] Incremental cost of OTT delivery for remainder of syndication arrangements [redacted] [redacted] [redacted] [redacted] [redacted] [redacted] Total CDN cost - aggregation only [redacted] [redacted] [redacted] [redacted] [redacted] [redacted] Does syndication by way of the iPlayer product represent value for money? 4.7.41. The Trust accepts the figures provided by the Executi ve for the purpose of its assessment and is mindful that its preferred approach involves investment in certain areas (such as support and testing) that are relatively new to the BBC, whilst those associated with distribution may be subject to significant c hange, such that anticipating the exact costs is somewhat difficult. 4.7.42. We also recognise that the issue of cost is not confined to delivery. In meetings with the Trust Unit, a number of stakeholders drew attention to the cost to the BBC of designing, develo ping and supporting multiple versions of its standard product, which, they submitted, was more expensive than other approaches, such as self - build or licensing or a combination of approaches. 4.7.43. We have also therefore had regard to the likely costs of ‘mixed distribution’ policies, which permit the use of branded areas or self - build, alongside the standard BBC product to a greater extent than envisaged by the Trust. With a ‘mixed distribution’ policy, we would expect to see a marginal reduction in overall cost s, driven in particular by development and maintenance and distribution; accompanied by an uplift in those costs associated with bespoke work, legal and compliance. The extent of these costs would, however, depend on the individual arrangements agreed by t he Executive. 4.7.44. We are mindful, however, that any potential reduction in overall cost must be set against the ability of any alternative approach to better deliver public value and satisfy the principles set out in our proposed policy. Further, should the ba lance between the different types of deployment fluctuate, such that branded areas or self - build represented a much higher proportion of all arrangements, there may come a point at which it becomes a more costly option for the BBC to maintain. 4.7.45. At the other end of the scale, under a scenario in which all of the current deployments – along with any future arrangements – were self - build or disaggregation - only, the costs incurred would be different in both character and quantum from the proposed policy and woul d almost certainly result in higher monitoring and compliance costs. The audience outcomes, in terms of the principles we are trying to satisfy, would also be more difficult to secure, such that, in our view, it would not deliver value for money. 4.7.46. Whilst ou r preferred approach carries costs, which are not insignificant, these are, in our view, justified by the benefit it delivers. For example, the proposed policy brings with it distribution costs and greater exposure to any increase in this area. Whilst cert ain costs, such as development, may be ameliorated by, for example, a policy of self - build or disaggregation - only, the corollary is higher compliance and monitoring costs and less control over key facets of the user experience, which are central to the del ivery of public value. Further, we note that the majority of distribution costs incurred by the BBC relate to the delivery of all online content, and that our proposed approach adds only incrementally to these. 4.7.47. Regardless of our approach to syndication, CD N fees are forecast to rise as a natural consequence of BBC online activity, and its obligations to broaden access to its content. 138 In formulating the proposed policy, we recognise the need to balance investment in content production with efforts to make t hat content widely and easily available to licence fee payers, and to ensure that the costs are proportionate. Whilst the proposed policy does not necessarily represent the lowest cost option, it does deliver all of the intended benefits. Further, the revi sed policy does not prescribe a single approach to content delivery, leaving room for further efficiencies in this area. 139 138 The BBC has specific obligations under clause 12 of the BBC Agreement. 139 It will be up to the Executive to determine how best to deliver its content, subject to compliance with the principles set out in the policy. 4.7.48. In summary, whilst the proposed policy could result in higher costs relative to alternative approaches, we consider that any such addi tional costs are offset against the ability to better deliver public value, advance the purposes and satisfy the key principles identified by the Trust. In our view, our preferred approach represents an efficient use of licence fee funds; evident in the co ntext of the policy and the value it will deliver. 4.7.49. The Trust is, however, mindful that it cannot anticipate the exact costs associated with the proposed policy as they will be dependent on the individual arrangements reached by the Executive with third pa rties. It is therefore important that the costs associated with syndication must be kept under control by the Executive and appropriately monitored by the Trust. 4.7.50. We therefore consider it necessary to require that the Executive ensure that each syndicatio n arrangement represents value for money, and have included this requirement within the proposed policy. We also require the Executive to report to the Trust within 12 months of the new policy coming into force on operational arrangements, including those associated with development, support, testing, monitoring, compliance and distribution. Further, the Executive is under a duty to conduct the BBC’s operational financial affairs in a manner best designed to ensure value for money and we will keep this area under review. 140 140 As per provisions in the Agreement. Concluding remarks on public value 4.7.51. We consider that our proposed approach to syndication underpins and advances delivery of the public purposes with particular relevance for the sixth, of helping to deliver to the public the benefit of emer ging communications technologies and services. Indeed, it is only by ensuring that audiences are able to access its services in a range of convenient and cost effective ways that the BBC can meet specific obligations under the Charter and Agreement. Furthe r, in guiding people to new and valued content, it directly supports the first two purposes, sustaining citizenship and civil society and promoting education and learning. 4.7.52. In respect of the drivers of public value, we believe that provision of the standard BBC product, as envisaged by the proposed policy, is likely to generate impact, embed quality and represent an efficient use of licence fee funds. In new and untested areas, reach can be difficult to predict, but a policy that aims to serve a wide range o f platforms and devices, whilst exercising control over key aspects of the user experience can reasonably be expected to preserve and, potentially even extend, reach and consumption of BBC content over time. 4.7.53. A policy that specifically provides for or mand ates self - build or disaggregation as the default approach to syndication of long - form television on - demand content may well achieve similar levels of reach of certain BBC content in the near - term, but it would not necessarily satisfy other public value con siderations, such as quality and impact or deliver the public purposes to an equivalent extent (an overview of these alternative options can be found at section 4.9). 4.7.54. We believe, therefore, that, wherever possible, the syndication of BBC content should be within a BBC product, such as iPlayer. But our challenge in a non - linear world is two - fold: not only must we safeguard delivery of the public purposes and public value, we must do so in a way that takes account of the effect of BBC activities on the wider market. Having set out our assessment of public value, we consider, in the section that follows, the potential competitive and market impacts of our proposed approach. 4.8. Competitive and market impact analysis 4.8.1. The proposed policy does not impose a single tec hnical solution nor does it prescribe a single approach to the delivery of content, 141 but neither does it encourage syndication via a branded area on a third party platform; via self - build; or on an asset - by - asset basis (our analysis on alternative options is set out at section 4.9). Instead, its preferred approach to the syndication of BBC long - form television on - demand content is a standard iPlayer product, delivered over the internet. 142 4.8.2. The policy allows for a degree of flexibility, however, and recognises that circumstances may occasionally arise that justify special arrangements that depart from this model. In deciding whether to enter into any such arrangement, the Executive should take account of all relevant factors, including the different circumstanc es facing each party and the presence of limiting factors, which mean it is not technically practicable or economically feasible to adopt a standard BBC product. 143 4.8.3. Further, provisions within the proposed policy require that all would - be partners are treate d on a fair, reasonable and non - discriminatory basis. 141 But we require all syndication arrangements to comply with the principles and requirements of the proposed policy and to fall within its terms. 142 The principles set out in the policy will apply equally to any future syndication product, refer to annex I. 143 The basis for any special arrangement will need to be very clear and the Trust does not anticipate that such cases will be common or easy to justify. Affected stakeholders and services 4.8.4. The provision of television video on - demand services (the relevant market for the purpose of our assessment) is based upon a complex supply chain. Broadly speaking, at the upstream level, content providers (primarily, UK PSBs and Hollywood studios) can syndicate their content via either a proprietary aggregation product (such as the BBC iPlayer) or a third party content aggregator (such as YouTube, iTunes, or Hulu). 