In 1997, the BBC launched its website. Within a year it was one of the most visited news sites in the world, available in multiple languages, free at the point of access, funded by the licence fee. It was extraordinary — a public institution, built before the dotcom boom, that understood the internet before most commercial organisations did.
The question that followed — one that different governments answered in the same way for twenty-five years — was: how far should the BBC be allowed to take this?
The answer, consistently, was: not very far. And the reason, consistently, was Rupert Murdoch.
The pattern
The mechanism by which the BBC has been constrained in digital markets is not secret. It follows a consistent pattern:
- The BBC proposes or launches a new digital service
- Commercial competitors — usually led by News Corp/News International, but joined by ITV, commercial radio, and digital publishers — argue that the service is unfair competition, using licence fee money to crowd out private enterprise
- A government regulator (the BBC Trust, then Ofcom) holds a review
- The review imposes conditions, restrictions, or outright prevents the service
- The BBC is smaller in digital markets than it would otherwise be. Commercial competitors benefit.
This pattern has repeated across: BBC Online, BBC News apps, the BBC iPlayer, BBC Sounds, BBC Studios' commercial activities, the BBC's proposed joint venture streaming service, and the BBC's local news expansion.
The specific cases
BBC Online (2004 onwards): Following a review triggered by commercial publisher lobbying, the BBC was required to operate a "Public Value Test" before launching new online services. The test required the BBC to demonstrate that the social value of a new service outweighed its negative impact on the commercial market. In practice, this created a significant regulatory burden that commercial operators did not face, disadvantaging the BBC in developing new digital products.
BBC iPlayer: When the BBC proposed iPlayer — now widely credited with pioneering catch-up television — commercial broadcasters lobbied against it. News International argued it would harm their ability to develop competing services. Ofcom required modifications. The BBC received approval for a constrained version of what it had originally proposed.
BBC Three (2016): Faced with a licence fee freeze that reduced its real-terms income, the BBC was forced to take BBC Three off linear television and make it online-only. The channel — which had developed talent including Fleabag, Doctor Who spinoffs, and Killing Eve — lost its broadcast slot. Commercial channels, including those owned by Murdoch's companies, retained theirs.
Project Kangaroo (2009): The BBC, ITV, and Channel 4 proposed a joint video-on-demand platform — a UK competitor to what would become Netflix. The Competition Commission blocked it on competition grounds, ruling it would be harmful to the market. Netflix launched in the UK in 2012. There is no British equivalent.
The Murdoch dimension
News Corp's interest in limiting the BBC's commercial activities is not difficult to understand. The BBC News website competes with The Times and The Sun. BBC Sounds competes with talkSPORT and other commercial radio. A BBC streaming service would compete with Sky.
What is remarkable is the degree to which successive UK governments — Conservative and Labour alike — responded to News Corp lobbying by imposing constraints on the BBC. Rupert Murdoch met with every Prime Minister from Thatcher to Cameron. Documents released under Freedom of Information requests have revealed the frequency of meetings between News International executives and ministers.
The relationship between Murdoch's UK operations and British government was subject to sustained scrutiny during the phone-hacking scandal and the subsequent Leveson Inquiry. Lord Justice Leveson's report found that the relationship between News International and politicians was "too close" and had created a situation where politicians were "scared" of adverse coverage and sought to cultivate Murdoch's support.
In this context, the repeated regulatory constraints on the BBC's digital activities look less like neutral market regulation and more like a pattern of political capture by a commercial competitor.
The counterfactual
The BBC in 2000 had:
- One of the world's most trusted news brands
- A production capability producing some of the world's most popular drama, documentary, and factual content
- 100% brand recognition in the UK
- A guaranteed income via the licence fee
- Existing digital infrastructure and expertise
Netflix in 2000 was a DVD postal service with 300,000 subscribers.
There is no technical or creative reason why the BBC could not have become a global digital media institution of the scale that Netflix has achieved. What it lacked was the regulatory freedom to compete. That freedom was consistently withheld, not by market forces, but by government decisions made in response to commercial lobbying.
Sources
- Ofcom — BBC Public Value Tests (multiple years)
- Competition Commission — BBC Worldwide / ITV / Channel 4 (2009)
- Leveson Report — An Inquiry into the Culture, Practices and Ethics of the Press (2012)
- House of Commons Digital, Culture, Media and Sport Committee — BBC Future (2021)