YouTube, iPlayer, Sky? Who’ll win the mass market for video on demand?

Now that iPlayer has lit the blue touch paper under catch-up TV, effectively creating the mass market for video on-demand, 2010 will be the year when a glut of competing services vie to be one of the UK’s main video-on-demand (VOD) aggregators. They can’t all win, so here’s our bet on who has the biggest likelihood of succeeding…

Federated iPlayer: 7/10

A year after it asked Anthony Rose’s team to offer the BBC’s super-successful catch-up technology to PSB counterparts as part of a plan to save them £120 million by 2014, the BBC Trust then blocked exactly that. But only on a silly Catch 22 – the trust didn’t like the proposal for creating a new company that would license out the tech – but, under European state aid rules, the BBC is compelled to make a profit from such a venture.

If and when Rose finds a way around this in 2010 (the trust encouraged the BBC to do so), the iPlayer brand – with 729 million requests in 2009 – may prove so appealing that broadcasters simply can’t forgo the kind of shop window it would give to their shows and advertisers. ITV is already copying iPlayer’s every move – if “ITV Player” sounds roughly similar, then its slogan “amazing telly you can’t miss”, is directly in line with iPlayer’s own “making the unmissable unmissable

VOD collaboration from the PSBs on the now-approved Project Canvas will, by default, spur them to a similar end in web VOD. This will all raise concerns from commercial quarters about BBC expansionism killing competition. Those quarters should understand BBC online chief Erik Huggers’ main motivation – building a domestic VOD foil to the large US aggregators…

Hulu: 2/10

It’s 14 months since the NBCU/Disney/News Corp JV, which has had an iPlayer effect in the U.S., told us it wanted to open shop in Britain. The main stumbling block was to await the conclusion of the Competition Commission’s Kangaroo inquiry. When the commission blocked the BBCWW/ITV/C4 JV in February, many like Huggers feared the door was open for a Hulu landgrab…

But, 10 months on, Hulu has still announced no content on which it can build a UK product launch. We continue to hear Hulu wants to carry broadcasters’ content exclusively – but, with so much in flux, signing away their crown jewels to a platform that may be rubble in a year’s time is the last thing content owners want to do.

More likely, broadcasters resolve with themselves that syndication generally is a good thing, then syndicate to as many quality aggregators, with big audiences, that they can find. Channel 4 and Five have already effectively shut the door to Hulu exclusivity by signing with both YouTube and SeeSaw. Hulu was believed to still be courting ITV with a promise of equity for exclusivity – but it may either have to give up this stipulation or risk becoming another Joost.

SeeSaw: 5/10

Where next for the technology, built by Sky Anytime creator Ioko, bought from ill-fated Projected Kangaroo by Arqiva? The transmitter infrastructure operator isn’t exactly an obvious choice to succeed in online, being more used to licensing spectrum airwaves to broadcasters than leasing them broadband distribution.

But Arqiva has strong relations with the broadcasters, both by virtue of those transmitters and being a partner in the Freeview JV. That proximity should give it advantages in negotiating for PSB content at least. SeeSaw has taken its time announcing any content but, now it has matched YouTube in securing C4 and Five, as well as some BBCWW shows.

But this puts it only on par, not ahead, and – unlike YouTube – it doesn’t yet have any brand name to trade on. But the SeeSaw name (also inherited from Kangaroo) is simply inspired, encapsulating both live and catch-up shows (“I see, I saw”) – it would be easy to imagine SeeSaw referred to in trails on BBC, ITV, C4 and Five as the UK’s main online catch-up destination. But not if a federated iPlayer really does happen – if so, SeeSaw may have to offer only the pay-for shows outside of the broadcasters’ initial 30-day public catch-up window.

YouTube: 7/10

Already heavily advertising its new UK Shows section, Google’s site is currently frontrunner in the race to be a UK VOD gateway. Having signed C4 and Five, it already has content from half of the main PSB operators.

Unlike either SeeSaw or Hulu, it’s an established brand that already has a tremendous audience to push those shows to. Allowing broadcasters to sell their own ad spots around their own content was the thing that convinced C4 and Five to jump aboard. And it’s a win-win for both sides – content owners aren’t locked in to exclusivity, and YouTube gets more quality content without any skateboarding dogs. None of this necessarily makes YouTube the key destination (if broadcasters refrain from exclusivity, YouTube may get just the same content as everyone else) – but it’s existing footfall as a video site will give it decent leverage.

Not everyone’s convinced. ITV executive chairman Michael Grade last year stirred up a hornet’s nest by calling YouTube a “parasite” (yes, he beat Murdoch to the same remark), but many expect Grade’s exit to thaw relations, particularly if ITV decides to push “eject” on those Hulu talks. The BBC may regard a YouTube VOD win as a threat from across the Atlantic – but a recent commitment to customise and syndicate iPlayer to services with over 100,000 users, plus the BBC’s need to distribute its content to as many people as possible, may compel it to add to YouTube. Still, the BBC Trust’s upcoming review of iPlayer syndication is set to clarify this further.