4.8.5. Th e proprietary aggregation product performs at least three key functions: . Content assembly and presentation . Content selection and discovery (i.e. search, navigation and recommendations) . Content playback 4.8.6. The primary route to on - demand content was traditio nally a desktop or laptop computer with an internet connection. However, consumers are increasingly adopting new routes, such as smart phones, tablets, television sets and games consoles. Providers can be grouped into three broad categories: i) Consumer el ectronics manufacturers supplying internet - enabled television sets (i.e. LG, Sony, Panasonic and Samsung), STBs (i.e. 3 View, Digital Stream, Humax) and game consoles (Nintendo, Microsoft and Sony) 144 144 Google TV belongs to this category, in that it has partnered with major CE manufacturers (Sony and Logitech) to sell TV sets and STBs empowered by Google.s Apps platform and search engine, whereas Apple TV is basically an STB which allows users to stream VOD content from their iTunes library. 145 It is important to note that whilst BSkyB is fully integrated as regards the production of television content, Virgin Media and BT Vision are resellers. ii) Free to air television platforms, such as Freeview a nd Freesat and hybrid DTT/IPTV propositions such as IP Vision and (pending its launch) YouView iii) Pay television operators which offer multiproduct bundles (comprising broadband, television and phone services), such as BSkyB, Virgin Media and BT Vision 145 4.8.7. From a user’s perspective, the platform essentially provides an interface that can perform some or all of the functionalities listed above (at 4.8.5) at a meta - level, in particular around assembly and selection. In this sense, it could be argued that when the iPlayer is featured among other ‘widgets’ or applications (as a standalone product), it essentially constitutes a platform within a platform. This may give rise to some friction between the content aggregator and the platform owner, depending on the b usiness model adopted by the latter, which is reflected in the degree of control it may wish to exercise over the functionalities thereof. 4.8.8. It is worth noting that moving from the first to the third category of provider (at 4.8.6) there is a higher degree of vertical integration in both the production and, most critically, aggregation of television on - demand content. In particular, the approach of pay television platforms may be to favour their own menu and navigation systems as the primary or sole means of access to all on - demand content. Hence, they may, in principle, be opposed to hosting on their closed platform a third party content aggregation product, particularly if that product does not integrate with its search and navigation. We consider this poin t in further detail below. 4.8.9. Having identified, in broad terms, affected stakeholders and services, we set out below an overview of their key concerns as they relate to market impact. Stakeholder concerns relating to market impact 4.8.10. As discussed elsewhere in t his document (in particular, at section 4.6), many respondents, a great number of them platform operators, were critical of the provisional policy and, in particular, of the approach to aggregation. A number of stakeholders raised points that related to bo th the public value and market impact associated with the provisional policy. Whilst our consideration of stakeholder points is set out in detail above, we summarise here the market or competitive impact specific comments alongside our consideration of the m. 4.8.11. Stakeholders including YouView, IP Vision, Sky, Virgin and informitv argued that complete control of the user experience would jeopardise seamless viewing, erode technological innovation and limit consumer choice (thereby resulting in consumer harm). O fcom meanwhile recognised potential for significant consumer benefit arising from platform operators being able to offer innovative ways of integrating on - demand content with their platforms, ‘for instance, through search or navigational tools,’ arguing th at such integration ‘could be of significant benefit to consumers’. 4.8.12. We recognise that the inclusion of metadata is integral both to the user experience and the discoverability of content and that accordingly it should be governed under the policy. In respo nse to stakeholder concerns, therefore, the revised policy mandates the release of metadata as part of any syndication arrangement. 146 4.8.13. In other areas, the policy prevents third parties from innovating around the playback of BBC on - demand content. Editorial controls, and restrictions on advertising and sponsorship, all designed to enhance public value, are a central tenet of the policy, thereby affecting but not precluding third party innovation. It does not, however, restrict such innovation with regard to n on - BBC content. 4.8.14. With regard to the operation of the policy, there was general agreement among industry stakeholders on the need for the BBC to publish further detail in respect of product specifications, release windows and support regimes. Consumer electr onics manufacturers in particular were keen to secure assurances from the BBC on the level and extent of support for legacy devices. 4.8.15. We acknowledge these concerns and, as set out above, can see considerable, practical value in publishing full information o n product specifications, release windows and support regimes and, as part of the proposed policy, will direct the Executive to make available within the guidelines all relevant material. 4.8.16. Sky questioned whether adequate consideration had been given to all relevant options and argued that the dismissal of a hybrid approach was not justified, ‘as [it] could deliver some of the key benefits of an aggregation - only policy’ whilst also leading to greater reach and fewer negative impacts. 147 In particular, it criti cised the ‘potential distortive effect of [BBC] public service content not being available to licence fee payers using certain television platforms, including Sky’s population of over 3.5 million connectable set - top boxes’. 4.8.17. The inability to offer BBC on - de mand content may, in certain circumstances, disadvantage a platform and perhaps result in customer churn. Whilst we believe our principles and objects will usually be best served by offering would - be partners direct access to the full range of BBC content, via their platform or device, within a BBC environment, we accept that circumstances may occasionally arise that justify special arrangements that depart from this model. In deciding whether to enter into any such arrangement, the Executive should take ac count of all relevant factors, including the different circumstances facing each party and the presence of limiting factors, which mean it is not technically practicable or economically feasible to adopt a standard BBC product. 148 (We deal with this point fu rther below.) 4.8.18. Virgin warned that the impact of costs of modification on stakeholders should be considered. [redacted]. By way of alternative, it set out a hybrid solution whereby licence fee payers with TiVo set - top boxes could access both the cable BBC VO D service for the 146 Consistent with relevant provisions within the proposed policy, refer to annex I. 147 Sky submission, p8, section 1.18. 148 The basis for any special arrangement will need to be very clear and the Trust does not anticipate that such cases will be common or easy to justify. Further, any such development will need to comply, on an on-going basis, with the principles and requirements set out in the proposed policy, refer to annex I. most popular BBC on - demand content as well as an integrated standard iPlayer, which would host the remainder of content. Virgin argued this would preserve the benefits of the cable VOD service, [redacted] , whilst providing viewers with ac cess to the full range of BBC on - demand content. 4.8.19. [redacted] argued that the iPlayer was a de facto market requirement for consumer electronics products, implying a position of dominance. 4.8.20. BT also drew attention to the impact of OTT delivery and the need to preserve a high - quality viewing experience: When considering the quality of the iPlayer service to the viewer it is undeniable that there is a quality standard that the viewer expects when watching content. A poor quality iPlayer experience will drive use r complaints to the ISP and could lead to customer churn. In such a competitive market as Broadband provision, these are serious issues and explain why BT Vision is as keen to drive up quality standards for the iPlayer as the BBC is. 4.8.21. In response to these c oncerns, the policy does not prescribe a single delivery solution and is sufficiently flexible to take account of individual circumstances and to permit alternative distribution mechanisms where appropriate. 149 We are aware that for some operators, with clos ed networks, the use of OTT may force or accelerate investment in a content delivery network, typically, to guarantee a certain level of service quality under an OTT solution. Against this, we recognise that such investment may be part of a long - term trend (we consider this point further below). 4.8.22. IP Vision argued that the provisional conclusions distorted the BBC’s incentives to syndicate and imposed onerous terms that favoured YouView. It also criticised the draft policy for failing to provide alternative access to BBC on - demand content: 149 The Trust does not prescribe a single approach to the delivery of content, but expects all such arrangements to comply with the principles and requirements set out in the proposed policy, paragraphs 14-16, and to fall within the terms of this policy. Enabling syndication of on - demand programming in no way prevents the BBC from continuing to operate the BBC iPlayer service and we consider it extremely odd that the Trust feels it necessary to prevent any alternative acces s to BBC content. BBC iPlayer is now one of the dominant online services in the UK and it would be inappropriate to effectively cut off any other means of access to BBC on - demand content. 4.8.23. IP Vision instead advanced an alternative approach, which would ‘see the BBC retain control over content encoding, protection and delivery, exposing these centralised functions as web services to third parties through a series of APIs. Third parties would be free to build user interfaces within the constraints of guideline s and associated terms and conditions, passing control to the BBC infrastructure for play - out using the APIs. On this basis, the BBC’s ability to control delivery windows, revoke content and so on would be unaffected’. 4.8.24. IP Vision further claimed that the B BC’s track record on a standards based environment was poor, and that it was unrealistic to expect tier one manufacturers with global reach to modify their technologies to accommodate ‘one application within one territory that would typically account for l ess than five per cent of the global connected consumer electronics products’. 