Why Five’s Exit Won’t Hurt Project Canvas Or The BBC

Five’s decision to no longer be an equity partner in the Canvas joint venture will save the broadcaster £16.5 million – and will mean very little to anyone involved in the project.

Not being a JV partner does not mean Five, led by Dawn Airey, won’t get to deliver its Demand Five VOD shows through the yet-to-launch service, just as other future content providers will. Indeed, the remaining partners will see the inclusion of all public service broadcasters as crucial.

Canvas costs are to be split equally between each JV member.

Prior to Five’s exit, that meant the seven partners of the BBC, ITV (LSE: ITV), C4, Five, BT (NYSE: BT), TalkTalk and Arqiva each committing to pony up £16.5 million over the next five years.

In fact, the BBC Trust last month ruled on the BBC’s involvement based on a proposal submitted when there were only four partners, so the paperwork says the BBC can spend £24.7 million, and exceed this by 20 percent.

Five’s exit makes a six-way split cost £19.2 million each – so the news doesn’t mean any extra cost burden to the BBC above what has been approved.

What’s more, any cost of Five’s exit is likely to be nullified by the addition of new project partners in future. Canvas has been considering new inclusions since April and will likely be keen to bring in new friends for strategic reasons, as well as to keep shared costs down.