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BBC iPlayer gets Ofcom OK

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LONDON -- U.K. media regulator Ofcom has broadly approved plans for the BBC to launch its broadband on-demand platform, the BBC iPlayer.

But the regulator has stipulated that the ability to record and watch whole series and store downloaded material for long periods of time should be cut back or excluded from the final product.

Announcing its market impact report on the iPlayer, Ofcom said Tuesday that the practice of "series stacking" -- which allows viewers to download a whole series after the final episode has been transmitted -- should be curtailed because it could "negatively impact" the DVD market.

It also has recommended that the BBC slash the amount of time viewers can store downloaded programs. The BBC had proposed 13 weeks, but the potential effect on DVD sales was considered significant enough that the regulator recommended either cutting the window to 14 days or dropping it altogether.

"Series stacking could discourage investment in commercial on-demand services and is likely to have an adverse effect on related markets such as DVD rentals and sales. Ofcom believes the scale of series stacking should therefore be substantially reduced or excluded altogether," the regulator said in a statement.

"In the case of catch-up TV on the Internet, the ability to store programs for up to 13 weeks could have negative effects on competition and, therefore, investment in consumer choice. Ofcom believes this storage window should be reduced or removed."

On balance, the regulator found that the launch of the BBC iPlayer would be beneficial for an audience increasingly turning to on-demand services.

Ofcom's own estimates suggest that between 20% and 30% of all viewing will be in on-demand mode in five years time.

"The proposed services represent an important opportunity for audiences to access BBC content in new and different ways. The services also have the potential to expand growth in U.K.-based new media industries," the Ofcom report said.

The media regulator was asked by the government to evaluate new BBC services to assess their impact on the commercial sector last year.

A decision on whether to launch the iPlayer will now be made by the BBC's governing body, the BBC Trust.

Commenting on Ofcom's report, Diane Coyle, trustee and chair of the BBC's public value test steering group, said the pubcaster will consider the market impact assessment alongside the broader public value such a service could offer license-fee payers.

"The (Ofcom) market impact assessment forms only one part of the public value test process. In reaching our eventual decision, we must also consider the potential public value created by the on-demand proposals. This will be published in the Public Value Assessment (PVA) of the on-demand proposals, which will now be carried out by the BBC Trust," Coyle said.

The BBC's proposed on-demand services consist of a chance for viewers to watch any BBC television program from the last seven days at a time of their choosing, simulcast BBC television channels and audio downloads of BBC radio programs.