4.8.25. [Redacted] submitted that, in a period of rapid experimentation and innovation, allowing only three different variants 150 would limit reach and restrict consumer choice. It was a mong those stakeholders calling for a more flexible approach and favoured a policy of mixed distribution (notably, the provision of ‘individual media assets available, rights permitting, as streams or files and the use of APIs to enable third parties to de velop iPlayer applications’). Above all, it noted that ‘the BBC should not be simply presenting an iPlayer or nothing proposition’. 4.8.26. In response to concerns from stakeholders in this area, our proposed policy does not prescribe a single technical solution. Whilst our approach to syndication has been further developed since publication of the provisional conclusions, we found no evidence, in the course of our review, that the policy put forward at that stage distorted incentives to syndicate (widely and indi scriminately) or imposed terms that favoured YouView. Given that the proposed policy (contained at annex I) is more flexible in approach, we are equally satisfied that it does not distort BBC incentives to syndicate or impose terms that favour YouView. 4.8.27. A number of stakeholders observed that the BBC should standardise to the minimum so to allow differences in implementations, and called for openness on the development of specifications. In response to concerns in this area, we therefore require the Executi ve to release sufficient information to enable third parties to plan and manage their development roadmaps which should include, but not be limited to, a set of objective criteria used to define standard products, development roadmaps, and technical suppor t (both the extent and duration) for standard versions. We believe this will address stakeholders’ concerns regarding the future implementation of standards in such a way as to minimise uncertainty and development costs. 150 Of the standard BBC product: HTML, Flash and MHEG. 151 Methodology for Market Impact Assessments of BBC services, paragraph 1.9, available at http://stakeholders.ofcom.org.uk/binaries/research/tv-research/bbc-mias/bbc-mia-meth.pdf. Market impact – static effects 4.8.28. Acco rding to Ofcom’s methodology, static effects are concerned with the immediate, first - order impact of BBC activities on the demand for other services, without taking account of how other service providers might respond, for example by altering their pricin g policies or investment plans. It is also important that any identified impacts are traced through to the implications for consumers and citizens. 151 4.8.29. The default approach of the policy to syndication, based on a standard BBC product (currently, the iPlayer ) amounts to a combination of a technological tie between BBC on - demand content and its media player, and a ‘quantity forcing’ commitment to carry the entire range of BBC content. 4.8.30. A requirement upon would - be syndication partners to provide access to the full range of BBC content does not appear to raise any significant issues, unless it is argued that forcing the entirety of BBC content could generate capacity problems, making it impossible or very costly for platforms to distribute content. This may not, however, be an issue in light of the pull VOD architecture underpinning the delivery mechanism employed for iPlayer, whereby only content that is requested is delivered. 152 4.8.31. Regarding the tie between BBC on - demand content and the iPlayer, it is worth noting that the popularity of the latter has fundamentally contributed to demand for VOD services in general. Nevertheless, absent this restraint, end - users would still have alternative routes to BBC on - demand content via other platforms and devices. The key issu e then, is the extent to which the tie would further reduce demand for these alternatives. 4.8.32. With respect to content assembly and selection, the release of metadata, as mandated by the proposed policy, will allow users to access and select BBC on - demand cont ent via a third party’s navigation system. This should help to ameliorate concerns raised by stakeholders regarding the integration of BBC on - demand content with third party search and navigation systems and allow them to deliver future innovations around the discoverability of such content on their platform or device. In addition to facilitating maximum choice for consumers, it also responds to the way in which they typically access on - demand content. By way of example, the vast majority of iPlayer traffic on the Virgin Media platform comes via its own menu structures. 153 4.8.33. As regards playback, this would be limited to, and occur only within, the standard BBC product (currently the iPlayer). The extent to which this would result in a reduction of demand for oth er media players depends on whether they are used only, or primarily, to view BBC on - demand content. This is unlikely, however, to be the case given that third party aggregation products largely compete on the range and variety of content offered. 4.8.34. The inab ility to offer BBC on - demand content may, in certain circumstances, disadvantage a platform. On the other hand, to the extent that the platform provides a bundle of services (so - called, ‘multiple - play’ platforms) a customer may be less likely to switch sim ply because it does not carry BBC on - demand content. Take - up of service bundling has increased considerably over recent years. Across the UK, 53% of homes took a bundle of communication services in Q1 2011. 154 But research from Ofcom suggests that consumers with these packages are less likely to switch. 155 4.8.35. Incentives to switch may be further reduced if a user can conveniently access BBC on - demand content via other means, such as a connected television. We recognise, however, that whilst sales of such devices a re increasing – one million were sold in 2010 156 – uptake of their services is likely to be more gradual, requiring as it does adequate broadband, a well integrated user experience and a shift in behaviour (the last, in particular, being more difficult to bo th effect and predict). Nor does the existence of alternative means of access detract from our proposed approach to syndication, which is guided by the belief that it is generally of benefit to licence fee payers that as many platforms and devices as possi ble can access BBC catch - up content. 152 As opposed to a push VOD network architecture where content is distributed and stored in advance over the hard disk of the end user.s device. 153 Research projects for the BBC found that „Search by Day. and „Search by Title. or A-Z is the most popular way to find VOD programmes, Quantitative online survey of 1400 Virgin Media users, April 2010. 154 Triple-play (bundling three services together) accounted for 32% of homes taking bundles (or 17% of all consumers) 155 Research from Ofcom showed that nearly half (45%) of consumers with broadband or a landline think that switching communications provider is too much hassle, strategic review of consumer switching, Ofcom 2010. 156 Ofcom Communications Market Report, August 2011, p.21. 4.8.36. As part of this, we accept that circumstances may occasionally arise that justify special arrangements that depart from the model envisaged under the proposed policy. 157 In deciding whether to enter into any such arrangem ent, the Executive should take account of all relevant factors, including the different circumstances facing each party and the presence of limiting factors, which mean it is not technically practicable or economically feasible to adopt a standard BBC prod uct. 158 4.8.37. Further, a number of concerns raised by stakeholders in the area related to delivery (BT, for example, drew attention to the impact of OTT delivery and the need to preserve a high - quality viewing experience amid concerns that a low quality experienc e could lead to churn). As set out elsewhere in this document, we recognise that there may be some potential for reliable delivery to be achieved via other means. Our revised approach does not therefore prescribe a single approach to the delivery of conten t. 159 4.8.38. In conclusion, the new policy provides greater flexibility around content discovery, and a more flexible approach to delivery and to exceptions (being not limited to circumstances where a partner is ‘unable’ to adopt a standard product). The key likely market impact relates to the playback functionality, over which the BBC seeks to maintain control, 160 but we have seen no evidence that restrictions in this area will have an appreciable negative impact on stakeholders (we discuss this point further below). 4.8.39. Further, given the proposed policy does not outline a preferred approach in respect of the syndication of radio and short - form content, we are satisfied that, in this area, it does not have appreciable negative market impacts. 157 Of access to BBC on-demand content via the standard BBC product, delivered over the internet, refer to annex I 158 The basis for any special arrangement will need to be very clear and the Trust does not anticipate that such cases will be common or easy to justify. Further, any such development, including a decision on who will meet the associated costs, will need to comply, on an ongoing basis, with the principles and requirements set out in the proposed policy, refer to annex I 159 But we require that all syndication arrangements comply with the principles and requirements set out in the proposed policy and fall within its terms, refer to annex I. 160 This also feeds into the means of delivery, as discussed above. 161 Methodology for Market Impact Assessments of BBC services, paragraph 1.9, available at, http://stakeholders.ofcom.org.uk/binaries/research/tv-research/bbc-mias/bbc-mia-meth.pdf. Market impact – dynamic eff ects 4.8.40. According to Ofcom’s methodology, dynamic effects are concerned with the extent to which BBC proposals might deter innovation and investment by the commercial sector, and potentially in the longer term by the BBC itself, if the market fails to grow as it otherwise might. Were commercial providers to be deterred from seeking to offer competing services this would ultimately have the effect of reducing choice for listeners and viewers, to the detriment of the public interest as a whole. 