BBC Trust Approves Project Canvas, Sets Conditions

25th Jun 2010 10:46

By Lilly Vitorovich Of DOW JONES NEWSWIRES LONDON (Dow Jones)--The British Broadcasting Corp.'s controlling trust Friday approved Project Canvas, a joint venture Web-television service that would bring Internet content and new video-on-demand to the TV, subject to several conditions. The conditions include free-to-air access for users, access to the platform for content providers and Internet Service Providers, as well as industry consultation. BBC Trust also said the BBC's involvement will not exceed the BBC's estimated costs by more than 20% over a five year period, and that Project Canvas "will comply with all applicable laws including competition and state aid law." "The Trust has concluded that Project Canvas will deliver significant public value for licence fee payers - people with a broadband connection will be able to access a wide range of on-demand content including BBC iPlayer, free of charge, through their TV sets," said Diane Coyle, BBC trustee and chair of the trust's strategic approvals committee. However, it has set conditions to the BBC's involvement in the venture in "recognition of the potential impacts on the market if Canvas is successful", Coyle said in a statement. The Trust will review the BBC's involvement in Project Canvas against the conditions of its approval 12 months after Canvas launches to consumers. Project Canvas is a venture between the BBC, ITV PLC (ITV.LN), BT Group PLC (BT.A.LN), RTL Group SA's (RTL.BT) Five, Channel 4, TalkTalk Telecom Group PLC (TALK.LN) and Arqiva Ltd. and is expected to be launched in Spring next year. The service will allow traditional broadcasters to attract new audiences while retaining existing viewers who have turned to the Internet for entertainment. In December, the BBC Trust provisionally approved the BBC's involvement in Project Canvas, saying that "the likely public value of the proposal justifies any potential negative market impact." Watching TV programs online has increased in popularity, aided by the BBC's on-demand Internet-TV service, iPlayer. Commercial broadcasters are exploring ways to distribute their programs to boost advertising. Project Canvas has faced criticism from pay-TV companies, particularly British Sky Broadcasting PLC (BSY.LN), which cites a lack of independent scrutiny for the project. A spokeswoman from Project Canvas was not immediately available to comment. News Corp. (NWS), which owns Dow Jones & Co., publisher of this newswire and The Wall Street Journal, holds about a 39% stake in BSkyB. -By Lilly Vitorovich, Dow Jones Newswires; 44-0-207 842 9290; [email protected] (END) Dow Jones Newswires June 25, 2010 05:46 ET (09:46 GMT)