Spurned advances 

3 August 2010 tbs.pm/1203

If you were wondering what Virgin Media’s stance on Project Canvas development was going to be, then wonder no more, but Virgin Media’s objections are in the final analysis both predictable and petty in equal measure. Let me explain…

The very fact that Virgin Media initially seemed to be interested in adopting Project Canvas themselves – and so is BSkyB, but that’s another (relatively secret) story altogether – suggests that they aren’t basically against such an idea as it stands, therefore any objections really have to be viewed in that particular context.

Basically speaking, Virgin supposedly wanted Canvas (or YouView as it’s likely to be called) but wanted things more its own way, to quote:

“Virgin Media has complained that Project Canvas has wrongly rejected what the company considers fair offers of integrating the technology into its own set-top boxes with a compromise on user interface.” (my emphasis)

Therefore if Virgin Media wanted to be ‘in’ on Canvas but was rejected because of desires to allegedly compromise the user experience, any subsequent gripes really have to be viewed in that wider context, especially since Project Canvas is all based around standardising the user experience as much as possible.

If the Project Canvas partners were prepared to make the necessary compromises (or the compromises themselves were very trivial) for Virgin Media, would Project Canvas still be regarded as an “anti-competitive cartel” by Virgin? (Of course the likely answer to that question would have been “No”.)

So what’s the long term thinking on all of this, especially from BSkyB (now Virgin Media’s supposed ally), who has been very adept at protecting its own monopolistic corner at the expense of most of its commercial rivals?

I strongly suspect that BSkyB’s strategy is now based around hoarding the rights as much commercial content as it can possibly get away with (HBO, Living TV…), together with trying to delay Project Canvas as much as it can; BSkyB still hasn’t yet revealed official opposition to the project even though this seems to be a given based on past evidence.

By contrast, Virgin Media’s current strategy of backing away from content production is very likely to be related to its newly-found BSkyB partnership; if VM can have a guaranteed supply of content (channels and programmes) from BSkyB then there’s no real need for VM to produce anything itself – that’s the theory anyway.

We could then ask the question as to whether Virgin Media was initially persuaded to go down this route by BSkyB (who would presumably want Living TV, etc., for its own, long-term purposes) since it would be relatively easy for Sky to dangle a big carrot in front of Virgin in order for such a deal to be struck despite their former animosity.

Perhaps it was the advent of Project Canvas in particular that caused the truce between BSkyB and Virgin Media as opposed to any veiled (and perhaps nonexistent) threat of a full investigation into BSkyB’s activities, especially as BSkyB still seems to be relatively unperturbed by regulatory activities (at least on the surface) outside of channel provision.

It also seems obvious that BSkyB is waiting until the very last moment before officially complaining about Project Canvas, because any subsequent investigation (if triggered) will then have the maximum delaying effect as a consequence.

Whether the conspiracy theorists are right in thinking that both BSkyB and Virgin Media are secretly working together in a coordinated attack remains to be seen (I personally think that it’s perfectly possible), but both parties do have broadcasting monopolies to protect even if they also have internet services of their own that run alongside them.

BSkyB knows that Project Canvas will eventually make it to market – as did Project Kangaroo under the belated and much-crippled guise of SeeSaw – but it also knows that the set top box-based IPTV market is still notoriously difficult to crack (as Apple and Microsoft have found out, with Google making yet another attempt very shortly).

So Sky is presumably banking on Project Canvas being so heavily delayed to the extent that its participants start to lose interest, which could theoretically end up causing yet more fragmentation amongst the commercial competition outside of BSkyB and Virgin Media.

BSkyB’s TV rights hoarding tactic should theoretically be ringing alarm bells at this point, but these bells seem to have been curiously disconnected in the aftermath of Sky being forced to share its sports channels in particular.

But at some point soon this could become a pressing issue, especially as the BBC has been dissuaded from entering bidding wars for US-originated programming, and ITV still seems to be relatively disinterested in acquiring foreign imports after recent and distinctly lacklustre attempts at doing so (remember what happened to Pushing Daisies).

Therefore when/if Project Canvas eventually puts in an appearance, any featured US imports in particular will primarily be limited to what Channel 4 and Five can come up with, which might not be disasterous in itself but will expose a particular weakness of broadcasting regulation as its stands.

And Ofcom may inevitably be forced into taking stronger action against BSkyB from a programming rights perspective as opposed to just forcing specific channels to be shared with rivals; an investigation that’s bound to happen sooner if Project Canvas manages to launch on time.

A Transdiffusion Presentation

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David Hastings Contact More by me