MSN Video: 5/10

MSN UK executive producer Peter Bale says video is “probably the biggest thing we’ll do next year”: “We believe high-quality long-form video online is not only a monetisable product but is going to bring an audience.” Having hired former BBC online and Kangaroo chief Ashley Highfield to run its consumer operations, Microsoft (NSDQ: MSFT) is primed to use his broadcast experience for a tilt at the area.

But, for MSN, what exactly defines success in the video space? This will be about rights and audience. As a portal, MSN is all things to all men, but pulls significant traffic through Internet Explorer – this will be an expansion in to an area that’s non-core, but potentially additive. On rights acquisition, shows licensed from All3Media and BBCWW (Shameless, Peep Show, League of Gentleman) arent exactly going to set the world alight by themselves.

But 2009 was a tentative trial from MSN. After those two initial deals, and in lieu of broadcaster licenses, MSN is going direct to indie producers, having signed an agreement with their umbrella body that paves the way for more deals. This won’t quite be the same kind of success as could offering, say, a syndicated iPlayer or ITV Player (ITV did a small such deal with MSN two years back, but it’s gone quiet). If MSN merely gets the same broadcaster content as everyone else, it will be just another video destination – but that video will still be a useful addition to the portal.

Blinkbox: 4.5/10

An under-the-radar operator, Blinkbox is one of those that isn’t shy about charging for some of the content it offers, for rental and download-to-own. TV and movie content from 16 studios means the site (which has extended from its original model of letting users send viral clips) has a decent enough portfolio – but, amongst the main UK broadcasters, only BBCWW shows.

There’s something respectable, at this point, about charging for content. The service is good and the quality high but, as bigger-name sites rise around it, offering free shows from the main networks, Blinkbox may be squeezed on the pay-for VOD front. But we see plenty of success potential for Blinkbox as a pay movie brand inside a Canvas box, for example.

Canvas: 6.5/10

If Sky and a possible OFT inquiry don’t manage to derail it (let’s face it, the BBC Trust acknowledges Canvas will hurt pay-TV operators), the new JV has the potential to radially reinvent the UK TV viewing experience in late 2010. iPlayer has already popularised VOD on computers (forgetting, for a moment, its popular Virgin Media (NSDQ: VMED) TV implementation) – now imagine VOD from all the broadcasters on TVs.

It’s a marker of how far the broadcasters have come with their licensing frameworks that they are all now ready to exploit the new world of catch-up on the living room telly. Canvas will extend what iPlayer has done for UK VOD consumption and amplify it by providing it through the screen people use most for TV, as well as introducing an innovative wave of internetty content widgets and services like Flickr, Twitter and more (get ready for your TV, finally, to become more like your computer if this comes to pass).

One of the most exciting Canvas uses is in finally giving the growing wave of desktop internet video distributors a mass-appeal route to the living room. Think YouTube, Dailymotion and Babelgum, alongside BBC One, on your widescreen from your sofa.

But all this excitement must be heavily qualified. While four broadcasters, two ISPs and two set-top box makers are now aboard, Canvas may struggle to convince TV makers like Panasonic, Sony (NYSE: SNE) and Sharp – all of whom are devising their own methods of integrated internet TV delivery – aboard. That could stunt Canvas’ real potential as an integrated TV experience, relegating it to yet another box under the screen.

Sky Player: 6/10

Sky emailed to remind us it’s showing signs of becoming a VOD aggregator of its own – though not in the same sense as above. Linked to the same kind of subscription model as is its satellite business, Sky Player groups not just its own channels but also the raft of third-party channels from its standard TV packages, as both live and catch-up. This will certainly have appeal to existing Sky TV subscribers who want to watch shows away from the living room., though its appeal will be limited in the wider context of mass-appeal aggregated catch-up.

Despite its dominant linear pay-TV position, Sky finds itself playing a kind of catch-up in the coming VOD race – it’s satellite delivery method can’t support true VOD like Virgin’s cable network can, and it hasn’t yet enabled a catch-up service to its boxes over their broadband connection, of which only the HD boxes have one. In the meantime, Sky has been taking its VOD on to other folks’ boxes (Xbox, Windows Media Centre, FetchTV). When Sky tools its own boxes for VOD in 2010, it will involve expensive migration of non-HD customers.

The main issue will be: can it get catch-up VOD rights from not just its own channels and its core partners (ie NatGeo) but also from the main PSBs? Then, the biggest object on Sky’s horizon is this: should it join the Project Canvas that it has fought against so hard? Canvas could prove a terrific distribution opportunity for Sky’s content. It could take advantage of Canvas’ pay-TV features to find a whole new subscription customer base. This could undermine the core satellite business on which Sky currently has nine million customers. But then, Sky has already divorced content from this in the Xbox and other relationships – perhaps, ultimately, splitting the content and distribution businesses can be split to good effect.

Broadcasters’ own sites: 9/10

The one guarantee as all these services crop up – broadcasters will use their homegrown VOD options as the core proposition, and as a fallback against failed super-aggregator bets, until such time as a winner might emerge.

ITV is seeing audiences skyrocket from its iPlayer imitation ITV Player, Channel 4 recently invested in a web-based overhaul for a now-free 4oD . These will likely remain the key platforms trailed in TV idents through 2010.