Report: 'Canvas will be Freeview 2.0'

IPTV joint venture Project Canvas will bring benefits for broadcasters and service providers by delivering an open evolution to the Freeview platform, a new report has said.

Financial services company Morgan Stanley recently compiled a creative analysis for BT about the potential impact of Canvas, which also includes BBC, ITV, Channel 4, Five and TalkTalk among its members.

The report gave a largely positive outlook for the project, which is currently at final approval stage with the BBC Trust, but warned that more work must be done to lock down the common technical standards.

Morgan Stanley noted that the Trust will reach a final decision on the BBC's Canvas involvement at the end of March. If it gives the full green light, then the platform could enter launch phase by the end of the year or in early 2011.

However, Morgan Stanley noted that any launch date would be dependent on the completion of major technical work, such as locking down specifications with manufacturers and also creating a workable electronic programming guide.

The report described Canvas as "Freeview 2.0", as it will deliver an upgrade to digital terrestrial television by creating a new receiver and user interface capable of delivering video on-demand and internet-based services.

Such a platform would be "particularly attractive" to the around 6m homes that have broadband but do not currently pay to access content, the report noted.

Morgan Stanley expects that Canvas boxes will cost between £150 and £200, although there may be options for co-branding and promotional giveaways with key partners. Canvas is also just a working title as an overarching consumer brand has not yet been agreed.

The report predicts that an App Store-style resource could be introduced to Canvas in the future, along with the integration of social networks such as Twitter.

As Canvas will be an open platform, the report noted that content providers would no longer need to pay the current sum of around £10m for capacity on digital terrestrial television to reach their target audience.

Internet service providers would also benefit from the service due an increased consumer demand for fixed broadband packages, along with greater opportunities to sell more expensive tariffs for high definition streaming. Storing popular programmes on local Canvas drives would also ease the burden of heavy streaming traffic over broadband networks.

Considering outstanding issues facing the project, Morgan Stanley said: "Canvas looks pro-competitive (breaking down platform barriers for content owners), but some media companies could still try to challenge its creation.

"It looks unlikely that this could freeze launch however as content is not being aggregated and the BBC shareholding will be only 16.6%."

However, it also warned: "The DTG [Digital TV Group] needs to finalise its work with Canvas to create common standards for consumer devices."

Earlier in the month, the DTG expressed concern that Canvas is failing to properly engage with all industry stakeholders to create a truly open standard.