The BBC’s proposed local video news service would have had a “significant market impact on commercial providers” according to Ofcom.
The regulator suggested a series of potential modifications to the local video proposal – such as guarantees over providing links to outside websites – but concluded that these would not be enough to offset the negative market impacts they had identified.
Ofcom”s 215-page market impact assessment found that the new service could have undermined up to four per cent of revenues for commmercial local news providers – but it said this was not the main issue.
“Our main concerns are about the effect of the BBC’s proposal on future commercial innovation in online local news, sports and weather services.”
Ofcom said: “Even in the absence of the BBC proposal, commercial prospects in these sectors are highly uncertain; a central issue being whether local online news services will be able to generate sufficient advertising revenues.
“Despite this, there are strong ambitions on the part of commercial providers to develop these areas of their business. Indeed almost every local newspaper now has its own website, although these vary widely in terms of numbers of stories, presentation, and the use of video content.
“The BBC Local Video service would represent a major presence in this area, and is likely to be of significantly greater scale than commercial providers could offer.
“Moreover, the current cyclical downturn in the economy means that the damaging effects of this proposal on commercial providers would be particularly acute if launched at this point in time.”
Click here to read the full Ofcom report: Ofcom’s Market Impact Assessment of the BBC’s Local Video Service