161 4.8.41. As in many emerg ing media markets in the past, two broad trajectories for devices and platforms are emerging, with an opposite proposition in terms of underlying business model and corresponding technological solutions. 4.8.42. The first is the ‘portal’ model. Under this model, manufacturers develop IPTV - capable devices that provide access to OTT applications from content providers. This could be via either a basic interface or a more complex menu that typically provides more sophisticated advice on content selection. The Sony PS 3 is an example of the former; the iPlayer application can be launched but the Sony PS3 adds no value to the experience. YouView is an upcoming example of the latter; which will, when launched, allow access to (among other things) on - demand services from c ontent providers, but will also add an overlay that allows (for example) users to search all content simultaneously. 4.8.43. Many device manufacturers and application developers are standardising, largely to HTML (with or without a Flash plug - in) or to Flash. Thi s is to facilitate the maximum range of applications on any given device. For example, a set - top box manufacturer running a bespoke operating system may struggle to attract every application developer, and hence be unable to offer the widest range of appli cations. If, however, the set - top box manufacturer ran a standard operating system (with an HTML compatible browser, for example) it could offer customers access to a greater number of applications incurring limited or little development effort. 4.8.44. At launch in 2007, the BBC stood slightly apart in promoting the iPlayer. The market has moved on, today there are several popular services offering access to audio - visual content and long - form programmes; YouTube and LoveFilm being two good examples. It is reasonab le to assume therefore that device manufacturers have an incentive to ensure their devices can support a broad range of applications and services. 4.8.45. This view is reinforced by a 2011 Ofcom report which noted that, ‘in 2010 all of the leading manufacturers l aunched televisions which included internet connectivity (primarily via applications providing access to services such as LoveFilm, YouTube and the BBC iPlayer…)’. 162 In this respect, the BBC’s ‘nudge’ towards ‘standard’ operating systems and/or a ‘portal’ m odel has little incremental impact per se. It is, in essence, only one of a growing number of popular applications, and is therefore unlikely to have unilaterally a dynamic effect on the market in terms of technological standard development. 4.8.46. The second tr ajectory is the one adopted by ‘multiple - play’ platforms, whereby a vertically integrated operator offers a bundle of pay - television, broadband and fixed and/or mobile phone services. These operators typically try to keep customers within a ‘walled garden ’, normally based on a proprietary technological standard (or a closed network albeit based on an IP protocol). 163 In principle, if the BBC were to allow disaggregated content, that would ameliorate stakeholder concerns in this area; operators could maintain control over both the user experience and delivery mechanism. 4.8.47. Alternatively, if the policy were to mandate access only through a standard BBC product, absent any exceptions, then the effect may be to ‘nudge’ closed platforms towards allowing access for t hird party aggregator products, or face potential problems retaining those customers who expect access to such applications, unless they have alternative routes to BBC on - demand content, via other devices, at no extra cost and little effort. 4.8.48. However, given the existence of other popular OTT applications to which end - users increasingly expect access, it is, in our view, unlikely that the use of a standard BBC product would have a dynamic impact on the evolution of business models underpinning closed platform s. Nevertheless, provisions within the policy permitting special arrangements under certain circumstances would seem to mitigate this risk. 162 Ofcom, 2011 Communications Market Report: UK, p. 206. 163 Technical Review of the iPlayer Television Landscape, Decipher Media Consultants, November 2011. 4.8.49. More generally, in mandating the provision of metadata, the policy may also have a potential dynamic impact on the d iscovery and delivery of BBC content, which may preserve a platform’s incentives to innovate in this area. 4.8.50. Regarding content delivery, the policy does not prescribe a single solution and is sufficiently open on this point that it is not possible to assess, at a policy level, the dynamic impacts. For some operators, with closed networks, the increasing use of OTT delivery may force or accelerate investment in a content delivery network. Against this, we recognise that such investment may be part of a long - te rm trend. It is difficult to quantify the impacts; however, our policy is sufficiently flexible to take account of individual circumstances and to permit alternative distribution mechanisms where appropriate. 164 4.8.51. Finally, the policy prevents third parties fr om innovating around playback of BBC on - demand content. Editorial controls, and restrictions on advertising and sponsorship, all designed to enhance public value, are a central tenet of the policy, thereby precluding third party innovations in this area. It does not, however, restrict such innovation with regard to non - BBC content and in the presentation and selection of content in general, given the inclusion of metadata in the proposed policy. 4.8.52. In summary, iPlayer is one of a growing number of popular OTT - based applications to which users increasingly expect access, suggesting that the use of a standard BBC product is unlikely to have per se a dynamic effect on the market in terms of evolution of business models and underlying technological standards. More over, the release of metadata will support future innovation around content discovery. With regards to content delivery, although we observe a growing trend towards the adoption of IP - based delivery solutions (regardless of their ‘open’ or ‘closed’ network architecture); we believe that the policy is sufficiently flexible to take account of individual circumstances and to permit alternative distribution mechanisms where appropriate. 165 164 Under the revised policy, whilst the Trust expects that the majority of syndication arrangements should be by way of the standard OTT iPlayer product, the Trust does not consider that syndication by way of a standard OTT iPlayer product is the only means by which the eight principles and value for money can be achieved. It does not thereby consider it necessary to preclude alternative means of syndication. Rather, the Trust considers it appropriate to leave scope for the Executive to enter into special arrangements where it is justified by the particular circumstances. The Trust would expect any special arrangements to be exceptional and require robust justification by the Executive. 165 The Trust does not prescribe a single approach to the delivery of content, but expects all such arrangements to comply with the principles and requirements set out at paragraphs 14-16 and to fall within the terms of this policy. 4.9. Assessment of alternative options 4.9.1. As part of our review and following our consideration of responses to the provisional conclusions, we examined in more detail the alternative options for the syndication of on - demand long - form television content. These alternatives allow for varying degrees of control and range from syndication via a branded area to syndication on an asset - by - asset basis, with a limited number of restrictions. 4.9.2. The provisional conclusions proposed that disaggregation, whether alone or in parallel with alternative approaches, would jeopardise fulfilment of the pub lic purposes to too great an extent. This area was a particular focus for stakeholders, many of whom believed that other less restrictive alternatives would deliver public value without having an adverse impact on the market. We have therefore set out belo w our consideration of these alternative options, and the extent to which we believe they would satisfy our policy objects and principles. 4.9.3. The ability to deliver the full range of benefits rests to a large degree on control. For example, where the implemen tation of key features, such as accessibility, remains within the control of the BBC, they can be offered in the same version release across multiple screens, generating efficiencies for the BBC and ensuring parity of experience for audiences. 4.9.4. Whilst no s ingle solution offers a panacea to all of the challenges facing the BBC, the standard BBC product emerged as the strongest preferred approach overall when assessed against our audience priorities, set out at section 4.5. We set out our reasoning below. Syn dication via a BBC - branded area on a third party platform 4.9.5. For the purpose of our assessment, we have assumed this option would still provide access to the complete BBC offer (and thereby satisfy (a) of the key principles), although we recognise that this m ay not be (and indeed, has not always been) the case. Prominence may be less easy to secure, particularly if the third party promotes its own in - house offer at the expense of BBC content. Brand attribution should be relatively easy to preserve as some leve l of branding is possible under all of the alternative approaches, although we recognise that there is greater margin for confusion where the primary branded environment is that of the third party. 4.9.6. The level of functionality (including access to assistive technologies and parental controls) and consistency of experience, both areas valued by audiences, may well be causalities of this approach. Similarly, the ability of the BBC to engage with licence fee payers, deliver recommendations, guide them to conten t of value and better understand their preferences, may be compromised if the BBC is unable to exercise control over key facets of the user experience. 4.9.7. Against this, we recognise that third party platforms can deliver a high - quality viewing experience, an d that proper integration with third party navigation should enable viewers to quickly and easily discover BBC content. 4.9.8. We also accept that there may be some potential for branded areas to be designed in such a way as to overcome some of these issues, but in so doing, the BBC must also demonstrate value for money. 