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BBC missing out on monetizing the 65M global iPlayer VPN users?

iPlayer device usage share

The announcement that 65M people are using iPlayer via VPNs from outside the UK suggests the BBC made an error when it abandoned a subscription global iPlayer service. However, analysis of iPlayer data indicates the company made the right decision.

GlobalWebIndex (GWI) made headlines with the announcement that 65 million people outside of the UK are free-loading on license-fee funded BBC content. Using a VPN, these interlopers are using iPlayer on PCs and mobile devices from outside of the country. Of these, the company says, the biggest share is in China, with 38.5 million.

GWI surveyed 47,000 people from around the globe and found that around a quarter of them said they used VPN technology. The most popular reason for using them was to access “better entertainment content.” Remarkably, GWI says that 1% to 8% of people said they were using VPNs to access iPlayer. Other services frequently accessed using a VPN included Netflix, and Amazon Prime.

There is speculation that the BBC could be missing out on millions in revenue from these clandestine users. The company recently shut down its subscription-based global iPlayer, so naturally there is speculation that many of the VPN users could be paying customers if a service were available to them.

Though these numbers do sound horrifying, are they a serious problem for the BBC? Looking at BBC iPlayer data, perhaps not so much.

To get an idea of the potential impact of VPN users on iPlayer, I looked at the growth in online accesses to iPlayer video and compared it to the growth in usage of iPlayer through TV platforms. The critical difference between the two is that the TV platform versions of iPlayer can only be accessed through pay TV services like Sky and Virgin Media. VPN access can only occur through the online version of iPlayer. If the VPN users are wielding a big influence (and 65M users should have a big impact) we should see much faster online growth unexplainable through other means.

Comparing quarterly growth in iPlayer video usage, online requests grew at about 18% year-over-year for the last 2 years versus 13% for TV platforms. However, that might not have anything to do with VPN users.

During the same period, mobile consumption of iPlayer video has exploded, increasing from 44% of online video requests to 56%. This corresponds closely with the growth in ownership of mobile devices in the UK. Tablet penetration was 34.6% in 2013 and will reach 50% this year, while the number of smartphones in the UK will grow from 56M in 2013 to 70M by the end of this year. The easiest way to watch iPlayer on a tablet or smartphone is over the Internet.

BBC iPlayer peak usage May 2015Another piece of data that suggests most iPlayer accesses are from UK viewers can be seen in the peak viewing data. The BBC iPlayer usage peak occurs at just after 10PM UK time, about an hour after the TV peak at 9PM. We might expect many of the 38M Chinese that say they watch iPlayer through a VPN to watch at their primetime (between 3PM and 4PM) UK time. However, we don’t see an unusual and unexplained spike of usage then.

This data suggests the vast majority of usage of iPlayer is coming from within the UK, from the license-paying British public. It also suggest that the VPN viewers of iPlayer are relatively light users, and therefore unlikely to be interested in subscribing to the global iPlayer. Which perhaps explains why the BBC abandon the global iPlayer subscription service in the first place.

Why it matters

65M VPN users of iPlayer outside of the UK sounds like it could be a missed opportunity for the BBC.

However, careful analysis of iPlayer and other UK data suggests these VPN users are not having much impact on the service.

They likely wouldn’t subscribe to the global iPlayer service if it was still available.

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