It seems only a few short years ago that the BBC and ITV were thought of as the titans of British media. But all of us in the UK’s traditional media solar system are getting smaller and smaller in the Apple, Amazon and Netflix universe.” Thus said Lord Hall, Director-General of the BBC, in March, as he unveiled the corporation’s plans for its new financial year.

“We need to find new ways to adapt to the changing needs of our audiences, and we need to be able to do it in real time to keep pace with our global competitors,” he continued.

Hall’s candid admission in the face of the US streaming giants’ dramatic rise provides the rationale for BritBox. This joint venture between the BBC and ITV will launch an online subscription video-on-demand (SVoD) streaming service for British program­mes later this year.

For many in British broadcasting, the long-awaited announcement was 10 years overdue. In a now-infamous decision in 2009, the Competition Commission blocked a proposal by the BBC, ITV and Channel 4 to create what would have been a pioneering video­-on-demand service.

Fast forward to 2019, and Netflix, which launched in Britain only in 2012 and costs from £5.99 a month, dominates SVoD streaming, with close to 10 million UK subscribers.

Its global investment in high-end, original drama and documentaries, such as The Crown and Black Mirror: Bandersnatch, combined with third-party archive content, has fuelled binge ­viewing. Amazon Prime Video is also a growing force, with 5 million UK users and a £5.99-a-month starting price. Other new and established players are suddenly jumping on the SVoD bandwagon. Apple announced plans for Apple TV+ in March, and Disney, which recently completed its acquisition of Fox to boost its content firepower, will launch Disney+ later this year.

Comcast’s Sky already operates a streaming service, Now TV, which costs from £7.99 a month, and Viacom launched MTV Play, an SVoD mobile app with a £3.99 price tag, in February. Discovery and the BBC have also announced a global, natural history SVoD streaming service, following the break-up of UKTV, which they co-owned. This service will not be available in the UK and Ireland.

So, BritBox will be entering an increasingly crowded UK marketplace at a time when, arguably, distinctive British content is under threat from global media and technology giants. “BritBox will be the home for the best of British creativity, celebrating the best of the past, the best of today and investing in new British originated content in the future,” promises ITV’s CEO, Carolyn McCall.

She insists that research shows there is demand for a British SVoD service and that consumers are willing to pay for multiple services, with “43% of all online homes interested in subscribing to a new service that features British content”. And that increases to 50% in homes that have Netflix. “We are not a substitute for Netflix,” she argues, “we are complementary to Netflix.”

ITV and the BBC gave few details when they announced BritBox in February, because they had only struck an initial agreement. It will be built on the same tech as ITV’s online service, ITV Hub, and will not carry advertising. There is no word on a launch date or pricing, although they promised it would provide “good value”.

McCall says: “The consumer proposition is good. It is going to be curated. It is going to be displayed properly. It’s going to be promoted. We will be building a lot of interesting data around what people do and what they don’t like.”

However, the joint venture has limited financial firepower compared with the US tech giants. ITV has committed to make a net investment of £25m in 2019, £40m in 2020 and less in the following years. The BBC has not disclosed its investment, other than to say that “no licence-fee funding will be used to pay for the service”.

The broadcasters say BritBox will be “the biggest collection of British content available on any streaming service”, with “thousands of hours” of “both very recent and older archive series” spanning drama, comedy and factual titles, plus some original commissions. That programmes from UK public service broadcasters are among the most-watched on-demand content on Sky and Virgin augurs well, suggests McCall.

Enders Analysis believes that “there is certainly a market for access to the full series of quality comedies and dramas, such as Only Fools and Horses, Midsomer Murders and Inspector Morse, as evidenced in the past by DVD sales”. As for just how big that market is, Enders reckons BritBox might initially attract 500,000 subscribers.

Although a commercial alliance between the BBC and ITV might once have been unthinkable in the UK, the two broadcasters have been collaborating on BritBox in the US for two years.

The North American version, which costs $6.99 a month and offers a middle­brow mix, from the latest episodes of EastEnders and Coronation Street to classics such as Doctor Who and Blackadder, gave the BBC and ITV confidence that they could collaborate on a home-grown version.

BritBox markets itself in the US and Canada by saying “indulge your inner Brit”, and has about 500,000 subscribers.

ITV’s Reemah Sakaan, who has been senior vice-president, creative and editorial at BritBox in New York, is group launch director of BritBox in the UK. She was previously a marketer for ITV, BBC and Diageo. This is a sign that advertising and promotion are likely to be crucial in the UK.

"If you’re a UK producer, this is fantastic"

BritBox will have its own small UK team to commission shows, with a focus on scripted, rather than unscripted, programmes. Amy Jones, who previously worked at Amazon Prime Video and Little Dot Studios, has joined as managing editor. Kevin Lygo, ITV’s director of television, will oversee commissioning.

“We will commission only from the UK, so, if you’re a UK producer, this is fantastic,” McCall says. However, the majority of BritBox’s content will be drawn from BBC and ITV programmes and box sets that have already aired.

BBC and ITV say they would welcome other partners, such as Channel 4, but the publicly owned commercial broadcaster may be constrained because it does not own the rights to its programmes.

There are no plans to expand the UK version of BritBox overseas, though Britons will be able to access it if they travel abroad.

Ian Whittaker, an analyst at investment bank Liberum Capital, welcomes BritBox but warns that competing with the streaming giants “raises the risk of [needing] significant extra investment”.

Limited investment might pose a different risk: the venture could struggle if it can’t compete for top talent. Whittaker also worries about how BritBox might be impacted by questions from the public about why they should pay for BBC content “when we are already paying the licence fee”. The corporation will, no doubt, point to its long history of airing shows on ad-funded UKTV and selling DVDs after shows’ initial broadcast window.

BritBox must tread an awkward line because the BBC and ITV will each continue to make most of their content available first on catch-up on their own standalone online services. The BBC plans to keep its shows on iPlayer for 12 months to ensure value for licence-fee payers.

Enders Analysis believes that it will not be easy for BritBox to differentiate itself from Netflix and Amazon, because the US streaming giants have for years hosted a lot of archive content from the BBC and ITV.

If the British broadcasters want to keep shows for BritBox, they could lose out on revenue from licensing series to other platforms. So, BritBox faces a daunting start, even if there is goodwill in broadcasting circles. Enders Analysis warns: “Selling this service will be a hard slog.”