4.9.9. In conclusion, a default approach of syndication via a BBC - branded area on a third party platform would not necessarily or automatically satisfy the key principles identified by the Trust and may not deliver sufficient public value to licence fee payers in terms of the level of functionality of the offering. Given the possible impact on the ability of the BBC to engage with licence fee payers, guide them to content, and deliver a consistent user e xperience, this solution, if applied across the board, is unlikely to sufficiently deliver the public purposes or otherwise deliver the public purposes to the extent envisaged in respect of the standard iPlayer approach. Further, it would incur additional costs in respect of bespoke work, development, maintenance and monitoring. Syndication via self - build 4.9.10. An alternative approach, advanced by a number of stakeholders, was syndication via self - build, whereby the BBC permits or licenses third parties to build a customised version of the standard BBC product. Although properly branded, the product would not be built, controlled or maintained by the BBC. Under this scenario, the BBC would instead rely on contractual arrangements to secure prominence, manage edit orial compliance and provide access to the full range of content. 4.9.11. Self - build may not always deliver the full range of functionality, such as assistive technologies and parental controls, whilst any direct connection with the audience may be hampered and w ith it access to accurate, timely user data, which allow the BBC to measure audience appreciation and engagement. It may also limit the ability of the BBC to innovate by introducing uniformly new functionalities where such improvements have the potential t o deliver public value. Further, this approach would require ongoing monitoring by the BBC which, if widespread, would exert a pressure on resources and may not, therefore, constitute an efficient use of licence fee funds, particularly if self - build became the de facto approach to the syndication of all on - demand content. 4.9.12. Whilst self - build would go some way to attenuating stakeholder concerns regarding aggregation and a perceived lack of flexibility, we believe it would not ensure fulfilment of the public p urposes if applied across the board. Nor do we believe that this solution would automatically satisfy the key principles set out in the policy (unless designed appropriately), particularly when compared with the standard BBC product. This is due, in partic ular, to the uncertainty over the provision of assistive technologies and parental controls; and the impact on the ability of the BBC to exercise editorial control, access timely usage data and maintain a direct connection with its audience. Syndication o n an asset - by - asset basis (disaggregation) 4.9.13. Syndication on an asset - by - asset basis as a default approach, with minimal, if any, restrictions, whilst ameliorating some stakeholder concerns, is least likely to be able to satisfy the audience facing principles defined at section 4.5 or otherwise deliver the public value envisaged in respect of the standard iPlayer. Access to the full range of content, due prominence, brand attribution, reliable delivery and consistency, all valued by audiences, would be comprom ised, as would access to timely viewing data, important to the BBC if it is to understand and respond to audience behaviours and preferences. The editorial offering would not have parity or consistency across all platforms and devices; whilst the implement ation of key features, such as parental controls, would be lost. 4.9.14. Whilst this approach may, in theory, maintain reach of certain BBC content in the near - term, the corollary is likely to be a sub - standard user experience that fails to satisfy the key princi ples. Further, such an approach carries additional costs in the areas of monitoring and compliance. We are not convinced, therefore, that this solution could be implemented across the board without adversely affecting delivery of the public purposes nor is it capable of being widely implemented in such a way that would satisfy the principles contained within the proposed policy whilst still representing value for money. 4.9.15. In conclusion we consider that the alternatives, if applied across the board, would not sufficiently deliver against the public purposes to the extent that the preferred approach of syndication via the iPlayer product will. We do not therefore consider that any potential adverse market impacts could be minimised further by the Trust adopting an alternative preferred approach to syndication, without there being a real risk that this would result in a failure to ensure the fulfilment of the public purposes and/or the BBC’s other obligations. 4.9.16. It is worth noting, however, that whilst our clear p reference is syndication via a standard BBC product, delivered over the internet, we recognise that circumstances may occasionally arise that justify special arrangements that depart from this model. Accordingly, the proposed policy provides scope for the BBC to enter into special arrangements provided that each arrangement complies with the mandatory elements of the proposed policy, including representing value for money. As set out in the policy, we do not anticipate that special arrangements will be com mon or easy to justify. 4.10. Concluding remarks 4.10.1. Having set out our revised policy position, alongside our consideration of relevant stakeholder concerns and how the proposed policy aims to deliver public value, the section that follows contains our revised vie w, including any obligations placed upon the Executive with regard to operational guidelines and transitional arrangements. 5. The Trust’s Revised View 5.1. Duties of the Trust 5.1.1. The Trust has reached its revised view on syndication and developed the proposed poli cy on the syndication of BBC on - demand content, having considered: . Consultation responses from individuals and industry respondents . Further representations from industry through stakeholder meetings . The independent expert reports prepared by Screen Digest and Decipher and other relevant research . The Executive’s submissions . Analysis undertaken by the Trust Unit 5.1.2. We have also considered our general duties under Article 23 of the Charter and our other legal duties. In particular, the Trust’s role of upholding t he public interest within the BBC, particularly the interests of licence fee payers. Particularly, but without limitation, we consider that we have: . Represented the interests of licence fee payers in considering the public value that would accrue to them f rom the syndication of BBC on - demand content . Secured the independence of the BBC through the application of an independent process for the consideration and development of the proposed policy . Assessed carefully and appropriately the views of licence fee pa yers through periods of formal consultation, consideration of relevant audience research, and the public value analysis contained at section 4.7 of this document . Exercised rigorous stewardship of public money through undertaking a value for money analysis which has informed our revised view on the proposed policy, contained at section 4.7 of this document . Had regard to the competitive impact of the BBC’s activities on the wider market through our consideration of responses from industry to the consultations , meetings with industry respondents and analysis of any potential market and competitive impact of the policy, contained at section 4.8 of this document . Ensured that the BBC observes high standards of openness and transparency through the publication of this decision document, the non - confidential consultation responses to the latest consultation and relevant underlying material relied on in reaching our proposed decision 5.1.3. The Trust has also received and considered privileged legal advice on the proposed p olicy’s compliance with competition law (including state aid law). 5.2. Summary of proposed policy and the Trust’s view 5.2.1. The proposed policy is intended to provide clarity to third parties, the Executive and licence fee payers as to the terms on which BBC on - dem and content and associated data should be syndicated and thereby accessible to licence fee payers through third party means. 5.2.2. The proposed policy covers arrangements for the provision of full - length television and radio content, short - form content and as sociated metadata. The final policy will replace the 2007 policy on the syndication of on - demand content. 5.2.3. In developing the proposed policy, the Trust has been mindful of its responsibility for upholding the public interest within the BBC, especially the interests of licence fee payers, as well as taking into consideration the views and concerns expressed by various industry organisations. The Trust has also had due regard to its responsibility of securing the effective promotion of the public purposes. 5.2.4. It is the Trust’s view that it is generally of benefit to licence fee payers that they can access BBC on - demand content on various platforms and devices, that BBC content reaches audiences and remains of relevance to audiences. The Trust also recognises the interests of industry organisations in including BBC on - demand content in their offerings. Accordingly, the Trust is of the view that there is public value and a broader public interest in the syndication of BBC content. 5.2.5. The Trust also considers that to ensure that licence fee payers continue to receive the full benefits associated with BBC content (including editorial and accessibility features), and to ensure that the BBC maintains a connection with its audiences, it is necessary for the BBC to retain an element of control over the provision of its content. 5.2.6. In order to ensure the realisation of the public value in syndication that the Trust has identified, the Trust requires that all future syndication arrangements must comply with the principles set o ut at section 4.5 and reflected in paragraph 14 of the proposed policy. All syndication arrangements should also represent value for money for licence fee payers. 5.2.7. The Trust has considered the various means by which BBC on - demand content can be provided t o third parties in order for consumers to access the content through different platforms and technology. It is the Trust’s view that syndication by way of a standard BBC product (currently the iPlayer) is the manner of syndication that best satisfies the e ight principles. Given the various standard BBC iPlayer products currently in existence, the Trust notes that it is technically feasible for the majority of interested third parties to integrate a standard iPlayer product. Further, that the provision of as sociated metadata to interested third parties will ensure sufficient flexibility for integration. 5.2.8. Having considered different means of syndication; that the main object of the BBC is the promotion of the public purposes; and the market and competitive impa ct; the Trust believes that any potential negative impact arising from its preferred approach to the syndication of BBC content is justified by the likely public value. 5.2.9. Whilst the Trust expects that the majority of syndication arrangements for long - form television on - demand content 166 should be by way of the standard iPlayer product, the Trust does not consider it necessary or appropriate to entirely preclude alternative means of syndication. Rather, the Trust considers it appropriate to leave scope for the Executive to enter into special arrangements where it is justified by the particular circumstances. The Trust would expect any special arrangements to be exceptional and require robust justification by the Executive. 166 The Trust does not specify a preferred approach in respect of short-form and radio on-demand content. 5.2.10. Subject to complying with the terms of the final policy once in force, it will be for the Executive to determine on a case - by - case basis whether to enter into a syndication arrangement with a third party, whether that is a standard or special arrangement. The Executive will also be responsib le for determining the appropriate allocation of development or other costs between the BBC and the third party in respect of each arrangement. The Trust does not consider it appropriate to involve itself in such negotiations. However, it does require the following: . That the Executive notify it of any potentially significant syndication arrangement for Trust consideration. Significance in this respect is based on a consideration of the impact, financial implications, novelty and duration of the proposal . Th at the Executive provide the Trust with six - monthly updates of all syndication arrangements considered, including the basis for entering into any special arrangements. Where a special arrangement has been considered or requested by a third party but not ap proved by the Executive, the Trust also requires an update on the reasoning for the Executive’s refusal . That the Executive report to the Trust, within 12 months of the new policy coming into force, on the following areas: operational arrangements to includ e key performance indicators for development, support, testing, monitoring and compliance; and costs, including those related to distribution . That the Executive comply with all legal and regulatory requirements, including state aid law, the BBC editorial g uidelines and fair trading framework 5.3. Syndication guidelines 5.3.1. The Trust will require the Executive to produce syndication guidelines setting out how it intends to implement the final policy that will be published by the Trust in due course and after consulta tion on the proposed policy at annex I. The guidelines will be subject to consideration and approval by the Trust. The Trust expects the guidelines to include provisions regarding methods of delivery, the provision of metadata and clarification on relevant technical information relating to the standard products. 5.3.2. The guidelines must be compatible with and interpreted in accordance with the final policy and where there is any inconsistency the terms of the final policy prevail. 5.4. Transitional arrangements 5.4.1. The Trust notes that the majority of existing syndication arrangements are by way of provision of the standard iPlayer product. However, subject to the terms of our final policy, certain transitional arrangements may be necessary to ensure all arrangements ar e compatible with the new policy. 6. Next Steps 6.1.1. Our provisional decision and the proposed policy are open to consultation from 9 November until 21 December 2011. Following the end of the consultation, we will consider representations and endeavour to publi sh the final policy shortly thereafter (expected in early 2012). The final policy will be followed by a revised set of guidelines, prepared by the Executive and approved by the Trust. 6.1.2. The Trust welcomes views from the public, the Executive and stakeholders , on the proposed policy. You may submit your response in the following ways: By email to : syndicationreview@bbc.co.uk By post to: On - Demand Syndication Consultation BBC Trust 180 Great Portland Street London W1W 5QZ Please complete the confidentia lity statement, below, when making your response. Audio and Braille versions of the proposed policy are available upon request by calling the BBC Trust on 020 321 44969 . How the Trust will use your Response 6.1.3. A summary of responses to this consultation wi ll be published on the Trust website after the consultation has closed. Comments will be used by the Trust, where appropriate, in reaching its final decision on the syndication of BBC on - demand content. 6.1.4. Names and/or addresses of individual respondents will not be published on the BBC Trust website. The Trust will publish details of organisational responses. Please copy or sign the declaration below to signal that you are prepared for some or all of your response to be made public. Otherwise the assumption i s that some or all of your response may be made public. If you would prefer that all or part of your response be treated as confidential, please make this clear in your submission. Confidentiality Statement PLEASE PRINT AND SIGN THIS DECLARATION IF YOU ARE SENDING A HARD COPY OF YOUR RESPONSE. IF YOU ARE SENDING AN ELECTRONIC RESPONSE, PLEASE COPY THIS STATEMENT INTO THE RESPONSE AND COMPLETE IT. If you would prefer that all or part of your response be treated as confidential, please complete the confidentiality section below. What do you want the BBC Trust to keep confidential? Nothing Whole response Part of it Which part? (Please indicate) Name Position/job title (if applicable) Organisation (if applicable) Address Telephone Email address The BBC Trust will retain and use your name, address, email address and the organisation you work for (if applicable) for the purposes of administering the online public consultations held on this website. You will have the option of deciding whether you want your response and, if responding on behalf of an organisation, its name displayed on this website (all other personal information will be withheld from display). Your personal details will not be passed to any third parties for marketing purposes. The BBC complies with the Data Protection Act 1998. For more information on BBC.s Privacy Policy please refer to http://www.bbc.co.uk/privacy/. The BBC is listed as a public body in Part VI of Schedule 1 to the Freedom of Information Act 2000; this means that, subject to certain restrictions, the BBC may be required to disclose information it holds to individuals and organisations making a valid request to be supplied with that information under the Act. If you have requested that all or part of your response should be kept confidential, the BBC will take reasonable steps to maintain confidentiality of that information if a request for its disclosure is received under the Act. Please note, however, that in the event the BBC is able to withhold information under the Act, this decision may be overturned by the Information Commissioner, the Information Tribunal or the courts. Please note that we may still refer to the contents of responses in general terms, without disclosing specific information that is confidential. We will exercise due regard to the confidentiality of information supplied. DECLARATION I confirm that the information I have submitted is a formal consultation response. It can be published in full on the BBC Trust.s website, unless otherwise specified, and I authorise the BBC Trust to make use of the information in this response to meet its legal requirements. If I have sent my response by email, the BBC can disregard any standard email text about not disclosing email contents and attachments. Name Signed (if hard copy) Annex I. Trust policy on the syndication of BBC on - demand content Syndication of BBC on - demand content Purpose 1. This policy is intended to provide third parties , the BBC Executive (hereafter, the Executive) and licence fee payers with clarity as to: . The terms on which BBC on - demand public service content and associated data 1 should be syndicated 1 „Metadata.. . The process by which the Trust will assess new arrangements 2. It super sedes the previous 2007 on - demand syndication policy and is supported by a revised set of operational guidelines prepared by the Executive. 3. Syndication refers to the provision of material by the BBC to third party platforms (e.g. cable, IPTV, DTT or satell ite) and devices (e.g. set - top boxes, mobile telephones, MP3 players, tablets, integrated televisions, players and games consoles) to enable licence fee payers to use these platforms and devices to access BBC on - demand content. 4. The role of the BBC Trust (h ereafter, the Trust) is to represent the interests of licence fee payers and carefully and appropriately assess their views. In exercising its functions, the Trust must act in the public interest and secure the effective promotion of the BBC’s public purpo ses. The Charter places other specific obligations on the Trust; it must have regard to the competitive impact of BBC activities on the wider market and ensure that the BBC observes high standards of openness and transparency. 5. The Trust intends to adopt a statement of po licy on the syndication of BBC on - demand content and to hold the Executive to account for compliance with it. It is for the Executive to consider and enter into syndication arrangements with third parties on a case - by - case basis, in accorda nce with the policy. 6. The principles and procedures set out in this policy are designed to ensure that relevant matters are appropriately considered in relation to all new syndication activity and that the effect of any arrangements is properly assessed. Sc ope 7. This policy covers arrangements for the following types of material: . Full - length television content, previously broadcast on BBC linear services and intended for viewing in its own right . Full - length radio content, previously broadcast on BBC linear se rvices . Short - form content, such as promotional trailers or news clips . Associated features, functionality and metadata 8. The policy is limited to the provision of material as permitted under existing service licences (i.e. it does not expand the scope of any such licence). 2 2 Save for content that has been commissioned and placed for marketing purposes. 3 The Charter places on the Trust the obligation to „exercise rigorous stewardship of public money., meaning that this policy takes account of the need for the BBC.s syndication arrangements to deliver value for money. 4 The Charter requires the Trust to „have regard to the competitive impact of the BBC.s activities on the wider market.; and pursuant to that, through its Statement of Policy on Competitive Impact, the Trust „requires the BBC, whilst always ensuring the fulfilment of its Public Purposes and taking into account its other obligations in the Charter and the Agreement, to endeavour to minimise its negative competitive impacts on the wider market. This requirement is known as the „Competitive Impact Principle... Objectives – serving the interests of licence fee payers 9. The Trust acts in the public interest and represents the interests of licence fee payers. This policy is accordingly designed to ensure that syndication operates in the overall inte rests of licence fee payers and that material covered by the policy is syndicated where it is in their interests. 10. The Trust considers that there is generally public value in syndication and that it is in the interests of licence fee payers that they can a ccess BBC on - demand content from as many platforms and devices as possible, consistent with this policy. In this respect, the BBC has specific obligations under clause 12 of the BBC Agreement: The BBC must do all that is reasonably practicable to ensure th at viewers, listeners and other users (as the case may be) are able to access the UK Public Services that are intended for them, or elements of their content, in a range of convenient and cost effective ways which are available or might become available in the future. 11. This does not mean that the BBC must make its content available on every platform and device: that would be impracticable (not least because it would not represent the best use of licence fee funds). However, the BBC’s overall approach to synd ication should always be guided by the belief that arrangements should aim to serve licence fee payers, by enabling convenient access to the full range of recently transmitted BBC linear content, whatever their choice of platform or device. 12. But this is not an absolute principle: other factors must be considered, such as value for money 3 and competitive impact. 4 In particular, given the proliferation and rapid development of platforms and devices, it will not represent value for money for the BBC to make its content available on every platform and device. To do so in any particular case will require a clear and strong justification. 13. This policy therefore sets out what the Trust might regard as ‘reasonably practicable’ in terms of syndication arrangements, ha ving regard to the full range of public purposes, obligations and objectives. Full - length television content Key principles 14. In order to deliver public value and advance the public purposes, all syndication arrangements should be designed such that licenc e fee payers: a) Have easy and timely access to the full range of BBC content 5 b) Can quickly and easily discover BBC content on third party platforms and devices, for example, by linking to content or accessing it through third party navigation systems, such as EPG or search c) Experience a content offer that is subject to editorial control by the BBC, and which allows the BBC to guide them to further content that they might not naturally be drawn to but which they may find informative and enjoyable d) Can easily iden tify content as originating from the BBC and can distinguish it from content from other sources e) Only experience BBC content in appropriate places and contexts f) Have a high - quality experience (e.g. ease of use, picture and audio quality) g) Can access content f ree of charge (which in the case of subscription services, means entry - tier level or equivalent), and free from advertising and sponsorship h) Have access to parental controls and accessibility features, such as subtitles and audio description, and those rela ted to the menu and user interface 15. As guardian of the licence fee, the Trust must exercise rigorous stewardship of public money; all syndication arrangements must therefore be able to demonstrate value for money for licence fee payers. 16. In addition to the se audience - facing principles, the Trust acknowledges that other factors are also relevant when considering any particular syndication arrangement, in particular, the need to ensure: 5 As part of its wider strategy, the BBC may also syndicate other products that are editorially selected by the BBC that complement its wider offer and sit alongside access to the full range of programmes available on the standard BBC iPlayer product. . Adequate scope for the BBC to introduce improvements and innovations as a udience expectations evolve and technology progresses, consistent with the terms of this policy and where such improvements and innovations have the potential to deliver clear public value . The prompt removal of on - demand content by the BBC where required f or legal or compliance reasons . Accurate and timely user data made available to the BBC (e.g. viewing numbers) 17. The Trust also requires the Executive to comply with all relevant legal and regulatory requirements, including state aid law and the BBC editorial guidelines and fair trading framework. In particular, it should ensure that it acts on a fair, reasonable and non - discriminatory basis when entering into syndication arrangements. 18. The Trust additionally requires the BBC to make metadata freely available to stakeholders, as part of any syndication arrangement, in order to facilitate the discovery of BBC on - demand content, and in a manner consistent with the principles at section 14, 15 and 16. 19. The Trust does not prescribe a single approach to the delivery mechanism employed in syndication arrangements, but expects all such arrangements to comply with the principles and requirements set out at paragraphs 14 - 18 and to fall within the terms of this policy. 20. Finally, any material syndicated by the BBC should on ly include external links to other providers where this is permitted by the platform. Approach 21. In setting out these principles, the Trust does not seek to impose a single technical solution. However, it believes that these principles will usually be best s erved by offering would - be partners direct access to the full range of BBC content, via their platform or device, within a BBC environment. This currently means a standard BBC product, such as the iPlayer, delivered over the internet, but the principles se t out in this policy apply equally to any future syndication products. 6 22. It will be for the Executive to decide how to syndicate its content within the terms of this policy, but in making decisions about such deployments, it must pay full regard to the need to make available to the overwhelming majority of platforms and devices on the market direct access to a standard iPlayer product or any future syndication product. 23. Circumstances may occasionally arise, however, that justify special arrangements that dep art from this model. In deciding whether to enter into any such arrangement, the Executive should take account of all relevant factors, including the different circumstances facing each party and the presence of limiting factors, which mean it is not techn ically practicable or economically feasible to adopt a standard BBC product. 24. The basis for any special arrangement will need to be very clear and the Trust does not anticipate that such cases will be common or easy to justify. Further, any such development , including a decision on who will meet the associated costs, will need to comply, on an ongoing basis, with the principles and requirements set out at paragraphs 14 - 20. 25. In cases where proposals for a special arrangement have been considered but not approv ed, the Executive must set out clearly to the relevant party the basis for its decision. 6 As at October 2011. 7 We set out our reasoning in the review document, which accompanies this policy. Full - length radio content 26. Our approach to the syndication of radio content takes account of the different ways in which such content is consumed (via an MP3 player, f or example). 7 Whilst mandating its inclusion within a standard BBC product syndication arrangement, we also permit a degree of flexibility in respect of radio - only arrangements. In order to deliver public value and advance the public purposes, all syndicat ion arrangements for full length radio content should be designed to ensure consistency with the principles set out at paragraph 14, specifically (b), (d), (e), (f) and (g). 27. The Trust also requires the Executive to comply with all relevant legal and regul atory requirements, including the BBC editorial guidelines and fair trading framework. In particular, it should ensure that it acts on a fair, reasonable and non - discriminatory basis when entering into arrangements to syndicate its radio on - demand content. 28. Whilst radio is subject to a different framework from television, and may therefore be syndicated in different ways, there is considerable public value in the inclusion of such content in a standard BBC product. We therefore expect the Executive to also m ake it available as part of its standard iPlayer product offer, as set out at paragraph 26. Short - form content 29. Our approach to the syndication of short - form content, including news clips and trailers, permits a more flexible approach, but remains subject to the relevant provisions within this policy (set out at paragraphs 14 (d) – (g); 15, 16 and 17). In particular, the Executive should ensure that it acts on a fair, reasonable and non - discriminatory basis when entering into arrangements to syndicate its c ontent. Process for new arrangements 30. The Trust is required to apply the Public Value Test to all significant changes to the UK Public Services. It is therefore ultimately responsible for determining whether new syndication arrangements would represent a s ignificant change to the UK public services. 31. The Trust considers that, in general, new Syndication Arrangements which meet the principles above, 8 are likely to be within the terms of existing service licences and are unlikely to represent a significant cha nge to the UK Public Services. 32. It is possible, however, that some proposals are of such scale that they could represent a significant change to the UK Public Services. 9 33. The Executive is responsible for determining the significance or otherwise of a syndic ation arrangement in the first instance. Where it considers a proposal to be a significant change to the UK public services it must refer it to the Trust. The Trust is the final decision maker as to whether an arrangement constitutes a significant change t o the UK Public Services. In exercising that judgment, it must have regard to impact, novelty, duration and cost, as set out in Clause 25 of the Agreement. If the Trust determines that a PVT is not required then it is anticipated that no further Trust appr oval will be required (unless falling under other Trust rules, protocols, policies or codes). 34. The Trust also considers that it is important not to put in place bureaucratic procedures that are disproportionate and which will unduly hamper and obstruct the Executive and its commercial partners from concluding new syndication arrangements which may be of considerable public value, particularly in this fast - developing market where delay may 8 At paragraphs 14-18. 9 In deciding whether new syndication arrangements are potentially significant, the relevant considerations are impact, financial implications, novelty and duration together with the presumption that any change which requires a new service licence or a change to the key characteristics of an existing licence is significant. detract substantially from the value of the proposed arrangements. The Trust would not therefore expect the Executive to seek prior Trust approval in relation to such arrangements, except in the above circumstances. 35. In order to appropriately monitor activity, the Trust therefore requires the Executive to: . Notify any new sy ndication arrangement which it considers to be a significant change to the UK Public Services either in itself or through its cumulative effect, to the Trust for consideration . Provide six - monthly updates of all syndication arrangements considered in that period, including the basis for entering into any special arrangements. Where a special arrangement has been considered or requested by a third party but not approved by the Executive, the Trust also requires an update on the reasoning for the Executive’s refusal . Within 12 months of the new policy coming into force, report to the Trust on operational arrangements, at an aggregate level, in the following areas: . Key performance indicators for development, support, testing, monitoring and compliance . Costs, inc luding those related to distribution 36. The Trust may require the Executive to suspend or cancel any syndication arrangements (or a collection of such arrangements), which it considers could constitute a significant change to the UK Public Services and for w hich prior Trust approval has not been obtained. Where prior approval is not sought before conclusion of those arrangements, the Executive must ensure that it can suspend the provision of material in the event that a Public Value Test is applied and that i t can terminate entirely the provision of material, in the event that the Trust decides not to grant approval, without material adverse financial consequences for the BBC. On - demand syndication guidelines 37. The Executive must prepare on - demand syndication gu idelines setting out in more detail how it will implement the policy operationally. In particular these should specify additional requirements designed to protect the BBC brand, ensure technical integrity, maximise delivery of the public purposes and ensur e a high - quality experience for users. The guidelines must follow the approach, logic and principles set out in the policy. They should be developed and, once issued, interpreted, in accordance with the syndication policy. 38. In formulating the guidelines, t he Trust expects the Executive to take due account of stakeholder views raised during our review. The Trust also considers the transparent operation of syndication arrangements to be essential. The Executive must publish sufficient information on the techn ical operation of the standard iPlayer (and any future syndication products) specifically designed for practical use by manufacturers, platform operators and other would - be partners. 39. This should contain sufficient information to enable third parties to pl an and manage their development roadmaps and should include, but not be limited to, a set of objective criteria used to define standard products, development roadmaps, and technical support (both the extent and duration) for standard versions. 40. The publish ed guidelines can be found at www.bbc.co.uk. Policy review process 41. The context against which this policy is set is fast moving and both technology and audience expectations will continue to evolve. The Trust will therefore consider whether it is necessary to review both the policy (including any reporting requirements placed upon the Executive) and guidelines by no later than mid - 2015. 42. In addition, the guidelines implementing the key principles set out in this policy must be kept under review by the Execut ive. Any significant changes may be made only with the approval of the Trust. The Trust is the final decision maker as to whether a change requires the approval of the Trust. Complaints 43. In the first instance complaints with regards to an alleged failure by the BBC to meet the terms of this policy or its on - demand syndication guidelines should be addressed to the Executive. 44. Complainants who are not satisfied with the response from the Executive may appeal to the Trust. The Trust will handle appeals throug h the process outlined under the fair trading complaints and appeals framework, details of which can be found on the Trust’s website, www.bbc.co.uk/bbctrust . 45. Appeals will be considered by the Trust, which repres ents the final stage in the complaints process. Transitional period for existing arrangements 46. As regards existing syndication arrangements, the Trust expects the Executive to enter into transitional arrangements with relevant third parties to ensure compli ance with the new policy and guidelines. Such arrangements should allow a reasonable time for any such transition, but are not expected to exceed 12 months from the time that the new policy comes into force. 10 10 Longer transitional arrangements will only be acceptable in exceptional circumstances. Annex II. Glossary of terms Broadband A high - speed network service with the capacity to transmit significant amounts of data at a high rate, supporting the delivery of a range of digital services, some or all of which can occur simultaneously Catch - up Catch - up television services available to aud iences CDN Content delivery network. In the context of this policy review, CDNs create multiple, mirror - copies of the iPlayer servers around the country, positioned near to areas of high - web traffic and connected by high - speed cables to the main BBC distr ibution point. The cost is directly proportional to the data carried, so it is also directly related to the number of programmes viewed. So, every time a person watches a programme on iPlayer, it costs the BBC a small amount Charter The current Royal Ch arter governing the BBC Convergence Convergence is the tendency for different technologies to evolve toward performing similar tasks, for example, watching programmes on a mobile device Data centres In the context of this review, data centres are BBC ent erprise servers and technology storage facilities which are operated and managed. IT equipment includes the racks, cabling, servers, storage, management systems and network gear required to deliver computing services to the organisation DTG Digital Tele vision Group DTT Digital terrestrial television, delivered most commonly through the Freeview service DVR Digital Video Recorder Encoding The process by which broadcast - formatted content is translated into other formats required for other play - out syste ms, e.g. via IP) EPG Electronic programme guide HD High - definition television IP Internet protocol, a method by which data (e.g. email, video) are sent from one computer to another on the internet iPlayer A BBC online service which enables users to access, view and / or listen to BBC content. ISP Internet service provider Linear content Refers to scheduled broadcast television or radio content Metadata Refers to information which describes the individual programme, for example, its name, gen re and time of broadcast On - demand Allows users to select, stream or download, store and view film and television programmes, usually within a certain timeframe, using a digital cable box or online service OTT Over the top delivery. Delivery of data ove r an ISP's broadband network Pull VOD A form of video - on - demand distribution that uses a permanent always - on connection to deliver video on - demand content upon a user’s request. Content is transmitted via cable or broadband networks directly Push VOD A f orm of video on - demand which uses a digital television recorder to store content automatically, often without requiring the user to perform any form of request. Content is often transmitted overnight when broadcast capacity is readily available PVT Public value test; significant changes to the BBC's UK Public Services must be subject to full and public scrutiny. The means by which this scrutiny takes place is the public value test. A PVT is a thorough evidence - based process which considers both the public value and market impact of the proposals. During PVTs, the BBC Trust will consult the public to ensure its decisions are properly informed by those who pay for the BBC Reach Measures reach of the BBC’s service to its audience Service licence The Trust aims to ensure that the BBC offers high - quality and original services for all licence fee payers. To help deliver this, it sets out the remit and expectations for each BBC service – and how that service will create public value by delivering the BBC’s publ ic purposes – in a published licence STBs Set - top boxes VOD Video on demand Any other defined terms used are taken from the BBC's Framework Agreement, unless otherwise stated.